Philippine Development Plan, 2011-2016

Philippine Development Plan
2011-2016
Philippine Development Plan 2011-2016
2011 by National Economic and Development Authority

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acknowledgement is made.
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ISSN:
Printed in the Philippines
ii
Table of Contents
List of Tables and Figures
vii
Chapter 1. In Pursuit of Inclusive Growth
11
What is Inclusive Growth
12
What Makes Inclusive Growth Elusive
15
How Shall We Achieve Inclusive Growth
19
How Shall We Monitor Progress Towards Inclusive Growth
25
A window of opportunity
25
Chapter 2. Macroeconomic Policy
27
Assessment and Challenges
28
Output and Employment
28
Economic Performance 2004-2010
28
Employment and Poverty
33
Supply-side measures
35
Demand-side approaches
35
Fiscal and Monetary Sectors
37
Fiscal Sector
37
Monetary and External Sectors
42
Strategic Framework
44
Fiscal Reforms
44
Monetary Policy and External Sector Reforms
50
iii
Chapter 3. Competitive Industry & Services Sectors

56
Competitiveness
56
Exports of Goods and Services
58
Investment
62
Micro, Small and Medium Enterprises (MSMEs)
66
Employment
67
Consumer Policy
70
Strategic Framework
71
Vision
71
Ten-point Agenda
71
Goal 1: Create a better business environment
72
Goal 2: Action agenda to improve productivity and efficiency
75
Goal 3: Action agenda to enhance consumer welfare
90
Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector

Assessment
93
94
Sector Performance
iv
53
94
Challenges
100
Strategic Framework
105
Vision
105
Goals and Strategies
105
Goal 1: Food Security Improved and Incomes Increased
105
Goal 2. Sector Resilience to Climate Change Risks Increased
108
Goal 3. Policy Environment and Governance Enhanced
110
Legislative Agenda
111
Chapter 5. Accelerating Infrastructure Development
113
Transport
117
Assessment, Issues, and Challenges
117
Strategic Plan and Focus
121
Water
125
Crosscutting Issues and Strategies in the Water Sector
125
Assessment, Issues, and challenges
125
126
Energy
139
139
148
Information And Communications Technology (ICT) Infrastructure
151
151
156
Social Infrastructure
160
Waste Management
160
Housing
164
Health Facilities
165
Education
167
Chapter 6. Towards a Resilient and Inclusive Financial Sector

Assessment
171
172
Current Structure of the Financial System
173
Condition and Performance
177
Challenges
180
Strategic Framework
182
Vision for the Financial Sector
182
Key Reform Objectives and Targets
182
Specific Reform Strategies
183
Chapter 7. Good Governance and the Rule of Law
195
196
Public Service Delivery
198
Integrity
200
Rule of Law
201
Citizens Participation
202
Political Processes and Systems
203
Gender Roles in Governance Structures
204
Strategic Framework
204
Curb Corruption Decisively
210
1.
Intensify Corruption Prevention
210
2.
Speedy Resolution of Corruption Cases, with Special Cases of Grand
Corruption
212
3.
Adopt a comprehensive anticorruption program
213
4.
Enhance the Legal and Policy Framework for Corruption Prevention
213
5.
Strengthen Integrity Mechanisms and Control Structures
213
6.
Enhance Partnership Structures and Mechanisms and International Linkages

214
7.
Conduct anticorruption advocacy campaigns
Strengthen the Rule of Law
vi
214
214
Chapter 8. Social Development
221
Assessment
222
Challenges
242
Strategic Framework
243
Goals
243
Targets
244
Policies and Strategies
249
Legislative Agenda
Chapter 9. Peace & Security
268
279
280
Internal Security Challenges
280
Other Security Challenges
281
External Security Challenges
281
Nontraditional Security Challenges
282
Strategic Framework
Section 1. Winning the Peace
282
282
Legislative Agenda
286
Section 2. Ensuring National Security
286
Legislative Agenda
288
Chapter 10. Conservation, Protection & Rehabilitation

of the Environment & Natural Resources
Assessment
State of the environment and natural resources
Challenges
289
290
290
299
Policy responses
299
Institutional issues
305
vii
Strategic Framework
308
Goal 1. Improved conservation, protection and

rehabilitation of natural resources
308
Goal 2. Improved environmental quality for a cleaner

and healthier environment
313
Goal 3. Enhanced resilience of natural systems and improved adaptive

capacities of human communities to cope with environmental
hazards including climate-related risks
315
Cross-cutting Strategies
Legislative Agenda
viii
317
320
List of Acronyms
322
Glossary
331
Bibliography
355
Planning Committees
369
Schedule of Consultations
380
A Social Contract with the Filipino People
381
Index
384
List of Tables and Figures

Chapter 1. In Pursuit of Inclusive Growth
Table 1.1
Table 1.2
Table 1.3
Table 1.4
Annual Average Growth Rate of Real Per Capita GDP (1950-2009)

Poverty and Inequality in Selected Countries (most recent available)
Transport Infrastructure ranking of Selected Countries (out of 139)
Strength of Bureaucracy and Input Costs in Selected Countries
Figure 1.1
Figure 1.2
Figure 1.3
Unemployment and Underemployment Rate: 1990 2010

Poverty Incidence and the Gini Ratio: 1991, 2003, 2006, 2009
Investment-to-GDP Ratios of Selected Asian Countries: 1994 2010 (in
percent)
Cohort Survival and Net Enrollment Rate, Philippines: 1990 2009 (In
percent)
Figure 1.4
Chapter 2. Macroeconomic Policy

Table 2.1
Table 2.2.
Table 2.3
Table 2.4
Table 2.5
Philippine Key Indicators

Official Poverty Statistics, Philippines: 2003, 2006 and 2009
Summary of Fiscal Sector Indicators, 2004-2010 (in million PhP)
Selected External Sector Accounts, 2004-2010 (in billion US$)
Selected Fiscal, Monetary, and External Medium-Term Targets
Figure 2.1
Figure 2.2
Figure 2.3
Figure 2.4
Figure 2.5
Figure 2.6
Contributions to Growth (Demand)

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

Table 3.1
Table 3.2
Table 3.3
Table 3.4
Cost of Doing Business Indicators

Export Performance (2004-2010)
Percent Share of Tourism to GDP, Employment and Total Exports
Vis--vis Visitor Arrivals Globally and in the Asia Pacific
Visitor Arrivals to ASEAN Countries (000)
ix
Table 3.5
Table 3.9
Table 3.10
Table 3.11
Philippines Travel and Tourism Competitiveness in Comparison with

Selected ASEAN Countries, 2009
Total Approved Investments of Foreign and Filipino Nationals by Industry:
2004 2010, (in million PhP)
BOI-PEZA Approved Investments (2009-2010)
Total Approved Foreign Direct Investments by Country of Investor:
2004 2010, (in million PhP)
PEZA Operating Economic Zones: 2004 2010
Micro, Small and Medium Enterprise Profile
Employment per Major Industry Group
Figure 3.1
Figure 3.2
Figure 3.3
Figure 3.4
Figure 3.5
Figure 3.6
BPO/IT Outsourcing, 2004-2011

Investments by Industry Sector in the PEZA Economic Zones
MSME 2008 Employment Share by Sector
Strategic Framework for Industry and Services
Strategic Destination Area for Tourism
Industry Cluster Map
Table 3.6
Table 3.7
Table 3.8
Chapter 4. Competitive and Sustainable Agriculture and Fisheries

Sector
Table 4.1
Table 4.2
Table 4.3
Table 4.4
Table 4.5
Table 4.6
Table 4.7
Table 4.8
Table 4.9
Table 4.10
Agriculture and Fishery (with Forestry) Performance and Contribution

to Economy: 2004-2010:
Contribution of Subsectors in Agriculture and Fishery Growth:
2004-2010
Value of Philippine Agricultural Exports and Imports:
2004 and 2010 (in million US$)
Agribusiness Lands (including Agroforestry) Developed: 2005-2010
Land Acquisition and Distribution Performance 2004-2010, (in hectares)
Land Productivity in Selected Southeast Asian Countries (in MT/Hectare)
Revealed Comparative Advantage (RCA) in Selected ASEAN Countries:
2007
International Trade of Agricultural Products: 2000 and 2009, (in billion
US$)
Inflation Rates by Commodity for All Households (in %)
Poverty Incidence and Magnitude in the Philippines: 2003 and 2009

Table 5.1
Table 5.2
Table 5.3
Table 5.4
Table 5.5
Table 5.6
Table 5.7
Table 5.8
Table 5.9
Table 5.10
Estimated Coverage of Access to Water: 1990-2008

Levels of Access to Safe Drinking Water
Estimated Coverage for Sanitation
Status of Irrigation Development: 2009
Flood-Related Impacts: 1980-2005
Projected Final Energy Consumption: 2009-2016
Internet Connection in Public High Schools Per Region: 2010
NG-LGU Cost-Sharing Framework
Summary of DOH Infrastructure and Equipment Upgrade Projects
by Region: 2007 -2010
2011 DBM Budget Gaps, in billion PhP
Figure 5.1
Figure 5.2
Figure 5.3
Figure 5.4
Figure 5.5
Figure 5.6
Figure 5.7
Figure 5.8
Figure 5.9
Percentage Access to Safe Water

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

Table 6.1
Table 6.2
Table 6.3
Table 6.4
Table 6.5
Comparative Market Shares of Key Banking Subgroups in the Philippines as

of end-September 2010
Philippine Stock Exchange - Listed Companies, as of February 25, 2011
Structure of Financial Systems in ASEAN-5 (Averages, 2000-2009)
Extent of Financial Access - Customer Reach (2010)
Legislative and Regulatory Priorities for the Financial System
Figure 6.1
Figure 6.2
Figure 6.3
Figure 6.4
Figure 6.5
Figure 6.6
Comparative Market Share of the Insurance Industry, December 2009

Financial Deepening in ASEAN-5
Comparative Benchmark Yield Curves, ASEAN+3
Selected Performance Indicators of the Banking System
Selected Stock Market Performance Indicators
Summary of Financial Market Performance

Table 7.1
Figure 7.1
Figure 7.2
Status of Submission and Evaluation of Rationalization Plans

Philippines: Worldwide Governance Indicators
CES Occupancy Data

Table 8.1
Table 8.2
Table 8.3
Table 8.4
Table 8.5
Table 8.6
Table 8.7
Table 8.8
Table 8.9
Table 8.10
Table 8.11
Table 8.12
Table 8.13.
Table 8.14
Table 8.15
Formal Basic Education Performance Indicators, by Sex: 2004-2009

Enrolment in Tertiary Level of Education by Sex: Academic Years
2004-2009
Direct Housing Accomplishments
Indirect Housing Accomplishments
Total Housing Needs: 2011-2016
Proportion of Households in Informal Settlements
Summary of Actual OFW Membership
Health, Nutrition and Population Targets
Education Targets: 2011-2016
Housing Targets by Program/Agency
Social Protection Targets
Agrarian Reform Targets (No. of Hectares to be Distributed
and No. of Beneficiaries under CARP)
Ancestral Domain/Lands Targets
Urban Asset Reform Targets
Proposed Legislations
xi
Annex 8.1
Annex 8.2
Annex 8.3
Annex 8.4
Annex 8.5
Annex 8.6
Annex 8.10
Pace of Progress of the Philippines in Terms of Attaining the MDG Targets

Regional Poverty and Subsistence Incidence and Magnitude, 2009
Provinces in the Bottom Cluster, 2009
Gini Concentration Ratios, by Region: 2006 and 2009
Income Poverty Measures, by Region: 2006 and 2009
National and Regional BDR Estimates for the
Regular Benefit Package, 2008
Various Forms of Malnutrition, by Region, 2008
Poverty Estimates of the Basic Sectors: 2000, 2003 and 2006
Regions with Minimum and Maximum Poverty Incidences
for Each Basic Sector, 2006
Regions with the Most Number of Poor for Each Basic Sector, 2006
Figure 8.1
Figure 8.2
Figure 8.3
Poverty Incidence in Southeast Asia

Share of Social Services in Total National Government Expenditures
Deployed Landbased OFWs by Top Occupational Category, 2009
Annex 8.7
Annex 8.8
Annex 8.9
Chapter 9. Peace and Security

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

Environment and Natural Resources
xii
Table 10.1
Table 10.2
Table 10.3
Table 10.4
Top 20 Provinces Susceptible to Floods

Top 20 Provinces Susceptible to Landslides
Hazard Susceptibility of Selected Provinces by Poverty Incidence
Forest Tenurial Instruments Implemented
Figure 10.1
Figure 10.2
Figure 10.3
Philippine Forest Cover: 1934-2003

Distribution of Active Faults and Trenches
Frequency of Tropical Cyclones in the Philippines: 1948-2006
01
In Pursuit
of Inclusive
Growth
In Pursuit of Inclusive Growth
13

What is Inclusive
Growth?
Inclusive growth means, first

of all, growth that is rapid
enough to matter, given the
countrys large population,
geographical differences, and
social complexity. It is sustained
growth that creates jobs, draws
the majority into the economic
and social mainstream, and
continuously reduces mass
poverty. This is an ideal which
the country has perennially
fallen short of, and this failure
has had the most far-reaching
consequences, from mass
misery and marginalization, to
an overseas exodus of skill and
talent, to political disaffection
and alienation, leading finally to
threats to the constitution of the
state itself.
Viewed by majority of Filipinos, the record

of economic and social progress up to now
has proved unsatisfactory for three reasons:
first, its pace has been slow when measured
against the achievements of the countrys
neighbors; second, the benefits of that
progress have not been broadly shared;
and third, issues of massive corruption and
of questioned political legitimacy have
undermined the peoples sense of ownership
of and control over public policy. Growth
has not only lagged, it has failed to benefit
the majority, who feel increasingly alienated
because their political institutions provide
little relief and have drifted beyond their
control. Growth, in short, has failed to be
inclusive.
It is high growth that is

sustained
Inclusive growth means, first of all,
growth that is rapid enough to matter,
given the countrys large population,
geographical differences, and social
complexity. It is sustained growth that
creates jobs, draws the majority into
the economic and social mainstream,
and continuously reduces mass poverty.
This is an ideal which the country has
perennially fallen short of, and this
failure has had the most far-reaching
consequences, from mass misery
and marginalization, to an overseas
exodus of skill and talent, to political
disaffection and alienation, leading
finally to threats to the constitution of
the state itself.
Historically the Philippine economy has
been mired in tepid and erratic growth.
Table 1.1 Annual Average Growth Rate of Real Per Capita GDP:
1950-2009 (in percent)
1951-60 1961-70 1971-80 1981-90 1991-00 2001-09

Hong Kong
9.2
7.1
6.8
5.4
3.0
3.2
Singapore
5.4
7.4
7.1
5.0
4.7
2.0
Korea
5.1
5.8
5.4
7.7
5.2
3.5
Taipei, China
7.6
9.6
9.3
8.2
5.5
2.7
Malaysia
3.6
3.4
5.3
3.2
4.6
2.2
Thailand
5.7
4.8
4.3
6.3
2.4
3.1
Indonesia
4.0
2.0
5.3
4.3
2.9
3.8
Philippines
3.3
1.8
3.1
-0.6
0.9
2.3*
Sources: Asian Development Bank (ADB), 2010; National Statistical Coordination Board
(NSCB)
*Average for the period 2001-2010
14
Figure 1.1 Unemployment and Underemployment Rate: 1990 2010 (in percent)
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
1990
1992
1994
1996
1998
Unemployment Rate (%)
2000
2002
2004
2006
2008
Underemployment (% of employed)
Note: Starting April 2005, the Labor Force Survey (LFS) adopts the new definition of unemployment.
Source: National Statistics Office (NSO)
Since 1981, growth has averaged only 3

percent annually. This is well below the
postwar growth rates of several highperforming Asian economies.
With population still increasing at
more than 2 percent per year, per-capita
incomes have risen only 20 percent in
real terms from 1981 to 2009. Over the
same period, by comparison, per capita
income increased four-fold in Malaysia,
five-fold in Thailand, and 11-fold in
PR China, an era in which absolute
mass poverty was basically eradicated
in these countries.
that massively creates jobs,

Quality economic growth means
primarily that rapid output increases
are translated into employment
creation. Unfortunately, rates of
unemployment have remained high
(Figure 1.1), averaging 10 percent in
19902005 and 7.5 percent in 20062010, (note that the data before and
after 2005 cannot be compared due to
a change in the unemployment definition

adopted that year). Underemployment has
also been widespread, with rates hovering at
around 18-20 percent in the late 2000s. This
remarkably contrasts with countries such as
PR China, Malaysia, and Thailand, where
unemployment has remained at 4 percent or
lower over the same period.
and reduces poverty.

Under the Millennium Development Goals
(MDG), the country committed to halving
extreme poverty from 33.1 percent in 19911
to 16.6 percent by 2015. This goal can still be
achieved provided that determined efforts
are undertaken (Figure 1.2). Mass poverty
remains the critical challenge, with the poor
accounting for more than one-fourth (26.5%)
of the population as of 2009. A deep cause
for concern is the fact that the incidence of
poverty has remained essentially stagnant
for almost a decade now. Given the countrys
population growth, this actually means that
the number of poor families and persons has
been increasing through time. This compares
unfavorably with some countries that have
This uses the revised official methodology approved on February 1, 2011 by the NSCB. Under the older methodology,
the poverty incidence for 1991 was 45.3 percent.
15
similar or lower per capita incomes (Table

1.2).
While poverty incidence declined between
1991 and 2009, the rate of decline has
been exceedingly slow. Indeed, there have
been periods, such as between 2003 and
2006, when the poverty incidence actually
increased despite above-average economic
growth. This underscores the need for
renewed efforts if progress in this area is to
be sustained. For every percentage-point
increase in income-growth in the Philippines,
poverty incidence falls by about 1.5

percentage points compared with the
range of 2.9 to 3.5 for high-performing
economies (PR China, Indonesia, and
Thailand) and the 2.5 average for a set
of 47 developing countries. Relative
to international experience, therefore,
Philippine economic growth thus, by
far, has largely bypassed the poor.
A proximate factor behind the weak
response of poverty to growth is high
Figure 1.2 Poverty Incidence and the Gini Ratio: 1991, 2003, 2006, 2009
50
40
30
20
10
0
1991
GINI index
2003
Subsistence Incidence
2006
2009
Poverty Incidence
Sources: NSCB, NSO
Table 1.2 Poverty and Inequality in Selected Countries (most recent available)
Official poverty
incidence in %
(2007/2008) 1/
China
Share of population
below $1.25 per Day, %
(2004/2005/2006/2007) 2/
Gini Coefficient
(2004/2005/2006/2007)1/
4.2
15.9
0.415
Indonesia
14.2
29.4
0.376
Malaysia
3.6
2.0
0.379
26.5*
22.6
0.448**
Thailand
8.5
2.0
0.425
Vietnam
13.5
21.5
0.378
Philippines
Sources/Notes:
*2009 Official Poverty Statistics, NSCB
**2009 Family Income and Expenditures Survey (FIES), NSO
1/ 2010 ADB Key Indicators
2/ UN Economic and Social Commission for Asia and the Pacific (UNESCAP) 2009 Statistical Yearbook
(www.unescap.org/stat/data/syb2009/)
16
inequality. Compared to other countries

in the region, income inequality in the
Philippines is high (Figure 1.2 and
Table 1.2). The Gini ratio, a measure of
inequality, is in the mid-40s, whereas in
Indonesia and Vietnam the Gini ratio
is at 38-39. Moreover, there has been
no secular tendency towards falling
inequality; movements in the Gini
ratio have been erratic at best, declining
in the early 1990s, rising until 2000,
then falling slightly before leveling off
at a still-high level by 2006. In general,
it is safe to conclude that the trade-off
between growth and inequality that is
commonly observed in other countries
still raises no policy dilemma in the
Philippines, where low growth has
been accompanied by increasing or
high inequality.
What Makes Inclusive

Growth Elusive?
Low growth, weak employment
generation, and persistently high
inequality are the immediate reasons
for the failure of inclusive growth in the
country. But these in turn have deeper
structural underpinnings.
Inadequate infrastructure is a
major constraint
First, the countrys investment record has
been poor and falling (Figure 1.3). As a share
of GDP, gross domestic investment peaked
at about 24.8 percent, before falling to just
15.6 percent in 2010. In contrast, investment
in Malaysia and Thailand soared to over 40
percent of GDP, and although they have
dipped since the Asian crisis, their levels are
still way above that of the Philippines (except
for Malaysia). Not only is the Philippines
investment ratio low, it has also been falling
since the mid-1990s, down to 15.6 percent
in 2010. This fall in capital accumulation is
a constraint to long-term economic growth
and employment-generation.
Weak investment particularly in the face
of a surfeit of national saving is a clear sign
of a lack of productive opportunities in the
economy. Inadequate infrastructure and a
resulting poor logistics network have been
identified as among the critical constraints
to investment and growth (ADB, 2007).
Besides stimulating investment itself,
infrastructure helps improve total factor
productivity, enabling the country to produce
Figure 1.3 Investment-to-GDP Ratios of Selected Asian Countries:

1994 2010 (in percent)
50.0
45.0
40.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
19941995199619971998199920002001200220032004200520062007200820092010
Philippines
Indonesia
Malaysia
Thailand
Note: For 2010, available data for Malaysia and Thailand are for Q1 to Q3 only.
Sources: ADB-Asian Development Outlook; Official Country Statistics websites; NSCB
17
Table 1.3 Transport Infrastructure Ranking of Selected Countries (out of 139)
Road
Port
Air
Railway
Philippines
114
131
112
97
Indonesia
84
96
69
56
Viet Nam
117
97
88
59
Source: The Global Competitiveness Report 2010-2011, World Economic Forum (2010)
more from each amount of input, effectively

lowering unit-cost.
An inefficient transport network

and unreliable power supply
have been identified as the
most significant infrastructure
constraints on overall growth.
The percentage of paved roads
to total roads in the country
remains one of the lowest in
the Southeast Asia. Similarly,
the quality of the countrys port,
air, and railroad infrastructure
leaves much to be desired.
Unless urgent action is taken,
the hitherto slow pace of
investments in power-generation
threatens not only growth but
also the realization of many
critical social and economic
goals under the Plan. Currently,
power is already in short supply
and unreliable in some parts of
the country.
An inefficient transport network and

unreliable power supply have been identified
as the most significant infrastructure
constraints on overall growth. The
percentage of paved roads to total roads in
the country remains one of the lowest in the
Southeast Asia. Similarly, the quality of the
countrys port, air, and railroad infrastructure
leaves much to be desired (Table 1.3). Unless
urgent action is taken, the slow pace of
investments in power-generation threatens
not only growth but also the realization
of many critical social and economic goals
under the Plan. Power is already in short
supply and unreliable in some parts of the
country.
as are major gaps and lapses

in governance,
Weak institutions and governance failures
are the second major barriers to investment.
On the positive side, with peaceful
leadership-changes through orderly and
credible elections, the nation has put
behind it a period of political instability
and deep mistrust of government actions,
both of which were rooted in allegations of
corruption in major economic projects and
the perversion of vital political processes.
The advent of a new administration is an
opportunity for government to regain the
citizens trust, lay bare the truth regarding
past abuses, and instil civic vigilance for the
future. But stability and a new atmosphere
of openness and accountability are only
the first steps in removing the governancebased fetters to investment and growth. A
18
great deal more remains to be done

in creating a governance climate that
encourages massive investment and
wins the peoples support. The country
continues to suffer from a reputation
for bureaucratic inefficiency, excessive
red tape, and widespread corruption.
In the 2011 Doing Business ranking,
for example, the Philippines placed
156th out of 183 countries. After
three decades of trade-policy reform, it
rated relatively well in trading across
borders. It rated poorly, however,
for starting a business, closing a
business, dealing with construction
permits, and protecting investors,
(156th, 153rd, 156th, and 132nd,
respectively).
The country also ranks poorly in
international comparisons of the
enforcement of law and contracts,
and competition measures. At the
national level, contracting for and
implementation of large public
infrastructure projects are frequently
stymied by difficult and nontransparent
bidding and award rules that discourage
wider private sector participation,
promote
collusion,
encourage
corruption, or provoke legal and other
challenges from losing parties. Risks
to large-scale investments can also
arise from the bias, incompetence,
or outright corruption on the part of
some regulatory agencies and other
oversight bodies, as well as lead to a
culture of litigiousness, encouraged
by misplaced judicial activism. Less
sensationally but with not less damage,
local governments impose their own
share of arbitrary requirements and
demands for corruption rents, which

take a toll especially on the investment
and employment decisions of many
small- and medium-scale enterprises.
The countrys long-standing problems
with high electricity and construction
costs are readily evident in global
comparisons (Table 1.4). Such high
costs are attributed to the lack of real
competition in strategic sectors such as
agriculture, maritime and air transport,
power, cement, and banking. In some
important cases, dominant firms
and interests can exert enough social
influence and political clout to limit
entry. Many of these same sectors have
dense backward and forward linkages,
so that their failure to advance causes
collateral negative effects in productivity
growth and investment in the linked
sectors, such as manufacturing (Bocchi,
2008). The threat of regulatory capture
extends not only to the functions of
agencies in the Executive branch but
also to those exercising legislative and
judicial functions that expand the scope
of government.
In agriculture, meanwhile, investment has

been stymied by continuing property-rights
problems and inconsistent policy. Property
rights in the countryside are also insecure.
In the remaining areas under land reform
coverage, for example, slow implementation
creates uncertainty of ownership, both on
the side of traditional landowners, and
the new landowners, many of whom have
yet to receive individual titles to their
cultivated parcels. Likewise, private sector
investment in some key crops is smothered
by politicized decision-making of marketing
and regulatory agencies, most prominently
in the case of rice, which falls under the
purview of the National Food Authority
(NFA).
Ultimately, however, the cost of poor
governance cannot be simply measured in
peso terms. Its more pernicious consequence
is the weakening of the civic spirit and the
erosion of trust in the rule of law. The country
is only now emerging from a recent past
marked by public perceptions of impunity
and unresponsiveness on the part of the
highest officials of the land, where elections
are stolen, public funds misappropriated,
private interests promoted at public expense,
public policy distorted to favor the few, and
Table 1.4 Strength of Bureaucracy and Input Costs in Selected Countries
Country
Philippines
Public Institution Index

2004 2009 2010
85
105
113
PR China
Malaysia
Electricity Building
(US$/KwH) Construction
Cost (US$/sq.
Meter)
Index of Ease of
Doing Business
(2010 Rank out of
183)
0.10
1022
144
0.08
97
89
34
30
43
0.07
282
23
76
68
58
0.07
221
122
Hong Kong
Indonesia
S. Korea
Singapore
Thailand
Vietnam
1
37
57
60
0.06
329
0.07
12
93
Sources: World Bank (WB), Doing Business 2006, 2007 and 2010 (www.doingbusiness.org)
MIGA and WB, Benchmarking FDI Competitiveness in Asia (2004)
19
public officers who aggrandized themselves

in the face of peoples suffering all without
visible legal redress, social consequence, or
material recompensation. The institutions
meant as remedies to such conditions media,
courts, political opposition, and the electoral
process were viewed as feckless, since some
of them had either been cowed, co-opted,
or corrupted. In such circumstances, it was
unsurprising that people felt alienated from
the political process and for cynicism to
overcome their respect for the law. Growth
in short was not inclusive owing to the basic
disregard of the peoples will and the failure
to render full and complete justice to all.
The government has devoted
considerable resources to
deliver social services to those
lacking access to health care
and education. However, poor
households in isolated areas
have difficulty in going to health
centers and schools, even when
services are offered for free
or at highly subsidized rates.
Clearly, poor infrastructure
provision, aside from being a
hindrance to investment and
business activity, also prevents
physical access to basic
services.
inadequate levels of human

development.
Human development, in terms of adequate
health, nutrition, and education outcomes,
has an intrinsic benefit. But it is also a
means to build the human capital of the
poor, providing them a means to break out
of poverty. Hence, the MDG of universal
primary education is consistent with
inclusive growth. Unfortunately, by several
yardsticks, the country has fallen short
of adequate service delivery (Figure 1.4).
While the net enrollment rate peaked at 97
percent in 1999-2000, its drop to 85

percent and below by the late 2000s
should be a cause for serious concern.
Worse, the cohort survival rate stayed
in the 70 percent range throughout the
1990s, only improving somewhat to the
70-75 percent range in the 2000s.
Most of the population is inadequately
protected from shocks to their already
meager human capital. While natural
disasters can affect any population
group, it is the poor who tends to be
most vulnerable and least resilient to
calamities. With respect to health care,
catastrophic illnesses are capable of
wiping out livelihoods, assets, and wellbeing of the poor and lower middle
classes. Meanwhile, chronic illnesses
(such as tuberculosis) may have less
extreme impacts, but may prevent
the poor from getting and keeping
remunerative work.
The
government
has
devoted
considerable resources to deliver social
services to those lacking access to
health care and education. However,
poor households in isolated areas have
difficulty in going to health centers
Figure 1.4 Cohort Survival and Net Enrollment Rate, Philippines:

1990 2009 (In percent)
100.0
95.0
90.0
85.0
80.0
75.0
70.0
65.0
60.0
1991
1994
1997
Cohort Survival Rate
2000
2003
2006
2009
Net Enrollment Rate
Source: SY 1991-1992 to SY 1998-1999, Department of Education (DepED) Statistical Yearbook;

SY 1999-2000 to latest, Basic Education Information System (BEIS); Basic Education Statistics
(Factsheet as of December 5, 2008); www.deped.gov.ph
20
and schools, even when services are

offered for free or at highly subsidized
rates. Clearly, poor infrastructure
provision, aside from being a hindrance
to investment and business activity,
also prevents physical access to basic
services.
Compounding the problem of access
is the propensity of poorer households
for higher fertility rates, reducing
households assets and per-capita
purchasing power. Parents may fail
to internalize the intergenerational
implications of child-bearing choice.
Unfortunately, in the Philippine setting,
the State has typically failed in its role
in promoting responsible parenthood
and reproductive health.
...and a poor and degraded

state of environment and
natural resources.
The deteriorated state of the countrys
environment and natural resources is
felt most by the poor, who depend on
such resources for their livelihood and
are most vulnerable to the consequences
of its degradation and depletion.
Climate change and risks from natural
disasters only amplify the association
between poverty and environmental
degradation.
Because of continuing deforestation,
only 45 percent of classified forestlands
remain. The deterioration of critical
watersheds is likely to affect water
supply. The quality of land resources
has been reduced by erosion, pollution,
and land conversion. Although one of
the worlds 18 mega-diverse countries,
the Philippines biodiversity resources
are also among the most threatened.
Coastal and marine resources have
been declining as a result of coastal
development
and
unsustainable
fishing practices. Major urban areas,
on the other hand, remain polluted, as
evidenced by poor air and water quality,
and by the inability to manage waste
properly and adequately.
Better environment and natural resource

management could lead to more and better
livelihood opportunities that increase the
resiliency of the poor. But this remains a
challenge that must be fully confronted.
How Shall We Achieve

Inclusive Growth?
To recapitulate: failure of inclusive growth
in the country is because of growth that is
low on average, and because the benefits
of such growth largely bypass the countrys
poor. Low growth is due to low investment
and slow technological progress because
of inadequate infrastructure, as well as
glaring gaps in governance. Narrow growth,
meanwhile, is largely attributed to lack of
human capital formation among the poorand
the failure to transform output growth to job
creation. The following lists the strategies
and programs that shall be pursued over
the Plan period to help achieve inclusive
growth.
Through massive investment in

physical infrastructure
The country urgently needs to make up its
massive infrastructure backlog. Investment
in infrastructure follows the plan detailed
in Chapter 5, which prioritizes the creation
of integrated and multimodal national
transport and logistics system. The system
shall connect underserved but otherwise
productive areas and communities to markets
and social services. Under this system, rural
areas, where most of poor reside, shall
receive renewed attention. Property-rights
issues in agriculture shall be finally resolved
signalling a rebirth of interest in agricultural
production that will make infrastructureinvestments in that sector, such as irrigation,
more effective, helping raise farmers
income, improve food security, and enlarge
agricultures contribution to the economy.
The deteriorated state of the

countrys environment and
natural resources is felt most by
the poor, who depend on such
resources for their livelihood
and are most vulnerable to
the consequences of its
degradation and depletion.
Climate change and risks from
natural disasters only amplify the
association between poverty and
environmental degradation.
Hindered by a record of perennially large

budget deficits, government shall generate
funds for infrastructure investment through
better tax collection and more rational
budget allocation hence the fiscal and
budgetary reforms discussed in Chapter
21
A big part of the solution to the

governance problem however
lies outside government
itself and involves the active
participation of private business,
civil society and the media in
governance, monitoring, and
feedback. This gives voice to
people, enables civil society and
the media to become partners
of government, and makes the
government more responsive to
the needs of citizens.
22
2. Realistically, however, government

funds may not suffice, given its need to
immediately attend to social development
and poverty-alleviation. For this reason,
government shall rely on the publicprivate partnership (PPP) scheme to
implement the bulk of its infrastructure
program. This scheme encourages the
large-sector of private business, including
major Filipino conglomerates and
large and reputable foreign partners, to
participate in financing, construction, and
operation of key infrastructure projects.
Such a program seeks deliberately to utilize
the huge savings and capital resources in
the private sector and to provide marketfriendly channels for these to support
national priorities.
The provision of vital infrastructure
and the expansion of logistics chains,
combined with a change in the governance
regime, is bound to elicit a strong positive
response across all classes of entrepreneurs
and financiers. Immediately benefited
by this will be those industries in which
the country already has a demonstrated
global advantage but whose expansion
is still fettered by certain infrastructure
inadequacies, such as power and
transport. Included here are the further
expansion of ICT-related activities such
as business-process outsourcing, (in which
the country is now the worlds largest
employer), different branches of tourism,
electronics, sustainable mining, housing
and construction, and agribusiness and
agroprocessing industries (Chapter 3).
This list of industries is only bound to
expand as distributional bottlenecks across
regions are cleared and the countrys
inherent advantages finally are revealed.
At the same time, government has
prepared specific programs to assist micro,
small, and medium enterprises (MSMEs)
at the enterprise-level and to encourage
the formation of industry clusters to foster
interfirm linkages.
through transparent and

responsive governance
Underpinning inclusive growth must
be a bedrock of sound institutions that
promote transparency, accountability,
the rule of law, and effective and
impartial performance of the regulatory
function of government, as discussed in
Chapter 7.
To move towards responsive governance,
systems that promote objective
decision-making,
professionalism,
transparency,
and
accountability,
shall be instituted and mainstreamed.
Thorough reforms in the budgeting
process, in public procurement, and in
the awarding of major contracts are
needed to restore public confidence in
government institutions and practices.
In budget-planning, a key reform shall
be the adoption of zero-based budgeting
(ZBB), under which budgets of
government departments and agencies
are comprehensively scrutinized and
justified in complete detail, from a zero
base, not just incrementally. Budget
releases will also henceforth be aligned
with the number of active personnel
and the actual progress of programs
and projects to avoid such abuses as
conversion and other kinds of fund
diversion.
In public procurement, full use shall
be made of electronic bidding and
procurement to minimize discretion,
achieve arms-length transparency, and
attain cost-efficiency. Terms of reference
shall be based on comprehensive
technical specifications prior to bidding
and contracting to facilitate close
comparability across alternatives and
to prevent arbitrary ex-post variation
orders. Clear terms and transparent
rules are vital to the success of big-ticket
infrastructure projects such as the PPP.
The publication and enforcement of
blacklists of contractors and individuals
suspected of rigging bids and showing
substandard performance shall be
undertaken to show the governments
determination to clean up procurement

and bidding.
The rationalization of government
functions, pay, and personnel shall be
continued and extended to cover not
only the bureaucracy itself but also
government-owned and controlled
corporations (GOCCs) and government
financial institutions (GFIs).
The anticorruption drive shall also
be strengthened with the passage
of the Freedom of Information Act
and the Whistleblowers Act, as well
as the revitalization of the RunAfter-Tax-Evaders (RATE), RunAfter-the-Smugglers (RATS), and
Revenue Integrity Protection Service
(RIPS) programs. Close collaboration,
coordination,
and
informationexchange among various agencies shall
form the basis for the build-up of cases
against public officials and private
persons involved in plunder, corruption,
tax evasion, and other crimes involving
the misappropriation of public
resources. Strong cases, especially those
involving well-known instances of
plunder and grand corruption, shall be
pursued uncompromisingly, showing
neither fear nor favor and in line with
true and complete justice for all. As
an indispensable first step, however,
the personnel of agencies that directly
involved in anticorruption efforts,
especially the office of the Ombudsman,
the Department of Justice (DOJ),
and the revenue agencies, must be
reinvigorated and rededicated.
A big part of the solution to the
governance problem however lies
outside government itself and involves
the active participation of private
business, civil society and the media in
governance, monitoring, and feedback.
This gives voice to people, enables
civil society and the media to become
partners of government, and makes
the government more responsive
to the needs of citizens. Among
other steps shall be the adoption of
client-satisfaction surveys at all levels of

government. Monitoring and surveillance
by the media, civil society, and an engaged
citizenry shall underpin the campaign
against corruption. This shall be facilitated
by formal citizens representation in
budgeting and procurement processes, the
disclosure of the allocation and expenditure
of funds of various agencies, the involvement
of civil society in the anticorruption effort,
and the provision of channels for ordinary
citizens to report directly and anonymously
to competent authorities on anomalies
in government functions and the state of
public-service provision.
Ultimately, however, good governance
must be founded on a cohesive society and
peoples trust in government. For this reason,
government will endeavor to be transparent,
communicate its intentions clearly, and seek
consensus on social directions. The means
of development communication and their
convergence with traditional and new mass
and social media shall be used for these
higher purposes.
Improving governance and strengthening
weak institutions in the country carry
tremendous potential for bringing down
the cost and risks of doing business. This is
evident in public sector projects themselves.
The PPP initiatives of government will not
succeed unless private partners are assured
of unbiased bid evaluations and award
decisions based on competent authority. In
the same manner, legitimate proponents of
build-and-transfer schemes will be in short
supply if their predecessors must face the
ordeal of official harassment and regulatory
risk. Strengthening governance, therefore,
also implies addressing the weak rule of law,
legal uncertainty, and high costs and delays
of the legal system in the country, which
have historically discouraged legitimate
investments in the economy and instead
fomented corruption. At the same time,
there is a simple need to streamline and
harmonize procedures within and across
government offices.
A strong competition policy would promote
a more open environment for investment,
23
innovation, and appropriate pricing. This

may be done by strengthening regulatory
agencies and making them less susceptible
to regulatory capture, lobbying, and rentseeking. The linchpin of competition policy
shall be an omnibus Competition and AntiTrust code that operationalizes constitutional
provisions against monopolistic practices, as
well as provides a transparent and predictable
framework for standards and procedures for
all regulatory authorities.
Human development is key

Together with physical investment,
investment in the countrys human resources
is key to sustained and broad-based growth.
This requires equitable access to basic
social services, as well as stronger social
safety nets and social protection against
shocks. Concrete objectives and programs
are spelled out in Chapter 8. Reaffirmed
here are the countrys commitments to the
MDG, of which the terminal point (2015) is
the penultimate year of this planning period.
The major priority reforms in education
have been spelled out in the Basic Education
Sector
Reform
Agenda
(BESRA).
Implementation of the agenda involves:
school-based
management;
enhanced
learning efficiency, such as through the K+12
system; quality assurance and accountability;
and complementary learning interventions,
e.g. alternative learning systems, early
childhood education, and so on.
The state shall ensure equitable access
to basic health care for all. This requires
strengthening the National Health Insurance
Program (NHIP). PhilHealth operations
shall be oriented towards increasing the
benefit delivery ratio at the national and
regional level. Investments in public health
programs shall aim to reduce maternal and
child mortality, mortality and morbidity
from tuberculosis, dengue, and malaria, as
well as prevent the spread of HIV-AIDS.
Upgrades of public health care facilities
shall be undertaken under the government
budget as well as through private-public
sector partnerships.
24
Two major strategies towards asset and

human capital formation for the poor
is community-driven development and
conditional cash transfers. The former
shall be pursued through the Kapit-bisig
Laban sa Kahirapan-Comprehensive
and Integrated Delivery of Social
Services
(KALAHI-CIDSS),
a
program for implementing small-scale
projects by barangays following their
own plans, priorities, and processes,
with funding support and in-kind
support from the national and local
governments. The KALAHI-CIDSS
has demonstrated its effectiveness
in generating net economic returns,
finding a cost-effective formula
for providing village infrastructure,
responding to community demands,
and sustaining community operations
and
maintenance
(Araral
and
Holmemo, 2007).
The latter social protection measures
are primarily implemented through
the Pantawid Pamilyang Pilipino
Program (4Ps). At the heart of the 4Ps
is the conditional cash transfer (CCT)
program, which provides 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. The cash transfer is, thus,
linked to the poors investment in their
own human capital (education and
health), which explains the programs
demonstrated effectiveness in reducing
poverty both immediately (through the
cash transfer itself ) and in the long run
(through human capital formation).
The provision of CCT targets the truly
deserving, while boosting demand for
education and health services from
poor households. In the design of
these and other future social protection
programs, the government shall always
ensure that such programs remain
accessible and attuned to the needs of
vulnerable groups, particularly children
of both sexes, women, the elderly, and
the disabled.
together with employment

generation, for both wageand self-employed
Emphasizing employment generation
means opening the widest legitimate
channels for all forms of employment,
whether in the form of formal wageor self-employment, whether in firms,
homes, or local communities, whether
at home or abroad. Work arrangements
mutually agreed upon shall also be
introduced. Employment generation
can also be pursued indirectly by
supporting those activities that exploit
the countrys comparative advantage in
more labor-intensive activities, typically
involving products and services that are
more competitive in the world market.
Exports have learning-by-doing and
dynamic comparative advantage aspects.
Through active trade policy, exporters
learn through time, and their skill sets
have evolved and became entrenched
into more technologically intensive
and higher skills processes. Exports can
become an important means of obtaining
technological know-how and in turn
generate positive spill over effects to other
sectors in the economy. This redounds to
faster accumulation and innovation, and
therefore accelerated growth.
Wider self-employment opportunities
shall be afforded by providing creditaccess to the poor through microcredit,
integrated in a business-service package
that includes market matching,technical
assistance, and community organizing
where necessary. Government will
direct wholesale finance institutions
such as the Peoples Credit and
Finance Corporation (PCFC), the
Land Bank of the Philippines (LBP),
and the Small Business Corporation
(SBC) that deal with microfinance
institutions to coordinate with
Department of Trade and Industry
(DTI),
Department of Tourism
(DOT) and viable microfinance
institutions (MFIs) to develop marketbased innovative financing schemes to
support microenterprises. Government will

collaborate with MFIs to use microfinance as
a tool for inclusive growth by expanding access
by microenterprises and poor households to
credit, savings, and other financial services.
Innovative market-based financing schemes
in support of microenterprises will support
governments goal of providing productive
employment opportunities to a broad crosssection of the population. Other channels
for rapid employment generation shall be
opened through programs of communitydriven development (CDD), which are
linked to poverty-relief, and labor-intensive
infrastructure projects of local governments.
In providing opportunities for formal or selfemployment or access to credit, government
shall take particular cognizance of the special
needs of women, whose potentially large
social contributions to social and economic
development are stunted by their domestic
and other social circumstances.
but complementary strategies

will be essential for success
The plans broad thrusts are massive
infrastructure development, higher governance
standards, human development and human
capital formation, direct poverty-relief, and
employment-generation. But such initiatives
cannot succeed if complementary strategies do
not support and enhance their impact.
These strategies can prosper only in a
macroeconomic regime of low inflation
and sustainable fiscal balances (Chapter 2).
Inflation directly and immediately erodes the
publics purchasing power and particularly
affects the poor and fixed-income earners,
thus putting poverty goals in peril. On the
other hand, uncontrolled government debts
and deficits endanger the goals of growth
and employment by raising borrowing
costs for public and private sectors alike,
putting a brake on all forms of investment.
Government shall, therefore, institute fiscal
reforms to permanently place the revenue
system on an even keel, primarily through
comprehensive coverage of taxpayers and
uniform coverage of commodities and
activities, higher standards of performance
and integrity among tax administrators, and
25
26
prompt rate adjustments, as allowed by law,

applied to tax and nontax revenue sources
alike. Expenditures shall be kept within the
bounds set by macroeconomic targets, among
others, by cutting back on wasteful programs
and deprioritizing unfunded mandates,
exercising tighter internal controls, and
continuing the rationalization of the size of
government, including GFIs and GOCCs.
Many of these reforms can become
imperatives of fiscal behavior through the
enactment of a fiscal responsibility law.
Monetary policy, on the other hand, will
continue to emphasize low and stable
inflation, with the Bangko Sentral ready to
use its tools to prevent the emergence of
asset bubbles, whether domestic or foreign.
In accord with the changing strength of the
countrys external position, foreignexchange
regulations shall be adjusted to facilitate
payments for trade and investment and, in
line with the policies of other countries, to
maintain the economys competitiveness.
renewal, measures to reduce waste and

pollution, and heightened capacities for
disaster-preparedness and response.
Ensuring ecological integrity and mitigating

the effects of climate change is essential for
success on several fronts. Natural disasters
and calamities can nullify hard-won gains
by damaging physical infrastructure, directly
endangering human lives and health, and
destroying livelihoods, particularly among
the poor and vulnerable. The dismal state
of the environment and natural resources
is a major reason that rural communities,
who depend on them as primary sources of
livelihood, perennially find themselves at
the bottom rung of the development ladder.
The countrys location makes it inherently
vulnerable to potentially destructive
natural events. This is aggravated by the
pressure of a growing human population
on environmental resources and habitable
environments as well as the anticipated
effects of global climate change. It shall be an
urgent task (Chapter 10), therefore, to devise
and adopt measures that will improve the
state of environment and natural resources,
enhance the resilience of natural systems,
and improve the ability of communities to
cope with environmental hazards, including
climate-related risks. Priorities include the
conservation, protection, and rehabilitation
of the countrys natural resources, urban
The end of armed conflict and the

attainment of lasting peace is vital to
breaking the vicious cycle of conflict
and underdevelopment in affected areas
that have otherwise huge potential for
social and economic development.
Towards this end, the government
shall pursue different tracks to
complete and implement negotiated
settlements with various armed groups
under a comprehensive peace process.
At the same time resources shall be
marshaled to raise the capacity of
the armed forces and the police in
dealing decisively with criminal groups
(Chapter 9). Relations with foreign
nations shall be actively cultivated to
support sovereignty, regional peace and
security, and economic cooperation
based on equitable and mutual benefit.
Paramount consideration shall be paid
to ensure the welfare and protection
of the millions of Filipinos working
overseas.
Although it is the Plans main thrust

to raise participation and standards in
basic education, there is no denying
the important role of higher education
and science and technology in the
countrys effort to attract high-quality
and high-productivity activities, such
as the greater value-added parts of
business-process outsourcing (BPO),
tourism, and some branches of industry.
Through a rationalization of the roles
of
higher-education
institutions
and a finer delineation of their roles
(Chapter8), the turnout of a critical
mass of scientists, engineers, and other
technical personnel shall be pursued
to allow the country is to climb the
value-added ladder in sectors where it
possesses global competitive potential.
How Shall We
Monitor Progress
Towards Inclusive
Growth?
Accountability requires government
to make known its plans in order to
afford its citizens the chance to test
its assumptions and monitor progress
quantitatively and in detail whenever
possible. Towards that end, the Plan
commits itself to quantitatively and
observable targets and milestones.
More detailed targets are presented in
the succeeding chapters, but the most
important ones are listed below:
This annual growth target will generate an

average of some one million (1,000,000) net
employment annually, and these will be found
primarily in industry and services, even as the
agricultural sector may continue to be a net
shedder of jobs. The completion of agrarian
reform, a resolution of property rights issues
in agriculture and implementation of major
infrastructure shall enable agriculture and
agro-processing to come into their own
again and begin to reabsorb labor. If the labor
force grows at 2.75 percent annually, the
unemployment rate should hover at 6.8 -7.2
percent during the Plan period, although it
should be noted these numbers do not factor
in possible reversals in overseas migration
trends as more domestic jobs are created.
Growth in output and

employment through higher should lead to poverty
incidence being cut by half
investments
A growth in real GDP averaging 7-8
percent per year under the Plan period
shall be a major objective. This figure
implies a tripling of per capita income to
about US$5,000 in two decades. This is
a higher growth trajectory than the past
decades and shall be attained through a
higher contribution of physical capital to
GDP growth, as well as through increases
in total factor productivity. Through
massive investments in transport,
water, energy, and other infrastructure,
and through good governance, the
contribution of physical capital to GDP
growth is targeted to increase. This
is possible under current conditions
through a significant but still attainable
increase in the share of investment
to GDP. Sustaining growth in later
years, however, will require even higher
investment ratios reaching 22 percent by
2016. It is expected that the investments
in infrastructure and in education and
health, improvement in governance,
and the supporting strategies (such as
research and development and science
and technology policies), are expected
to boost total factor productivitys
contribution to GDP growth.
As productive employment raises incomes,

cash-transfer programs are sustained and
access to health and education improved, the
incidence of poverty among the population
should decline from 33.1 percent in 1991 to
16.6 percent by 2015 or less, in line with the
countrys MDG commitment. Inequality can
also be expected to decline over the medium
term as access to development opportunities
are equalized across geographic areas and
across the different income and social
spectrum.
A window of opportunity
Since more than two decades past, the
Philippines has never faced a better chance
than today of finally breaking out of its
perennial condition of poverty, inequity, and
lagging human development.
In economic terms, the countrys external
payments and international credit position
have not been healthier in decades for various
reasons. Thanks to overseas remittances,
surpluses on current account have been run
consistently since 2003. After decades of
trade reform, the industrial structure is now
fairly undistorted by subsidies and heavy
protection. The currency is stable and perhaps
27
even too strong and inflation has been low to

moderate for more than a decade. Lastly, the
country is emerging relatively unscathed from
the worst global economic downturn since
the 1930s.
To be sure, immediate problems

and obstacles remain, chief
of which are the countrys
lagging rate of investment, the
governments continuing fiscal
constraints and heavy debt
burden, the countrys poor quality
of infrastructure, and stagnating
levels of human capital. But
many of these phenomena have
existed long before and are in
the nature of consequences
rather than causes. Undeniable
is the fact that some hopeful
conditions have emerged, and
that economic and political
opportunities now exist for a real
change a break-away from
the cycle of mass poverty, social
division, and political conflict that
have been the hallmarks of the
countrys recent history.
Even politically, there have been positive

developments: the country has managed a
peaceful constitutional transition through a
popularly elected government; financial and
political sovereignty vis--vis creditor and
other nations has never been greater; civil
liberties and political rights continue to be
asserted and exercised even in the face of
brutal assaults; agrarian reform, the countrys
most ambitious attempt at asset reform, is due
to be completed; and efforts to resolve armed
conflicts finally and peacefully are under way.
To be sure, immediate problems and obstacles
remain, chief of which are the countrys
lagging rate of investment, the governments
continuing fiscal constraints and heavy
debt burden, the countrys poor quality of
infrastructure, and stagnating levels of human
capital. But many of these phenomena have
existed long before and are in the nature of
consequences rather than causes. Undeniable
is the fact that some hopeful conditions have
emerged, and that economic and political
opportunities now exist for a real change a
break-away from the cycle of mass poverty,
social division, and political conflict that have
been the hallmarks of the countrys recent
history.
The true paradox is why the nation has been
unable to step forward even under improving
conditions.
This Plan is built on the conviction that such
obstacles can be cleared and the above historic
task accomplished in this lifetime through the
prudent marshalling of available resources, the
participation and support by all sectors, and
through government and citizens living out
and practising the countrys best civic ideals.
Without the wise application of resources,
social cohesion, and good governance, little
can come of even the best-laid plans, and
28
another window of opportunity will have

closed for this generation of Filipinos.
Nor should it be forgotten that todays
chances were purchased by past
sacrifices: by overseas workers who
endured separation from their families;
by laborers and farmers who experienced
wrenching structural changes; by the
middle class and other taxpayers who
shouldered the debt burdens of the
past; by government personnel who
soldiered on professionally despite the
rot surrounding them; and by the brave
and vigilant citizenry who never lost
faith in constitutional values, democratic
processes, and the possibility of an
honest government.
Such sacrifices can be repaid only by
demonstrable success in our time.
Neither the past nor future generations
will forgive the present if it fails in its
pursuit of inclusive growth.
02
Macroeconomic
Policy
Macroeconomic Policy
29
Growing output and employment are the preconditions for progress in almost all social
and economic aspects of development. Productive employment and rising incomes for
the vast majority over a long period can do more to combat poverty decisively than any
direct assistance government can ever provide.
It is private actors from the smallest self-employed entrepreneurs to the largest
conglomerates that create productive jobs and incomes. Governments responsibility
however through fiscal and monetary policies is to create an environment for
vigorous economic activity, as well as to ensure that enough gains from growth are
set aside for larger social purposes or channelled into social investments that facilitate
future growth. These objectives are achieved by government decisions regarding the
size and direction of public spending and taxation (fiscal policy) and by decisions
regarding the control of the nations money supply (monetary policy).
the demand side, private consumption

(which comprises about 70% of
GDP), grew an annual average of 5.4
percent. Merchandise exports grew
at an average of 9.4 percent, while
exports of non-factor services (which
included BPOs such as back office
payroll or accounting and call centers)
registered an average of 20.6 percent.
Capital formation, on the other hand,
Output and Employment

Economic Performance 2004-2010
GDP growth averaged 5.6 percent for the
period 20042006, while average GNP
growth was higher at 5.9 percent, boosted
by transfers from overseas workers. On
Figure 2.1 Contributions to Growth (Demand)

30.0
7.3
20.0
6.4
5.3
7.1
5.0
1.1
10.0
3.7
0.0
-10.0
2004
Imports
Source: NSCB
30
2005
Net Exports
2006
StatD
2007
Gov't
2008
Investment
2009
Private
2010
GDP
Figure 2.2 Contributions to Growth (Supply)

8.0
7.3
7.1
7.0
6.4
6.0
5.0
5.3
5.0
3.7
4.0
3.0
2.0
1.1
1.0
0.0
-1.0
2004
Services
2005
2006
Industry
2007
2008
Agriculture
2009
2010
The economy expanded at its

fastest rate in three decades in
2007, with GDP growing at 7.1
percent (and GNP growing at
7.4%).
GDP
Source: NSCB
averaged 1.2 percent growth per year

during the period (Table 2.7). Overall,
consumption fuelled by remittances
is the largest and most stable source
of growth from the demand side. The
contribution of net exports (including
BPO), although volatile, was also
positive. Investment made a small
positive contribution in 2004 and 2006,
but contributed negatively in 2005. The
contribution of public consumption to
growth has been marginal (Figure 2.1).
On the supply side, the largest
contribution to growth consistently
came from the services sector, followed
by the industry sector. The agriculture
sector, which is vulnerable to changes
in weather patterns, managed to make
a small positive contribution to growth
during the period (Figure 2.2).
Average growth was relatively modest,
owing to the economys vulnerability
to a number of domestic and external
shocks. The continued US-led war
on terrorism, accompanied by the
escalating prices of petroleum and
sluggish demand for electronics
dragged down economic activities in
2005. Domestically, political factors
were partly responsible for compelling the

government to run under reenacted budgets.
The relatively low inflation in 2002-2003 was
followed by upward price pressures in 2004
due to geopolitical tensions in the Middle
East and growing resource demands from
China and India, all of which contributed to
a surge in world oil prices.
The economy expanded at its fastest rate in
three decades in 2007, with GDP growing
at 7.1 percent (and GNP growing at 7.4 %).
With greater fiscal space from the previous
years tax reforms , and with spending ahead
of national elections, public construction
rose 29.1 percent. Private construction
likewise grew 13.3 percent, boosted by
remittance-fuelled residential construction
as well as the need for more supply of office
space. Overall, capital formation grew 12.4
percent, up from the 5.1-percent growth of
a year ago and the 8.8- percent contraction
two years previously. Likewise, private
consumption, which constitutes the largest
proportion of GDP on the expenditure side,
continued its stable growth at 5.9 percent,
fuelled by remittances from overseas workers
(Table 2.1).
31
Table 2.1 Philippine Key Indicators
Indicators
2004
2005
2006
2007
2008
2009
2010
GNP
6.9
5.4
5.4
7.5
6.4
4.0
7.2
GDP
6.4
5.0
5.3
7.1
3.7
1.1
7.3
Agriculture
5.2
2.0
3.8
4.9
3.1
0.0
-0.5
Industry
5.2
3.8
4.5
6.8
4.9
-0.9
12.1
Mining
2.6
9.3
-6.1
26.0
1.9
21.5
18.4
Manufacturing
5.8
5.3
4.2
3.3
4.2
-4.4
12.3
Construction
3.4
-5.9
9.6
21.0
7.6
9.8
10.5
Electricity, Gas & Water
4.2
2.5
6.4
6.7
7.3
-2.9
8.5
Electricity & Gas
4.3
2.5
6.2
6.7
7.6
-3.5
8.8
Services
7.7
7.0
6.5
8.1
3.1
2.8
7.1
Personal Consumption
5.9
4.8
5.5
5.8
4.7
4.1
5.3
Government Consumption
1.4
2.3
10.4
6.6
0.4
10.9
2.7
Capital Formation
7.2
-8.8
5.1
12.4
2.3
-5.7
17.0
Fixed Capital
1.3
-6.6
3.9
10.9
2.7
-0.4
17.1
-0.8
-7.3
7.6
19.5
4.2
7.4
12.0
Public Construction
-9.3
-18.0
31.4
29.1
-1.3
22.5
3.7
Private Construction
4.8
-1.1
-3.7
13.3
8.2
-2.8
19.1
Durable Equipment
3.2
-7.1
1.3
4.5
1.9
-8.2
25.7
Changes in Stocks
-444.1
-58.1
64.1
57.5
-7.5
-139.8
-356.1
4.2
1.9
3.0
4.3
3.8
-1.6
-5.6
15.0
4.8
13.4
5.5
-2.0
-13.4
25.6
Merchandise Exports
12.9
4.2
11.3
4.1
-1.7
-16.8
26.0
Non-Factor Services
28.8
8.3
24.7
12.3
-3.0
2.3
24.3
5.8
2.4
1.8
-4.1
0.8
-1.9
20.7
Merchandise Imports
6.2
2.1
1.3
-5.6
0.1
-1.8
20.2
Non-Factor Services
-1.4
8.5
11.0
20.9
9.9
-3.6
26.3
Unemployment (in percent)
11.8
8.7
8.0
7.3
7.4
7.5
7.3
Underemployment (in percent)
17.6
21.0
22.6
20.1
19.3
19.1
18.7
Construction
Changes in Stocks
(% of capital formation)
Exports
Imports
Sources: NSCB; Labor Force Statistics Yearbook; DOLE-LFS

Note: The 2005 unemployment rate data may not be consistent due to the adoption of a new unemployment definition in
the April 2005 round LFS.
32
rates were cut (on December 18, 2008) and

the fiscal stimulus bared (in January 2009)
This, although the inflation had been headed
down since September 2008.
On the production side, the services sector

continued to be the largest contributor
to growth. The industry sector, with
unprecedented growth rates from mining
(at 26.1%) and construction (21% )
sectors, contributed higher more to
GDP growth as compared with the
previous three years (Table 2.1 and
Figure 2.2). Agriculture, with help
from the better weather compared to
the past two years, also had a higher
contribution to GDP than in the past
two years (Figure 2.2).
Monetary and fiscal stimuli came somewhat

late. Overall, there was a noticeable
slowdown in private consumption, and in
government construction and consumption,
and a contraction in exports during the year.
On the production side, agriculture, industry,
and services all slowed down.
The brunt of the global crisis was felt in
the first half of 2009 when merchandise
exports registered an average decline of
23.4 percent per quarter, caused largely by
the contraction of electronics and garments
exports. Furthermore, although government
consumption and construction increased in
the second quarter, the effects of the fiscal
stimulus were blunted by the impact of two
typhoons that hit the country in SeptemberOctober 2009. Notwithstanding the effects
of the global financial crisis, GDP in 2009
rose by 1.1 percent, a figure within the target
of 0.8-1.8 percent, making the Philippines
one of the few economies in the region to
register positive performance amidst the
recession. GNP on the other hand, grew
by 4 percent, fuelled by robust inflows of
overseas remittances.
Price pressures toward the middle

part of 2008 (Figure 2.10) - on
account of rising world prices of
grains and petroleum, as well as the
global recession affecting the country
through the trade channel towards the
later part of the year, contributed to
the slowdown of GDP growth to 3.7
percent (GNP growth was 6.4% for the
year). As early as the start of 2008, it
was clear the US would experience a
recession and that the impact would
reach the Philippines (in fact the
Philippine stock index already fell 9.8%
month-on-month in January 2008 and
electronic exports contracted 6.5% in
August 2008). It was not until close
to the bottom of the crisis that policy
Notwithstanding the effects of

the global financial crisis, GDP
in 2009 rose by 1.1 percent, a
figure within the target of 0.8-1.8
percent, making the Philippines
one of the few economies in
the region to register positive
performance amidst the
recession.
Figure 2.3 Contributions to Growth (Demand)

8.2
6.3
7.1
7.8
25.0
15.0
2.8
4.6
3.9
1.2
2.1
0.2
3.7
0.5
5.0
-5.0
-15.0
Q1
Q2
Q3
Q4
Q1
2008
Imports
Net Exports
Q2
Q3
Q4
Q1
Q2
2009
StatD
Gov't
Q3
Q4
2010
Investment
Private
GDP
Source: NSCB
33
In 2010, coming from a low base and boosted by

the rebound in world trade, quarterly GDP grew
7.3 percent. Remittance-driven consumption
and the pick-up in investments and net exports
(from significant negative contributions in
2009) boosted growth (Figure 2.3). On the
supply side, the strong reversal of industrial
performance (from negative contributions to
growth in 2009), and the continued significant
contribution of the services sector, drove the
growth (Figure 2.4). Higher growth, however,
was constrained by the negative impact of El
Nio on agriculture and fisheries. Meanwhile,
real GNP expanded by 7.9 percent as

growth in net factor income from abroad
eased to 10.3 percent from 31.6 percent
in the same period in 2009. A significant
part of the high growth in 2010 was
clearly due to a recovery from a low base,
implying that these growth rates cannot
be expected to continue in 2011 and
beyond without structural changes in the
economy. Such structural changes are
needed even more to achieve this Plans
goal of a 7 to 8-percent annual growth
rate in GDP.
Figure 2.4 Contributions to Growth (Supply)

10.0
7.8
8.2
8.0
7.1
6.3
6.0
4.6
3.9
3.7
4.0
2.8
2.1
0.5
2.0
0.2
1.2
0.0
-2.0
-4.0
Q1
Q2
Q3
Q4
Q1
2008
Q2
Q3
Q4
Q1
2009
Services
Industry
Q2
Q3
Q4
2010
Agriculture
GDP
Source: NSCB
Figure 2.5 Philippines Unemployment Rate, 2006-2010 (in %)

8.2
8.0
7.8
8.0
7.6
7.4
7.2
7.4
7.3
7.4
7.3
7.0
6.8
2006
Sources: NSO, LFS
34
2007
2008
2009
2010
Employment and Poverty
in 2005, 2006 and 2007, respectively,

lower than the Plan targets. Using the new
International Labor Organization (ILO)based methodology recently adopted by
the country, unemployment stood at 8
percent in 2006, 7.3 percent in 2007 and 7.4
percent in 2008 (Figure 2.5)1. Despite these
improvements, however, unemployment
remains high in comparison with the
countrys Asian neighbors (Figure 2.6) and
Increased globalization and faster

economic growth have provided
opportunities for Filipinos entering the
labor market. Using the old concept
of unemployment on which the Plan
targets were based, unemployment
rate improved from 11.9 percent in
2004 to 11.4, 11.1 and 10.8 percent
Figure 2.6 Comparative Unemployment Rates in Selected Asian

Economies: 2006-2010
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2006
China
Indonesia
2007
South Korea
2008
Malaysia
2009
Philippines
2010*
Singapore
Thailand
Sources: NSO, LFS; http://www.tradingeconomics.com.

* latest available data
Figure 2.7.Employment Generated, 2005-2010 ( in 000)

1200
1000
800
600
400
200
-200
2005
Services
2006
Non-Manuf. Industry
2007
2008
Manuf.
2009
Agriculture
2010
Total
Sources: NSO, LFS

1
The DOLE started using the ILO-based definition in the April 2005 round of the Labor Force Survey (LFS) thus
making it difficult to compute the FY2005 unemployment rate.
35
Figure 2.8 Employment by Class of Worker and Underemployment Rate,

2005-2010 (in percent)
100.0
80.0
60.0
40.0
20.0
0.0
2005
Unpaid family Workers
2006
2007
Own-accountWorkers
2008
Wage and Salary Workers
2009
2010
Underemployment Rate
Sources: NSO; LFS
meeting job creation targets continued to be

a challenge.
The economic slowdown in 2008 affected the
manufacturing sector and resulted in a net
employment generation of only 530,000 net
compared to the 771,000 yearly average for
the period 2005-2007. The manufacturing
sector in particular registered a negative net
employment generation of about 134,000.
In 2009, employment in both agriculture
and manufacturing sectors remained
sluggish. During that year, the services sector
accounted for about 94 percent of the total
972,000 new jobs generated. (Figure 2.7).
With strong export and industrial
performance in 2010, the economy
showed some improvement on the labor
front. In the October round of the 2010
LFS, the unemployment rate stayed at
7.1 percent, bringing the 2010 full-year
average unemployment rate to 7.3 percent,
lower than the 7.5 percent recorded in
2009. New jobs generated for the year
were estimated at around 983,000, slightly
36
more than in the previous year.

Average underemployment in 2010
likewise improved to 18.7 percent
from the previous 19.1 percent.
While the LFS results indicated an
improved
employment
situation,
underemployment was still relatively
high. In addition, the employment share
of unpaid family workers and part-time
workers stood at 11.5 percent and 35.2
percent, respectively, which suggests
there is great room for improving
employment conditions in the country.
Given the high underemployment rate
of about 20 percent, it is not surprising
to find a relatively high percentage of
own-account workers (averaging 35.7%)
among Filipinos. This partly reflects
the difficulty of gaining employment
in the formal labor market and implies
a high incidence of informal sector
work. In addition, the 43.2-percent
educated unemployed out of the total
unemployed labor force is also very
high, a symptom of the labor mismatch
Table 2.2.Official Poverty Statistics, Philippines: 2003, 2006 and 2009
Indicator
2003
Year
2006
2009
A. Among Families
Poverty incidence (%)
20.0
21.1
20.9
8.2
8.7
7.9
3,293,096
3,670,791
3,855,730
1,357,833
1,511,579
1,453,843
24.9
26.4
26.5
11.1
11.7
10.8
19,796,954
22,173,190
23,142,481
8,802,918
9,851,362
9,440,397
Subsistence incidence (%)

Magnitude of poor
Magnitude of food poor
B. Among population
Poverty incidence (%)
Subsistence incidence (%)
Magnitude of poor
Magnitude of food poor
Source: NSCB
in the country and a factor contributing

to the growing deployment of Filipino
workers overseas, averaging about 1.1
million per year.
In the labor and employment sector,
therefore, the policy challenge is
to increase decent and productive
employment and to enhance inclusive
job-rich growth. To achieve this
goal, the country can pursue supplyside strategies (such as enhancing
the human resource base), as well as
demand-side approaches (such as
enhancing the returns to human and
physical or entrepreneurial capital).
Supply-side measures
Working people are not simply the
beneficiaries of growth but also its
creators and drivers. Just as increases
in employment and labor productivity
contribute to economic growth, so
too investments in the development
of human resources help provide a
foundation for a job-rich growth
and development strategy. Qualities such

as education, skills, health, and cognitive
abilities help determine an individuals ability
to obtain productive employment, as well as
expand the scope of labor productivity and
pace of technological advancement of the
country. Inclusive growth thus requires a
special focus on the working poor and the
unemployed, who comprise a significant
portion (43%) of the labor force.
In the labor and employment

sector, therefore, the policy
challenge is to increase decent
and productive employment and
to enhance inclusive job-rich
growth.
Demand-side approaches
Earnings and employment will depend
on the rate, quality, and distributional
aspects of economic growth. The rate of
economic growth determines the extent
of employment opportunities. Inclusive
growth, in particular, must mean a higher
and broad-based demand for labor and
therefore more employment opportunities.
This is important, considering the persistent
unemployment and underemployment levels
in the country. The sheer volume of workers
working temporarily overseas2 indicates
the lack of employment opportunities and
suggests that domestic investments and
About one million OFWs are deployed per year, with their remittances accounting for at least 9.5 percent of GNP
in 2009.
37
Figure 2.9 Poverty Incidence of Families by Region (in Percent): 2003, 2006 and 2009
40.0
30.0
20.0
10.0
NCR
II
III
IV-A
IV-B
2003
VI
VII
VIII
IX
2006
XI
XII
CAR
ARMM
Caraga
2009
Source: NSCB
entrepreneurship are being held back. These
constraints need to be addressed along with
strategies formulated to ensure that the working
poor and the unemployed can participate and
benefit from the development process.
the geographical distribution of poverty

remained unchanged, with the locus of
high poverty incidence being consistent
in MIMAROPA, Bicol, Eastern Visayas,
and in Mindanao (Figure 2.9).
A lack of gainful and quality employment

opportunities is an important reason why
poverty incidence in 2006 went up to 32.9
percent from 30 percent in 2003 (Table 2.2)
and essentially stagnated between 2006 and
2009.
The regional distribution of poverty

also highlights the large disparities in
family income across the country. Most
of the regions in Luzon had relatively
lower shares of families living below the
poverty threshold than in MIMAROPA,
Bicol, Visayas and the Mindanao regions.
The lower poverty incidence in NCR
and Regions 1, 2, 3 and 4-A can be
attributed to higher access to employment
opportunities and basic social services,
while armed conflict and peace and order
problems resulted in higher poverty in
Mindanao.
Disaggregated data also shows that across

the different regions of the country, poverty
incidence among families generally increased,
with Regions 3, 4-B, 7, 8, and ARMM posting
more than 3 percentage points increases in
poverty. The Regions ARMM (55.3%),
CARAGA (45.5%), MIMAROPA (43.7%),
Bicol (41.8%), Eastern Visayas (40.7%), and
Central Visayas (40.2%) also registered more
than 40 percent poverty incidence while NCR
had the lowest estimated poverty incidence
of 7.1 percent. For the period 2003-2009,
38
Fiscal and Monetary

Sectors
Sound fiscal and monetary policies that
foster macroeconomic stability are crucial
to achieving sustained economic growth.
A sustainable fiscal balance helps the
country avoid boom-bust cycles that
disrupt the pace of economic growth.
Appropriate levels of fiscal deficits also
allow the government to continuously
support critical social programs and
infrastructure projects. Prudent and
responsible monetary policy that achieves
low and stable inflation, in turn, gives
both consumers and businesses a chance
to plan over a longer time horizon. At the
same time, it helps ensure that financial
markets are stable and credit conditions
are appropriate to support the continuous
expansion of economy.
This section thus addresses the issues of

macroeconomic stabilization. Performance
and challenges in the fiscal and the monetary
or external sectors are first addressed.
Strategies that need to be adopted to achieve
macroeconomic stabilization are then outlined.
Fiscal Sector
In 2004-2009, the government implemented
reforms to place the fiscal house on a sounder
footing. Major reforms to improve the
revenue situation during the early part of the
period included the revisions of the excise
tax on alcohol and tobacco, an expansion
of the scope and an increase in the rate of
the value-added tax (VAT), as well as the
enactment of the Lateral Attrition Law. As
a result, tax effort rose from 12.5 percent in
2004 to 14.2 percent in 2008. The National
Table 2.3. Summary of Fiscal Sector Indicators, 2004-2010 (in million PhP)
Particulars
2004
2005
2006
2007
2008
2009
2010
Total Revenues
706,718
816,159
979,638
1,136,560
1,202,905
1,123,211
1,207,926
Tax Revenues
604,964
705,615
859,857
932,937
1,049,179
981,631
1,093,643
BIR
470,329
542,697
652,734
713,605
778,571
750,287
822,623
BOC
127,269
154,566
198,161
209,439
260,248
220,307
259,241
7,366
8,352
8,962
9,893
10,360
11,037
11,779
101,754
110,544
119,781
203,623
153,726
141,580
114,283
Total Disbursements
893,776
962,938
1,044,429
1,149,001
1,271,022
1,421,743
1,522,384
Current Operating Expenditures
755,748
831,716
904,179
947,357
1,031,849
1,141,967
1,229,785
283,065
296,361
324,690
350,291
374,662
414,023
469,402
MOOE
83,838
84,753
99,993
128,311
138,690
176,458
182,092
Subsidy
6,926
8,151
11,884
21,686
16,982
17,438
21,005
Allocation to LGUs
114,068
122,194
136,865
149,150
170,583
203,233
216,079
Interest Payments
260,901
299,807
310,108
267,800
272,218
278,866
294,244
132,352
129,515
140,120
191,894
224,780
274,712
283,340
5,676
1,707
131
9,750
14,393
5,064
9,258
(187,058)
(146,779)
(64,791)
(12,441)
(68,117)
(298,532)
(314,458)
Others
Non-Tax Revenues
Personal Services
Capital Outlays
Net Lending
Fiscal (Deficit)/Surplus
Sources: Bureau of Treasury (BTr), Department of Budget and Management (DBM)

Note: Table 2.3 was based on 2011 Fiscal Statistics Handbook and Cash Operations Report as of September 2010.
39
Government (NG) reduced its deficit from

an average of 3.9 percent of GDP in 20002004 to a more manageable 2.7 percent of
GDP in 2005. This was further reduced to
1.1 percent in 2006 and was almost balanced
in 2007 at 0.2 percent of GDP. The improved
fiscal positions of the NG, the social security
institutions, local governments, and the GFIs
translated into a surplus in the countrys
consolidated public sector financial position
amounting to PhP21.3 billion or 0.3 percent
of GDP in 2007, from a deficit of PhP235.9
billion or 5.0 percent of GDP in 2004.
As economic activities slowed down owing
to the recent global financial crisis, however,
revenue collection weakened. Revenue effort
dropped from 16.2 percent in 2008 to 14.6
percent in 2009, back to prereform levels.
Tax effort dipped to 12.8 percent in 2009,
the lowest in the ASEAN region, where it
averaged 14.9 percent. In addition, several
tax eroding measures were enacted in 2009
and 2010, which granted tax relief to various
sectors, but depleting the revenues gained
from earlier tax reforms. Revenues from
taxes with specific rates also either remained
flat or failed to rise in proportion with GDP
Governments ability to raise

additional revenues from nontax
sources has remained weak as
well. Part of the problem lies
in the governance challenges
faced by GOCCs in their
operations.
because of the failure to index them. The

share of excise taxes on sin products
and petroleum barely changed during
the period, from 21 percent of total
revenues in 2004 to 22 percent in 2009.
Governments
ability
to
raise
additional revenues from nontax
sources has remained weak as well. Part
of the problem lies in the governance
challenges faced by GOCCs in their
operations. Foremost of these are
the multiple and often conflicting
mandates; the various levels of oversight
bodies; the need to update government
ownership policy; the need to improve
board governance; and the need to
strengthen transparency and disclosure.
The exemption of some GOCCs,
including GFIs, from the Salary
Standardization Law (SSL) granted by
Congress, has provided authority to the
boards of government corporations to
adjust the compensation of their officials
without restraint. Certain GOCCs also
have mandates that are inconsistent
with prudent fiscal behavior (e.g.,
they are used as subsidy providers and
Figure 2.10 Year-on-Year Inflation Rate (2004- 2010)

10.0
9.3
7.6
8.0
6.2
6.0
6.0
4.0
3.8
2.8
3.2
2.0
0.0
2004
2005
2006
Source: Bangko Sentral ng Pilipinas (BSP)
40
2007
2008
2009
2010
conduits for social services which were

not compensated by the NG), while
others have managed to exist only on
the back of government subsidies.
In addition, many fees and charges for
services have not been appropriately
adjusted and in some cases, have even
been lowered on request of the private
sector (e.g., some fees and charges which
affect exporters have been lowered to
accommodate them). Collections from
this source have not risen in line with
the costs of providing the said services.
As the revenue position weakened and given

the need to for a stimulus to counter the
continuing recessionary pressure, the NG
deficit in 2009 reached 3.9 percent of GDP
while the consolidated public sector deficit
was 3.3 percent of GDP in the same year. In
2010, the NG deficit to GDP ratio dropped
to 3.7 percent from 3.9 percent in 2009
while the consolidated public sector deficit
improved to 1.6 percent of GDP.
Some recent developments have been
encouraging, however. Total revenues in
2010 rose by 7.5 percent from the previous
Table 2.4 Selected External Sector Accounts, 2004-2010 (In Billion US$)
2004
2005
2006
2007
2008
2009
1.6
2.0
5.3
7.1
3.6
9.4
8.5
-7.5
-9.1
-6.6
-6.1
-11.7
-6.7
-8.4
1.9
2.0
4.5
4.9
2.2
5.8
4.5
Trade in Goods
-5.7
-7.8
-6.7
-8.4
-12.9
-8.8
-10.4
Trade in Services
-1.8
-1.3
0.1
2.2
1.2
2.1
1.9
Income
-0.1
-0.3
-1.3
-0.9
0.1
-0.2
0.3
Current Transfers
9.2
11.4
13.2
14.2
15.2
16.2
16.6
-1.6
2.2
0.0
3.5
-1.6
-1.6
7.9
Capital Account
0.0
0.0
0.1
0.0
0.1
0.1
0.1
Financial Account
-1.6
2.2
-0.1
3.5
-1.7
-1.7
7.8
BALANCE OF PAYMENTS
-0.3
2.4
3.8
8.6
0.1
6.4
14.4
OFW Remittances
8.6
10.7
12.8
14.4
16.4
17.9
19.4
Gross International Reserves (GIR)
16.2
18.5
23.0
33.8
37.6
44.2
62.4
% of short-term debt based on

original maturity
321.6
289.2
458.5
476.4
536.4
1105.5
1086.2
% of short-term debt based on

residual maturity a/
163.0
164.6
251.3
300.7
333.2
500.5
575.1
63.3
55.0
45.9
38.5
32.6
34.89
33.1 b/
90.8
88.2
90.7
87.2
87.0
92.7
90.4 c/
9.2
11.8
9.3
12.8
12.9
7.3
9.6 c/
CURRENT ACCOUNT
Goods and Services
% of GDP
CAPITAL AND FINANCIAL ACCOUNT
External Debt-to-GDP
Medium-to-long-term (% of total)
Short-term (% of total)
2010
Source: BSP (http://www.bsp.gov.ph, updates as of March 30, 2011

a/ Refers to the adequacy of reserves to cover outstanding short-term external debt based on original maturity plus principal
payments on medium-to-long-term loans of the public and private sectors falling due within the next 12 months
b/ Outstanding external debt as of September 2010
c/ January-September 2010
41
The year 2010 was notable for

the expenditure controls brought
back by government, which
enabled an orderly transition
from two years of fiscal
stimulus in response to the
global economic crisis back
to fiscal consolidation mode as
the global economic situation
normalized.
year. Tax revenues were up by 11.4 percent

due to improved performances by the
Bureau of Internal Revenue (BIR) and
Bureau of Customs (BoC) which had
higher collections by 9.6 and 17.7 percent,
respectively. Notwithstanding these, the
revenue position still remains precarious
as both the BIR and the BOC fell short
of their respective targets in 2010. The
postponement of privatization efforts, in the
expectation of better terms and conditions,
has reduced nontax revenues relative to the
same period in 2009. Dividends and interest
income have not increased sufficiently to
offset the lack of proceeds from sale of assets.
absorptive capacity of the agencies and

their capability to implement projects
must be strengthened to spur economic
activity and help create employment
particularly in the countryside. The
early approval of the Fiscal Year (FY)
2011 budget, the release of 100 percent
of agency budgets in January 2011,
as well as measures facilitating the
procurement process were all intended
to provide this spending jumpstart for
the year. The closer monitoring of the
rate of agency spending and absorption
issues during the year should facilitate
the identification of needed measures.
Meanwhile, disbursements grew at a slower

pace than revenues, increasing by 6.7
percent from the 2009 level compared to
the 7.5 percent expansion in revenues. The
increase can be attributed to the higher
personal services requirements (13%) due
to the continuing implementation of the
SSL 3, the increased provision for the CCTs
and the automated national and barangay
elections, the carry-over disbursements from
last years rehabilitation and reconstruction
projects, and the higher provision for
Internal Revenue Allotment (IRA) and
interest payments.
For
the
period
2004-2010,
infrastructure outlays were given an
increasing share of the budget, rising
to 15.2 percent (2009), and remarkably
higher by 4.7 percentage points than
that in 2004. In 2010, infrastructure
spending was 14.7 percent of total
government expenditure. Similarly, the
budget share of regular expenditure
items necessary for more efficient
operations of government increased
by 2.6 percentage points from 9.4
percent in 2004 to 12 percent in 2010.
Meanwhile, the budgetary requirement
for interest payments was reduced from
29.2 percent of the budget in 2004
to 20.7 percent in 2010. As a result,
greater fiscal space was created for
capital outlays and other productive
expenditures.
Government spending contracted from 18.3

percent of GDP in 2004 to 17.2 percent
of GDP in 2008 but has since increased to
18.5 percent of GDP as of 2009 given the
governments economic resiliency program
(ERP). As a share to GDP, disbursements
dropped to 17.9 percent in 2010.
The year 2010 was notable for the
expenditure controls brought back by
government, which enabled an orderly
transition from two years of fiscal
stimulus in response to the global economic
crisis back to fiscal consolidation mode as
the global economic situation normalized.
The tighter prioritization of expenditures
with the application of the ZBB approach,
and the calibration of allotment and cash
releases in anticipation of revenue inflows
were particularly helpful in this transition.
But as the composition of expenditures
and the quality of services improve, the
42
For 2010, infrastructure and other

capital spending grew more slowly
by PhP6.5 billion or 3 percent yearon-year, given the lower obligation
program for infrastructure and other
capital outlays in 2010 compared to
2009. The growth is largely attributed
to the carry-over disbursements for
rehabilitation
and
reconstruction
activities due to typhoon Ondoy in
the latter part of 2009, and for other
completed projects.
Disbursements were expanded in 2009
to counter the effects of the global
economic slowdown and to provide
additional relief, rehabilitation and

reconstruction efforts prompted by
the destructive calamities that hit
the country. In 2010, total national
government spending for the first
three quarters amounted to PhP1.15
trillion, a 7.2-percent increase over that
in 2009. The increase stemmed largely
from spending on personal services,
in compliance with mandated salary
adjustments, and larger maintenance
outlays. However, interest payments
increased its share of the total budget
from 19.6 percent to 21.2 percent
after higher fiscal deficits reappeared.
This higher deficit scenario, coupled
with the weaker revenue effort, has
constrained budgetary allocations to
the economic and social sectors, which
are vital for the achievement of faster
and more inclusive economic growth
over the medium-term.
Low levels of spending on education,
health and infrastructure largely and
generally reflected the low level of
government public expenditure3 . Low
spending for social sectors caused poor
outcomes in these areas and meant
higher costs for the population who
must spend for what government ought
to have provided. NG spending on
social services sector as a share of the
budget declined from 28.9 percent to
27 percent in 2004 to 2007, recovering
to 28.7 percent in 2009, and to 31.9
percent in 2010. Although spending
on social services has gone up, the
government still needs to increase its
spending on priority sectors and reduce
nonpriority expenditures if it is to keep
pace with neighboring countries and
close the gap in public spending.
Thus, generating sufficient revenues to
support growth in the medium-term
remains the greatest challenge for the
fiscal sector. More effort in revenue
collection is needed so that an expenditure

program more responsive to growth can be
undertaken without bloating the countrys
deficit and while still keeping the debt
ratio at sustainable levels. Proactive debt
management should also continue in order
to reduce the debt service burden and to
free up resources that could otherwise be
channelled to more productive spending.
While the rules governing the contracting
of debt and debt guarantees by agencies
have recently been streamlined, some have
failed to adhere to best practice and have
contributed to the bloating of deficits. These
instances include projects under buildtransfer contracts whose fees and charges
were kept unduly low for political reasons,
those implemented and funded from
government-to-government arrangements
where accusations of overpricing are
still being investigated, and automatic
guarantees provided under the charters of
some GOCCs.
GOCCs continue to be a large source of
fiscal risk. As of end of 2008, their total
liabilities (excluding those of the BSP)
amounted to 36.9 percent of GDP. GOCCs
are frequently directed to bear the cost
of social programs that should ideally be
funded out of the budget. A case in point
is the NFA, which operates on a buy-highsell-low policy. NFAs mandate to maintain
floors for farm gate prices while keeping
retail rice prices at reasonable levels virtually
prevents the agency from recovering its cost.
Public utilities like the Light Rail Transit
Authority (LRTA) also face considerable
financial constraints because user charges
are maintained at levels that can only be
maintained through heavy public subsidies.
Low levels of spending

on education, health and
infrastructure largely and
generally reflected the low
level of government public
expenditure. Low spending for
social sectors caused poor
outcomes in these areas and
meant higher costs for the
population who must spend for
what government ought to have
provided.
Despite the power tariff increase in 2005

and the privatization of the generating
assets and the off-loading of the operation
and investment responsibilities for both
the power plants and transmission assets
This is also the view of the recent Public Expenditure Review (PER) by the WB.
43
to the private sector, the National Power

Corporation (NPC) and the Power Sector
Assets and Liabilities Management
Corporation (PSALM) remain sources
of fiscal risk. The full implementation of
the universal levies, provided for under
the Electric Power Industry Reform Act
(EPIRA) will play a major role in mitigating
the fiscal risks from the power sector.
Monetary and External Sectors

Prices
GOCCs continue to be a large

source of fiscal risk. As of end
of 2008, their total liabilities
(excluding those of the BSP)
amounted to 36.9 percent of
GDP. GOCCs are frequently
directed to bear the cost of
social programs that should
ideally be funded out of the
budget.
Inflation in the Consumer Price Index (CPI)

averaged 5.6 percent for the period 20042010 with a declining trend, averaging 3.8
percent in 2010. From 2004 to 2006, much
of the inflation pressure was due to supply
shocks, including increases in global oil prices
that led to higher domestic pump prices,
minimum wage adjustments throughout the
country, hikes in transport fares and utility
charges, and weather-related disturbances.
Meanwhile, with good weather conditions
and a relatively firm peso, inflation declined
to 2.8 percent in 2007, the lowest annual
average in 21 years.
The steady decline in inflation was
interrupted by sharp increases in world
commodity prices, which fed into a
9.3-percent inflation rate in 2008. Monetary
authorities responded by raising the policy
rate by 100 basis points for June-August
2008. By late 2008, the balance of risks to
the inflation outlook had shifted downwards
following the easing of commodity prices,
the moderation in inflation expectations,
and the slowdown in economic activity.
These developments provided latitude for
monetary easing to support growth amidst
the global financial crisis in 2008-2009,
including the 200-basis point reduction in
policy interest rates. Monetary authorities
also adopted other crisis intervention
measures at the height of the global financial
crisis and smoothly disengaged from

these when financial conditions began
to normalize. 4
The monetary policy stance remains
supportive of noninflationary growth.
Credit remains adequate in supporting
economic activity. This is evident in
the steady uptrend in bank lending
and smooth functioning of domestic
financial markets. Low and stable
inflation has also contributed to lower
costs of funds in the market, supporting
investment
and
consumption
expenditures by firms and households.
External Sector
The current account balance as a
ratio of GDP has increased from
1.9 percent in 2004 to 4.5 percent in
2010. The current account position has
shifted to structural surpluses in large
part due to the resilience of overseas
remittances, increased services receipts
from business process outsourcing, and
steady tourism receipts. These sources
of foreign exchange inflows have been
more stable than investment flows.
Driven by the surplus in the current
account and the improvement in capital
and financial account, the balance of
payments has also registered surpluses
since 2005.
However, merchandise exports growth
performance was relatively volatile,
reflecting the countrys vulnerability
to global developments. The annual
average export growth for 2004-2010
was 6.5 percent, which was pulled up
by the 34.8-percent growth in 2010 as
the global economy began to recover.
4 In addition to the 200-basis point reduction in the BSP policy rate, other measures included the: (a) opening of US
dollar repo facility; (b) increase in rediscounting budget from PhP20 billion to PhP60 billion; (c) the reduction in
banks reserve requirement by two percentage points; and (d) some easing of the loan value and access criteria to the
rediscounting facility. The BSP later disengaged from these measures. It aligned the peso rediscount rate to the BSPs
policy rate, restored the peso rediscounting budget to its precrisis level of PhP20 billion and restored the loan value and
the past-due loan ratio requirements for banks availing themselves of the rediscounting facility to their precrisis settings.
44
Meanwhile, the exports of services have

been on an uptrend, mainly on account
of transportation, travel, and other
business, technical, and professional
services.
Merchandise
imports
outpaced exports, with more than 60
percent of total imports consisting of
raw materials and intermediate goods,
and capital goods.
Overseas Filipino (OF) remittances
have been steadily growing even when
the global financial crisis broke out.
In 2010, remittances coursed through
banks amounted to US$18.8 billion, an
increase by 8.2 percent from the level
recorded in previous year.
The countrys favorable external
position has also been supported by the
continued improvement in the countrys
external debt profile. The Philippine
external debt-to-GDP ratio was 63.3
percent in 2004. As of September 2010,
this ratio was down to 33.1 percent.
The long-dated maturity structure of
the countrys foreign currency debt has
helped to limit rollover and foreign
exchange risks.
With the strong external payments
performance, international reserves
have risen, providing strong coverage for
both imports and short-term external
debt. At end-December 2010, the gross
international reserves (GIR) stood at
US$62.4 billion, based on preliminary
data. This level of GIR could cover
10.3 months of imports of goods and
services, and was equivalent to 10.8
times the countrys short-term external
debt based on original maturity and 5.7
times based on residual maturity. The
comfortable level of foreign exchange
reserves provides a strong cushion that
helps the economy withstand external
shocks.
As a result of the strong external
liquidity position, the Philippine
peso has remained broadly stable. The
trends in the real effective exchange
rate (REER) show that the peso has
lost some competitiveness against major

trading partners compared to six years ago.
In the last two years, however, the peso
gained competitiveness against baskets
of competitor currencies (both broad and
narrow) owing to the narrowing of the
inflation differential, which offset the
nominal appreciation of the peso.
The Philippine economy nonetheless faces
a number of issues and challenges that may
warrant monetary policy actions.
Capital inflows
Bright
prospects
for
emerging
economies combined with the prolonged
accommodative monetary policies in
advanced economies have driven large
capital inflows into emerging economies,
including the Philippines. Foreign capital
inflows can be an important source of funds
for investment expenditures but also entail
risks that need to be closely monitored and
addressed when warranted. Huge capital
inflows can contribute to excessive liquidity
growth, cause asset market imbalances,
and lead to inflation pressures that can
complicate monetary policy.
Asset market imbalances
The monetary policy stance

remains supportive of
noninflationary growth. Credit
remains adequate in supporting
economic activity. This is evident
in the steady uptrend in bank
lending and smooth functioning
of domestic financial markets.
Low and stable inflation has also
contributed to lower costs of
funds in the market, supporting
investment and consumption
expenditures by firms and
households.
Asset price dynamics are an important

consideration in the pursuit of price stability
by monetary authorities.The build-up of asset
market imbalances contributes to financial
stability risks that can harm economic
activity, and in turn affect the outlook
for price developments. The recent global
financial crisis resulted in a deep economic
downturn which became a major source of
downside risk for the inflation outlook in
advanced economies. Furthermore, financial
markets provide an avenue through which
monetary policy actions are transmitted to
the real economy. Vulnerabilities stemming
from the financial sector as a result of
asset price bubbles can complicate and
reduce the effectiveness of monetary, fiscal,
and regulatory policies. While monetary
authorities remain focused on achieving low
and stable inflation, they will continue to be
highly attentive and alert to credit growth,
45
asset price developments, and financial

imbalances which can have implications on
financial stability and ultimately, on price
stability. Monetary authorities will also
continue to employ macroprudential tools
to help prevent overheating and undue risktaking in asset markets. Macroprudential
regulations already in place have thus far
helped make the economy less prone to asset
price escalations. These regulations include
the statutory limit on the share of real estate
loans to banks total loan portfolio and the
maximum loan-to-value ratio for real estate
loans.
Global commodity prices
Bright prospects for emerging
economies combined with the
prolonged accommodative
monetary policies in advanced
economies have driven large
capital inflows into emerging
economies, including the
Philippines.
Volatile and rising global prices of key

commodities can have significant impact
on domestic prices. While these are mainly
supply shocks in nature, they may lead to
second round effects that could result in
elevated inflation expectations. Monetary
authorities will continue to coordinate with
other government agencies to temper the
impact of global commodity price shocks
on domestic prices. Monetary authorities
will remain vigilant and ready to implement
timely policy adjustments in response to
the emergence of second-round effects on
inflation.
Strategic Framework
To achieve the overarching goal of
inclusive growth, government lays down
the conditions for a stable macroeconomic
environment that is conducive to sustaining
a higher growth path. For fiscal policy, the
main task is to expand the narrow fiscal
space and to get on a sustainable revenueand-spending path. For monetary sector
and external sector policies, this means
commitment to low and stable inflation
conducive to balanced and sustainable
growth and reduced external vulnerabilities.
46
Fiscal Reforms
One of the most important tasks that
need to be addressed in order to achieve
macroeconomic stabilization is to put
order in the fiscal house. The large
budget deficits incurred as a result of
the fiscal stimulus during the global
economic and financial crisis resulted in
the need for fiscal consolidation. At the
same time, the reduction of spending
for infrastructure and social services as a
result of the governments expenditure
compression efforts in 2002 to 2006,
has resulted in large financing gaps in
these areas. These financing gaps, in
turn, not only constrained the countrys
economic growth, but also limited the
access of the poor to the economic gains
the country has achieved. The challenge
in the medium term, therefore, is
one of achieving fiscal consolidation,
while at the same time substantially
increasing the countrys investments in
infrastructure, health, and education.
The overall strategy in the fiscal sector
in the medium term is to increase tax
effort to 15.6 percent of GDP. This
is to be achieved through an annual
incremental 0.3 percentage point
annual rise in the collection effort
of BIR, and 0.1 percentage pointfor
the BOC. At the same time, non tax
revenue collection would be increasing
equivalent to an average of 1.2 percent
of GDP through governance reforms.
Correspondingly, the NG deficit
should decline to a level of 2 percent of
GDP by 2013 and must be maintained
at this level until 2016. Also, beginning
2013, the consolidated public sector
deficit must be brought down to 1.5
percent of GDP. The specific strategies
and programs designed at achieving the
abovementioned targets are detailed
below.
Tax Administration Reforms

Before even attempting to introduce
structural reforms into the countrys tax
system, administrative reforms must
be given priority. Numerous reform
measures are being lined up to improve
tax administration. These measures
include the following:
1. Establishing a tax registry
comprehending all taxpayers;
2. Using comprehensive third-party
data to determine the potential tax
base;
3. Maintaining a transparent and
productive tax audit program;
4. Fully staffing the BIR and BOC
with competent and adequately
trained personnel;
5. Formulating transparent
consistent tax rulings;
and
6. Revitalizing the RATE, RATS

and RIPS programs of government;
7. Establishing
performance
evaluation; and
appropriate
standards
and
8. Instituting a more effective system

of rewards and penalties under the
Lateral Attrition Law backed up by
performance standards.
Tax Policy Reforms

To complement the efforts to
improve tax administration and to
ensure that revenues are adequately
protected, priority policy reforms
need to be instituted, namely: the
rationalization of the fiscal incentives
system and the enactment of a fiscal
responsibility law. The rationalization
of fiscal incentives will save revenues
for the government by doing away with
redundant incentives (e.g., those directed

at investments that would have taken place
even with the absence of such incentives). At
the same time, rationalization will allow the
government to direct the incentive system at
the export sector so that its full potential can
be realized.
A fiscal responsibility law is necessary to
hasten the fiscal consolidation process
and enforce fiscal discipline at all levels
of government. The fiscal position of
government should be kept on an agreed
deficit path. Such a law is also necessary
to keep the countrys debt at a manageable
level.
With proper timing, other tax reforms
need to be undertaken in order to improve
the revenue take of the tax system while
promoting equity and a level playing field
for all stakeholders. Priority must be given
to adjustments in the excise tax on alcohol
and tobacco products, as well as the excise
tax on petroleum. The use of the so-called
PAYGO system as a collection handle must
also be maximized.
The overall strategy in the fiscal

sector in the medium term is
to increase tax effort to 15.6
percent of GDP.
The distortions of the tax system caused

by the enactment of piecemeal exemption
laws must be corrected. A reversal of these
unnecessary tax exemptions must be pursued
in order to restore the integrity of revenues
and make the tax system more efficient and
equitable.
Nontax Revenue Reforms

Fees and charges collected by government
agencies have not been adjusted since a
decade ago. Consistent with the sound
principle of cost recovery, these fees must be
adjusted to cover the cost of administering
government services.
Government must aggessively pursue the
auctioning of its assets such as air frequencies
and permits to develop renewable energy
resources. GOCCs must also be made to
contribute their fair share to the revenue
effort by, among others, promptly remitting
dividends.
47
Expenditure Policy Reforms
The key challenge in the

area of expenditure policy is
how to substantially increase
productive expenditures, such
as those for infrastructure and
social services (e.g., education
and health) and catch up with
the accumulated investment
deficits in these areas while
at the same time aggressively
reducing wasteful and inefficient
expenditures.
The key challenge in the area of expenditure

policy is how to substantially increase
productive expenditures, such as those
for infrastructure and social services
(e.g., education and health) and catch
up with the accumulated investment
deficits in these areas while at the same
time aggressively reducing wasteful and
inefficient expenditures. Public expenditure
on infrastructure, as a share of GDP, went
down from an average of 2.4 percent in
1995-2000, to an average of 1.8 percent
in 2001-2011. By comparison, China,
Vietnam, and Thailand spent upwards of 7
percent, 8 percent, and 14 percent of GDP,
respectively, on public infrastructure during
the last decade. Similarly, public spending
on basic education was 3.4 percent of GDP
in 1998, but decreased to 2.9 percent in 2002
and continued to slip reaching 2.2 percent in
2008. In other East Asian countries public
expenditure on education averaged 3.9
percent of GDP in 2007.5
In order to address this challenge, the Plan
envisions the implementation of several
major public expenditure management
reforms not only to help narrow the fiscal
deficit over the medium term but also
ensure that resources are allocated to priority
investments, such as human capital and
infrastructure. Toward this end, expenditure
reforms that have been introduced in the
recent years will be strengthened and in
some cases, revitalized, in order to improve
resource allocation and build resultsorientation into the government service.
Among these reforms are the following:
Medium-Term Expenditure Framework
(MTEF)
components of the MTEF are the

Paper on Budget Strategy (PBS) and
the Forward Estimates (FEs).
The Paper on Budget Strategy will link
budget allocation with the national
agenda of the government to identify
the priority areas for spending, and to
incorporate the sectoral and regional
implications in the dimension and
distribution of the budget; and
Forward Estimates (FEs) are the
estimated annual costs of ongoing
programs and projects. These will
help ensure the continuous funding of
program requirements beyond a given
fiscal year, and help provide a sound
basis of future years budget trends. In
order to adopt more rigid and realistic
FEs, the government will pursue
automation that is linked to existing
budget application systems and to the
PDP and PIP.
Organizational Performance
Indicator Framework (OPIF)
This enables the channelling of
resources to where it best produces
the desired results and outcomes, as
indicated by agreed upon performance
indicators. The implementation of the
OPIF will be cascaded to the operating
units of the agency, in order to sustain
the restructuring of government
expenditures to the priority sectors.
The linking of the OPIF and
Performance Management SystemOffice Performance Evaluation System
(PMS-OPES) being spearheaded by
the Civil Service Commission, will
allow the institution of a performancebased compensation system.
The continued adoption of the multiyear

budgeting system (the MTEF) will improve
the predictability of funding, and integrate
policy with resource allocation. The main
5
In the health sector, the countrys public expenditure per capita on health was US$39 in 2006, compared to the median
of US$88 per capita expenditures for comparable East Asian countries. Overall, the Philippine NG spending on social
safety net programs was a mere 0.3 percent of GDP in 2007 and 0.8 percent of GDP in 2008, which is less than half
of the mean expenditure on social welfare programs of 1.9 percent of GDP in a group of 87 countries.
48
Fiscal Responsibility Bill (FRB)

The DBM and DOF shall work
together to revive the FRB initiative
dating back to 2004 and shall push for
its approval. The bill aims to strengthen
fiscal discipline in the public sector by
prescribing principles of responsible
fiscal management, establishing control
mechanisms on spending, and adopting
preventive measures against the erosion
of the tax base of the government.
One of its prominent features is
ensuring that proposals to grant fiscal
incentives or permanent increases in
national government expenditures
must be offset by permanent increases
in revenue or permanent reductions in
other expenditures.
Government Rationalization Program
(RP)
Executive Order (EO) No. 366 issued
on October 4, 2004 aims to build a
smaller bureaucracy and improve public
service delivery through the strategic
review of the mandates, operations,
organizational structures, functions,
programs and activities of national
government agencies; the elimination
of overlapping or duplicating functions;
and the focusing of government efforts
and resources towards its core or vital
functions. Given the current progress
in rationalizing half of the agencies in
the Executive Branch, its continuation
is expected to lead to the elimination
of 12,549 regular positions, saving the
government some PhP2.4 billion in
annual salaries and compensation.
Procurement Reforms
Significant progress was made in
reforming the procurement system
through the passage in 2003 of Republic
Act (RA) No. 9184 or the Government
Procurement Reform Act. Aside from
standardizing and modernizing the
procedures in government purchasing,
the law also requires the use of the
Philippine Government Electronic
Procurement System (PhilGEPS) by all

government entities, which serves as the sole
portal hosting sources of information on all
government procurement. From 2011, the
following functionalities in the PhilGEPS
will be implemented: (a) virtual store for
electronic purchasing; (b) expanded supplier
registry as a centralized electronic database
of all manufacturers, suppliers, distributors,
contractors and consultants registered in
the system; (c) introduction of charges and
fees to sustain operations and maintenance
of the system; (d) e-payment system to
enhance the functionality of the virtual
store; (e) e-bid facility for electronic bid
evaluation of all types of procurement for
goods, infrastructure projects and consulting
services; and (f ) uploading of the individual
Annual Procurement Plan (APP) of
each government procuring entity. Public
procurement in the country shall continue
to adapt to improvements in modern
technology through introduction of future
functionalities in the PhilGEPS that will
facilitate service delivery, transparency and
competitiveness in the public procurement
system
The Plan envisions the

implementation of several major
public expenditure management
reforms not only to help narrow
the fiscal deficit over the
medium term but also ensure
that resources are allocated to
priority investments, such as
human capital and infrastructure.
Stronger Internal Control System (ICS)

Along with procurement reforms, the internal
control system of government entities is
being strengthened to reduce waste and
corruption. The DBM, in partnership with
the Office of the President-Internal Audit
Office has issued the National Guidelines
on Internal Control System (NGICS). The
NGICS serves as a guide to departments/
agencies
in
redesigning,
installing,
implementing and monitoring their
respective ICS, taking into consideration
the requirements of their organization and
operations. A government Internal Audit
Manual (PGIAM), consistent with the
NGICS, will soon be finalized in order to
assist the government in establishing fully
functioning internal audit offices in the
public sector.
The government will find more ways to
further strengthen public expenditure
management with the following expenditure
reforms and initiatives:
49
Zero-Based Budgeting (ZBB) Approach
In succeeding budget
processes, the government
shall widen the scope of
the evaluation of the major
programs or projects under
the ZBB approach to build up
capacity, and to institutionalize
program evaluation in the
government.
Anchored on the good governance thrust of

the Aquino administration, the Department
of Budget and Management (DBM) led the
review and evaluation of ongoing programs
and projects through the ZBB approach in
preparing the 2011 Budget. Complementing
the MTEF and the OPIF, the ZBB
approach is geared towards assessing the
continued relevance and priority of
programs; ascertaining whether the program
objectives and outcomes are being achieved;
identifying alternative or more effective and
efficient ways of achieving the objectives;
and guiding decisions whether the resources
for the program or project should continue
to be provided at present levels, increased,
reduced, or discontinued.
Initial findings and recommendations from
the conduct of ZBB exercises during the
preparation of the 2011 Budget include:
Termination of programs no longer
delivering intended outputs and
outcomes;
Holding of the funding for
some programs pending removal of
bottlenecks in project implementation
and procurement;
Expansion
of
well-performing
programs to alleviate or mitigate critical
gaps in social and economic services;
Recommendation
on
the
implementation of difficult reforms in
GOCCs;
Stricter controls in the use of lumpsum funds following master plans and
government priorities; and
Deactivation of selected agencies and
GOCCs.
In succeeding budget processes, the
government shall widen the scope of the
evaluation of the major programs/projects
under the ZBB approach to build up capacity,
50
and to institutionalize program

evaluation in the government.
Transparency and Accountability
Safeguards in the Budget Process
The
overarching
goal
is
to
enhance transparency and enforce
accountability
in
government
operations by incorporating general
and special provisions in the General
Appropriations Act (GAA). Under
the 2011 GAA, all departments and
agencies, including those enjoying fiscal
autonomy, are required to post their
approved budgets on their websites and
the status of their programs/projects
starting 2011. Special provisions in
the budgets of agencies and GOCCs
with key programs and projects require
the posting of the details of program
beneficiaries and locations of projects
on their websites for better information
and appreciation of the public. This
practice also allows the public to verify
agency outputs vis--vis targets.
Public Financial Management (PFM)
and the Government Integrated
Financial Management Information
System (GIFMIS)
This initiative aims to harmonize and
integrate the budgeting, accounting,
and auditing systems of the government.
Reforms in the PFM system will make
it more transparent, accountable,
and performance-oriented.
A
Memorandum of Agreement (MOA)
has been executed between the DBM,
Commission on Audit (COA) and BTr
to develop the GIFMIS.
Contingent Liability Management
(CLM)
Considering the fiscal impact of
realized contingent liabilities (CL)
from existing BOT and GOCC
projects that are guaranteed by NG, a
joint ICC-DBCC resolution will be
issued to strengthen CLM through
the preparation of the CLM Plan by
implementing agencies, training for

value analysis/value engineering and
CL assessment, evaluation by the DOF
of CL for every financing/procurement
option, and full disclosure of required
budget for CL that will become real
liabilities and will thereby need funding.
Timely Approval of the Annual
Budget
Addressing the urgent needs of
agencies in a timely and predictable
manner is the main reason that the
government pushes for the passage
and approval of the GAA before the
fiscal year starts. To be able to do this,
the government revised its budget
schedule in anticipation of early budget
preparation activities to give ample
time for the DBM and the agencies
to conduct consultations with sectoral
groups, civil society organizations
(CSOs), and Regional Development
Councils (RDCs). The new schedule,
coupled with improved budget
documents submitted to Congress, will
facilitate the budget legislation process,
hence ensure timely enactment of the
annual budget.
Rationalization of GOCCs and GFIs
To better streamline the budgetary
support given to GOCCs/GFIs, the
government has embarked on instituting

reforms to reduce their financial vulnerability
and improve service delivery. The DOF and
the DBM are collaborating in the passage of
a law to strengthen oversight functions on
GOCCs/GFIs, and to create a Government
Corporate Council that will effectively
manage and supervise the operations of
these entities. Administrative and legislative
measures will also be proposed to amend or
restructure GOCC charters. A review of the
compensation granted to board members,
officers, and employees of GOCCs and
GFIs will also be undertaken to control costs
of personal services in GOCCs and make
compensation equitable relative to that in
the National Government.
Debt Management Reforms

Reforms in the management of debt must
also be implemented. A dedicated unit in the
DOF needs to be set up to consider more
aggressive options such as debt exchanges
and swaps at the most opportune times to
optimize savings. There needs to be a greater
diversification of modes, instruments used,
and currency mix, as well as more innovative
terms and features.
Likewise, all types of projects funded from
borrowing, whether these are governmentto-government arrangements, automatically
guaranteed under GOCC charters, and
under BOT or PPP arrangements, should
Table 2.5 Selected Fiscal, Monetary, and External Medium-Term Targets
2011
Fiscal Balance (% of GDP)
2012
2013
2014
2015
2016
-3.2
-2.6
-2.0
-2.0
-2.0
-2.0
3.0-5.0 a/
3.0-5.0 b/
3.0-5.0 b/
3.0-5.0 b/
n.a.
n.a.
55.3 55.8
62.5
71.3
81.3
94.3
109.4
Growth rate (%)
9.0 10.0
12.0
14.0
14.0
16.0
16.0
Imports (US$Bn) c/
71.5 72.1
85.1
100.4
118.5
141.0
167.8
Growth rate (%)
17.0 18.0
18.0
18.0
18.0
19.0
19.0
Inflation rate (%)

Exports (US$Bn) c/
a/ Approved under DBCC Resolution No. 2009-10 dated 27 November 2009.

b/ Approved under DBCC Resolution No. 2010-3 dated 09 July 2010. The BSP shifted from a variable annual
inflation target to a fixed medium-term inflation target of 4 1 for 2012-2014.
c/ Approved by the Monetary Board on 24 March 2011.
51
be subject to the rigid test of project viability

and procurement processes and conducted
with the highest standards of transparency.
During the project evaluation process, the
extent of contingent public exposure to
liability should be clearly identified and
appropriate allocations in the budget should
be made in future years.
Monetary Policy and External

Sector Reforms
Monetary policy will remain

committed to the achievement
of low and stable inflation that
is conducive to a balanced and
sustainable growth of output and
employment.
Monetary policy will remain committed

to the achievement of low and stable
inflation that is conducive to a balanced
and sustainable growth of output and
employment. Monetary authorities will be
alert to signs of emerging inflation pressures
to consolidate the hard-won price stability
that has contributed to policy predictability
and enabled households and businesses
to make better informed decisions. This
stance entails continuous macroeconomic
surveillance efforts for a more effective
management of risks. At the same time,
monetary authorities will continue to
improve their communication of policy
intentions and actions.
In recent years, monetary authorities have
implemented a number of reforms to
enhance the effectiveness of the monetary
policy framework. In 2006, the way the
inflation target was arrived at was changed
from specifying a range to specifying a point
with a tolerance interval which effectively
widened the BSPs target band. A broader
target band provides added flexibility to
monetary authorities in steering inflation,
particularly in the domestic setting where
consumer prices are subject to large supply
shocks because of the sizeable share of food
items in the consumer basket. The economic
policymakers also announced in 2010 the
shift to a fixed medium term inflation target
from a variable annual inflation target. The
adoption of a fixed medium term inflation
6
target aims to promote a long-term view

of inflation, help better anchor inflation
expectations, and support consumption
and investment by fostering greater
predictability in economic decisions
(Table 2.5).
The monetary authoritys reform
agenda will focus on improving the
institutional set-up and fine-tuning
the procedures of inflation targeting.
Key measures to be pursued for more
effective inflation management include
the following:
a. Given the interdependent real
and financial markets across the
globe and the risks involved, the
BSP shall pursue the expansion of its
monetary policy toolkit to enhance
the flexibility and efficiency of its
monetary operations with a view to
safeguarding both price and financial
stability.
b. Pursuant to the provisions of RA
7653, the monetary authorities will
request the full capitalization of the
BSP to ensure that financial losses
from time to time do not deter the
BSP from fulfilling its mandate of
maintaining price stability. A bigger
capital base will enhance the BSPs
financial autonomy and credibility,
giving more confidence to the
market.
Enhancing the link to financial

stability
The economic downturn resulting
from the recent global financial crisis
brought to light the importance of
policy coordination in promoting
macroeconomic stability. The close
coordination of monetary, regulatory,
and fiscal policies was critical to the
The Financial Sector Forum (FSF) in an interagency body composed of the BSP, Securities and Exchange
Commission (SEC), Insurance Commission (IC), and the Philippine Depository Insurance Corporation (PDIC). The
FSF principally provides an institutionalized framework for coordinating the supervision and regulation of the financial
system, for strengthening the exchange of information among the different regulators, and for the promotion of better
consumer protection.
52
restoration of global financial stability.

This, in turn, paved the way for business
confidence to improve and ultimately,
for economic recovery to take root.
Interaction of different policies is likely
to remain the new modus operandi
for economic policy markers. In this
regard, promoting closer coordination
of macroeconomic and financial sector
policies could be explored, including
through a wider representation in the
Financial Sector Forum (FSF) . 6
On the external sector, policymakers
will continue to adopt appropriate
measures that will cushion the
economy from external shocks as well
as ensure the health of the countrys
external payments position and the
sustainability of its external debt over
the medium-term.
The monetary authorities will continue
to adopt a flexible exhange rate policy to
help the economy to be better insulated
against external shocks.
The foreign exchange regulatory
framework will be further reviewed
to keep it responsive to the needs
of an expanding and increasingly
integrated economy. Since 2007, the
monetary authorities have undertaken
four major phases of foreign exchange
reforms. The reforms brought greater
access to foreign exchange resources
for trade, investment and other
foreign transactions. The measures
also facilitate the diversification of
investment portfolios and help reduce
the economys vulnerability to shocks.
its bond exchange program. This program

aims to boost liquidity sourced from
longer-dated securities and to provide longterm financing for government initiatives
promoting PPP for infrastructure and
economic development.
The monetary authorities will also
endeavour to maintain the external debt
stock and the external debt service burden at
sustainable levels. This will entail continuing
the comprehensive and regular monitoring
of the level and maturity profile of the
countrys external debt and the conduct of
debt sustainability assessments.
Complementing the sound management of
external debt level, the monetary authorities
will also build cushions against shocks by
promoting an adequate level of international
reserves.
The monetary authoritys reform

agenda will focus on improving
the institutional set-up and finetuning the procedures of inflation
targeting.
Furthermore, policymakers will need to

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

maintained at more manageable and
sustainable levels. This shall entail
appropriately designing the external
debt structure to minimize risks
emanating from currency and maturity
mismatches. With respect to the NG,
it will review the countrys sovereign
bonds and debt profile to identify
which instruments shall be eligible for
53
54
03
Competitive
Industry &
Services
Sectors
Competitive Industry and Services Sectors
55
Competitive Industry &

Services Sectors
Several measures of competitiveness reveal fundamental weaknesses in major
development aspects compared to the rest of the world. Compared with its
neighbours, the countrys economic performance in terms of investments, exports and
competitiveness is unsatisfactory and need to be reversed. The Philippine economy
over the past years has been characterized by a reduced share of manufacturing
sector in the countrys gross domestic product (GDP) and declining gross domestic
investment rate.
Enabling the industry and services sectors to contribute significantly to economic growth
and employment requires addressing a number of constraints to their development.
Strategies shall therefore be pursued to help raise the competitiveness of industries by
improving the business environment; raising productivity and efficiency and inculcating
quality consciousness among manufacturers and producers to offer quality goods and
services comparable with global brands.
Business competitiveness will be enhanced by improving governance, strengthening
economic zones, and strengthening national brand identity/awareness. To increase
productivity and efficiency, government shall focus interventions on key priority areas,
provide firm level support to MSMEs, increase market access, expand industry cluster
development and intensify the culture of competitiveness. Proactive measures to
empower consumers, promote competition and enforce trade regulations shall also be
pursued.
By addressing the countrys problem of low

competitiveness, this Plan aims to promote
higher growth in per capita GDP and boost
employment. The focus shall be to enable the
industry and services sectors to contribute to
massive job generation, provide opportunities
for Filipinos to rise above poverty, and
ultimately offer a meaningful choice for
Filipinos to pursue gainful employment here
or abroad. The Plan shall adopt a deliberate,
focused approach that addresses the
countrys business environment, anchored
on investments in human capital and
implementation characterized by a back to
basics approach coupled with innovation
and whole of government as underlying
principles.
The chapter focuses on three medium-term
goals: (i) improved business environment,
56
(ii) increased productivity and efficiency

and, (iii) enhanced consumer welfare.
For a better business environment,
government and the private sector shall
work to improve governance, as well
as investment promotion areas and
amplify a National Brand and Identity
Awareness. Business competitiveness
will be enhanced by promoting a
consistent, predictable, and responsive
policy environment, streamlining
bureaucratic procedures and fostering
transparency, promoting e-commerce
and ICT-enabled automation, and
encouraging partnerships with the
private sector. The system of licensing,
registration, and issuance of permits
shall be improved to reduce the
cost of doing business. To promote
investments, government shall give
priority to key policy concerns, namely:

labor, telecommunications, transport
(aviation and domestic shipping),
energy, peace and order and the rule of
law. A national branding or marketing
awareness campaign will be launched to
bring pride in quality Philippine-made
products and to give a distinct identity
to the country as a source of products
that are valued worldwide.
To increase productivity and efficiency,
government shall give priority to the
development of areas that have the
highest growth potentials and generate
the most jobs. These include: tourism;
business process outsourcing (BPO);
mining; agri-business and forest-based
industries; logistics; shipbuilding;
housing; electronics; infrastructure;
and other industries with high growth
potential. Likewise, the government
will also increase its market access
and further promote Philippine goods
and services abroad. A culture of
competitiveness shall be intensified,
whereby the countrys human capital
shall be developed through marketsensitive education and training.
Government shall work to promote
mutually agreed work arrangements
between employers and the labor sector
and to strengthen tripartite councils
to achieve industrial peace. More
importantly, an entrepreneurial culture
will be fostered by encouraging Filipinos
to invest in their own businesses and
become successful and innovative
entrepreneurs.
A
two-pronged
approach shall be adopted, consisting
of firm-level assistance to potential/
new and existing micro, small, and
medium enterprises (MSMEs) and the
use of the industry-cluster approach.
Government shall promote sustainable
livelihood and micro enterprise
development, harnessing the Overseas
Filipinos (OFs) community as a source
of capital. Program interventions shall
be supported to develop the core values
needed to form an enterprising nation.
The final key strategy is inculcating qualityconsciousness

among
manufacturers
and producers to offer quality goods and
services comparable with global brands.
Consumer expectations shall be promoted
as the impetus for suppliers to deliver
quality goods and services that give value
for money. The concerns of both businesses
and consumers shall be balanced through
proactive measures to empower consumers,
promote competition, and enforce trade
regulations. Government shall: (1) promote
consumer education and consumer advocacy;
(2) intensify consumer protection and trade
regulation; and (3) develop product and
service standards. In addition, the entire
supply chain shall reduce production and
distribution cost particularly on basic and
prime commodities
57
Assessment and
Challenges
Competitiveness
Competitiveness indicators have for
some time now been used to measure the
countrys business landscape. From 1994
to 1999, the Philippines ranked between
32 to 35 in the International Institute for
Management and Development (IMD)
Global Competitiveness Report but slipped
to 49 from 2000 to 2007.
Several measures of
competitiveness reveal
fundamental weakness in major
development aspects compared
to the rest of the world.
Several measures of competitiveness

reveal weakness in major development
aspects compared to the rest of the world.
In the World Economic Forum (WEF)
Global Competitiveness Index Ranking,
the Philippines ranked 87th out of 133
countries, and last among the ASEAN-6
subset of countries for the period 20092010. In specific categories, the Philippines
ranked 113th in institutions; 113th in labor
market efficiency; 99th in innovation; and
98th in infrastructure.
In 2009, the Philippines ranked 43rd out of
57 countries and last among five ASEAN
members; next to last in infrastructure;
and 51st in economic performance in the
IMD Global Competitiveness Report; and
placed 139th out of 180 countries (6th
among the ASEAN-6) in the Transparency
Internationals
Corruption
Perception
Index. In 2010, the country ranked 144th
among 183 countries and also last among
the ASEAN-6 in the International Finance
Corporation/World Banks (IFC/WB)
Doing Business 2010 Report. 1
Compared with its neighbors, the countrys
economic performance in terms of
investments, exports, and competitiveness
is unsatisfactory and needs to be improved.
Over the past years, the Philippine economy
has been characterized by a reduced

share of the manufacturing sector in
the countrys GDP and declining gross
domestic investment rate. The country
continues to lag behind its neighbors
in terms of foreign direct investments.
(FDI). The Arangkada Philippines
2010 report noted that inflows of
(FDI) into the Philippines were lowest
among six ASEAN countries, and that
many multinational firms not already
present in the Philippines bypassed the
country.2
In
the
2010
IMD
Global
Competitiveness Report, the countrys
overall infrastructure quality ranked
below that of Singapore, Malaysia, and
Thailand and was closer to Indonesia
and Vietnam. The inadequate and poor
quality of infrastructure diminished
the countrys overall competitiveness
and its capacity to attract investments.
Aside from cumbersome business
procedures and high cost of power,
inefficient transport network raises
production cost, all causing a higher
cost of doing business. Infrastructure
and communication problems also
hinder access to raw materials and
distribution of goods and services to
consumers.
The Doing Business survey of the
IFC/WB also consistently identifies
the high cost of doing business in
the Philippines as a major obstacle to
competitiveness. (Table 3.1). The IFC/
WB Doing Business Report 2011, on
the other hand, reported the 148th
ranking of the Philippines in terms of
ease in doing business, a finding related
to the difficulties of transacting with the
local government units (LGUs) and
national agencies in terms of length of
time, steps, signatories, costs and other
The Annual Meeting of the Global Federation of Competitiveness Councils held in Washington D.C. in December
2010 agreed to adopt new paradigm metrics beyond the existing competitiveness reports and surveys. Metrics of
competitiveness substantially different from current indicators will be used in future surveys. The new measures, due by
the end of 2011, will focus on the creation of a sound business environment for firm-level productivity.
The same report notes that in the period 1970-2009, Indonesia, Malaysia, and Thailand each received twice or three times
as much FDI as the Philippines, and that only 4.5 percent of total FDI in six ASEAN countries came to the country.
58
Table 3.1: Cost of Doing Business Indicators

Country
Number of startup procedures
Time to start a
business (days)
Cost to register
business
Procedures to
enfore a contract
Time to enforce a
contract (days)
Rigidity of
employment
index: 0 (less
rigid) to 100
(very rigid)
(% of GNI pc)
2004
2009
2004
2009
2004
2009
2004
2009
2004
2009
2004
2009
Philippines
15
15
60
52
25.4
28.2
37
37
862
842
29
29
PR China
13
14
48
37
15.9
4.9
35
34
406
406
28
31
Malaysia
30
11
25.1
11.9
30
30
600
585
10
10
Hong Kong
11
3.4
1.8
24
24
211
280
Indonesia
12
151
60
131
26
39
39
570
570
40
40
S Korea
10
17
14
15.7
14.7
35
35
230
230
27
38
Singapore
0.7
21
21
120
150
Thailand
33
32
6.7
6.3
35
35
479
479
11
11
Vietnam
11
11
56
50
30.6
13.3
34
34
356
295
33
21
Source: World Bank, Doing Business 2005 and 2010 (http://www.doingbusiness.org)
indicators. There is broad agreement that the

process of applying for a business renewal
registration is a long, difficult, and tedious
process. Starting a business in a Philippine
city involves an average of 15 procedures,
takes 38 days, and costs 29.7 percent of
income per capita. The country was listed
among the countries with high number of
procedures for starting a business, although
wide differences exist across different
Philippine cities3.
Measured competitiveness affects the
countrys capacity to attract trade and
investments. The economic situation remains
a challenge for the Philippines, which is
seen as falling short of its true potential
for attracting both domestic and foreign
investment, given its human, natural, and
capital endowments4.
Protectionist paradigms were embodied

in flawed policies manifested through
market power or the extent to which a
firm can influence the price of an item
by exercising control over its demand,
supply or both, barriers to entry, and
rent-seeking practices. Clearly, some
businesses do not get level playing
fields.
Philippine products and services face
some challenges in the international
market. For instance, there is lack of
information on the standards of other
countries. A certification system for
exported products is still not fully in
place. Laboratory and common service
facilities are either incomplete and
outdated or inadequate. The costs of
ISO certification can be borne only by
the more liquid traders and producers.
Policies that distort competition are the

main impediments to economic growth.
3
Such variations could be due to differing procedures and practices at the local government level, differential performance
of local branches of national agencies, and variations in local taxes and fees.
See, for example, the World Banks Country Assessment Report 2005.
59
With tariffs reduced, difficulties experienced

by manufacturers, exporters/traders will
increasingly pertain to technical barriers
such as standards and conformity assessment.
Standardization, a component of the
technical infrastructure, protects consumers
and accelerates product integration into the
global trading system. Other components
of the technical infrastructure, such as
metrology, accreditation, certification and
testing, are dispersed with different agencies
involved in conformity assessment, spreading
government resources thinly. A robust and
harmonized technical infrastructure would
not only help the country overcome trading
barriers and protect the buying consumers,
but also cut redundant overhead costs due to
many regulatory bodies.
Exports of Goods and Services

But for the global economic
crisis, the last five years would
have been a favorable period for
exports.
If not for the global economic crisis, the last

five years would have been a favorable period
for exports. The countrys exports grew by
an average of 10.65 percent from 2004 to
2007, supported by continued strong growth
in global trade. The expected negative effect
of the 9/11 terrorist attacks in 2001 was
mitigated by the renewed confidence on
safer trade as ensured by more stringent
export regimes of the European Union

(EU) and the United States (US).
Export growth peaked in 2006, when
exports surpassed targets and grew
by 18.3 percent, driven by rising sales
to the countrys traditional trading
partners, the US and Japan, as well
as China, the Netherlands, Germany,
Singapore, Malaysia and Korea. This
pace could not be sustained in the
following years, owing to the slowdown
in the US market, high production costs,
particularly in energy and logistics, and
a strong peso.
In the fourth quarter of 2008 the sector
felt the effects of the global economic
crisis, actually contracting by 2.19
percent relative to 2007. As the global
recession dragged on in 2009, export
value fell drastically, contracting by 16.1
percent compared to 2008. In 2010,
however, exports began to rise again,
surging ahead with two-digit growth
rates in line with the expectations of
global economic recovery (Table 3.2).
For 2010, merchandise exports
amounted to US$48.3 billion, growing
Table 3.2: Export Performance (2004-2010)

FOB Value (US$ billion)
Growth Rate (%)
2004
2005
2006
2007
2008
2009
2010
2004
2005
2006
2007
2008
2009
2010
Plan target
43.1
47.4
52.3
58.2
65.4
74.3
84.3
10
10
10
11
12
12
13
Actual
42.8
44.8
52.9
59.2
57.9
48.6
63.9
10.6
4.6
18.3
11.9
-2.2
-16.1
31.5
Percent to
target (%)
99.3
94.5
101.3
101.9
88.6
65.4
75.8
Plan target
39.8
43.8
48.2
53.5
60.0
67.1
75.8
10
10
10
11
12
12
14
Actual
38.8
40.3
46.5
49.5
48.3
37.6
50.7
9.8
3.8
15.6
6.4
-2.5
-22.1
34.8
Percent to
target (%)
97.5
91.9
96.5
92.5
80.4
56.1
66.9
Goods &
services
Of which:
goods
Source: Bangko Sentral ng Pilipinas with basic data from the National Statistics Office
60
34.8 percent over exports in 2009.

This was supported by increases
in exports of manufactured goods
and total agro-based products, both
at about 36 percent. The countrys
top ten export commodities also
registered
increases
particularly
coconut oil, communication/radar
and semiconductor devices. Exports
registered positive growth with the
recovery of global trade.
The movement of Philippine electronic
exports has followed global trends.
Electronic products still account for
the bulk (61 percent) of Philippine
merchandise exports during the period.
Semiconductor shipments, making up
77 percent of electronics exports, grew
53 percent in 2010.
The countrys traditional trading
partners, Japan and the US, remain as
the countrys top export destinations,
followed by Singapore, China, Hong
Kong, Germany, Netherlands, Republic
of Korea, Thailand and Taiwan in the
top ten destinations.
Exports of services meanwhile grew
by 150 percent from US$4 billion in
2004 to US$13.2 billion in 2010. Other
business services, travel, and computer
and information services account for
48 percent, 21 percent, and 16 percent,
respectively, of total services exports.
Globally, the evolution in technology,
prioritization of business strategies,
migration, innovation and trends,
environment-consciousness, and value for
money have influenced the emergence of
technology based sectors, strengthened
hospitality services and increased the
capability for borderless transactions.
The Government has been vigilant in the
growth of these industries, two of which
are the BPOs and tourism.
Business Process Outsourcing (BPO)

The BPO industry is acknowledged as a
driving force for economic growth and
employment in the country. Two distinct
drivers largely contributed to the growth of
BPO demand: (1) increasing globalization
which led to the lowering of barriers to
trade that allowed companies to explore
alternative locations to lower operating costs
without sacrificing the quality of service;
and (2) advancements in information and
communication technology (ICT) which
enhanced service delivery using the internet
in a cost efficient and timely manner.
Typical outsourced services include the
operation of human resources departments,
telephone call centers, distribution centers,
research needs, computer departments or
services, and the design and/or engineering
of components or end-products. The
Philippines introduced BPO services in
the country through the call centers or
voice services. However, the industry has
evolved to higher value, non-voice BPO
functions such as finance & accounting,
human resource and administrative services,
and transcription services. The years 2007
to 2008 marked the turning point and
remarkable growth in the back office and
knowledge process outsourcing (KPO) such
as research, analytics and legal services; with
more than two-fold growth in revenues from
US$400 million to $830 million.
The BPO industry is

acknowledged as a driving
force for economic growth and
employment in the country.
Figure 3.1. BPO/IT Outsourcing 2004-2011
Source: Business Processing Association of the Philippines
61
In 2010, the BPO industry has attained its

US$ 9 billion revenue target while employing
about 530,000 full-time employees (FTEs)
(Figure 3.1). The US remains the prime
source for outsourcing activities and
opportunities for the Philippines as well as
the major supplier of outsource work to the
European and Japanese companies.
Because of its ready supply of professionals
equipped with the required language
skills, cultural affinity with the US and
UK markets, and strong customer service
orientation, the Philippines has gained
considerable traction as a BPO destination.
For the years 2007, 2008 and 2010, the
country has been recognized by the National
Outsourcing Association of UK and cited it
as the Offshoring Destination of the Year.
In the midst of global and

national economic, political and
social upheavals, the tourism
sector remained resilient.
In 2010, the Philippines posted almost US$

5.70 billion of pure voice-based revenues,
which is even higher than India. Thus, in
stand-alone voice business, the country
ranks number one globally. However, India
continues to be the leader in the global BPO
industry mainly with its strong presence
and capacity in information technology
(IT) such as software development. On
the supply side, while the country produces
480 thousand graduates per annum, the
number of available workforce is undersized
compared to Indias 3 million talent pool.
The country would need to enhance the
capability of its professionals in the IT

sector to capture opportunities from
Indias BPO market in the IT subsector.
Aside from labor resource, the country
also needs to develop suitable locations
to ensure that BPO investments and
expansions can be accommodated.
Physical and IT infrastructures are
key solutions to address growth of the
industry.
The
National
Capital
Region
dominantly houses majority of the
BPO companies in the country. In
2009, the government and the private
sector collaborated on a project dubbed
as the Next Wave Cities wherein
focus will be directed on locations with
high-growth potential in the BPO
services. Ten cities were identified
namely: Davao; Santa Rosa, Laguna;
Bacolod; Iloilo City; Metro Cavite
(i.e. Bacoor, Dasmarias, Imus); Lipa,
Batangas; Cagayan de Oro; Malolos,
Bulacan; Baguio City, and Dumaguete.
In 2010, five cities are being eyed as
BPO-potential destinations, namely:
Dagupan, Legaspi, Metro Subic, Metro
Naga, and General Santos.
Table 3.3: Percent Share of Tourism to GDP, Employment and Total Exports
Vis--vis Visitor Arrivals Globally and in the Asia Pacific
Tourism Contribution
Year
% Share to
GDP
2004
6.17
2005
2006
% Share
to National
Employment
Visitor Arrivals
Growth Rate
% Share to
Global Arrivals
9.62
20.1
0.30
6.16
9.55
14.5
0.33
6.15
9.54
8.4
0.34
2007
6.18
9.66
8.7
0.34
2008
6.05
9.77
1.5
2009
6.03
9.96
Average
6.12
9.68
Tourism Receipts
% Share to
Asia and the
Pacific
1.61
% Share to
Total Exports
30.7
4.25
1.71
12.3
3.98
1.71
23.1
5.18
1.70
7.4
4.31
0.34
1.71
-17.87
3.62
- 3.9
0.34
1.67
- 7.9
4.09
8.21
0.33
1.69
7.96
4.23
Sources: National Statistical Coordination Board, Department of Tourism and World Tourism Organization
62
Growth Rate
Tourism
From 2004 to 2009, the average
shares of tourism in GDP and in total
employment were 6.12 percent and 9.68
percent, respectively. In the midst of
global and national economic, political
and social upheavals, the tourism sector
remained resilient. Visitor arrivals in the
past six years grew at an annual average
of 8.21 percent from 2.29 million in
2004 to 3.01 million in 2009. The
threat of terrorism and financial crisis
has not dampened the industry as it
demonstrated moderate improvement
in its market share to the global and
Asia and the Pacific arrivals from 0.30
percent in 2004 to 0.34 percent in 2009 and

from 1.61 percent in 2004 to 1.67 percent in
2009, respectively (Table 3.3).
Tourism receipts from inbound expenditure
of foreign visitors from 2004 to 2009 also
expanded at an average of 7.96 percent from
US$ 1.99 billion in 2004 to US$ 2.23 billion
in 2009. Consequently, the share of tourism
receipts to total exports in the economy grew
at an annual average of 4.94 percent during
the same period.
These receipts have driven private and
foreign investments in the accommodation,
transportation, recreation, entertainment
and miscellaneous services sectors of the
Table 3.4: Visitor Arrivals to ASEAN Countries (000)

Countries
2009
2008
2007
2006
2005
2004
Malaysia
23,646
22,052
20,973
17,547
16,431
15,703
Thailand
14,146
14,584
14,464
13,822
11,567
11,737
Singapore
7,488
7,7778
7.957
7,588
7,079
6,553
Indonesia
6,324
6,234
5,506
4,871
5,002
5,321
Vietnam
3,747
4,236
4,229
3,584
3,468
2,928
Philippines
3,017
3,139
3,092
2,843
2,623
2,291
Cambodia
2,046
2,001
1,872
1,591
1,333
987
Source: World Tourism Organization
Table 3.5: Philippines Travel and Tourism Competitiveness in comparison with selected ASEAN Countries, 2009
Country
Regulatory Framework
Prevalence
of Foreign
Ownership
Property
Rights
Time
Required
to Start a
Business
Business Environment and Infrastructure

Cost to
Start a
Business
Quality
of Air
Transport
Infra
Number of
Operating
Airlines
International
Air
Transport
Network
Quality
of
Roads
Quality of
Ground
Transport
Network
Cambodia
75
118
124
124
87
75
86
80
116
Indonesia
24
117
122
114
75
37
57
105
51
Malaysia
67
38
33
73
20
27
33
17
21
Philippines
98
92
114
94
89
48
76
94
115
Singapore
28
Thailand
89
61
90
39
28
13
26
32
31
Vietnam
104
75
112
77
92
39
91
102
58
Source: World Economic Forum, and Travel and Tourism Competitiveness Report 2009
63
tourism industry. Tourism is regarded as

the fourth largest contributor to foreign
exchange receipts. The top three are
electronics and semiconductors, overseas
Filipino remittances, and BPO.
Outside Manila, the most frequented
destinations visited by foreign tourists
included: Boracay Island, Tagaytay, Cebu,
Laguna, Batangas, Cavite, Bohol, Pampanga,
Palawan and Davao. Among the activities
undertaken by most tourists during their visit
in the country were shopping for local crafts
and delicacies; sightseeing, beach holiday,
scuba diving, visiting friends and relatives,
honeymoon; attending business meetings;
and looking for investment opportunities.
Many tourists also engaged in various
cultural, nature and adventure experiences
to complement, perhaps, their medical and
health activities. In 2010, foreign tourists
spent an average of US$ 83.93 per day and
stayed an average of eight nights during
their visit.
However, the Philippines ranked only
sixth in attracting foreign tourists vis-vis its ASEAN neighbors, whose market
shares have rapidly grown, while that of
the Philippines expanded modestly. Visitor
arrivals in Malaysia in 2009 totaled 23
million; Thailand, 14 million; Singapore, 7.5
million; Indonesia, 6.3 million; and Vietnam,
3.7 million. (Table 3.4).
More work is needed to enhance the countrys
competitiveness as a tourist destination.
The countrys attractiveness hinges on the
availability of support infrastructure (air, land
and water), a healthy business environment,
and transparent and proactive rules and
regulations. The WEF 2009 Report ranked
the Philippines lowest among comparable
ASEAN neighbors in terms of the number
of airlines with scheduled flights originating
in the country and the availability of good
air connections to overseas markets to
provide access for more foreign visitors. The
Philippines also lagged behind in terms of
quality of roads and ground transportation
network that offers efficient accessibility to
major tourism centers and tourist attractions
(Table 3.5).
64
Restrictions on foreign ownership

of companies and property rights
remained a handicap in attracting
tourism investments, especially from
international chains and the network
of accommodation operators. The
time and cost needed to start a tourism
enterprise also deserve attention.
The Philippines contributes actively
to global policy-making as well as
observes and promotes international
agreed principles and norms in the
domestic setting. As global and regional
economies become more integrated,
internal policy decisions will inevitably
influence decisions and policies of other
countries, and vice-versa. This reality
enhances internal coordination and
cooperation mechanisms and external
country-team representation protocols
among government instrumentalities
and various stakeholders in society.
An outward-looking orientation must
be complemented by an alignment of
laws and regulations that facilitate the
expected benefits and lessen any adverse
effects of interfacing closely with the
world economy. Internal processes and
legal framework must be strengthened
to take advantage of opportunities
presented by the global economic
environment. At the same time, small
and medium enterprises need to be
informed of how these policies will
benefit them in trading their goods in
the international community.
Investment
Total approved local and foreign
investments increased from 2004 to
2008 but declined in 2009. The top
two sectors, i.e. manufacturing and
electricity, accounted for more than
half of the total approved investment.
The top four sectors (manufacturing,
electricity, finance and real estate, and
private services) account for 78 percent
of the total (Table 3.6). In 2004,
the mining industry was revitalized
as the Supreme Court ruled on the
constitutionality of the Philippine

Mining Act of 1995.
A review of share by sector/industry shows

no trend in increase or decrease of particular
sector, with approved investments in most
sectors fluctuating annually.
Table 3.6: Total Approved Investments of Foreign and Filipino Nationals

by Industry, In Million Pesos (2004 2010)
Industry
2004
Agriculture
2005
2006
2007
2008
2009
2010
212
770
4,734
1,856
2,498
2,873
2,272
2,079
47,042
14,222
2,186
1,140
83
3,857
14,090
216
179
1,080
8,564
21,659
45,403
139,078
131,923
32,296
189,920*
7,158
10,019
28,833
54,927
114,088
89,111
72,108
Gas
106,521
269
561
17
Manufacturing
54,330
150,161
151,984
94,677
75,518
106,300
215,153
1,512
8,294
16,147
13,776
48,269
2,019
8,108
41,006
15,344
29,105
37,631
71,417
29,353
40,255
Storage
388
26
35
1,340
1,059
Trade
517
357
26,332
780
531
2,155
1,461
Transportation
467
22,172
3,530
10,329
16,516
3,830
12,248**
2,537
45,975
221,815
231,233
357,002
385,804
464,221
314,114
542,605
Communication
Construction
Electricity
Finance & R. Estate
Mining
Private Services
Water
Total
Source: National Statistical Coordination Board

* Data lumped for Electricity, Gas and Water
**Data lumped for Transportation, Storage and Communication
Table 3.7: BOI-PEZA Approved Investments (2009-2010)

BOI
2010
PEZA
2009
% Change
2010 1/
2009/2
TOTAL
% Change
2010
2009
%
Change
Project Cost
(P)
302,100
124,171
143.29
204,395
175,365
16.55
506,494
299,537
69.09
Foreign (P)
22,329
10,397
114.76
142,167
103,421
37.46
164,496
113,818
44.53
Local (P)
279,771
113,775
145.90
62,227
71,944
(13.51)
341,998
185,719
84.15
246
248
(0.81)
518
502
3.19
764
750
1.87
Employment
36,751
95,372
(61.47)
84,340
79,435
Source:
Board of Investments and Philippine Economic Zone Authority
1/ Locator investments - PhP 176.753billion; Developers - PhP 27.641 billion
2/ Locator investments - PhP 140.987billion; Developers - PhP 34.378billion
6.17
121,091
174,807
(30.73)
No. of
Projects
65
From 2004 to 2009, direct investments

grew by 7.8 percent5, although 2009 saw
investment flows decreasing by 32.3 percent,
reflecting the effects of the global crisis,
there were hopeful signs of a rebound. In
2010, investment commitments from
both foreigners and Filipinos increased

to PhP542.6 billion compared to
PhP314.1 billion in 2009. More than
60 percent of investments approved
during the period came from Filipino
investors with PhP346.5 billion worth
of pledges.
Table 3.8: Total Approved Foreign Direct Investments by Country of Investor

From 2004 - 2010, In Million Pesos
Country
2004
2005
2009
2010
Japan
26,596
27,539
20,066
38,587
16,116
70,737
58,333
USA
27,108
14,913
8,199
36,089
19,721
12,947
13.159
Korea
3,260
10,828
4,327
12,076
39,954
9,624
31,182
Netherlands
1,473
19,208
188
14,401
45,354
2,070
36,784
Singapore
1,524
889
396
44,246
6,565
3,468
7,283
UK
1,683
195
5,887
10,182
25,272
3,439
1,065
China (PROC)
127
195
7,935
1,822
2,307
2,392
5,657
Br. Virgin Islands
208
658
450
670
2,111
1,176
7,654
111,916
21,382
18,432
56,010
25,281
15,963
48,098
173,895
95,807
65,880
214,083
182,681
121,816
196,069
Others
Total
2006
2007
2008
Source of basic data: National Statistical Coordination Board
Figure 3.2. Investment by Industry Sector in PEZA Economic Zones

(1995-2010)
Source: Philippine Economic Zone Authority

5
66
Based on compounded annual growth rate
Of the PhP542.6 billion worth of

investment pledges of both foreigners
and Filipinos in 2010, 39.7 percent
or PhP215.2 billion are intended for
projects in manufacturing. Electricity,
gas and water garnered 35.0 percent
share or PhP189.9 billion, and finance
and real estate at 13.3 percent or
PhP72.1 billion. These industries
have been consistent recipients of
investment commitments from foreign
and Filipino investors. Potential
investments in manufacturing as well
as in electricity, gas and water increased
significantly compared to finance and
real estate, which dropped to PhP72.1
billion from PhP89.1 billion.
Total BOI-PEZA-approved investments
for 2010 amounted to PhP506.5 billion,
a 69 percent surge over approvals in
2009 (Table 3.7). This was brought
about by resurgent investor confidence,
which reached an all time high in the
second quarter of 2010. These approved
investments generated 121,091 jobs.
By country of origin, the US and Japan
have been the two top sources of FDI
in the Philippines. In recent years
investments from the Netherlands, the
United Kingdom and South Korea have
also increased (Table 3.8).
Investments with the Philippine
Economic Zone Authority (PEZA)
in 2009 posted an increase of 13.3 percent

over the previous year despite the global
financial crisis. Direct employment in
PEZA zones also grew slightly (by 0.44
percent) notwithstanding layoffs in many
business establishments in the country and
worldwide during the same period.
From 1995 to 2010, investments in
enterprises
located
inside
PEZAregistered economic zones came mostly
from
the
electronics/semiconductor
industry. Locators from the electronics/
semiconductor sector contributed 42.88
percent of total investments in the ecozones.
Following this was the basic metal/mineral
industry (9.29%); information technology
services (7.69%); transport (shipbuilding,
car part, equipment) (6.78%) and electrical
machinery and apparatus (5.46%). These
comprise the top five sectors garnering the
largest number of investments over the past
15 years of PEZAs existence (Figure 3.2).
The Philippine MSME sector is

a critical driver for the countrys
economic growth. However, the
growth of the MSME sector has
not been vigorous enough to
propel the economy.
The
majority
of
PEZA-registered
enterprises are owned by foreign nationals.
The Japanese, owning 25.97 percent of total
PEZA-registered locator enterprises in
2010, top the list of foreign owners. These
are followed, in order, by Koreans (10.62%),
Americans (10.12%), Singaporeans (3.96%),
British (2.99%), Taiwanese (2.23%), Dutch
(2.15%), Chinese (1.77%), Australian
(1.69%), Malaysian (1.39%), German
(1.35%), and various other nationalities
(7%).
Table 3.9: PEZA Operating Economic Zones (2004 2010)

Operating Economic Zones
2004
2005
2006
2007
2008
2009
2010
Manufacturing
53
51
53
60
62
63
64
IT
16
28
37
88
112
127
148
12
13
Tourism
Medical Tourism Park
Medical Tourism Center
Agro-Industrial EZ
Total Operating
69
% of Growth Over Previous Year

Source: Philippine Economic Zone Authority
80
92
154
183
207
239
16%
15%
67%
19%
13%
15%
67
In 2010, the economic zones operating

under PEZA management totaled 239
(Table 3.9). In the next six years, initiatives
will be pursued to enhance and increase
the number of economic zones following
the observed growth patterns. Efforts shall
include exploration of new areas such as
agro-industrial and tourism zones, opening
to new markets such as the Middle East,
Germany, Australia and New Zealand, and
strengthening priority markets of Japan,
USA and Korea.
Since ecozone applications are private sector
initiated and market-driven, prospective
locators may locate in certain areas for as long
as they meet the criteria stipulated in Section
6 (Criteria for the Establishment of Other
Ecozones) of The Special Economic Zone Act
of 1995.
Opportunities for investments also are
attributed to sound policies and reforms to
attract investors. Policies for investments such
as exhibiting sound incentives to distinct
industry have been unstable.
Reforms are required to appropriately offer
incentives to investments in sectors that will
have high impact on employment as well as
influx of reserves in the country. However, it is
also important that sectors are reviewed

and monitored to determining industry
sectors that should be prioritized in
providing incentives. Likewise, reforms
are necessary to foster public and private
partnerships in boosting investment areas,
programs and projects.
Micro, Small and Medium

Enterprises (MSMEs)
The Philippine MSME sector is a critical
driver for the countrys economic growth.
The sector serves not only as potential
supplier and subcontractor to large
enterprises and exporters but is also a part
of the support system for logistics services.
The MSME sector accounted for 99.6
percent of total establishments in the
country, and contributed 61.2 percent of
the countrys total employment and 35.7
percent of total value-added. However,
the growth of the MSME sector has
not been vigorous enough to propel the
economy (Table 3.10).
The size-distribution of firms has changed
little in the past two decades, with the
proportion accounted for by medium
sized enterprises remaining small. As a
result, the countrys industry structure
Table 3.10: Micro, Small and Medium Enterprise Profile

2008 Number of
Enterprises
Total
Micro
761,409
697,077
58,292
3,067
2,973
758,436
91.6
7.7
0.4
0.4
99.6
1,663,382
1,314,065
418,058
2,149,085
3,395,505
30.0
23.7
7.5
38.8
61.2
2,108,546
103,918
431,340
216,685
1,356,603
751,943
100
4.9
20.5
10.3
64.3
35.7
380,289
62,474
328,248
518,313
631,247
221,452
9.9
52.0
82.1
% Distribution
2008 Employment
554,4590
% Distribution
2006 Value Added
(in million pesos)
% Distribution
2006 Value added per
worker (in pesos)
% of large enterprises
Source: National Statistics Office
68
Small
Medium
Large
MSMEs
is often characterized by a missing or

hollowed middle.
The performance of MSMEs was
constrained by various factors. These
include high cost of doing business,
lack of access to finance and market
information, and low productivity and
competitiveness. Poor business conditions
are a greater challenge for MSMEs given
their limited resources. Many are unable
to qualify for bank loans for lack of the
necessary track record and collateral. The
lack of credit information also makes it
more difficult for banks to determine
MSMEs creditworthiness. With limited
management and financial capabilities,
many MSMEs are unable to respond
dynamically to the domestic and export
markets.
MSMEs have a low ability to meet the
threat of local and global competition
because of lack of information needed
for market access and business
environment; failure to attain scale
economies needed to produce quality
goods and services; and the sectors laidback approach to seeking new markets
and responding to market needs.
The low productivity of MSMEs
can be attributed to the sectors lack
of access to new technology, weak
technological capabilities, and its failure
to engage in innovation and research
and development (R&D) activities.
The result is wasteful duplication and
non-optimal use of limited resources.
Furthermore, lack of awareness for
science and technology (S&T) and
scarcity of S&T human resources are
limits to production optimization.
While the value-system of workers and
employees undoubtedly affects the total
productivity of firms, low productivity
in the industry and services sectors
may also be due to their inflexible
organizational set-up and processes.
Firms cannot easily adjust to the
6
fast-changing needs and demands of their

clients, consequently affecting their level
of productivity. In addition, the countrys
domestic manufacturing is not strongly
linked with its exports manufacturing
compared to its neighboring countries.
Employment
Rise in employment in industry and
services
In 2008 the number of employed persons
increased from about 31.6 million in 2004
to around 34 million in 20086. This meant
almost three million persons joined the
Philippine labor force over a period of four
years.
The agricultural sector continues to play an
important role in employment and in jobs
creation as it has employed about 10.6 million
Filipinos in 2008. In addition, the fishing
sector employed about 1.42 million persons
in 2008. Most Filipino workers therefore,
are still in the agriculture and fishing sectors
while the rest are in non-agricultural sectors
such as industry and services.
Nonetheless, workers and employees in
the industry and services sectors combined
outnumber agricultural workers and
comprise more than half of the employed
from 2004 to 2008. The economic role of
nonagricultural workers, especially those
in the services sector, is therefore crucial,
especially in the era of the knowledge- and
skills-based economy, the most evident local
manifestation is the booming outsourcing
industry.
As of 2010, a total of 38.9 million were
reported to be in the labor force from among
the 60.7 million population over 15 years of
age. Of the three sectors (i.e. Agriculture,
Industry and Services), Services accounts
for the biggest share of total employment
2009 Yearbook of Labor Statistics.
69
(Table 3.11). The current Plan calls for total

employment to grow by six million by 2016.
The MSME contribution to employment
in 2008 totaled 3.4 million. Ranked by
subsector, wholesale and retail trade
contributed the bulk of employment at 35.1
percent, followed by manufacturing with
18.7 percent and hotels and restaurants with
12.46 percent (Figure 3.3).
Among
microenterprises,
wholesale
and retail trade contributed 47 percent
of total employment, followed by

manufacturing with a 15 percent share,
and hotels and restaurants with 13
percent. This is the same employment
pattern for small enterprises with
wholesale and retail trade accounting for
26 percent, followed by manufacturing
and hotels and restaurants with
contributions of 19 percent and 13
percent, respectively. The pattern
is somewhat different for medium
enterprises, where manufacturing
makes the biggest contribution (31%)
Table 3.11: Employment per Major Industry Group

Major Industry Group
2008
Ave
ALL INDUSTRIES
Agriculture
Agriculture, Hunting and
Forestry
Fishing
Industry
Mining and Quarrying
Manufacturing
Electricity, Gas and Water
Supply
Construction
Services
Wholesale & Retail Trade,
Repair of Motor Vehicles,
Motorcycles and Personal
and Household Goods
Hotels and Restaurants
Transport, Storage and
Communications
Financial Intermediation
Real Estate, Renting and
Business Activities
Public Administration &
Defense, Compulsary Social
Security
Education
Health and Social Work
Other Community, Social
and Personal Service
Activities
Private Households with
Employed Persons
Extra-Territorial
Organizations & Bodies
34,089
12,030
10,604
1,426
5,048
158
2,926
130
1,834
17,011
6,446
2009
Apr
Jan
35,061 34,262
12,043 11,846
10,582 10,446
Jul
Oct
Ave
34,997
12,313
10,841
35,508
11,940
10,476
35,478
12,072
10,563
1,400
4,856
152
2,849
134
1,472
5,088
166
2,841
130
1,464
5,273
177
2,947
145
1,509
5,154
169
2,937
160
1,891
1,721
17,925 17,560
6,736 6,635
1,951
17,595
6,681
2,004
18,294
6,725
1,888
18,250
6,901
1,461
5,093
166
2,894
142
Jan
Jul p
Oct p
36,285
12,317
10,835
36,489
12,261
10,765
1,439
5,487
212
3,063
137
1,482
5,391
193
2,995
140
1,496
5,373
197
3,057
164
2,014
1,964 2,075
18,680 18,874 18,414
7,040 7,063 6,885
2,062
18,577
7,050
1,955
18,855
7,161
36,047 36,000 35,413

11,974 11,804 11,512
10,505 10,346 10,073
1,469
5,394
199
3,031
150
1,458
5,323
193
3,009
157
953
2,590
1,010
2,679
988
2,660
976
2,628
1,064
2,694
1,012
2,735
1,063
2,721
1,104
2,736
991
2,741
1,034
2,697
1,121
2,709
368
953
369
1,064
337
1,044
389
1,023
376
1,090
375
1,100
399
1,147
384
1,120
383
1,061
419
1,164
411
1,243
1,676
1,749
1,659
1,794
1,772
1,771
1,846
1,823
1,959
1,831
1,771
1,071
392
833
1,138
421
877
1,157
435
857
1,068
408
907
1,157
428
876
1,168
412
868
1,175
450
913
1,146
432
950
1,156
447
984
1,234
456
862
1,165
464
855
1,729
1,880
1,785
1,718
2,110
1,908
1,925
2,114
1,804
1,829
1,954
Notes:
1. Details may not add up to totals due to rounding.
2. Based on past week reference period.
3. Industry classification is based on the 1994 Philippine Standard Industrial Classification
p Preliminary
Source of basic data: National Statistics Office, Labor Force Survey
70
2010
Apr
followed by wholesale and retail trade

(14%) and real estate, renting and
business activities (12%). This pattern
is repeated for large enterprises, with
manufacturing contributing almost 37
percent of employment, followed by real
estate, renting and business activities
(21%) and financial intermediation
(10%. )
A survey by the Bureau of Labor
and Employment Statistics reports
that employers have difficulty filling
up vacancies because of a shortage
of applicants with the right job
competencies
and
qualifications,
although two million Filipinos were
unemployed.
The 2006 National
Manpower Summit emphasized that
unemployment in the country arose
mainly from a mismatch between
skills needed for available jobs and
skills possessed by job-seekers; and a
geographic mismatch between locations
of job opening and job seekers. While
shortages of skills are evident in certain
occupations and areas in the country,
oversupply of other skills are likewise
observed.
To date, there are reported shortages in

medical and health services, as Filipino
nurses are in high demand abroad. High
turnover rates and low hiring rates
meanwhile continue to worry stakeholders
in the BPO industry. On the other hand, an
oversupply of skills in certain occupations is
also reported. For instance, the educational
system continues to produce large numbers
of liberal-arts graduates for whom the
demand is either not encouraging or still to
be identified.
In addition, the countrys low labor
productivity due to mismatched or deficient
skills relative to available jobs contributes
to the low productivity in output of goods
and services. This also affects compensation,
since some company owners are unable to
raise wages and salaries owing to missed
revenue opportunities which in turn are
caused by low production.
Increasing the national

awareness of consumer rights,
responsibilities and options for
redress encourages a vibrant
sector that will demand better
products and services.
Reports during the consultations for the

DOLE Project Jobsfit 2020 also noted a
concentration of hard-to-fill occupations in
the high-end categories, such as accountants
and engineering professionals. Hard-to-
Figure 3.3: MSME 2008 Employment Share by Sector

71
fill vacancies were also noted for associate

professionals and clerks.
This square pegs-round holes phenomenon,
which has affected efficiency in the labor
market, may be aggravated by the fastchanging demand for skills in the global
labor market.
Consumer Policy
Consumers have a vital role in the economy.
When they are empowered, consumers can
improve economic performance by helping
drive competition, productivity and business
innovation.(OECD Toolkit, 2010)
In the Philippines, emphasis is made
on policies and programs that promote
consumer welfare and protection. Republic
Act (R.A.) 7394 or the Consumer Act of
the Philippines states the policy of the State
to protect the interest of the consumer,
promote his /her general welfare and
establish standards of conduct for business
and industry. Thus, Government is mandated
to pursue the following objectives:
a. protection against hazards to health
and safety
b. protection against deceptive, unfair and
unconscionable sales acts and practices;
c. provision of information and education
to facilitate sound choice and the proper
exercise of rights by the consumer;
d. provision of adequate rights and means
of redress; and
e. involvement of consumer representatives
in the formulation of social and economic
policies.
Empowered consumers are aware of their
rights and are informed of fair trade laws.
Product quality and safety standards have
become effective stimuli for manufacturers
72
to improve their products and

consequently enhance competition
among firms. Increasing the national
awareness of consumer rights,
responsibilities and options for redress
encourages a vibrant sector that will
demand better products and services.
In 2007, an Awareness, Knowledge,
Attitude and Practice Study was
commissioned by the Department
of Trade and Industry (DTI) to
determine the publics concern for
their rights and responsibilities as
consumers. The study showed that
half of the respondents were aware of
the programs for consumers and said
these were satisfactory but needed
improvement. The study recommended
a more creative message development,
coordination and closer partnerships
with LGUs and consumer-advocates
in each region, strengthening the
role of the consumer welfare desk/
customer service in addressing
consumer complaints, and integration
of consumerism in the schools and
communities.
In 2010, consumer complaints received
by Consumer Welfare Desks both
in government field offices and in
business
establishments
reached
75,000, majority of which were
about consumer products and service
warranties, liabilities on products and
services, and product quality and safety.
While 99 percent of the complaints
were eventually resolved, there is a
clamor for a shorter resolution period.
Responsibility for developing and
implementing consumer policy and
programmes rests on the National
Consumer Affairs Council composed
of the DTI, DepED, DOH, DA,
several consumer groups and business
organizations, tasked to improve
the management, coordination, and
effectiveness of consumer programs.
Strategic Framework
The Plan seeks to enable the industry
and services sectors to contribute
significantly to economic growth
and employment. This requires
interventions that address the countrys
competitiveness by improving the
business environment; increasing
productivity and efficiency; and
promoting a dynamic consumer sector
that demand globally competitive/
quality goods and services offering best
value for money.
Vision
A globally-competitive and innovative
industry and services sector that contributes
significantly to inclusive growth and
employment generation.
Ten-point Agenda
Clear and concrete strategies and action
plans are necessary to achieve doable goals
and targets.
Figure 3.4. Strategic Framework for Industry and Services
73
Goal 1: Create a better business

environment
The government shall continuously work for
an environment characterized by transparent
and predictable public policies. Processes
shall be streamlined, business procedures
standardized; and quality of transactions
ensured. This competitive advantage
influences the decision to invest in the
Philippines; as well as raises the capability
to promote and channel local products and
services in various global markets. Thus, to
ensure a better business environment, the
government shall aim to be in the upper
third in the global competitiveness ranking
(i.e. IFC/WB Doing Business Report).
Improve Governance
1. Streamline bureaucratic procedures and
foster transparency
Improvements in the Business Registration/
Permits and Licensing System (BPLS) shall
be pursued both at the national and local
government levels. The BPLS will help
standardize the procedures for acquiring
permits and licenses to operate new business.
It will not only reduce the time to secure
permits but also eliminate corruption by
limiting face-to-face contacts between the
applicant and regulator. The government will
implement a customer-oriented approach to
policies, rules and regulations on procedures.
Public service quality standards for all
frontline services of the government and
international-based management systems
throughout the government shall be adopted.
The National Government shall strengthen
LGUs capacity for good governance
and LGU commitment in promoting a
unified approach. To lower transaction
costs and promote better transaction flows,
Government shall enhance collaboration
between the public and private sectors
(Refer to Chapter 7: Governance).
2. Promote a consistent, coherent,
cohesive, predictable, and responsive policy
environment
To address investor confidence and retain
existing investors, government shall give
priority to key concerns, namely: labor,
74
telecommunications,
transport
(aviation and domestic shipping),
energy, peace and order, and disaster
risk-reduction programs. Government
shall address the facts and the
reality behind the countrys lagging
competitiveness indices, particularly
those pertaining to: (1) international
investments, (2) basic infrastructure, (3)
scientific infrastructure, (4) education
(5) business legislation, (6) energy, (7)
exports, (8) ethics, (9) labor, and (10)
barriers to entry and exit.
As the world recovers from the global
economic crisis, competition for
opportunities is bound to tighten. The
Philippines is among nations vying for
a strategic place in the global market.
Considerable challenges confront the
countrys efforts to compete for tourists,
capital, entrepreneurship, and links to
global supply chains.
In the medium term, the following
policy reforms shall be pursued:
Amendments to Executive
Order (E.O.) No. 226 or the
Omnibus Investment Code of
1987- to strengthen the investment
promotion
and
industrial
development functions of the Board
of Investment (BOI).
Enactment of an Anti-Trust/
Competition Law - to level
the business playing field by
strengthening the legal and
institutional framework to combat
unfair trade practices, prohibit
cartels and monopolies and
sanction key officials of companies
that violate fair competition.
Amendments to the Export
Development Act - to incorporate
significant changes in the global
trading environment as well as
establish lasting solutions to
recurring export development
issues, with emphasis on sanctions,
enforcement, and the privatization

of export promotion functions.
Reforms in the Aviation Sectorfull implementation of
E.O.
No. 219 providing for an open
and competitive international
aviation sector that allows local
and foreign air carriers to expand
their operations, maintain a strong
aviation industry, and ensure
international connectivity.
Land Use Plan - to provide a
sound basis for the local tourism
development,
including
the
designation of tourism enterprise
zones by the Tourism Infrastructure
and Enterprise Zone Authority
(TIEZA).
Amendments to the Tariff and
Customs Code of the Philippinesto support fair trade and oppose
all unfair trade policies and
practices, especially on smuggling
and
to be compliant to the
international standards on customs
procedures under the Revised
Kyoto Convention to which the
Philippines acceded.
Amendments to the Local
Government Code- to provide an
environment conducive to business.
Amendments to the Labor Codeto address labor-related issues, and
harmonize and strengthen labor
force and management and ensure
that countrys labor policies is
aligned with international treaties
and ratified International Labor
Organization Convention.
Reforms in public research
and
development
(R&D)
prioritization and funding system
and full implementation of the
Technology Transfer Act of 2009
(R.A. 10055)- to ensure social
return on public R&D investments.
Measures to be considered include
a systematic national research inventory;

a clearinghouse for new major research
investments; and a systematic effort to
translate outputs of completed research
into actionable policy measures or into
potential product developments or
innovations.
Reform of the R&D tax incentive
under R.A. 8424- to encourage innovative
and collaborative behavior among private
firms.
Amendments to the Intellectual
Property Code- to serve the needs of
the copyright-based industries as well as
strengthen the enforcement capability of
the Intellectual Property Office.
Passage of the Data Privacy and
Anti-Cybercrime Bills- to ensure the
security, integrity, and dependability
of the countrys information and
communications structure.
Amendments to the Standardization
Law- to strengthen the national standards
body.
Amendments to the Barangay Micro
Business Enterprises (BMBEs) Act- to
support the growth and development of
microenterprises.
Amending and transferring the
function and mandate of the Philippine
Council on ASEAN and APEC
Cooperation to the Philippine Council
on Regional Cooperation.
Government
shall
formulate
a
comprehensive national industrial strategy
that spells out opportunities, coordinates
and promotes the growth of forward and
backward linkages in priority areas and highpotential growth sectors as well as prepares
other industries to attract investments and
generate jobs. This plan entails a regular
review of national investment incentives
to examine their thrust, adequacy, and
consistency with local regulations especially
those pertaining to priority sectors i.e.,
mining, tourism, agribusiness and BPO-IT.
75
The government shall include programs to

implement disaster-mitigating measures,
sustain socio-political stability, and create
necessary conditions to ensure safe and
peaceful business environment for investors.
Furthermore, government shall support
policies and legislation that shall:
a. promote a working balance between
the interests of labor and capital as well
as provide avenues for dialogue and
cooperation based on mutual benefit
b. pursue anti-corruption, anti-red tape,
anti-smuggling and integrity initiatives
The Philippines needs to be
known as a country offering
vast opportunities for trade and
tourism and will be promoted as
a conducive investment haven
that is now open for business.
c. provide a fertile landscape for

Philippine domestic and foreign
investments (i.e. power regulation,
cabotage principle, etc.). The problem
of high cost energy must be addressed
by achieving a price range comparable to
energy costs among ASEAN peers (i.e.,
Indonesia, Vietnam and Malaysia).
d. mainstream Disaster Risk reduction
(DRR) and Climate Change Adaptation
(CCA) in industry and services sectors
by:
Establishing compliance mechanisms
for business sector on DRR standards.
Strengthening implementation of or
reform existing laws on land-use and
related laws such as building code for
disaster-resilient industry and service
sectors.
Assessing the level of DRR awareness
and activities among the private sector
and disseminate information, education
and campaign (IEC) materials on DRR
to ensure their support, participation and
cooperation
The following programs will also be pursued
to support DRR and CCA:
Develop and operate innovative
financing schemes to secure sustainable
financing for programs on climate
76
change. This can take the form

of payment for ecosystem services
including collection of fees for
water consumption by industries
and fees from tour organizers,
lodging and other tourist facilities
for ecotourism.
Design and implement DRR
and CCA measures for mining
companies. Areas suitable for
mineral resources development
shall be defined based on
scientific information on climate
change risks and vulnerability of
ecosystems and communities
Develop synergy between
small-scale, medium and largescale mining operations taking
climate change and prudent
mineral resources development
into consideration.
3. Promote e-commerce and ICTenabled automation
Automation and computerization of
government processes shall be pursued
to reduce transaction costs and make
public service more efficient.
The
e-Commerce Law shall be fully
integrated in the policy environment
for business.
4. Encourage Public-Private
Partnership (PPP)
The government shall provide an
enabling
business
environment
for private sector investments and
partnerships by pursuing a stable
macroeconomy and sound public
policies. Government shall recognize
the essential role of the private sector as
the engine of the countrys growth and
development. The government shall
provide for the transparent bidding of
PPP projects for the period 2011-2014.
The government shall also promote the
Philippines as an ideal partner in PPPinfrastructure development; and closely
monitor and ensure transparency in
the management of PPP projects.
Planning, implementation, financial
accountability, and evaluation shall

ensure that such investments are
safeguarded.
Strengthen Economic Zones
The government shall continue the
promotion of private sector-led
development of economic investment
promotion areas by both foreign and
local investors. Moreover, government
shall also provide the needed support in
the setting up of investment locations.
Economic zones shall be promoted
and special economic zones shall be
strengthened. Experience has shown
that facilitating economic zone
development by the private sector is
effective in attracting export enterprises
to locate in said zones, given the
support facilities, infrastructure and
services available in such areas. The
development of economic zones
generates employment and business
opportunities by establishing linkages
among industries in and around the
economic zones.
In
addition,
the
Government
shall pursue the issuance and full
implementation of the rules and
regulations for the designation of
tourism enterprise zones, envisioned
to expand the current room capacities
and diversify products in tourist
destinations.
Strengthen National Brand/Identity
Awareness
Government
will
initiate
and
implement a national branding and
marketing campaign to promote the
Philippines not only as an investment
site and tourist destination but as
producer and supplier of quality
world-class products and services. The
Philippines needs to be known as a
country offering vast opportunities for
trade and tourism and will be promoted
as a conducive investment haven, now
open for business.
The Plan intends to pursue the development

and promotion of Brand Philippines.
The aim is to achieve among global buyers
a Philippine First mindset by creating a
distinct Philippines brand widely accepted
and recognized in the global export market
connoting quality, value and reliability.
Moreover, to be known as Asias trendsetter
in export products and services, and setting
the highest standards of creativity, innovation
and excellence.
A new tourism marketing campaign/
branding shall be developed in consonance
with the countrys international image and
trade promotion thrust, with emphasis given
to our countrys vast retirement potential
and epicurean attractions.
Moreover,
judicious
selection
and
programming shall be undertaken in
mounting a compelling and meaningful
Philippine participation in various cultural,
tourism,fairs and trade expositions worldwide
with preference for those sanctioned by
foreign governments, global associations and
inter-government organizations.
The government shall pursue

innovation as an essential
factor in harnessing culture of
competitiveness.
Goal 2: Action agenda to improve

productivity and efficiency
Higher productivity and efficiency of industry
and services sector must be manifested in
increased levels of exports, investments,
tourism revenues, and entrepreneurship. By
2016, the following targets are laid down:
(a) US$ 91.5 billion in annual merchandise
exports; (b) US$28.9 billion in annual
services exports; (c) PhP3,796.47 billion
in cumulative approved investments (d)
a doubling of annual visitor arrivals to 6
million by 2016; (e) US$4.5 billion in annual
tourist receipts by 2016; (f ) a national goal
of six million jobs cumulatively generated by
2016, about 4.6 million of which will come
from industry and services. Of these, two
million will come from MSMEs.
Intensify the Culture of Competitivenenss
A culture of competitiveness pursues the
development of a positive, innovative, and
creative mindset through training, paving
avenues for enhancements, reinforcement
77
of shared values, and emphasis on linkages

of skills and development as contributor to
economic growth. It will make the fullest
use of PPP wherein results directly impact
on competitiveness. Efforts shall be pursued
to instill a national consciousness that
appreciates the significance of achieving
competitiveness in process and quality.
With its limited resources,

Government shall focus its
interventions on key areas that
are job generating, where the
country enjoys comparative
advantage, and with high growth
potential.
Because the delivery of any product or service

should respond above all to the needs of the
customers, policies that foster a customercentric business environment will be given
close attention. An aggressive education and
information campaign through productivity
and quality-related training, seminars, and
promotional materials, in print and mass
media, are necessary. Development of
customer-service standards sets the norms.
Incentives, recognition schemes and quality
awards can serve as rewards and inducements
to high-performing, customer-focused
organizations.
In addition, the government shall pursue
innovation as an essential factor in
harnessing culture of competitiveness. Along
these lines government shall: (1) review
the role of higher education institutions
in the countrys innovative system; (2)
review investments in science, technology
and innovation (STI) human resources
to directly link them with strategies in
retaining the best and brightest Filipino
STI talents; and (3) promote a culture of
multi-disciplinary collaboration, knowledge
sharing, open dialogue and cross-fertilization
of ideas as extremely relevant and important
in the emerging global competitiveness
environment.
Government shall promote a national
culture of competitiveness by instilling
customer focus and a sense of pride in job
well done. A culture of competitiveness is a
national psyche toward achieving excellence
in the delivery of products and services
that respond to the needs of the customers.
Embodying a culture of competitiveness
requires the following initiatives:
1. Developing Human Resources

Government shall develop human
resources that instill a national culture
of excellence by developing and
harnessing a broad range of vocational,
clerical, technical, managerial and
entrepreneurial skills, propagating
firm-level productivity and boosting
competitiveness awareness. Harnessing
skills and human capital as asset,
propagating firm-level productivity
and competitiveness shall be promoted
in line with full human development.
Program interventions shall be pursued
to develop the core values for an
entrepreneurial mindset.
Such a mindset is one that will bolster
for an enterprising mindset and a
proactive attitude will be pursued. This
mindset leads to constant improvement
and innovation, creativity in offerings
and processes and therefore becoming
competitive at all times. Individuals
become self-driven, resourceful, always
positive and optimistic, opportunities
and solution-oriented.
To ensure market-responsive education
and training, the supply side of the
labor equation should be addressed
through quality education/training and
effective assessment and certification
systems. The government shall
undertake and maximize capacitybuilding programs with the support
of foreign governments and intragovernment organizations under the
framework of various bilateral and
multilateral engagements. Likewise,
linkages among Filipino skilled
workers and their business network,
technical experts and Filipinos involved
in epistemic communities abroad shall
pursue various multi-stakeholder
talent-sharing and brain-gain and skills
enhancement initiatives (e.g. Science
and Technology Advisory Council, the
Balik-Scientist Program and ERDT).
In addition, sunrise industrial or
service activities with global potential
shall be identified by roadmaps that
78
forecast and prepare initiatives for skills

requirements on employment needs.
From 2007 to 2010, four roadmaps
were developed for such industries:
(a)electronics, (b) BPO/IT enabledservices, (c) medical tourism, and (d)
health and wellness ( including the
retirement ) sectors. By 2016, roadmaps
for the remaining sunrise industries
namely agribusiness, eco-mining, value
chain materials, and manufacturing,
shall be developed to complement
the employment requirements. In
cooperation with higher education
institutions and the private sector,
niches shall be identified and matched
with the employment needs and
strategic positioning of local firms and
industries.
2. Mutually agreed-upon working
arrangements
Mutually
agreed-upon
working
arrangements increase efficiency and
streamline operation. Thus, they are
essential for the competitiveness of
enterprises. These must be consistent
with the promotion of employment and
protection of basic rights of workers
accompanied by adequate social safety
nets to protect the vulnerable workers. The
government shall establish facilitation
mechanisms and services accessible to
workers and enterprises alike.
3. Strengthen existing Tripartite
Industrial Peace Councils
In line with democratic institutions and
traditions, policies should encourage
the strengthening and reactivation or
creation of more industry tripartite
councils nationwide and firm-based
dispute settlement schemes that are
geared toward self-regulation governed
by voluntary codes of good labormanagement practices. In addition, the
government will adopt conciliation-
mediation and alternative dispute resolution

mechanisms at different levels (LGU,
industry, and national); implement a less than
30-day mandatory conciliation-mediation
of all labor cases under the single-entry
approach; and campaign for less industrybased voluntary code of good practices.
Focus Interventions To Increase Exports/
Investments/ Tourism
With its limited resources, Government
shall focus its interventions on key areas
that are job generating, where the country
enjoys comparative advantage, and with
high growth potential.
1. Investment promotion, industry
development in job-generating areas
To increase exports and encourage foreign
and domestic investments, the government
shall pursue intensive promotion and
industry development as well as offer a more
focused incentives package to stimulate the
economy and allow all development partners
an opportunity to take advantage of the
gains from increased economic activities.
The Philippine Export Development Plan
2011-2013 and 2014-2016 shall provide
detailed strategies to implement the overarching strategy of Moving Up the Value
Chain to Double Exports. With more
investments pouring in and more revenues
from exports and tourism, consumption is
boosted by higher purchasing power from
a vibrant economy. With the fundamentals
in place, this whole process becomes a cycle
that leads to growth. To maximize the gains
from targeted and holistic interventions, the
following key areas will be pursued in the
medium term:
a. Tourism
Tourism is a powerful driver for economic

growth, infrastructure
modernization,
local area development, and employment
generation. The increase in visitor
expenditure and investment arising from
tourism activities create livelihood and jobs
in many local communities, which helps
reduce poverty.
Tourism development will be pursued in a
sustainable manner to continuously create
79
jobs and livelihood for local communities

and generate foreign exchange for the
economy while ensuring a high level of
visitor satisfaction. Adherence to sound
and manageable environmental practices
in the development and promotion of
tourist destinations as well as enhancement
of tourism products and services will
serve as cornerstones for planning,
product development, human resources
development, and marketing. Aiming to
make the Philippines a destination of choice
for tourism in the Asia-Pacific region,
the government shall take the following
measures:
Encourage the diversification of
existing destinations, and creation of
new tourism areas and products

including the expansion in
room capacities through the
implementation of the rules and
regulations for the designation
of Tourism Enterprises Zones
(TEZs).
Mobilize
the
enormous
capacity of the countrys LGUs at
the provincial, city and municipal
levels by strengthening their
capacity to plan, regulate and
guide tourism development
so that it is environmentally
and socially sustainable as well
as economically inclusive and
viable. Moreover, increase the
Figure 3.5: Strategic Destination Area for Tourism
Source: Department of Tourism and Japan Bank for International Cooperation- Sustainable Management Plan for Central Philippines.
80
competitiveness of the countrys

tourism enterprises and products
by implementing partnership
with the LGUs and the private
sector to implement a mandatory
system for the accreditation of
tourism enterprises, including the
formulation of a national standards
and certification program for
tourism facilities and services to
ensure the highest quality and
international comparability of the
countrys tourism products.
Formulate a national tourism
development plan (NTDP) as the
framework for the identification
of
tourism
destinations
and
products,
domestic
and
international
markets,
marketing and promotion as
well as prioritization of tourism
infrastructure
requirements
by the Department of Public
Works and Highways and the
Department of Transportation
and
Communications,
and
designation of TEZs by the
TIEZA. This will also provide the
basis for LGUs to subsequently
formulate their local tourism
development plans. (Figure 3.5)
Encourage LGUs to develop
tourism related-products and
services using the communitybased and ecotourism approaches
as implemented by innovative
and
entrepreneurial
local
governments in Bohol, Palawan,
and Bicol, and have contributed
to poverty reduction, protection
of the environment, and gender
equality in local areas. To this end,
LGUs can seek the assistance of
capable public and private higher
education institutions in their
areas, whose academic, research
and extension programs in
tourism-relevant disciplines and
technical expertise can be tapped
for local tourism/culture planning,
tour guide services, standards-
setting and quality assurance for the

hospitality sector, site and institutional
development, and the showcasing of
cultural heritage.
Undertake a focused and sustained
international and domestic tourism
promotion campaign and programs
using both traditional and the new
social networking media targeting
existing and new markets as well as
OFs.
Launch focused and sustained
international and domestic tourism
programs using the new media with
the support of OFs. Likewise, the
support and cooperation mechanism
for private sector and nongovernment
organizations participation shall be
enhanced. Efficient intra-government
coordination system shall be put into
practice in tourism promotional and
planning activities. These shall involve
the Tourism Promotions Board (as
mandated by the Tourism Act of 2009)
and the respective tourism related
promotional units of the Department
of Foreign Affairs (DFA), Department
of Health (DOH), Philippine
Retirement Authority (PRA), BOI,
DTI, Department of Environment and
Natural Resources (DENR), National
Commission for Culture and the Arts
(NCCA), and the various agencies and
councils supporting culture and the
arts (i.e. CCA, FDCP, and so forth).
The entry of tourists under thematic
programs (e.g. health and wellness
and employment generation) shall
be further facilitated in coordination
with the DFA, Department of Justice
(DOJ) and the BOI. Such a multidimensional stakeholder approach
shall maximize the promotion of
medical tourism; retirement; meetings,
incentives, conventions and exhibitions
(MICE); adventure and ecotourism;
film production, and Philippine
cultural and culinary diversity.
81
Develop and implement a new

tourism
marketing
campaign/
branding in consonance with the
countrys international image and trade
promotion thrust.
Promote public- private-sector
partnerships both in infrastructure
development
and
capacity
expansion and modernization in the
accommodation and recreation sectors,
among others. The private sector will
be engaged in extensive consultation
to identify gaps, policy reforms and
programs that will assist the tourism
sector achieve its goals and objectives
in the medium term. The Tourism
Coordinating Council shall be the
vehicle to strengthen such partnerships.
b. Business Process Outsourcing
The Philippines is now the second-largest

destination for outsourcing and is soon
expected to lead the global industry in terms
of revenue earnings in voice/call center
operations. The Philippines is projected by
foreign analysts to lead in all aspect of BPO
operations worldwide in the next five years.
Thus, it is imperative to build the right value
proposition to sustain both prevailing and
prospective global positions.
BPO, IT and IT related services
comprise both voice (e.g., call centers)
and non-voice (e.g., back office/
knowledge
process
outsourcing
(KPO), IT outsourcing, Engineering
Services Outsourcing (ESO) and
design process delivery, transcription,
animation, and game development.
Even as the Philippines takes the top
position in the contact-center segment
of the BPO industry, there is a need
to nurture the growth in the KPO
segment of the BPO industry, further
enhance wage and work conditions,
and strengthen the multi-stakeholder
support framework. Thus, an average
annual export growth of 20 percent
shall be achieved from the following
strategies: (1) development of a
sustained data collection system for the
services sector; (2) implementation of
82
a comprehensive export branding

program; and (3) legislation
for data privacy and against
cyber-crime in order to reduce
risk perception of Philippine
BPO services as well as pursue
legislation of the Magna Carta
for Call Centers Workers.
In addition to BPO, Services
and Creative Industries shall be
promoted and enhanced. This
will include other services such as
accounting (professional services
and outsourcing), education,
engineering,
franchising,
interactive media with focus on
animation, and gaming, health
and wellness, and shipcrewing/
ship management.
To support the industry, there is a need
to nurture the talent pool, develop the
infrastructure and regulatory support,
and improve the socioeconomic
environment. To this end, government
shall:
Enhance
investment
promotion
and
industry
development
strategies
by
synergizing
initiatives
and
programs of the government
and private sector to maximize
resources;
Harmonize the educational
system with the changing needs
of the industry;
Advocate talent development
through training and opportunity
building, creating awareness
that BPO provides high-paying
jobs/careers, and focusing on
expanding the talent pool;
Sustain
government
commitment thru fiscal and nonfiscal incentives and facilitate the
conduct of industry-focused road
shows overseas;
Improve the long-term risk

perception and overall business
environment; and
Expand the development of
Next Wave Cities in partnership
with private sector.
c. Electronics
The electronics sector is a major

driving force of the Philippine
economy and has consistently been
a source of high-value, high-impact
investments preferred Original Design
Manufacturer (ODM) and Original
Equipment Manufacturer (OEM).
Likewise, the country also houses some
of the worlds top electronic companies.
There are two major players in the
electronic components sector: the thirdparty subcontractors, which are mainly
Filipino-owned, and the multinational
plants which cater to the requirements
of their parent companies.
The electronics industry will continue
to be the driver of growth of Philippine
merchandise exports. Shipments are
foreseen to exceed US$ 30 billion
by 2010. At an annual growth rate
of 10 percent, electronics exports are
expected to hit more than US$ 50
billion by 2016.
The priority sub-sectors for promotion
for electronics are: (1) components/
devices (semiconductors); (2) electronic
data processing; (3) automotive
electronics; and (4) solar power or
photovoltaic cells.
To show the reliability of Philippine
electronics and increase exports, country
image branding and investment are
significant. Likewise, this would entail
aggressive promotion by: targeting
emerging markets; conduct of highlevel investment missions; integration of
the electronics industry; establishment
of human competencies throughout the
value chain such as continuously growing

talent pools in MS and PhD levels as long
term strategy; and attract new players in
potentially competitive sub-industries such
as solar cells, growing capacity in IC design
and the countrys collaboration with Taiwan.
d. Mining
The Philippines is situated along a welldefined belt of volcanoes called the CircumPacific Rim of Fire making it one of the
most mineralized countries in the world.
The Mines and Geosciences Bureau (MGB)
estimates that some nine million hectares of
the Philippine total land area of 30 million
hectares are geologically prospective for
metallic minerals. Some of these areas may
be developed further, particularly large
ore bodies and linked with downstream
processing industries. The operation of
processing plants and value-adding activities
which have a demand-pull effect on primary
production will serve as a catalyst for
the development of other industries and
sectors generating economic activities. The
multiplier effects of these industries will
foster the growth of the mining industry
throughout the country.
The Philippine Mining Act is regarded
as among the first worldwide to mandate
corporate social responsibility in mining
projects and activities.
The current export oriented mining industry
should aim at producing manufactured
goods and industrial products based on an
industrialization framework and supported
by a strong R & D program on efficient and
state of the art technologies. For instance,
copper production should be linked with
smelting and refining operations down to
the manufacture of cable wires and other
high value finished products. The Iron and
Steel Industry should be rationalized to
address not only the local requirements but
should also compete in the export market.
83
Generation of more investments in mining

and mineral processing and mineral
based manufacturing industries is the
key to doubling exports by the sector by
2016. Policies, goals, objectives, strategies
and programs of both national and local
government entities need to be in sync and
focused on promoting mining and mineral
processing to establish industrial zones in
identified areas with substantial mineral
deposits.
In the short-term, investment promotion
activities of the BOI, DFA (and its Foreign
Service Posts), and DTI (and its Foreign
Trade Service Corp) may focus on preidentified mining projects determined
by both the BOI and the MGB as
problem-free in terms of mining permits,
in collaboration with the LGUs, and in
consultation with local community. Other
recommendations to further increase the
sectors competitiveness and contribution to
economic development are the following:
Develop the framework for the
industrialization of the Philippine
Mining/Mineral Industry to support
the countrys export activities and
vertical integration to stimulate
downstream and upstream industries
and encourage domestic processing of
minerals for the export markets;
e. Housing
Investing in mass and socialized

housing will enable investors to enjoy
incentives, as the government seeks to
address the housing gap of 5.8 million
units from 2010 to 2016 or about
800,000 units per year. The government
has also increased the target number of
housing loans from 75,000 to 150,000
housing units. This is in line with the
governments thrust of facilitating access
to a variety of housing options that are
decent, affordable, and responsive to
the diverse and changing needs of the
people by providing incentives to lowcost mass housing developers.
f. Agribusiness/Forest-based Industries
As one of the identified priority areas,

market-driven and competitiveness-led
agribusiness/forest-based and livestock
industries shall be continuously
promoted in both inbound and
outbound investment missions, and
shall be included in promotional
activities such as business matching
and investment briefings.
Harmonize national and local

government policies, goals, objectives,
strategies and programs; and
To further raise investment in agrobased industries, the government shall

provide incentives as well as identify
lands that are adequate for certain
agricultural products. These lands
should have already been covered by
agrarian reform and the agro-based
industries will respect the security
of tenure of the agrarian reform
beneficiaries (ARBs) and will work
to improve the income and livelihood
of the ARBs. The domestic economy
shall be strengthened through asset
reforms, development of agriculture
and promotion of industrialization. (See
Chapter 4: Competitive and Sustainable
Agriculture and Fisheries)
Ensure international linkages to

relevant global sustainable extractive
Among agro-based products exported

by the Philippines, the exports of fresh
Strictly enforce compliance with

environmental and social development
commitments;
Cleanse inactive mining applications
and non-performing mining contracts;
Continue
public
information
campaigns and increase dialogues
with concerned groups. Inform the
public about responsible mining that
minimizes environmental impact;
84
industry standards and best

practices
and
benchmarks
(e.g.
Extractive
Industries
Transparency Initiative or EITI).
and processed foods are seen growing at

10 percent annually, a performance that
will come mainly from fresh fruits such
as banana, pineapple, mango, papaya,
and okra; preserved fruits; beverages;
and processed marine products
(e.g. tuna, shrimps, etc.). Markets
of these products shall be expanded
and diversified through international
promotional events, inbound business
matching and addressing the market
access issues resulting from new
requirements of target and growth
markets. Government shall strengthen
the certification system for Good
Manufacturing Practices (GMP),
Hazard Analysis Critical Control Point
(HACPP), and ISO 22000 as well as
halal and kosher food standards and
certifications. The DOST and DTI
shall assist food processors in improving
the packaging of food products.
The DA shall ensure the production
of specific varieties required by the
market and other agri-products which
are raw materials for processed food,
e.g. allocation of sugar. Moreover,
new Free Trade Agreements (FTAs)
will be utilized to increase Philippine
agricultural exports.
Coconut, which is widely available
in the country, is an immense source
for food and non food products. Non
food-based products such as coconut
oil account for a significant portion of
Philippine exports of coconut products
with crude coconut oil accounting
for most of coconut oil exports. To
double exports of coconut products
by 2016, value-added products such
as refined coco oil, coco biodiesel and
oleochemicals shall be promoted.
Technology shall be developed to collect
coconut water from the production of
coconut oil. It is also imperative that
supply of coconut should be available
to processors.
Refined coco oil is used for both food
and industrial/external applications. To
promote the use of refined, bleached
and deodorized (RBD) coco oil in the

international food processing market, the
government shall help in information
campaigns to counter the negative
publicity about coco oil (allegedly
perpetuated by producers of competing
products), and create an awareness of
coconut oils health benefits.
The
Philippines
already
figures
prominently in almost all categories
and products of the worldwide coconut
industry, but efforts shall be undertaken
to further develop the coco-coir and cocopeat segments to export higher value
products such as geo-textile for soil erosion
control or green architecture projects,
rubberized coir products for car seats,
mats, bed mattresses, air filters, among
others. Investments in technology shall be
promoted and issues concerning material
supply aggregation and consolidation
shall be addressed.
Through a trilateral undertaking, the
DA, DFA and the DTI, shall continue
to source breeders for cattle and water
buffalo in order to enhance the supply of
beef and milk products in the market.
g. Logistics
The Philippines international logistics

activity is relatively small compared to
nearby countries. Together with the
growing MSMEs potentials and global
supply chain relations, this low base
indicates a potential for high growth for
logistics and supply chain activities.
To expand the sector, the government shall
encourage investments in the development
and expansion of logistics infrastructure
in the international market. It will also
promote other existing ports such as those
located in Batangas and Subic not only
to decongest the Manila port but also to
open opportunities to worldwide shipping
in the new areas.
Furthermore, the government shall review
and develop/reform policies and rules,
such as customs practices; transshipment
85
of cargoes in various modes (i.e. air-air, seaair, and air-sea); and foreign shipping services
along the entire multi-modal transportation
chain.
h. Shipbuilding
The Philippine shipbuilding sector, which

now ranks fifth in the industry, covers
building, ship repair and shipbreaking, and
accounts for two percent of the total world
market. By 2014, investments are expected
to grow by PhP93 Billion. Investment
growth will be focused on serving identified
markets, such as South Korea and Japan,
although other markets opportunities will
also be considered.
In addition, support for shipbuilding shall
also come from promoting the countrys
human capital and continuously providing
enhancement programs.
The export market, which is dominated by
three foreign shipbuilders, accounts for more
than 98 percent of the total turnover, with
the number expected to increase. Under
good management and with skilled human
resources matched by capital, technology and
global market opportunities, the industry is
moving forward to make the Philippines
the fourth largest shipbuilding nation in the
world in the next five to ten years.
i. Infrastructure
Infrastructure plays a vital part in the

countrys economic development and
growth. Investment shall be directed towards
the development of air and sea ports;
roads; agricultural support facilities such
as irrigation systems and systems for water
supply; commercial infrastructure for trade
and exposition; waste management systems
(i.e. solid and liquid waste); and energy
source facilities for power supply. (Refer
to Chapter 5: Accelerating Infrastructure
Development).
j. Other High-potential Industries
While there are priority areas that will

be focused on, the government will also
be vigilant in nurturing industries that
post potential in (1) domestic and export
86
market demand; (2) job generation;

(3) utilization of local talents and
creativity; and (4) maximization of
the total value chain. Prospective areas
perceived as high-growth potential
include: homestyle products; wearables;
motor vehicle parts and components;
garments; and construction and related
materials, among others.
Homestyle Products. Annual growth of 7
percent is targeted in the design-driven
homestyle products, which includes
furniture and furnishings, holiday dcor,
houseware and ceramics, woodcraft,
giftware (excluding toys), shellcraft,
and basketwork. The booming outdoor
market in China and India and nontraditional markets such as South
America (Brazil), Eastern Europe and
the Middle East shall be the target
markets. Aggressive export promotion
through international trade fairs shall be
pursued. The strong design capability
of exporters, capitalizing on the mixedmedia furniture, shall be continuously
developed and sustained.
Wearables. Fine jewelry is the major
export product of this industry. It
also covers costume jewelry, fashion
accessories such as headgear, scarves,
gloves, belts and bags. To attain the
10 percent annual growth target, the
government shall help the industry
gain international exposure through
trade fairs and shall put in place
uncomplicated export and import
policies and regulations.
Motor Vehicle Parts and Components.
This industry targets an average annual
export growth of 12 percent for parts
and components and up to 5 percent
for completely-built up (CBU) exports.
Wiring harness exports, driven by rising
global market demand, are expected to
grow in volume by 97 percent through
more efficient operations, or almost
US$ 24 million in additional annual
export earnings. Earnings are also
expected beginning 2012-2013 from
projects with the U.S., Korea, Thailand,

U.K. and Australia.
To attain the targets for CBU exports,
government and the private sector
shall aggressively encourage global car
manufacturers to assign specific car
models to be supplied by Philippine
original equipment automotive parts
manufacturers/exporters.
The Replacement Parts Market will
be tapped in addition to the original
equipment parts market. Products with
high potential are: electric fuel system
parts; substrates for catalytic converters,
anti-lock brake system, leafsprings,
radiators, exhaust system and mufflers,
automotive rubber parts, alternators,
automotive carpets, tempered safety
glass, windscreen, weatherstrips,
automotive plastic parts, nuts and bolts,
and aluminum alloy wheels.
Subcontracting for customized orders
of various automotive metal and plastic
fabrications such as casting, forging,
stamping, machining, and tooling will
be pursued.
Garments. The garments industry is
one of the countrys foreign exchange
earners, exporting a total of US$1.67
billion in 2009. Top export markets
include the US, Japan, Great Britain,
Germany and Canada. For 2011, exports
are estimated to increase by as much
as US$2 billion. Employment in the
industry, currently at 150,000 workers,
is foreseen to increase considerably over
the next five years.
Construction and Related Materials.
The construction sector consists of
(a) wood-based products (e.g. doors,
windows, plywood and veneer, joineries/
moldings); (b) metal-based products
such as iron and steel, aluminum and
copper products; (c) nonmetal-based
products (except marble); and (d)
chemical-based products (e.g. PVC
plastic, vinyl, paints and varnish). By
2013, the construction industry is
expected to reach a total of US$ 1.37 billion

in export sales, with a 12 percent annual
growth.
The formulation of a Construction Industry
Strategic Plan for the 21st Century or CI21
is intended to provide a framework for the
industrys accelerated growth.
2. Development and implementation of
programs that will enhance productivity
and efficiency through green programs and
sustainable consumption and production
patterns.
Programs will include PPP initiatives;
projects in the countryside such as ecoefficiency and eco-design programs (i.e.
Bayong Development, Bamboo and coconut,
among others); advocacy programs that will
be enhanced through LGU, community,
and media partnerships; and funding of
projects and programs through international
grants shall be explored. Domestic efforts
shall include the granting of incentives (i.e.
through the BOI Investments Priorities
Plan or IPP) to green projects and programs.
3. Development and implementation
of technology development projects in
various priority areas/sectors to boost
its innovativeness and competitiveness
(i.e. the design of an ICT-based English
language learning to increase the human
resource uptake of call centers).
4. Review indicators on the number of new
technology-based firms created.
5. An integrated high-impact export
promotion program that will enhance
country branding will be adopted and
implemented at the initiative of the DFA,
DTI, DOT, DA, pooling their resources
with other relevant stakeholders.
6. Industry and services shall be induced
to ascend the value chain to develop
higher local value-added products and
services through a well-conceived and
comprehensive industrial strategy.
Market diversification shall be achieved by:
targeting high-economic growth markets
such as China and India, participating
in global supply chains with ASEAN;
maximizing the benefits existing Free
87
Trade Agreements; and strengthening

our international trade policy negotiation
structures.
Likewise, BDS will also educate

MSMEs in processes that are nonthreatening to the environment.
Provide Firm-Level Support To Potential,

New, And Existing Micro, Small And
Medium Enterprises.
2. Improve access to financing

Government Financial Institutions
such as the Peoples Credit and
Finance Corporation, Land Bank
of the Philippines, and the Small
Business Corporation the main
wholesale finance institutions catering
to microfinance institutions (MFIs)
shall collaborate with DTI, DOT
and viable MFIs in developing
innovative market-based financing
schemes to support micro-enterprises.
Government will collaborate with
MFIs to use microfinance as a tool for
inclusive growth by expanding access by
microenterprises and poor households
to credit, savings, and other financial
services.
1. Facilitate access to BDS
The government shall continue

to implement the national
innovation strategy called
Filipinnovation.
Government shall create a favorable

environment for MSMEs to thrive and
ease their access to financing, facilitate
their entry to larger markets and increase
their productivity and efficiency. Almost
half of MSMEs are engaged in wholesale
and retail trade. Given this large number,
government shall carry out programs to
maximize their participation in supply and
distribution systems within value chains
for identified industry clusters. Business
development services (BDS), including
enhancements needed to boost productivity,
will be provided for promising MSMEs.
The government shall also build on existing
programs, specifically the One Town, One
Product (OTOP) Program, information
campaigns, provincial caravans, and SME
Centers.
In addition, government shall encourage
the formation of new MSMEs. LGUs
shall facilitate business registration, provide
enabling environment in support of
enterprise development, and fully implement
MSME-related laws (e.g. Magna Carta for
MSMEs, BMBE Law).
To complement the existing strategies
identified under the SME development
plan, four thematic areas shall be adopted:
corporate social responsibility, climate
change, gender, and migration. This
approach shall also foster economic activity
in the countryside. Government shall also
assist in the development of programs that
will encourage MSMEs to produce green
products, and use environment-friendly
processes. Business development services
will maximize the use of local and sustainable
sources such as waterlily, bamboo, coconut
among others, and utilize materials in
producing and marketing domestic and
exportable products from these resources.
88
3. Develop livelihood programs for

sustainable micro-enterprise
Government shall support the
transformation
of
livelihood
activities of the poor into sustainable
microenterprises. To this end, DTI
and DSWD shall collaborate in
providing business development and
productivity enhancement services to
existing livelihood projects. With closer
collaboration between DTI and DOT,
community-based and ecotourism
projects will be implemented to provide
alternative and supplemental livelihood
for local communities as well as help
in poverty reduction, raise family
income, and promote a better quality
of life in the rural and far-flung areas,
which are considered desirable tourism
destinations.
4. Promote Entrepreneurship among
OFs
A more aggressive campaign to tap
OFs as sources of capital shall be
pursued. Government shall utilize
media and various forums, including
presidential and official trips, in
encouraging entrepreneurship among
OFs and/or their dependents. DTI
and DOLE shall review and strengthen

existing programs and consider ways
to maximize the brain gain derived by
OFs from foreign deployment. The
DFA, DOLE, DOF, Commission on
Filipinos Overseas, and the Bangko
Sentral shall conduct financial literacy
campaign overseas to educate and
orient OFs regarding their investment
and remittance options which may
include special bond issuances and
related financial instruments.
5. Advancing through Science,
Technology and Innovation (STI)
A whole-of-government approach will
be pursued to achieve competitiveness.
Thus, the government will strengthen
vital factors that highly contribute to the
advancement, distinction, satisfaction
and demands in the domestic and
international
markets
Science,
Technology and Innovation (STI), and
Quality.
a. The government shall continue to
implement the national innovation
strategy called Filipinnovation. This
will enable the country to achieve (1)
a competitive and multi-disciplinary
work force competent in producing
value-added
knowledge-based
services of global standards; (2)
competitive local firms driven by or
borne out of constant innovations
brought about by increased R&D;
and (3) a public policy environment
that ensures continuous innovation
not only through executive, legislative
and judicial initiatives but through
local government programs. It will
promote the usage of Information
and Communications Technology
(ICT) in enterprises. Filipinnovation
focuses on: (1) strengthening human
capital investments for STI; (2)
stimulating STI; (3) enhancing
management of the STI system; and
(4) upgrading the Filipino mindset
in S&T. Since the strategy/policy
imperatives are interconnected, it
shall be coordinated and harmonized
to create necessary conditions to deepen

and consolidate STI capacity.
b. The government shall set up a National
Quality Infrastructure to integrate and
coordinate series of activities involving
metrology, standardization, testing, and
accreditation and certification. It will
provide procedural landscape for products
and services of enterprises, particularly
SMEs, to meet quality requirements.
It will guarantee competitiveness in
the national and international markets
through quality certification.
c. STI, a crucial factor for productivity,
competitiveness, job creation, sustainable
development and poverty alleviation will
also pursue R&D initiatives:
The industry clustering strategy

is vital for linking manufacturing
with other sectors.
Address opportunities for STI

professionals;
Address structural gaps in the STI
and R&D sectors such as inefficiencies
in the structure of incentives and
allocation of R&D resources that
are obstacles to new programs and
activities which could help attain STI
and R&D goals;
Facilitate new STI policies needed
to boost productivity, economic growth
and job creation through increased
knowledge-intensive
economic
activities while maintaining social
cohesion;
Foster tie-ups between industry
and the higher education institutions
to strengthen the effective transfer of
appropriate technology and advanced
skills needed by the industry and for
the production of higher value goods
and services;
Facilitate and utilize sufficient
information on the scientific and
technological experiences and knowhow of other countries;
89
Figure 3.6: Industry Cluster Map
The government shall pursue

market access through effective
bilateral, multilateral and
regional engagements and
representation, and maximize
opportunities offered by existing
trade agreements.
Establish e-centers to enhance

access to knowledge and technology,
particularly in rural and remote areas;
Implement programs and tools to
support and respond to climate change
and disaster risks incidents especially
for fishers and agri/marine farmers;
and
Policy backup and enforcement
mechanisms for existing laws require
bolstering and institutionalizing in close
collaboration with neighborhoods.
Cluster Development
In developing identified industries,
government shall pursue an industry
cluster program to foster inter-enterprise
linkages among MSMEs and strengthen
collaborative networks.
Industry
Clusters
are
geographic
concentrations of competing, collaborating
and interdependent businesses, working
on a similar regional infrastructure and
creating wealth of regions through exports.
It fosters the transfer and adoption of new
technologies, creates risk capital, and attracts
foreign investment
90
It breaks down organizational,

geographical and sector boundaries,
all needed for creating a cycle of
sustainable economic growth. The
industry clustering strategy is vital
for linking manufacturing with other
sectors (e.g. mining, agriculture,
tourism, construction, etc.), particularly
as these affect raw material needs of
manufacturing and the manufacturedproduct requirements of other sectors.
(Figure 3.6)
Industry clusters provide benefits such
as:
Maximizes
capacity
through shared hard and soft
infrastructure, human resources,
R&D and safety standards;
Provides access to all players,
attracting expertise and local
suppliers;
Ensures that top export
products or revenue streams
are sustained through the
development of its value chains
down to the provinces and
municipalities;
Offers a focus to attract new

investments, encourage local
expansion and stimulate start-up
of new companies;
Promotes
collaboration
partnership;
and
horizontal
strategic
Enhances
productivity
by providing firms access to
specialized inputs and skills,
as well as unique information,
knowledge and technology; and
Promotes
product
complementation that enables
longer visitor stay and higher
expenditure
in
tourism
destinations.
The government shall maximize PPP as
a strategy in industry clustering. On a
larger scale, growth centers or regional
hubs shall be identified to synchronize
the mobilization of public and private
resources. These hubs shall unlock
productive capacity in the countryside
by providing a critical mass of resources
in support of private businesses even
outside the capital. The integrated
international air and sea connectivity
of Clark-Subic, Cebu, Cagayan de Oro
(with the upcoming PPP project for
the Laguindingan airport), and Davao
shall be highlighted to enhance the
profile of these growth centers among
foreign and local investors.
For IT-enabled clusters such as
technology
business
incubators,
technology parks and clusters of
knowledge-based
industries,
the
creation of shared infrastructure and
the provision of business support
services for innovators and developing
entrepreneurs shall be promoted. The
establishment of technology business
incubators across the country will be
pursued, taking into consideration
commercial sustainability, careful
matching of target markets with the
strengths and ambitions of potential
firms, and proximity and linkages to research

institutes and universities. The provision
of business support services shall be
private sector-led and demand-driven. The
clustering of knowledge-based industries
through science and technology parks shall
be stimulated
Global And Regional Integration (Increase
Market Access)
The government shall pursue market access
through effective bilateral, multilateral and
regional engagements and representation,
and maximize opportunities offered by
existing trade agreements. The government
commits to engage all possible stakeholders
in undertaking proactive participation
in international engagements geared at
keeping the country in the radar screen of
international business. This initiative will
particularly benefit and maximize trading
potential of MSMEs.
Proactive measures to
empower consumers, promote
competition, and enforce trade
regulations shall be pursued.
Preferential Trade Agreements (PTAs)

contribute to the competitiveness of
Philippine export products and services. The
low utilization rate of these agreements in
the country shows the need to conduct the
orientation and capacity-building workshops
for manufacturers, enterprises, and service
providers to enhance their capability to avail
themselves of the benefits of these PTAs.
The government shall therefore initiate the
following programs and activities:
International trade strategy
The government shall pursue the following
programs to complement its international
trade strategies and provide more
opportunities for market access: (1) National
Single Window will be opened to improve
trade facilitations and logistics; (2) support
shall be afforded to infrastructure and quality
of trade facilitations to improve the efficiency
of logistics services; (3) to further assist
MSMEs integrate into global production
networks, government shall formulate and
implement an industrial strategy, as well
as enhance SMEs capabilities; and (4) the
negotiation process shall be reviewed and
enhanced through reforms of trade policies,
the formulation of a negotiation process,
and capacity building of the Trade Related
91
The entire supply chain shall be

improved to reduce production
and distribution cost of basic
and prime commodities
Matters (TRM) Committee, and tradenegotiators. Best-practice models shall be

adopted for trade analysis to get more robust
cost-benefit analyses of proposed measures
and reforms.
agreements to their advantage. Using

mass and digital media as a tool, each
information session will be supported
by campaigns such as press releases and
radio and television coverage.
Economic diplomacy and consular

commercial and economic representation
overseas
Goal 3: Action agenda to

enhance consumer welfare
The coming years will see the redefinition of

globalization, as the global economic system
continues to integrate with the domestic
economy. The government will therefore: (1)
maintain and safeguard economic security in
multilateral, regional, and bilateral economic
engagements; (2) maintain and safeguard
national and economic security through
strategic partnerships within the Asian
region to ensure that Philippine foreign
policy decisions are taken in the context of
Asian Regionalism and Asian Community;
(3) continuously evaluate multilateralism and
the stability of international organizations;
and (4) work to attain the Millennium
Development Goals (MDG) targets by
2015 and reduce poverty through intensified
international cooperation.
A consumer sector that is vibrant and

dynamic demand better products and
services and encourages the production
of high quality products and services
that are globally competitive. It shall
be a key strategy under the Plan to
raise consumers consciousness of their
rights and responsibilities, and their
options for redress. The objective is to
intensify consumer education, starting
from the young. Hence by 2016, the
Plan envisions 100 percent integration
of consumer welfare in the education
curriculum; and resolution period of
consumer complaints reduced by half.
In line with the ASEAN Tourism Strategic

Plan and the Multilateral Agreement on Full
Implementation of Passenger Air Services,
greater collaboration will be undertaken
to realize the potential of the ASEAN
region as a source market for tourism. In
addition, tour programs shall be developed
through twinning and dual destination with
other ASEAN countries, attracting more
international tourists and foreign direct
investments in tourism.
To inform the public including private
industries/firms engaged and/or potentially
capable to trade outside the country, the
government will continue its information,
education and communication campaigns
on PTAs. The information campaign
sessions will be conducted in 12 key
cities nationwide to cover discussions of
the benefits of the agreements as well as
administrative procedures for availment.
The sessions will also feature businesses,
which have so far benefited from a PTA to
entice and encourage others to leverage said
92
Encourage Consumer Products And

Services Satisfaction.
To encourage the production of
competitive products and services,
government shall encourage a consumer
sector that is vibrant and dynamic and
demands better products and services.
1. Intensive consumer education and
advocacy
An informed consumer is an empowered
consumer; hence, government shall
intensify its consumer advocacy efforts
through a more aggressive awareness and
information campaign. The government
shall pursue consumer education by
integrating product quality and safety
based on internationally accepted
standards in the high school curricula as
well as in alternative learning systems.
Likewise, the government shall expand
its links with media and utilize available
media channels such as radio, print,
television, and out-of-home advertising

and tools, as well as actively network
with various organizations. Also, it will
advocate consumer programs that will
merit public and private satisfaction.
2. Consumer protection and trade
regulation
The government shall help maintain
reasonable prices and availability of supply
of basic and prime commodities. To
achieve this, the government will intensify
and expand programs that will address
affordability of basic necessities and
prime commodities. To address consumer
concerns, a sustained mechanism for
speedy resolutions of complaints will
be implemented in collaboration with
the private sector. The government shall
work at the development of a national
comprehensive competition policy, pursue
the legislative agenda on competition
law, product liability and other consumer
related laws.
3. Development of products and services
standards
The government shall encourage the
manufacture of products to conform to
internationally accepted standards. By
2016, an additional 2,000 Philippine
National Standards will be developed,
adopted and harmonized, while
100-percent compliance by companies
on standards that are developed for
mandatory certification will be enforced.
Improve Supply Chains Of Basic And Prime

Commodities
The Price Act of the Philippines declares the
policy of the State to ensure the availability
of basic necessities and price commodities at
reasonable prices at all times without denying
legitimate business a fair return on investment.
It is also a declared policy of the State to provide
effective and sufficient protection to consumers
against hoarding, profiteering and cartels with
respect to the supply,distribution,marketing and
pricing of said goods, especially during periods
of calamity, emergency, widespread illegal price
manipulation and other similar situations. In
this regard, government is mandated to: (1)
develop, adopt and promulgate measures to
promote productivity in basic necessities and
prime commodities; (2) develop an improved
and efficient transport and distribution
system; and (3) develop, adopt and promulgate
measures to stabilize prices at reasonable levels.
Under the Plan, government will intensify
and expand programs that will maintain
the affordability of basic necessities and
prime commodities. A review of the supply
chain will be implemented to determine
effective points of interventions to make
enhancements and eliminate deficiencies.
This requires infrastructure support and
logistics mechanisms that shall result in
lowering of price with the elimination of
middlemen and other barriers to bring the
goods and services to the market. Producers,
manufacturers, traders, retailers, and
consumer organizations shall be consulted
so that the supply chains of basic goods and
services may be improved, reducing costs
in production and distribution and thereby
checking rise in prices.
93
94
04
Competitive
and
Sustainable
Agriculture
and Fisheries
Sector
Competitive and Sustainable Agriculture and Fisheries Sector
95
Competitive and Sustainable

Agriculture and Fisheries Sector
The agriculture and fisheries sector provides food and vital raw materials for the rest of the
economy. It is itself a significant market for the products and services of the non-agricultural
economy. As the sector grows and modernizes, it releases surplus labor to the industry and
services sectors. Rising productivity and efficiency in the sector are critical in maintaining
the affordability of food and purchasing power, especially among the poor. The sectors
development is therefore vital in achieving inclusive growth and poverty reduction as well
as attaining the targets under the MDGs.
The country, however, exhibits a slower structural transformation than other East Asian
countries. The shares of agriculture in GDP and total employment have continued to decline,
but the transfer of the labor released from this sector to higher-productivity jobs in industry
and services has lagged owing to low skill levels among agricultural workers and distortions
in other economic sectors.
Increasing demands on the sectors output have also put pressure on its natural resource
base. Unsustainable practices employed to improve yields have resulted in land degradation
and problems of water availability. Climate change has exarcebated the inherent vulnerabilities
of the sector. Development efforts need to focus on transforming the sector into one that is not
only highly productive but also climate-resilient, environment-friendly, and sustainable.
Assessment
Sector Performance
The sector remains an important
part of and contributor to the
economy.
Contribution to output and employment.
From 2004 to 2010, agriculture and fisheries
contributed an average of 18.4 percent to
GDP and the sector grew at an average rate
of 2.6 percent annually. This performance
was significantly below the target of the
previous Plan. Among the regions, the top
contributors in 2009 have been Region 4-A
(12.1%) followed by Region 3 (11%), Region
6 (10%), Region 10 (8.2%) and Region 12
(8.0%). In terms of employment, the sector
employed an average of 11.8 million people.
1
These account for almost 35.1 percent

of the total work force (Table 4.1). If
the whole agriculture value chain is
considered, the contribution to GDP
and total employment would reach 35
percent and 50 percent, respectively.
Contribution of subsectors. The sectors
growth was driven primarily by fishery
(1.21%), palay (0.40%), corn (0.31%),
banana (0.22%) and poultry (0.22%) as
shown in Table 4.2 in the next page.1
Growth in the fisheries sector is partly
due to the expansion of aquaculture and
robust demand for commodities such as
seaweeds. The productivity of municipal
fisheries, such as small-scale capture
fisheries (less than 3 gross ton boats),
has been declining, however. This can
be partly attributed to overfishing and
poor enforcement of fishery laws. The
The values in parenthesis reflect growth rate as weighted against commodity share in the Agriculture, Fishery and Forestry (AFF)
gross value added.
96
Table 4.1. Agriculture and Fishery (with Forestry) Performance and Contribution to Economy: 2004-2010
AFF Sector
2004
2005
2006
2007
2008
2009
2010
Average
MTPDP Target
4.0 - 5.0
4.2 - 5.2
4.2 - 5.2
4.0 - 5.0
4.3 - 5.2
5.1 - 6.2
5.2 - 6.2
4.4 - 5.4
Performance (in %)
Actual Growth
5.2
2.0
3.8
4.9
3.1
0.01
(0.5)
2.6
Agri Gross Value

Added (in Php M)
226,417
230,954
239,777
251,495
259,410
259,424
258,081
246,508
% share to GDP
19.6
19.1
18.8
18.4
18.3
18.1
16.8
18.4
Agri Employment (in

'000 persons)
11,381
11,628
11,682
11,785
12,030
12,043
11,974
11,789
36.0
36.0
35.8
35.1
35.3
34.3
33.2
35.1
% share to total
employment
Source: BAS, NSCB, 2011

Note: Revised growth target for 2008 and 2009 based on August 2008 DBCC Meeting
Table 4.2. Contribution of Sub-Sectors in Agriculture and Fishery Growth: 2004-2010
Sector
% contribution to growth
2004
2005
2006
2007
2008
2009
2010
Average
Palay
1.3
0.1
0.8
1.0
0.6
(0.5)
(0.5)
Corn
1.0
(0.2)
1.0
0.7
0.2
0.1
(0.6)
0.40
0.31
Coconut
0.0
0.1
0.0
(0.0)
0.1
0.1
(0.0)
(0.02)
Sugarcane
0.2
(0.2)
0.2
(0.2)
0.5
(0.2)
(0.4)
(0.02)
Banana
0.1
0.3
0.2
0.3
0.5
0.1
0.0
0.22
Other crops
0.1
0.2
(0.02)
1.3
(0.3)
(0.4)
0.4
0.16
Livestock
(0.1)
0.3
0.3
0.3
(0.1)
0.1
0.2
0.13
Poultry
0.5
0.0
(0.0)
0.0
0.5
0.2
0.4
0.22
Agricultural Activities
0.2
0.1
0.2
0.2
0.1
0.1
(0.1)
0.11
Fishery
1.9
1.3
1.3
1.6
1.3
0.6
0.4
1.21
Source: BAS, 2011
The positive performance of palay and

corn is due to the use of quality seeds,
increase in yield, and rehabilitation of
irrigation facilities. For banana, this is
due to an expansion in area, an increase
in yield, and good demand in the local
and export markets.
exports, in terms of value are coconut oil,

fresh banana, tuna, pineapple, tobacco, and
seaweeds. The overall balance of trade in
agriculture has become increasingly passive,
with the deficit widening from US$837
million in 2004 to US$3.2 billion in 2010.
The country recorded a favorable trade
balance in some items, however, namely,
vegetable and fruits (US$634 million),
fishery products (US$497 million), and
crude rubber (US$31.7 million) in 2010
(Table 4.3). There was no significant change
in the structure of exports in the period.
Contribution to global trade. Between

2004 and 2010, agriculture and fisheries
sector exports rose from US$2.5 billion
to US$4.1 billion. The top agricultural
Share to total land area and number of

farmers. In terms of land area, a total of 4.8
million agricultural farms in the country
occupy 9.7 million hectares (2002 Census
national stock assessment of the Bureau

of Fisheries and Aquatic Resources
(BFAR) suggests that two-thirds of the
12 major fishing bays in the country are
already overfished.
97
of Agriculture and Fisheries). These account

for almost 32 percent of the total land area
of the country. The top four crops with the
highest hectarage are coconut (3.33 million
hectares), followed by rice (2.47 million
hectares), corn (1.35 million hectares), and
sugarcane (0.36 million hectares). In terms
of number of farmers and fisherfolk, about
1.61 million farmers are engaged in fishing
(25.1%), 1.4 million are in coconut (21.7%),
1.35 million in rice (21.0%), 0.68 million
in corn (10.6%), 0.07 million in sugarcane
(1.0%) and around 1.32 million in other
commodities (20.6%).
Agribusiness land development. Through the
efforts of three rural development agencies,
namely the DA, DAR and DENR, under
the National Convergence Initiative

(NCI), over 1.83 million hectares
of land have been developed for
agribusiness, generating about 2.67
million jobs between 2005 and 2010
(Table 4.4).
The NCI is a strategic development
approach that can contribute to
sustainable development in the
countryside through complementation
of efforts in the rural sector. In
December 2010, the three agencies
signed the Joint Memorandum Circular
( JMC) adopting a shared Policy and
Implementation Framework for the
Enhanced National Convergence
Initiative among DA, DAR, and
DENR.
Table 4.3. Value of Philippine Agricultural Exports and Imports: 2004 and 2010 (in million $US)
2010*
2004
Item
Export
Meat and Meat Preparations
Import
Trade Balance
Export
Import
Trade Balance
4.3
150.9
(146.5)
39.4
381.6
(342.3)
75.1
482.5
(407.4)
142.1
743.7
(601.6)
Fish and Fish Preparations
413.4
37.0
376.4
633.8
136.8
497.0
Cereal and Cereal Preparations
44.5
659.2
(614.7)
98.5
2,446.3
(2,347.8)
Vegetables and Fruits
783.4
102.9
680.5
916.6
282.7
633.9
Sugar and Sugar Preparations
Dairy Products and Bird's Eggs
102.3
70.2
32.1
105.1
369.5
(264.4)
Coffee, Tea, Cocoa, Spices
14.1
90.0
(75.9)
13.0
237.6
(224.7)
Crude Rubber
36.1
31.9
4.1
55.9
24.2
31.7
Fixed Vegetable Oils and Fats
581.3
71.0
510.2
1,269.8
39.1
1,230.7
Others (e.g., tobacco, fertilizer, machinery etc.)
452.1
1,647.7
(1,195.6)
823.6
2,669.6
(1,846.0)
Total Agricultural Exports/Imports

Source: BAS, 2011
Note: *2010 figures are preliminary
2,506.7
3,343.5
(836.8)
4,097.6
7,331.2
(3,233.6)
Table 4.4. Agribusiness Lands (including Agroforestry) Developed: 2005-2010
2005-2007
Agency
Areas
Jobs
Generated
2008
Areas
2009
Jobs
Generated
Areas
2010
Jobs
Generated
Total
Jobs
Generated
Areas
Areas
Jobs
Generated
DA
812,096
1,334,678
335,948
479,747
295,524
436,677
30,408
52,767
DAR
247,493
237,387
19,579
27,492
31,605
41,981
2,106
2,106
300,783
308,966
8,759
8,759
1,967
1,967
50,024
50,024
60,750
60,750
1,068,348 1,580,824
357,494
509,206
377,153
528,682
32,513
54,873
DENR
TOTAL
Source: National Convergence Initiative Secretariat, December 2010
98
1,473,976 2,303,869
1,835,508 2,673,585
Table 4.5. Land Acquisition and Distribution Performance: 2004-2010 (in hectares)
Accomplishment
Year
MTPDP
Target
Funded
Target*
Hectares
No. of ARBs
in %
Funded
Per MTPDP PerTarget
2004
212,121
110,046
104,069
71,682
49
95
2005
122,931
130,000
131,069
88,152
107
101
2006
214,000
130,000
125,177
72,280
58
96
2007
214,000
130,000
134,041
94,807
63
103
2008
220,453
130,000
146,275
90,738
66
113
983,505
630,046
640,631
417,659
65
102
2009
85,764
59,488
43,792
69
2010
200,000
107,179
63,298
54
915,810
807,298
524,749
Sub-total
Total
88
Source: DAR, 2011

Note: *Targets based on approved/reenacted budgets
Extension of land reform. The

accomplishment of land acquisition
and distribution (LAD) for the period
2004-2010 compared to the funded
target is at 88 percent. On the other
hand, the accomplishment in terms of
the previous Medium Term Philippine
Development Plan (MTPDP) 20042010 target is around 65 percent
(Table 4.5). The target projection in the
previous Plan states the commitment
to finish land distribution by the
end of 2008, the last year of the 10year extension provided under the
Comprehensive Agrarian Reform
Program (CARP). A total of 807,298
hectares were distributed to 524,749
agrarian reform beneficiaries (ARBs)
during the period. From 1987, the
cumulative area distributed has now
reached 4,113,347 hectares.
Extending the CARP for the second
time was a challenge unlike the first
when RA 8532 was passed by the
legislative branch before the Ramos
Administration ended on June 30, 1998.
This time, no second extension law was
passed by Congress after the 10-year
extension period. From July 1, 2008 to
June 30, 2009, CARP continued to be
implemented only under a Joint HouseSenate Resolution. On August 7, 2009,

RA 9700, otherwise known as the CARP
Extension with Reforms or CARPer, was
signed into law mandating the completion
of land distribution in five years. It also
provided an additional appropriation of
PhP150 billion for the implementation of
the major components of CARP.
Gains in the sector have been

achieved, but its full potential is
unrealized.
Growth below target. During the period
2004-2010, the average growth, while
positive at 2.6 percent annually, has been
below the target of the previous Plan,
which is a sustained growth of 4.4 percent
to 5.4 percent. The occurrence of the
global financial crisis, a fuel price spike in
2008, and climate-related events in 2009
(e.g., El Nio, typhoons) all contributed
to the non-attainment of the target. The
devastation from the typhoons Ondoy and
Pepeng resulted in damage to agriculture
and fisheries estimated at PhP24.7 billion
in 2009 pulling down the sectors growth
to only one-tenth of a percent in the same
year.
During the period 2004-2010,

the average growth, while
positive at 2.6 percent annually,
has been below the target of
the previous Plan, which is a
sustained growth of 4.4 percent
to 5.4 percent. The occurrence
of the global financial crisis,
a fuel price spike in 2008,
and climate-related events in
2009 (e.g., El Nio, typhoons)
all contributed to the nonattainment of the target.
99
Table 4.6. Land Productivity in Selected Southeast Asian Countries (in mt/hectare)
Commodity
Rice (paddy)
Corn
Coffee (green)
Banana
Coconut
Mango, mangosteen & guava
Abaca
Papaya
Pineapple
Sugarcane
Vegetables (fresh)
Land Productivity, 2009

Indonesia
Malaysia
Philippines
Thailand
Vietnam
5.0
4.2
0.7*
59.7
6.6*
11.6
1.0*
85.1
74.2
63.1
10.6
3.7
5.6
0.6*
21.8
2.8
4.1
no data
10.0
34.7
46.7
13.2
3.6
2.6
0.8
20.2
4.6
4.1
0.5
19.6
37.4
56.8
8.0
2.9
4.2
1.0
13.6
5.8
8.0
no data
17.0
20.9
71.7
8.4
5.2
4.0
2.2*
14.3*
7.9*
7.1
no data
no data
13.0
58.6
12.6
Source: Food and Agriculture Organization Corporate Statistical Database

Note: *2008 data; 2009 is preliminary data
Table 4.7. Revealed Comparative Advantage (RCA) in Selected ASEAN Countries: 2007
Commodity
Rice (milled)
RCA in 2007
Indonesia
Malaysia
Philippines
0.002
0.000
0.001
Thailand
23.423
Vietnam
37.510
Corn
0.117
0.002
0.010
0.507
0.003
Coffee (green)
4.173
0.005
0.002
0.085
30.556
0.011
0.035
26.329
0.082
0.039
11.618
0.472
66.303
0.033
0.000
Banana
Coconut (desiccated)
Fruits (dried)
0.458
0.038
0.372
10.716
2.759
Tropical fruits (dried)
0.000
0.000
251.868
0.000
0.000
Mango, mangosteen & guava
0.145
0.058
11.972
3.834
0.162
Abaca
0.155
0.000
30.805
0.000
0.000
Papaya
0.007
1.754
7.417
0.157
0.000
Pineapple
0.050
0.241
47.533
0.628
0.038
Sugar (raw)
0.000
0.000
2.220
5.453
0.204
0.110
0.807
1.598
5.163
0.504
2.393
1.003
0.975
1.880
1.854
Vegetables (fresh)
Total Agri Products
Source: Habito et al., 2010
Declining productivity and competitiveness.

While the productivity of the agricultural
workforce has increased annually by an
average of 1.66 percent from PhP19,894 in
2004 to PhP21,553 in 2010, land productivity
in terms of yields of traditional crops (e.g., rice,
corn, sugarcane and coconut) has stagnated
or declined. The Philippines ranked fourth in
rice, coconut, sugarcane and fifth in corn out
of five ASEAN countries namely Indonesia,
Malaysia, Philippines, Thailand and Vietnam
100
(Table 4.6). In terms of price (producer

price), rice in the Philippines is the
most expensive (US$318.8/MT), which
can be attributed to the lack of factor
endowments such as a contiguous land
area and big river systems. Furthermore,
the growth of total factor productivity
(TFP) growth in agriculture has
remained at a low level in the
Philippines, namely 0.2 percent per year
over the past two decades, compared
to 1.0 percent per year in Thailand, 1.5

percent per year in Indonesia, and 4.7
percent in China (WB, 2010).
Comparative advantage not fully
exploited. The country actually has a
revealed comparative advantage (RCA)2
not only in its lead exports such as
coconut, banana, mango, pineapple,
but also in sugar, abaca, papaya, dried
tropical fruit, fresh fruit and fresh
vegetables (Table 4.7). Despite the
export potential of these commodities,
however, particularly the emerging crops,
the countrys share (8.3%) and value of
agricultural products (US$3.2 billion)
to total exports is among the lowest in
comparable ASEAN countries.
The country also continues to be the
only agricultural net-importer among
comparable ASEAN members, with
an agricultural trade deficit of US$2.4
billion in 2009 (Table 4.8). The total
value of agricultural imports amounted
to US$5.6 billion, the top six
agricultural imports being rice, wheat,
soya bean products, milk and cream
products, tobacco, and urea. The value
of agricultural exports in 2009 for the
Philippines was only US$3.2 billion3
(WTO, 2010). This is small compared
to those of Indonesia, Malaysia and
The country actually has

a revealed comparative
advantage (RCA) not only
in its lead exports such as
coconut, banana, mango,
pineapple, but also in
sugar, abaca, papaya,
dried tropical fruit, fresh
fruit and fresh vegetables.
Despite the export potential
of these commodities,
however, particularly the
emerging crops, the countrys
share (8.3%) and value of
agricultural products (US$3.2
billion) to total exports
is among the lowest in
comparable ASEAN countries.
Thailand which had over US$20 billion

each.
Elusive rice self-sufficiency. For the period
2004-2010, domestic rice production has
met only 84.71 percent of the countrys
annual average rice requirements,
notwithstanding
substantial
public
investments in the rice sector (DA, 2011).
During the global food crisis in 2008, the
Philippines imported some 2.4 million
MT of rice valued at US$1.9 billion to
supplement its domestic rice stocks.
Increase in food commodities prices. The
average increase in the prices of rice
and corn were the highest among basic
commodities for the period 2004-2010, at
7.8 percent and 7.5 percent, respectively
(Table 4.9). This is largely due to the
global food crisis in 2008 which saw the
retail price of rice increased by as much
as 29.1 percent. The 6.4-percent inflation
in selected food commodities prices is
higher compared to the national headline
inflation rate of 5.6 percent. Higher prices
of food commodities erode purchasing
power, especially among the poor, and
highlight the grave threats to food security
due to extreme shocks, affecting not only
production, but also marketing systems.
For the period 2004-2010,

domestic rice production has
met only 84.71 percent of the
countrys annual average rice
requirements, notwithstanding
substantial public investments
in the rice sector. During the
global food crisis in 2008, the
Philippines imported some 2.4
million MT of rice valued at
US$1.9 billion to supplement
its domestic rice stocks.
Stagnant poverty headcount. Despite

positive growth and gains in productivity
in some subsectors, there has been almost
no change in the welfare of almost 6.4
million farmers, fisherfolk and other
Table 4.8. International Trade of Agricultural Products: 2000 and 2009 (value in $US billion)
Country
Value 2009
Export
% Share
2000
2009
Value 2009
Import
% Share
2000
2009
Trade
Balance
2009
Indonesia
25.3
11.9
21.1
11.4
13.1
12.4
13.9
Malaysia
20.9
8.2
13.3
12.3
5.6
10.0
8.5
Philippines
3.2
5.1
8.3
5.6
8.4
12.2
(2.4)
Thailand
28.0
17.7
18.4
9.4
7.2
7.0
18.6
Vietnam
10.7
27.3
18.7
9.3
8.1
13.2
1.4
Source: World Trade Organization
RCA is the share of a product in total Philippine exports as a ratio of the share of the same product in total world exports.
This is slightly higher than the value of exports in Table 4.8 since WTO category is broader than the figures released by NSO.
101
Table 4.9. Inflation Rates by Commodity for All Households (in percent)
2004
2005
2006
2007
2008
2009
2010
Country
Rice
Corn
Eggs
Fish
Fruits and Vegetables
Meat
Average
Philippines (headline
inflation)
Average
2.6
10.7
5.4
8.0
6.0
13.0
7.6
7.0
5.5
3.5
6.6
5.0
5.9
5.6
3.7
4.7
5.6
5.2
8.8
2.4
5.1
3.4
4.4
6.8
3.3
2.9
2.6
3.9
29.1
23.2
6.9
9.1
11.7t
8.9
14.8
7.5
6.1
6.8
6.1
5.9
5.4
6.3
1.1
-1.8
2.7
3.1
0.5
4.1
1.6
7.8
7.5
5.4
5.9
5.8
6.0
6.4
6.0
7.6
6.2
2.8
9.3
3.3
3.8
5.6
Source: NSO, 2011
Table 4.10. Poverty Incidence and Magnitude on the Philippines: 2003, 2006 and 2009
Item
Families
Population
Poverty Incidence (%)

2003
2006
2009
Magnitude of Poor (in M)

2003
2006
2009
20.0
24.9
3.3
19.8
21.1
26.4
20.9
26.5
3.7
22.2
3.9
23.1
Change in Average Real

Income (bottom 30%)
2009 vs. 2006
8.3
no data
Source: NSO, 2011
Despite positive growth and

gains in productivity in some
sub-sectors, there has been
almost no change in the welfare
of almost 6.4 million farmers,
fisherfolk and other workers
dependent on the sector.
Inefficiencies along the

agricultural supply chain result
in postharvest losses, higher
transaction and distribution
costs, and lower productivity.
workers dependent on the sector. The poverty

incidence of families has changed slightly
between 2003 and 2009 at 20.0 percent
and 20.9 percent, respectively (Table 4.10),
while poverty in terms of population has
increased from 24.9 percent to 26.5 percent,
respectively. This is despite an increase in
average income of the bottom 30 percent
of families of 8.3 percent in real terms from
2006 to 2009.4
Challenges
Growth in production and
productivity faces formidable
constraints.
High cost of production inputs
Inputs such as fertilizers and pesticides
typically account for 20-30 percent of total
production cost while livestock and poultry
feeds account for as much as 70 percent.
As such, any variability in prices directly
translates to an increase or decrease in the
prices of agricultural commodities, especially
at the farm level. The increase in international
4
prices of commodities and the fuel

price spike in 2008 contributed to the
high prices of domestic fertilizer and
corn. The price of fertilizer rose by as
much as 135 percent in 2008 compared
to 2007 and contributed to a decrease
of 2.2 percent in palay production in
the fourth quarter of 2008.
Inefficient supply chain and

logistics systems
Inefficiencies along the agricultural
supply chain result in postharvest losses,
higher transaction and distribution
costs, and lower productivity. The
Philippine logistics system has been
characterized as being cost-inefficient,
unresponsive to customers and market
requirements, and unreliable. Compared
to developed countries, distribution and
processing costs in the country are 2030 percent higher with logistics costs
accounting for almost 30-40 percent of
total marketing costs (NEDA-UNDP,
2005).
The poverty estimation methodology was refined by the NSCB in February 1, 2011. However, urban-rural disaggregation
is not yet available when the official poverty statistics was released last February 8, 2011.
102
The ineffective logistics services

coupled with inappropriate postharvest
handling have, likewise, resulted in huge
postharvest losses. For rice and corn, about
14.75 percent and 7.2 percent of the total
production are lost during postharvest
operations, respectively. Losses are even
higher in horticultural crops: losses in
fruits range from 5 to 48 percent, while
losses in vegetables range from 16 to 40
percent. These postharvest losses, when
translated into monetary values, sizeably
reduce the income of farmers and their
households (BPRE, 2010).
Inadequate provision of irrigation

infrastructure
As of 2009, the total area provided
with irrigation service is 1.54 million
hectares wherein 765,000 hectares are
under the National Irrigation Systems
(NIS). Communal Irrigation Systems
(CIS) cover around 558,000 hectares.
The total service area represents 49
percent of the potential irrigable area
of 3.126 million hectares. However,
the pace of irrigation development
in the country has been estimated at
less than 1 percent per year. While
quick-gestating irrigation development
activities such as rehabilitation and
improvement of existing systems and
facilities were envisioned to fasttrack
irrigation development, the sector
remains hampered by lack of funds to
sustainably operate and maintain these
irrigation systems, inadequate technical
capacity of Irrigators Associations
(IA) and the National Irrigation
Authority (NIA) field personnel, as
well as inadequate water supply. The
succeeding Chapter 5, Infrastructure
Development, offers a detailed
assessment of rural infrastructure,
particularly irrigation bottlenecks
and narrates strategic directions to
overcome these bottlenecks.
Low rate of adoption of

technologies, including
mechanization
Despite the availability of science and
technology packages and products such as
organic fertilizer, high-yielding varieties,
cost-reducing farming practices, and valueadding technologies, adoption by farmers has
been slow because of: (a) weak links between
technology producers and extension workers
and farmers/fisherfolk; (b) lack of media
and public awareness of the benefits of the
technologies; and (c) financial or capacity
constraints of intended users.
Similarly, the use of mechanization in
Philippine agriculture has been low. The
current mechanization level of the sector,
which is 1.68 horsepower (hp)/hectare, is far
below other Asian countries such as Korea
(4.11 hp/hectare) and China (3.88 hp/
hectare). Among rice and corn farmers, only
21.7 percent have mechanized while the rest
continue to use manual labor and farm animals
in production activities (UPLB, 2009). The
inadequacy of aftersales service, substandard
machinery, and the sporadic, fragmented and
disorganized implementation of agricultural
and fishery mechanization have contributed
to low mechanization in the sector.
Limited access to formal credit and

financing
From 2004-2009, the annual proportion of
agri-fishery and forestry (AFF) loans to total
loans granted by banks was at a low average
of 2.5 percent. The limited access to credit
by small farmers and fisherfolk, despite the
banking sectors reported large amount of
funds available for lending, has been due to:
(a) the lack of track record among farmers;
(b) lack of knowledge on accessing formal or
bank financing, particularly putting together
the required documents; (c) lack of acceptable
collateral; delayed release of loans; and (d)
numerous documentary requirements that
formal lending institutions require from
farmers upon commencement of transactions.
On the part of the banks, their aversion
to high-risk and low-income agricultural
projects, the high cost of administering small
103
loans, and poor repayment performance

of agricultural loans, among others, have
constrained the provision of credit to farmers
and fisherfolk (ACPC, 2010).
Competing uses of agricultural lands.
Agriculture, together with the natural
resource sector, has been adversely affected by
shifts towards competing uses. Particularly
sensitive for its implication for food security
is the conversion of prime agricultural lands
to nonagricultural uses (i.e., residential,
commercial and institutional) and the rising
demand for industrial crops (e.g., biofuel).
Alternative land use activities have also
encroached upon ecologically fragile lands.
These point to the need for a national land
use policy that will rationalize the optimal
allocation of land among competing uses.
The Philippines has long been

vulnerable to weather risks,
a fact exacerbated by climate
change. Since the 1980s, the
growth in agricultural gross
value-added (GVA) has been
erratic partly owing to the
impact of severe weather risks
and the periodic occurrence
of the El Nio and La Nia
phenomena. Aside from
typhoons Ondoy and Pepeng,
the El Nio in 2010 caused
damages to agriculture and
fishery estimated at PhP8.4
billion over a total area of
355,986 hectares.
Mindanao
These changes bring further pressures on

agricultural production, which is already
stressed by other resource scarcities and
economic challenges. Changing rainfall
patterns, rising temperatures, increasing
frequency and intensity of typhoons and
dry spells, and sea level rise are expected
as a result of climate change. These
impacts will spell a difference in terms
of cropping calendars, unpredictability of
yields, pest pressures, crop losses, livestock
and fisheries production, and damages to
existing infrastructure. Sea level rise is
already being experienced in parts of the
country, reducing the productive coastal
areas for agriculture and fisheries. Salt
water intrusion in the lowlands and in
aquifers for irrigation and domestic uses
is also already being experienced.
Households dependent on
agriculture are especially
vulnerable to climate variability
Environmental degradation
and extreme events.
Climate change
The Philippines has long been vulnerable to
weather risks, a fact exacerbated by climate
change. Since the 1980s, the growth in
agricultural gross value-added (GVA) has
been erratic partly owing to the impact
of severe weather risks and the periodic
occurrence of the El Nio and La Nia
phenomena. Aside from typhoons Ondoy
and Pepeng, the El Nio in 2010 caused
damages to agriculture and fishery estimated
at PhP8.4 billion over a total area of 355,986
hectares.
The DOST-PAGASA scenarios 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 35 C is expected to increase
in all parts of the country in 2020 and 2050.
Projected seasonal mean temperatures in
the Philippines are expected to rise by about
0.5-0.9 C for 2020 and 1.2- 2.0 C by 2050.
Extreme rainfall is also projected to increase
in Luzon and the Visayas while a decreasing
104
trend is projected in
(MDGF-1656, 2010).
Of the countrys total land area,

5.2 million hectares (about 17%)
are severely eroded and another
8.34 million hectares (27.3%) are
vulnerable to drought, alternating with
floods and typhoons on an annual
basis. In the lowlands, continued
use of unsustainable production
practices such as the extensive use of
chemical inputs, expansion of grazing
lands, slash and burn practices, and
deforestation especially in watershed
areas have resulted in land degradation
(i.e., erosion, declining soil fertility)
and problems of water quality and
availability. In the upland ecosystem,
climatic drivers and human-induced
activities have resulted not only in
land degradation but also in the loss of
biodiversity (BSWM, 2004).
Agricultural development is
also undermined by flawed
policies and institutions.
Weak agricultural extension
service
Devolution of agricultural support
services and extension, beset by lack
of LGUs absorptive capacities, has
resulted in weak extension services.
The decentralization of the agricultural
extension service was pursued on
the premise that the constraints to
production and service requirements
of farmers and fisherfolk would be
best addressed through an LGU-led,
NG-supported agriculture service
system. The devolution, however, has
been beleaguered with poor absorptive
capacities of LGUs to take on the
task of extension service provision.
With the social, infrastructure, and
economic sectors, agriculture has been
less prioritized in the development
agenda of many LGUs. Hence, funding
allocation is minimal and often times
dependent on the support of the
DA. This has resulted in inadequate
manpower and weak extension services
of local agriculture offices, both at
the provincial and municipal levels
(Balisacan, 2006).
Contradictory rice policy

Vested with the function of stabilizing
the supply and prices of rice, the
countrys staple, the NFAs operations
aim to raise farmgate prices to secure
farmers profit, and at the same time,
maintain retail prices at an affordable
level for consumers. Government
intervention on both sides of the market
has led to huge public losses, increased
the volatility of domestic prices, reduced
the welfare of both consumers and
producers, and discouraged the private
sector from investing in distribution and
storage facilities (Balisacan et al., 2006).
The NFA support price has on average
led to an increase in consumer prices in
ten regions of the country and contributed

little to price stabilization (Purdue University,
2005). It is worth noting that among NFA
rice consumers, only 46.6 percent are
considered poor. In addition, among all poor
households who are supposed to benefit
from NFA rice, only 24 percent have been
able to access them (Reyes et al., 2009).
Incomplete implementation of asset

reforms
The long period of implementation and
pending completion of the CARP has
resulted in underinvestment in the sector,
largely owing to the uncertainty faced by
landowners. Landowners are reluctant to
invest while their farms are undergoing
acquisition processing. On the other hand,
for lands that have been awarded, support
services to the ARBs are insufficient to
improve productivity. The implementation of
asset reforms must therefore be completed in
the next five years as provided in RA 9700,
including the allocation and release of the
PhP150 billion budget for the program. The
full implementation of the CARPer will
facilitate asset reform and serve as an incentive
to farmers and other stakeholders to invest in
rural areas (Habito & Briones, 2005).
The current spending on

agricultural research and
development (R&D), a public
good of demonstrated benefits,
is a mere 0.10 percent of
agriculture GVA. This is
one-tenth of the 1.0 percent
benchmark suggested by
international practice.
Limited investments in public goods

Public goods are important because their
benefits are shared by the community; they
yield high social returns on investment and
have long-term impacts, and they are not
readily provided by the private sector but
important to society as a whole. On the
other hand, other interventions, such as
subsidies on fertilizer have benefits limited
to target groups, have impacts which are
short-run, are costly to government, and
do compete with or crowd out the private
sector. The current spending on agricultural
research and development (R&D), a public
good of demonstrated benefits, is a mere
0.10 percent of agriculture GVA. This is
one-tenth of the 1.0 percent benchmark
suggested by international practice. In
the case of rice (which is indicative of the
pattern for other products), the contribution
of R&D, infrastructure and extension to rice
105
production is estimated at 2.5 percent 40

percent, and 15 percent respectively, while
returns on investments are: (a) 77.1 percent
for R&D; (b) 80 percent for extension; and
(c) 18 percent for irrigation (Balisacan, 2006).
Public good provision must consider
quality. Many infrastructure and postharvest
facilities deteriorate rapidly. Field reports
document the poor quality of flat bed
dryers and rice straw choppers for organic
fertilizers. Graft and corruption eat up a
large part of the outlays.
Food security exists when

all people, at all times, have
physical and economic access
to sufficient, safe and nutritious
food that meets their dietary
needs and food preferences for
an active and healthy life.
In 2004-2010, funds allocated for marketing

assistance accounted for only 1.1 percent
of the average annual budget of the DA.
This is 7 percent lower than the prescribed
allocation under the AFMA of 1997. The
timely access and dissemination of market
and market-related information is critical
to making optimal business decisions
that in turn impact on revenue, consumer
prices, and supply conditions. Likewise, the
availability of real-time market intelligence
is useful in identifying potential markets as
well as information on supply requirements.
Limited investments on
commodities with comparative
advantage
While public investment for the rice sector has
been substantial in the past years, amounting
to almost 60 percent (PhP22.56 billion) of
the 2009 AFMA fund, the allocations for
high value and export commodities such
as fruit trees, vegetables, tree crops and
fisheries have been inadequate. Net returns
from vegetable and fruit tree production
are higher than from rice production by a
range of PhP5,000-100,000 (BAS, 2009).
The opportunity cost of underinvesting in
other commodities is therefore very high.
Focusing on commodities where we have
comparative advantage will not only result
in increasing income but also improving
access to food, higher purchasing power, and
enhanced overall welfare of the rural sector.
Incomplete implementation of the

Strategic Agriculture and Fishery
Development Zones (SAFDZs)
106
and preparation of Integrated

Development Plans (IDPs)
The identification of SAFDZs as
provided under AFMA has not
been fully implemented (AFMA
Review, 2007). Programs in the sector
should also focus on areas of high
agriculture potential to avoid spreading
investments too thinly resulting in small
impact in the rural areas. The SAFDZs
will also facilitate prioritization of
investment programming in the sector.
The identification of these areas should
be initiated by LGUs, with technical
support from the DA and DENR to
ensure that priorities are consistent
with local development thrusts and
strategies, as well as aligned with the
national policies.
Delay in the implementation of

rationalization plans
Efficient and effective institutions
and bureaucracy are essential to
creating an enabling environment
that encourages private, LGU and
foreign investments in the economy.
However, the countrys agricultural
bureaucracy is continuously beset with
problems related to overcentralization,
fragmentation of agencies, weak
coordination, overlapping of functions,
politicization and corruption, making
it ineffective in spurring growth and
development for the sector (Habito
and Briones, 2005). At the national
level, there is a need to rationalize
the DA to focus its core functions
on public goods and services, such
as R&D extension, and regulation;
and maintain its steering role in the
development of the sector.
Strategic Framework
Vision
The Plans vision is a competitive,
sustainable and technology-based
agriculture and fisheries sector, driven
by productive and progressive farmers
and fisherfolk, supported by efficient
value chains and well-integrated in the
domestic and international markets,
contributing to inclusive growth and
poverty reduction.
Goals and Strategies

Within six years, through prudent use
of resources, the agriculture and fisheries
sector shall have attained the following:
(a) improved food security and increased
rural incomes; (b) increased sector
resilience to climate change risks; and
(c) enhanced policy environment and
governance.
Strategy 1.1 Raise productivity5 and incomes

of agriculture and fishery-based households
and enterprises.
Raising productivity and incomes is an
important first step towards modernizing
the sector. Productivity enhancements will
make agriculture and fishery products more
competitive, contributing to the growth of
the other economic sectors. Chapter 3 on
further reinforces the important linkage
between the agriculture and non-agriculture
sector, especially in the promotion of
agribusiness and exports. The increased income
of agriculture and fishery-based households
and enterprises shall lead to the improvement
of the quality of lives and capital accumulation
for investments. Below are the measures that
shall be taken to implement the above strategy:
a) Diversify production:
Facilitate and promote diversification of
production and livelihood options;
Goal 1: Food Security Improved and

Incomes Increased
Update SAFDZs as bases for identifying

investment areas;
This Plan takes the view that food security

exists when all people, at all times, have
physical and economic access to sufficient,
safe and nutritious food that meets their
dietary needs and food preferences for an
active and healthy life (FAO, 2002).
b) Complete the delineation of municipal

waters for better fishery resource
management;
This goal will be further fleshed out with

the release of the Food Staples SelfSufficiency Roadmap (FSSR) 2011-2016.
The FSSR aims to attain self-sufficiency
in staples by focusing on irrigation and
instituting reforms in the NFA.
For the sector to fulfill its role in reducing
rural poverty and to achieve food security
in the long term, increased incomes,
productivity and production shall be
prioritized. Increased investments and
employment are to be fostered and ARBs
transformed into profitable entrepreneurs.
5
Raising productivity and

incomes is an important first
step towards modernizing
the sector. Productivity
enhancements will make
agriculture and fishery
products more competitive,
contributing to the growth of
the other economic sectors.
c) Improve rural infrastructure and facilities:

Establish climate-resilient agriculture
infrastructure through enhanced technical
design of irrigation and drainage systems
and facilities, farm-to-market roads
(FMRs), postharvest facilities (PHF),
trading posts, among others;
Provide irrigation services and facilities
focusing on rehabilitation and restoration
of national irrigation systems; maintain
existing systems and establishment of
small scale irrigation systems; enhance
cost-sharing/counterpart
mechanisms
for financing with LGUs; and adopt an
Productivity refers to land, labor and capital.
107
integrated water resource management

approach to ensure water supply;
and responsive National RD&E

agenda;
Increase the effectiveness6 and efficiency

of the rural infrastructure system,
including agricultural logistics and
various facilities such as farm-tomarket roads (FMR), postharvest and
information systems (see also Chapter
5: Infrastructure Development); based
on a master plan, identify priority
FMR projects that strategically link
production and consumption areas; and
Increase investments in integrated

RD&E programs that promote
productivity enhancement, develop
environment-friendly and efficient
technologies throughout the value
chain, in partnership with selected
higher education institutions,
LGUs, private and business sector;
Tap private sector participation in the

construction of the needed support
infrastructure for the sector;
d) Develop markets and sharpen regulatory
competence:
Provide effective market assistance,
marketing support and information
systems, product development, market
intelligence, and encourage participation
in product promotion activities, both in
the domestic and international markets;
Provide trade facilitation, including
provision of trade and fiscal incentives to
encourage participation and investments
from the private sector. This will, likewise,
entail reforms and law enforcement of
agriculture trade policies, and strengthen
market access initiatives and technical
assistance to SMEs and cooperatives,
among others; and
Sharpen
regulatory
competence
through technical and legal training,
improvements in laboratories and
equipment, and alignment of domestic
with internationally accepted standards,
including those for organic inputs, food,
and Halal certification;
e) Strengthen Research, Development and
Extension (RD&E):
Update databases and information
systems for the formulation of a reliable
6
108
Harmonize all agricultural and

fisheries mechanization programs
and projects of all concerned
national government agencies,
LGUs, and higher education
institutions;
Rationalize and strengthen the
extension system to improve
complementation of national, local
and private sector entities along
the value chain in the provision of
extension services;
Expand and sustain the sectors
human resource base (see also
Chapter 8: Social Development); and
Encourage
the
participation
of farmers, fisherfolk and their
organizations in research and
promotion activities;
f ) Improve the sectors credit access:
Form
stronger
partnerships
between government and private
financial institutions;
Strengthen the AFMA-mandated
Agro-Industry
Modernization
Credit
Financing
Program
(AMCFP);
Implement capacity building
programs to improve the creditworthiness of farmers, fisherfolk
and their organizations;
Effectiveness refers to cost effectiveness, applicability in the area or suitability with the needs of end-users.
Promote long-term financing

for long-gestation crops such as
coconut, rubber, oil palm, coffee,
cacao and fruit trees similar to
Indonesia, Malaysia and Thailand;
Develop and pilot test innovative
financing schemes that would
target farmer and fisherfolk who
have no collateral and credit track
record; and
Intensify
information
dissemination of credit, guarantee
and insurance programs.
g) Secure food
affordability:
availability
and
Ensure the availability of food

staples (rice, white corn, and other
starchy food) at reasonable prices at
all times;
Focus on long-term productivityenhancing measures for agriculture
and fisheries such as irrigation,
R&D and extension services
instead of short-term interventions
(i.e., direct input subsidies);
Engage proactively with LGUs
and the private sector to provide
strategic agricultural infrastructure
and services;
Optimize
productivity
in
mariculture parks and broaden the
aquaculture base;
Transform the NFA into an agency
focused on addressing extreme
shocks to food supply and prices,
while maintaining a predictable
regulatory environment for rice
trade; and
Management of consumption and
diversification of staples.
Strategy 1.2. Increase investments and

employment across an efficient value chain.
New investments are particularly important
since the sector employs a large share of
the labor force and accounts for a majority
of the poor population. Making the sector
competitive and modern, however, may
render some workers redundant, as in the
case of mechanization. For the released
rural workers to find gainful employment
in the industry and services sector, capital
accumulation must rise sufficiently such as
in agro-industries and agricultural services
(e.g., marketing and logistics). In addition,
complementary education and training
can make rural workers more adaptable
and flexible. Expanding the markets of
agriculture and fishery products through
value-adding and scaling-up of operations
can also provide additional employment
opportunities.
New investments are

particularly important since
the sector employs a large
share of the labor force and
accounts for a majority of the
poor population.
a) Create job opportunities by expanding

existing markets, aggressively exploring
new markets and promoting private
investments on agro-industries, agriservices (i.e., custom-hiring), agroforestry and fisheries, in both PPP and
private sector-led modes;
b) Localize
agricultural
promotion
and development in accord with the
subsidiarity principle. Regional strategies
must take precedence in championing
local commodities and promoting sector
competitiveness;
c) Promote more value-adding into products
and develop the capacities of stakeholders
for value-chain management;
It is important to strengthen
ARBs capacities for
agricultural production
and transform them into
entrepreneurs capable of
improving the productivity of
the awarded lands, adding
substantial value to their
produce, engaging in off-farm
endeavors, and improving
their access to the markets.
d) Promote
vertical
and
horizontal
integration of input, production, and
marketing (e.g., agro-industry clustering);
e) Strengthen the countrys agricultural
exports by focusing resources on highvalue crops (fruits and vegetables,
ornamentals, rubber, oil palm, coffee,
coconut, etc.) and fishery products (e.g.,
grouper, seabass, seaweeds, etc.), where
comparative advantage is high; and
109
f ) Expand investments in aquaculture and

other food production areas.
Goal 2. Sector Resilience to

Climate Change Risks Increased
Strategy 1.3. Transform agrarian

reform beneficiaries (ARBs) into viable
entrepreneurs.
The resiliency of the countrys agriculture

sector is threatened by climate change
and extreme weather events. Damage
to rural infrastructure and losses to
crops, livestock and fishing grounds,
water allocation and the competing
priorities in the use of water supply are
a few emerging problems that should
be dealt expediently. Sound scientific
advice is needed regarding appropriate
crop varieties, cropping patterns, and
climate-vulnerable structures, including
irrigation systems.
The CARP intends to improve the living

conditions and wellbeing of the ARBs,
lifting them out of poverty and empowering
them to improve their socioeconomic future.
Awarded agricultural lands, the ARBs basic
input for their economic activities, must
therefore be harnessed for this purpose,
taking into consideration ecological
sustainability and gender equality/equity. It
is important to strengthen ARBs capacities
for agricultural production and transform
them into entrepreneurs capable of
improving the productivity of the awarded
lands, adding substantial value to their
produce, engaging in off-farm endeavors,
and improving their access to the markets:
a) Achieve land tenure stability of the ARBs
in the CARP-awarded lands, preferably
through individual certificates of land
ownership award (CLOA) or at least
through collective CLOA;
b) Strengthen the organizational capacity of
ARBs and ARB organizations to develop
and manage agri-enterprises;
c) Scale-up microenterprises into formal
and viable SMEs through the clustering
of ARCs and establishing networks of
enterprises;
d) Liberalize access to credit by ARBs;7
e) Provide enterprise-based legal support
for ARBs and ARB organizations
to strengthen their structures and
mechanisms; and
f ) Establish physical infrastructure (FMR,
irrigation systems and postharvest
facilities, among others) in strategic
ARCs and clusters.
7
110
In compliance with Section 14 of Republic Act 9700
Strategy 2.1. Reduce climate

change-related risks and the
vulnerability of natural ecosystems
and biodiversity through ecosystembased management approaches,
conservation efforts, and sustainable
environment and natural resourcesbased economic endeavors such as
agri-ecotourism.
a) Adopt Integrated Water Resource
Management
(IWRM)
and
Sustainable Land Management
(SLM) Technologies in the
development of water, land, and
related resources;
b) Promote
environment-friendly
and sustainable production systems
that use the farming systems
approach, employ good agriculture/
aquaculture practices, and promote
organic agriculture, as embodied in
RA10068 or the Organic Agriculture
Act of 2010;
c) Improve the climate change
resilience of fisheries through the
restoration of fishing grounds, stocks
and habitats and through investment
in sustainable and climate changeresponsive fishing technologies and
products; and
d) Strengthen sustainable, multisectoral

and community-based resource
management mechanisms.
Strategy 2.2. Increase the resilience
of agriculture communities through
the development of climate changesensitive technologies, establishment
of climate-resilient agricultural
infrastructure and climate-responsive
food production systems, and
provision of support services to the
most vulnerable communities.
a) Strengthen
R&D
for
the
improvement of crop, livestock
and fishery varieties (i.e., resistant
to temperature increase, droughttolerant, resistant to stresses such as
water logging and pests);
b) Promote viable and competitive
crop, livestock and fishery varieties
that can tolerate climate variability;
c) Establish
climate-resilient
agriculture infrastructure through
enhanced technical design of
irrigation facilities, FMR, PHF, etc.
that take climate risks and extreme
climate events into account; and
Strategy 2.4. Incorporate natural hazards

and climate risk in the agricultural land use
plan or the Comprehensive Land Use Plan
(CLUP)
a) Pursue the passage of a National Land
Use Law as a basis for effective land use
policy and planning; and
b) Use land use planning at national and local
levels to identify hazardous areas and as
a basis for implementing adaptation and
mitigating measures in climate risk- and
disaster-prone areas.
Strategy 2.5. Strengthen the capacity of
communities to respond effectively to
climate risks and natural hazards.
a) Conduct IEC campaigns and capacity
building activities for the purpose at the
local level; and
b) Establish community-based early warning
systems,
agrometeorology
stations,
automatic weather stations (AWS) and
climate field schools.
Strategy 2.6. Continue vulnerability and
adaptation assessments especially in food
production areas.
The NCI is a multisectoral and

integrated planning approach
adopted by the DA, DAR,
and the DENR towards more
efficient use of resources.
Through the NCI, the three
rural development agencies
undertake joint planning,
programming and budgeting
as well as monitoring and
evaluation in the achievement
of the sectoral goals and
targets of the Plan.
d) Strengthen agricultural extension a) Produce updated weather-based dynamic

cropping calendars to address the
and support services to raise farmers
irregularity of wet and dry seasons, and
knowledge and capacity to adopt
develop optimal planting windows based
climate-sensitive
farming
and
on medium-range weather forecasts; and
fishing technologies.
Strategy 2.3. Strengthen the
agriculture and fisheries insurance
system as an important risk sharing
mechanism.
b) Undertake a study to assess groundwater

resources availability and vulnerability
to ensure food security during period of
drought.
a) Improve risk-reducing mechanisms

(i.e., guarantee, insurance) to
encourage more banks and other
lending conduits such as cooperatives
and NGOs to lend to agriculture
and fisheries; and
b) Introduce innovative risk-transfer
mechanisms such as weather-based/
index insurance systems.
111
Goal 3. Policy Environment and

Governance Enhanced
As a complement to the preceding goals, the
policy environment and governance shall
be enhanced through: (a) the NCI; (b) the
use of an effective common management
strategy among agencies concerned; (c)
budgetary reforms; (d) PPP; and (e) a review
of laws and policy issuances.
Strategy 3.1. Reaffirm the mechanisms and
objectives of the National Convergence
Initiative (NCI).
The NCI is a multisectoral and integrated
planning approach adopted by the DA, DAR,
and the DENR towards more efficient use
of resources. Through the NCI, the three
rural development agencies undertake joint
planning, programming and budgeting as
well as monitoring and evaluation in the
achievement of the sectoral goals and targets
of the Plan. The objectives of the NCI include:
a) Accelerating the completion of the CARPer
up to 2014;
b) Rationalizing land use policies and
strengthen the system of land property
rights;
c) Promoting sustainable agriculture and
preserve the land resource base;
d) Enhancing the investment and opportunity
climate for agribusiness;
e) Promoting sustainable upland development
and forest management; and
f ) Initiating CCA and mitigation measures.
Strategy 3.2. Adopt Managing for
Development Results (MfDR) as a common
approach among rural development agencies.
MfDR is a management strategy that focuses
on development performance and sustainable
improvements in outcomes, providing both
framework and practical tools for strategic
planning, risk management, progress
monitoring, and outcome evaluation (OECD
112
Policy Brief, March 2009). By focusing on

clear and measurable results, government
resources are translated into programs
and projects that deliver development
outcomes.
Strategy 3.3. Implement budgetary
reforms.
The current budget system for the
sector is commodity- and productionoriented and is not geared to promoting
competitiveness. Funding for key
functional areas under the AFMA, such
as market and information services,
regulatory functions, research, etc.,
is currently allocated to commodity
programs, which are centrally managed
and lack the ability to prioritize
strategically across the entire sector.
A revised budget format shall correct
this shortcoming by introducing a
system based on priorities, functional
responsibilities and market needs,
consistent with the AFMAs goals. The
revised format will also provide for a
greater alignment between the planning
and budget processes. This budgetary
reform is also inherently linked with the
MfDR strategy.
Strategy 3.4. Pursue PPP especially
for infrastructure and value chain
development.
The private sector will be tapped to
participate in governments efforts in
delivering immediately the needed
infrastructure and services in the
agricultural and fisheries sectors. 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 3.5. Review critical legislation

(i.e., AFMA, Fisheries Code) and policy
issuances (i.e., sugar trade).
A review of laws and policies shall
be a continuing activity to ensure the
responsiveness of such issuances to
current developments in the sector. The
AFMA of 1997 and Fisheries Code of
1998, mandates a mandatory review every
five years. Corn and sugar trade policies
will also be reviewed, to take into account
the latest global trends and market forces,
and to ensure supply adequacy supply,
price stability, and affordability.
Legislative Agenda
Pursue the Passage of a
National Land Use Law
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 shall serve
as guide to the optimum allocation of
land among competing uses within the
framework of sustainable development.
It shall also provide a mechanism for
resolving land use policy conflicts taking
into consideration the principles of social
equity and economic efficiency.
Institute Reforms in the NFA

The NFA Reorganization Act will further
rationalize grains-sector trading. It
restructures the agency by separating its
regulatory and proprietary functions. The
NFA shall 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.
Rationalize DA, DAR and DENR

The agriculture bureaucracy should be
rationalized through the efficient and
effective convergence and complementation
of the agriculture, agrarian reform and natural
resources (AARNR) service agencies and
related offices by taking measures to sort out
institutional overlaps. The convergence effort
will operationalize sustainable development
by integrating the social, economic, and
environmental aspects of rural development.
The proposed legislation will rationalize and
strengthen the provision of extension services
towards improving national, local and private
sector complementation.
Work for the Accelerated

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

Labelling Law
This measure puts in place a coordinated food
safety and certification system, clearly defining
the functions and mandates of the agencies
concerned; establishing a system for public
laboratories to ensure the credibility of test
results; and strengthening the participation of
food supply industries in the global food trade,
among others. Consumers right to information
should also be protected through proper
labelling of raw materials and ingredients
of processed food products, including those
sourced from genetically-modified organisms.
113
114
05
Accelerating
Infrastructure
Development
Accelerating Infrastructure Development
115
Accelerating Infrastructure
Development
The Plans infrastructure development program aims to contribute to inclusive growth and
poverty reduction. It will support the performance of the countrys economic sectors and
ensure equitable access to infrastructure services, especially as these affect the peoples
health, education, and housing. Toward these ends, the government will accelerate the
provision of safe, efficient, reliable, costeffective, and sustainable infrastructure.
Low levels of investment in

infrastructure are directly caused
by the countrys tight fiscal
situation.
Inadequate project preparation,
poor project quality-at-entry, and
poor project execution cause
delays and changes in project
scope and raises costs in the
course of implementation.
The countrys inadequate infrastructure has

been identified as a critical constraint to
economic growth1. This inadequacy, in both
quantity and quality, is the result of low levels
of public and private sector investments
in infrastructure, which fall short of the
requirements of a progressive economy and
a growing population. Moreover, inequitable
access to basic infrastructure services has
also become an obstacle to poverty reduction
and, more generally, to inclusive growth
because it limits the opportunities for
economic and social advancement available
to marginalized sectors.
To accelerate infrastructure development
and offer equitable access to infrastructure
services, the following objectives and
strategies shall be pursued across all
infrastructure subsectors:
To optimize resources and investments

Low levels of investment in infrastructure are
directly caused by the countrys tight fiscal
situation. Notwithstanding the measures to
address the narrow fiscal space discussed in
Chapter 2, the following strategies need to be
implemented to make the most of available
resources and investments in infrastructure:
Improve project preparation,

development, and implementation
Inadequate project preparation, poor
project quality-at-entry, and poor project
execution cause delays and changes in
project scope and raises costs in the
course of implementation. All of these
significantly reduce the projects value
and hamper the attainment of project
objectives.
To address this problem, the following
policy reforms2 shall be implemented:
Strengthening the capacity of
NEDA and other government
agencies in Value Engineering/
Value Analysis (VE/VA) and Risk
Analysis and Management to ensure
that infrastructure projects are not
overdesigned or overspecified and
to minimize cost-overruns, project
implementation delays, and changes
in scope of works;
Incorporation of VE/VA and
Risk Analysis in the guidelines and
processes of the NEDA Investment
Coordination Committee (ICC);
See ADB. Philippines: Critical Development Constraints, ADB Publications, December 2007, p.1-62 and C.F.
Habito. An Agenda for High Inclusive Growth in the Philippines. ADB Publications 2010, p. 1-61.
These reforms were recommended under the 2009 Philippines-Australia Partnership for Economic Governance
Reforms (PEGR)-funded Reform Agenda 006-07 on Institution Strengthening of the NEDA and other oversight
agencies on value engineering, contract preparation, and performance monitoring of infrastructure projects
116
Development
of
Model
Transaction Documents/Contracts
that may be uniformly applied
to PPP projects of national
government agencies (NGAs) and
LGUs3; and
Monitoring, management, and
evaluation (MME) of PPP projects
for the immediate mitigation of
potential problems during contract
implementation, while maintaining
clear lines of accountability between
contracting parties and the oversight
agency.
To assist agencies in project preparation, a
fund to support the conduct of feasibility
studies may be established. This fund
will ensure that feasibility studies are
undertaken in a timely and correct
manner.
With regard to PPP projects, NEDAICC approval of business cases shall
be secured before proceeding to a full
feasibility studies to save on project
preparation costs. This shall include the
go or no-go decision on a project at an
early stage and shall be required of all
PPP projects irrespective of modality.
Synchronize planning and

budgeting
The MTEF and the OPIF represent
substantial progress in ensuring the
consistency and responsiveness of the
expenditure program with the national
development agenda of the government.
Despite these, there is still a need to
guarantee that only those infrastructure
programs and projects that will generate
genuine economic benefits and are
consistent with established development
plans will be adequately funded for timely
implementation.
By synchronizing the prioritization of programs

and projects on one hand and allocating
appropriate funding across government
agencies on the other, the government
ensures that only programs and projects that
are strategic and critical to the realization of
developmental goals shall be prioritized for
funding. As a prior step, however, government
agencies must demonstrate that proposed
projects indeed make positive net contributions
to national economic and social welfare.
Coordinate and integrate

infrastructure initiatives
Development initiatives across infrastructure
subsectors shall be coordinated and integrated.
This ensures that the requirements of
these subsectors are addressed within the
fundamental levels of the infrastructure sector
and that their contributions are fully utilized.
Intended outcomes are better realized if there
is a coordinated and integrated strategy for
infrastructure initiatives.
Development initiatives across

infrastructure subsectors shall
be coordinated and integrated.
Intended outcomes are better
realized if there is a coordinated
and integrated strategy for
infrastructure initiatives.
LGUs play a key role in infrastructure

development. While local autonomy is
duly recognized, the financial and technical
capacity of LGUs must be enhanced if they
are to become more effective development
partners. Their capacity for planning must also
be improved so that local and national plans
can be harmonized.
To aid planning and project development, the
collection, management, and integration of
key infrastructure and related data both at the
national and local levels will be improved.
To attract investments in infrastructure

Improving investor confidence is necessary
in order to generate additional financing
and attract service providers. Both, in turn,
ease the burden of government in providing
infrastructure. The following strategies
aim to make the country an attractive
Specific BOT/PPP model transaction documents/contracts have already been developed for four subsectors namely:
(a) urban mass rail; (b) bulk water supply; (c) solid waste management (SWM); and (d) ICT. A contract drafting tool
which aims to encompass all other projects and sectors not covered by the four model contracts has also been developed.
The model contracts and the contract drafting tool are both posted on the NEDA website under the Programs and
Projects section.
117
destination for investments by establishing

a stable, consistent, and transparent policy
environment and by reducing the moneyand time-cost of doing business:
Improve the institutional and

regulatory environment of the
infrastructure sector
Regulatory agencies play a vital role in
infrastructure development since they
strongly influence, for good or ill, the
provision of existing infrastructure services
and the levels of forthcoming investments.
They also affect the accessibility of such
services, particularly the rates at which these
are made available.
Improving the regulatory environment for
infrastructure therefore becomes contingent
on institutional reforms, which will involve:
a. the separation of operation and
regulatory functions of agencies in order
to remove conflicts of interest that
arise naturally when such functions are
performed by a single entity;
b. the establishment of an independent
body that consolidates in itself all
regulatory functions to support the
provision of public infrastructure services
in subsectors with multiple regulators;
c. the creation of a regulatory framework
where this is lacking and necessary; and
d. the strengthening of regulatory
institutions through capacity building
and reinforced independence.
Regulatory agencies should pay special
attention to vertical integration trends
in supply and distribution utilities. These
may facilitate transfer-pricing and result in
inefficiencies from the supply side to the
distribution side. This issue becomes critical
in sectors where natural monopolies are
present, such as energy and water, where
returns on investment are guaranteed and
where distribution is regulated while supply
is not.
118
Encourage PPPs
The huge investment requirements of
the infrastructure sector, coupled with
the governments need to observe fiscal
discipline, means that government shall
tap the private sector for the financing,
construction, operation, maintenance, and
rehabilitation of major infrastructure in
high-priority areas, such as transportation,
power and water.
To this end, the environment for the
implementation of PPPs shall be
improved by revisiting the following
guidelines and policies:
a. RA 7718 and its Implementing
Rules and Regulations (IRR);
b. Guidelines and Procedures for
entering into Joint Venture ( JV)
Agreements between Government
and Private Entities; and
c. RA 9184 or the
Procurement Reform Act.
General
The objective of the review shall be

to clarify ambiguous provisions and
streamline the procedures and processes
of project approval and implementation.
Experience during the global financial
crisis and constraints encountered by
concerned agencies in processing and
implementing PPP projects will also be
considered to make these guidelines and
policies more responsive and attractive to
the private sector.
To foster transparency and

accountability in infrastructure
development
Encourage stakeholder
participation
Government shall encourage the active
participation of the public and civil society
in governance, monitoring, and feedback.
Transparency
and
accountability
are integral to a predictable policy
environment conducive for investment.
To adapt to climate change and mitigate

the impacts of natural disasters
Institutionalize CCA and
DRRM in infrastructure
development.
The impacts of climate change and
natural disasters add to the countrys
infrastructure problems and hamper
resolution of the constraints earlier
discussed. Hence, CCA and DRRM
will be institutionalized in infrastructure
development.
Plans and designs should include the
possible effects of climate change and
natural disasters in order to develop
disasterresilient infrastructure and
help mitigate the adverse impacts
of climate change. LGUs should
also incorporate CCA and DRRM
strategies into their respective plans,
programs and budgets to allow timely,
efficient and effective mitigation and
disaster response at the local level.
To provide productive employment

opportunities
Adopt a labor-intensive scheme
where applicable
Infrastructure can contribute significantly
to local employment generation and can
harness skills and technical expertise of
the workforce. To provide productive
employment opportunities that will
contribute to inclusive growth, the
infrastructure sector shall adopt an
employmentintensive or laborbased
scheme whenever it is most optimal in
infrastructure development. Safety and
health in public works undertakings
shall be ensured at all times.
Infrastructure
Subsectors
Transport
Assessment, Issues, and Challenges4
In the MTPDP 20042010, the development
of the countrys transport infrastructure was
principally aimed at the decentralization
of progress and development by providing
opportunities for growth, especially in
regions and areas adjacent to Metro Manila.
Towards that end, the following major
thematic areas in transport were pursued and
became the primary focus of both public and
private investment: (a) the development of
the nautical highway system and road-rollon/roll-off (RORO) terminal system linking
the entire country; (b) the development of
tourism infrastructure to provide access
to major tourism destinations; (c) the
affirmative action for peace and development
in Mindanao and other deeply impoverished
areas; and (d) the decongestion of Metro
Manila and the spread of development to
adjacent regions.
The impacts of climate change

and natural disasters add to the
countrys infrastructure problems
and hamper resolution of the
constraints earlier discussed.
Hence, CCA and DRRM will be
institutionalized in infrastructure
development.
Facilities for RORO have been built or

rehabilitated in 22 ports identified under
the Strong Republic Nautical Highway
(SRNH), with 42 RORO ships operating
in the identified SRNH routes run by 25
shipping operators as of the end of 2009.
Economic gains have been recorded in
connection with the intermodal roadRORO terminal system (RRTS) connecting
Mindanao, Visayas, and Luzon, with a
reduction in travel time by around 12 hours
and a reduction of transport cost by 37-43
percent for passengers and 24-34 percent
for cargo. The Subic Bay Port Development
Project was also completed and was expected
to generate significant benefits with the
increase in the ports container capacity
from 100,000 to 600,000 TEUs (20-foot
equivalent units).
Source: Updated MTPDP 20082010
119
The
SubicClarkTarlac
Expressway
(SCTEx), linked to the existing North Luzon
Expressway (NLEX), was also completed and
has been operational, reducing travel time from
Subic to Manila and from Tarlac to Manila.
The construction of the Tarlac-Pangasinan-La
Union Toll Expressway (TPLEx) extending
the SCTEx from Tarlac to La Union is
ongoing and is expected to relieve traffic
congestion along the existing Manila North
Road. In the Southern Luzon Corridor, the
completion of the Batangas Port Development
Project and the Southern Tagalog Arterial
Road (STAR) Expressway will pave the way
for the development of the industrial belt south
of Metro Manila.
120
in La Union were upgraded, while the

first phase of improvements on the
Busuanga (Coron) Airport in Palawan
was substantially completed.
With respect to roads and bridges, the

completion of substantial improvement
and rehabilitation is expected to reduce
transport costs and induce economic activities,
particularly in the rural areas. As of December
2009, 22,468 km. (75.15%) of all national roads
had been paved, of which of 13,525 km. were
national arterial roads and 8,943 km. national
secondary roads. Meanwhile 93 percent of the
total 314,456 linear meters of national bridges
have been made permanent. As for local roads,
of the 30,924.76 km. of existing provincial
roads, 30.2 percent or 9,345.15 km. have been
paved, while 69.5 percent, or 21,464.50 km, are
unpaved, with 0.4 percent or 115.11 km. of still
undetermined condition. Of the 14,810.44 km.
of city roads, 61.7 percent, or 9,138.348 km.
have been paved and 35.8 percent, or 5,308.220
km, are unpaved, with 2.5 percent or 363.872
km. of undetermined quality.
On the goal of developing SubicClark

as an Asian logistics center, the Civil
Aeronautics Board (CAB) approved and
published the IRR of EO 253 expanding
air services at Diosdado Macapagal
International Airport (DMIA) and
Subic Bay International Airport (SBIA).
Developments at DMIA include the
expansion and rehabilitation of the
existing passenger terminal and the
installation of radar equipment to
enhance the safety of flights, as well
as to ensure round-the-clock airport
operations even in adverse weather. The
CAB and the RP Air Panel negotiated
air services agreements (ASAs) from
2006 to 2010 with Singapore, Turkey,
Oman, Russia, Libya, Cambodia, United
Kingdom, Spain, Brunei, Australia,
Kuwait, UAE, Qatar, Malaysia, Finland,
Iran, Thailand, Netherlands, Hong Kong,
Canada, Macau, Palau, Bahrain, Peoples
Republic of China, India, Japan, Republic
of Korea, Nepal, and New Zealand.
These agreements resulted in increases in
capacity entitlements, new routes, more
access points, multiple airline designation,
and airline cooperative arrangements. The
CAB was able to negotiate an average of
200300 tons capacity per week for cargo,
which covers Manila, Subic, Clark, and
other points in the Philippines.
Major tourist destinations identified in

the previous Plan included CebuBohol
Camiguin, ClarkSubic, Cordillera, Davao,
Ilocos, Boracay, and Palawan, among others. To
serve Panay Island and its immediate environs,
the New Iloilo Airport was completed in June
2007. The New Bacolod (Silay) Airport for
Negros Island destinations was inaugurated
and opened for operations on January 18,
2008. The Caticlan Airport is currently being
rehabilitated, and the Kalibo Airports terminal
building was initially expanded to cater to the
increasing visitor traffic to Boracay Island and
nearby destinations. To serve the Cordillera
area, the facilities of the San Fernando Airport
While there are completed and ongoing

transport projects implemented through
PPP under the BOT Law, private-sector
participation in transport infrastructure
development has been continually
enhanced to augment the governments
budgetary support for capital investment.
This effort included the development and
construction of expressways, railways, and
airports; the privatization of individual
ports or groups of ports; and the operation
and maintenance of transport facilities.
For the roads subsector, the JICA-assisted
Master Plan on High Standard Highway
Network Development, which identified
a long list of potential PPP expressway

projects, was completed in July 2010.
In addition, the Preparatory Survey for
PPP Infrastructure Development Project,
which aims to identify bottlenecks in PPP
project implementation and select priority
infrastructure projects, is underway and
close to completion.
Some of the maintenance of land transport
assets (i.e., maintenance of national,
provincial, and city roads nationwide;
improvement of drainage; installation of
adequate traffic lights, and road safety and
pollution monitoring devices) had been
undertaken in the last few years using
revenues from the Motor Vehicle Users
Charge (MVUC). Objectivity in the
prioritization and allocation of resources
for national road maintenance was also
enhanced using a computerized system
with comprehensive and up-to-date
technical and economic criteria and data.
For local roads, an incentive-based policy
reform program is currently underway.
This uses incentives or grants to finance
road maintenance and rehabilitation
to motivate LGUs to institute policy
reforms in local government systems and
processes, and improve performance in
road rehabilitation and maintenance and
other service delivery.
Despite notable accomplishments in the
transport sector, the institutional and
bureaucratic reforms proposed under
the previous Plan seeking to separate
the operation and regulation functions
of transport agencies have not been
achieved. This notwithstanding, the civil
aviation subsector underwent a degree
of reorganization with the enactment
of RA 9497 on March 4, 2008 creating
the Civil Aviation Authority of the
Philippines (CAAP). RA 9497 grants
the new body fiscal autonomy through
the corporatization of the preceding
civil aviation agency, while retaining its
technical regulation functions over the
civil aviation industry. The economic
regulation functions meanwhile rest
with the CAB. There is a need to pursue
a full restructuring of the air transport
organizations as well as those for the ports and

for rail transport.
To become globally competitive and address
safety issues, especially those raised by civil
aviation stakeholders, the government is
implementing the Communications Navigation
Surveillance/Air Traffic Management (CNS/
ATM) system in accordance with International
Civil Aviation Organization (ICAO) standards.
A similar project was completed in 2004
the Nationwide Air Navigation Facilities
Modernization Project (Phase 3)to replace
ageing air navigation equipment.
Likewise, maritime safety measures have been
pursued in domestic shipping in compliance
with International Safety Management (ISM)
and National Safety Management (NSM)
codes and the Maritime Industry Authority
(MARINA) Ship Safety Inspection System.
Ship inspection has also been enhanced through
the Japan International Cooperation Agency
( JICA)-assisted Project on the Enhancement
of Ship Inspection completed in 2005. A
MOA between MARINA and the Philippine
Coast Guard (PCG) to implement ship safety
inspection was signed on September 14, 2005.
To strictly monitor compliance by ships and to
enforce maritime safety rules and regulations
by deputized maritime enforcers, MARINA,
on March 16, 2009, signed a memorandum
of understanding (MOU) with the PCG,
Philippine National Police-Maritime Group
(PNP-MG), the Union of Local Authorities of
the Philippines (ULAP), and the Liga ng mga
Barangay (LNB). In 2010, a total of 356,831
mandatory predeparture inspections (MPDI),
992 port state control inspections, and 5,476
Safety of Life at Sea (SOLAS) compliance
inspections were conducted by the PCG.
Compliance with international maritime
security standards has been implemented
through the adoption of the International Ship
and Port Facility Security (ISPS) Code. Vessel
Traffic Management Systems (VTMS) have
been installed in the Port of Manila, Corregidor
Island, and the Port of Batangas following the
security provisions of the Code. There are plans
for the installation of similar standards in other
major ports.
121
In 2005, the Study on Wooden-Hulled Ships

(WHS) recommended standards, rules,
and regulations for the continued operation
of existing wooden-hulled ships, and the
construction, safety, and operation of new
ones. On October 27, 2010, the Rulebook
on the Construction and Repair of WoodenHulled Ships and Wooden-Hulled Boats with
Outriggers was approved by the MARINA
Board. As part of the domestic shipping fleet
modernization program, MARINA entered
into a MOA with the Development Bank
of the Philippines (DBP) Maritime Leasing
Corporation (now, DBP Leasing Corporation)
on June 2, 2008. The aim is to provide loan
facilities to qualified ship owners or operators
who are interested in the acquisition of RORO
ships to be deployed in SRNH routes. As of
June 2010, seven companies have availed of
the said facility involving the acquisition of 12
RORO ships. EO 588, entitled Strengthening
the Philippine Shipbuilding and Ship Repair
Sector and Instituting Measures to Promote
Its Growth and Development, was issued
on December 8, 2006. This mandated the
formulation of a Comprehensive Development
Plan for the Philippine Shipbuilding and
Ship Repair Industry that was completed on
October 16, 2007 and subsequently endorsed
to the Office of the President on December
3, 2007 together with the draft memorandum
circular directing the implementation of the
Plan.
To further promote the development of
domestic shipping, RA 9295 entitled an Act
Promoting the Development of Philippine
Domestic Shipping, Shipbuilding, Ship Repair
and Ship Breaking, Ordaining Reforms in
Government Policies towards Shipping in
the Philippines and for Other Purposes was
enacted on May 3, 2004. The law deregulated
the domestic shipping industry by allowing
domestic operators to set their own passenger
or cargo rates, hence promoting investments in
the industry.
Notwithstanding the accomplishments in the
transport sector, several issues and challenges
still remain to be addressed, such as the
following:
122
Lack of integrated and

coordinated transport network
A major shortcoming of the sector is
the absence of an integrated and wellcoordinated national transport plan that
will guide the prioritized funding and
implementation of transport projects,
as well as the physical planning and
intermodality of transport infrastructure.
This situation is likely a consequence of the
current institutional setup characterized
by weak coordination, regulation, and
oversight for transport policies and plans.
The lack of integration between national
and local government plans and
programs/projects is also a major problem
that results in gaps in the transport
network, contributing to the low capacity
and quality of infrastructure facilities. This
is partly a consequence of the insufficient
capacity of LGUs to finance and manage
local projects, particularly roads, and the
lack of national government funds to
maintain the existing national transport
infrastructure base.
Global assessments of the countrys
transport infrastructure network indicate
that its quality and capacity remain low.
These deficiencies stem mainly from
inadequate and unreliable funding
for construction and development of
transport infrastructure, as well as for the
management and maintenance of existing
transport infrastructure assets.
To promote productivity and trade
competitiveness, seamless multimodal
transport networks and logistics systems
are needed. The MTPDP 20042010
recognized the need for a transport logistics
system that will decongest Metro Manila
by ensuring efficient linkages between its
business centers and nearby provinces. In
2007, the SubicClarkManilaBatangas
(SCMB) Corridor, which connects the
three regions accounting for two-thirds
of the countrys GDP, was envisioned as a
major transshipment and logistics hub in
the Asian region following the creation of
the Luzon Urban Beltway (LUB) Super
Region. The SCMB Corridor handles

more than 80 percent of the volume of
the national cargo throughput, but its
potential is constrained by inefficient
logistics operations and infrastructure
support.This has primarily resulted in high
transport costs of goods and services that
has made the corridor less competitive.
What is needed is a seamless multimodal
logistics system along the SCMB
Corridor to support intraregional trade
and investment, an increase in the level of
services of an integrated transport system,
and an efficient flow of commodities,
supplies, and inputs to tourism areas and
various economic and industrial zones.
Other strategic logistics corridors need to
be identified and developed in a similar
manner.
Overlapping and conflicting

functions of transport and other
concerned agencies
The institutional structure of the transport
sector needs to be studied thoroughly to
determine the most efficient institutional
setup and the corresponding institutional
reforms to improve the quality of transport
service, and to prevent conflicts between
different modes of transport that serve the
same purpose. A requisite, however, is a
long-term policy framework to achieve an
integrated and well-coordinated national
transport plan. This policy framework
would also address governance issues in the
sector by raising the level of accountability
of decision-makers and serve as the basis
for a multimodal transport plan to guide
investment planning, programming, and
prioritization, among others. Specific
policies related to governance may be
included in the policy framework to ensure
that the public sector is performanceoriented and that outcome-based services
are promptly delivered.
Transport safety and security

concerns
Road accidents are now the fourth leading
cause of death in the Philippines according to
the DOH. The ADB Regional Safety Program
published in 2005 estimated the national cost of
traffic accidents for the Philippines at US$1.9
billion (or roughly 2.8 % of GDP). In addition,
truck overloading continues to be a problem.
According to a JICA-DPWH axle load survey
in 2004 and a DPWH survey in 2005, about 11
percent of the 3-axle trucks and 12 percent of
the 4-axle semitrailers were overloaded.
On the other hand, the maritime subsectors
record in the area of safety is alarmingly bad,
with an average of more than 160 accidents per
year over the last decade. Maritime accidents
are a major problem owing to a combination
of factors such as: (a) a mostly retro-fitted
and aging fleet; (b) underappreciation of
cargo balancing on-board vessels; (c) loss of
experienced crews to foreign shipping; and (d)
natural disturbances.
Additionally, the Federal Aviation Authority
(FAA) of the US has downgraded the category
of the Philippines aviation capability in
providing safety certification and oversight
for international carriers, citing technical and
regulatory deficiencies, among others.
Underdeveloped transport facilities

in conflict-affected and impoverished
areas
As a result of armed conflict and inequity in the
distribution of income, economic activity and
investments have been constrained in some
areas of the country. In particular, conflictridden areas have experienced damages in their
transportation network and have suffered from
the disrupted delivery of basic services, thereby
adversely affecting the peoples welfare and the
quality of life.

The current state and performance of
the transport sector indicates gaps and
bottlenecks that need to be addressed to
support the governments thrust toward
123
competitiveness and its development goals.

What is envisioned is a safe, secure, efficient,
viable, competitive, dependable, integrated,
environmentally sustainable, and peopleoriented Philippine transportation system
that will focus the sectors development
objectives and strategies on resolving
identified issues and challenges.
transport infrastructures will be defined

in conjunction with the crafting of a
NTP. For rail transport, for example, the
government can be the primary developer
of the railway infrastructure, while the
private sector can be responsible for the
operations and maintenance of the facility
including the provision of rolling stock.
To ensure an integrated and

coordinated transport network
Likewise, the NTP shall consider

the definition of the roles of national
government entities and LGUs in
transport infrastructure development and
management (e.g., cost sharing policy/
subsidy), notwithstanding the Local
Government Code of 1991, including
scope of duties and responsibilities, as well
as the linking of national and local plans,
and budget allocation.
1. Adopt a comprehensive long-term

National Transport Policy (NTP)
A safe, secure, efficient, viable,

competitive, dependable,
integrated, environmentally
sustainable, and people-oriented
Philippine transportation system.
To guide the accomplishment of transport

objectives and goals and to improve governance
in the sector, a comprehensive long-term
NTP must be put in place. This will guide
the restructuring of the transport sector into a
well-coordinated and integrated multimodal
transport system. The NTP should clearly
establish the governments policies in the areas
of resource generation and allocation; the
criteria for the preparation of agency plans,
programs and projects; cost recovery and
subsidies; regulations for passenger transport
services; urban transport and settlements;
transport logistics; and governance. In the
interim, the NTP shall be operationalized
through an executive order, and in the mediumterm, through a legislative enactment. The
NTP would eliminate uncertainty and lend
predictability and consistency to government
decisions, thereby promoting accountability.
With regard to PPP project implementation,
policies related to risk allocation (e.g., allocation
of regulatory risk), delivery of ROW, and
government financial support for viability gap
funding of transport projects will be established.
Additionally, the NTP will institutionalize
CCA and DRR strategies in recognition of the
major impacts of environmental, geologic, and
meteorological hazards on the development
and preservation of transport infrastructure. It
will also promote a people-oriented transport
system that mainstreams gender considerations.
The roles of the private sector vis--vis those
of government agencies and other authorities
as well as LGUs in the development,
operation and management of various
124
The government will also address the

inadequate linkage between the planning
and budgeting processes to ensure that
resources are allocated to their most
important uses for transport infrastructure
and management.
2. Develop strategic transport
infrastructure and maintain/manage
transport infrastructure assets
a. Prioritize asset preservation
While transport connectivity is of

utmost importance, the upgrading of the
quality and capacity of existing transport
infrastructure will be prioritized before
expanding the coverage of the networks.
The latter will be based on a strategic plan
that takes modal complementation into
account. For rail transport, the quality of
the existing railroad tracks and services
must be upgraded.
In the allocation of resources, higher
priority shall be given to asset preservation
or maintenance and rehabilitation of
the existing transport infrastructure
network rather than new construction or
development.
The user-pays principle shall be applied
at the very least for the purpose of asset
preservation. This principle may be

invoked whenever pricing of the service
is possible and potential users unwilling
to pay for the service can be excluded.
The same argument may be invoked for
full investment-cost recovery. The focus
shall be the upgrading of the quality and
capacity of existing ports, roads, airports,
and rail lines.
Additional funding for maintenance
should be provided to heighten and
effectively maintain existing infrastructure
assets. The previous annual appropriation
of PhP4 billion for road maintenance
on top of the Road Fund should be
reinstated. Budgetary allocation may be
further augmented through the GAA.
The government shall also enhance a
user-pays culture in infrastructure
management. As proposed under the
previous Plan, RA 8794 (An Act
Imposing a Vehicle Users Charge on
Owners of All Types of Motor Vehicles
and for Other Purposes) may be
amended to include a fuel levy or some
other form of road user contribution in
order to expand the Road Fund. For longterm sustainability, the stability of available
and adequate maintenance funds shall be
ensured. To ascertain the sustainability of
local transport networks, an incentivesbased reform agenda for LGUs shall be
put in place, where applicable, to help
LGUs improve their performance in
transport infrastructure management and
maintenance.
b. Provide access to major and strategic tourism
destinations and production areas
Dependable transport access will

be facilitated in coordination with
LGUs to support major and strategic
tourism destinations. National and local
coordination will be fostered to provide
the necessary transport infrastructure to
link production and agricultural areas
to major roads leading to markets and
population centers.
5
c. Promote environmentally sustainable and peopleoriented transport
The government will continue to promote

an environmentally sustainable and peopleoriented transport system. The shift from the
use of fossil fuel to renewable energy sources
to power vehicles shall be pursued. Nonmotorized transport facilities such as sidewalks,
footbridges, underground walkways, and
bicycle ways will be provided to ensure safety
of pedestrians and bicycle users. Transportation
design and systems shall consider the frail,
elderly and differentlyabled persons, among
others.
3. Develop an integrated multimodal logistics
and transport system
a. Identify and develop strategic logistics corridors
based on a National Logistics Master Plan
The SCMB Corridor and other strategic

logistics corridors must be developed to become
seamless intermodal logistics corridors. In
support of this, a Logistics Master Plan shall be
completed to guide overall development. This
plan shall consider the intermodality of the
transport network system, the industrial and
area development plans and the identification
of the necessary initiatives, programs, and
projects. It will promote subregional economiccum-logistics cooperation and will fully utilize
the logistics systems that link the regions
traversed by the logistics corridor (e.g., Central
Luzon, Metro Manila, and Southern Tagalog
for the SCMB corridor). The aim shall be
an economic corridor where development
benefits not only large cities but also smaller
towns and rural areas along the corridor.5
The user-pays principle shall be

applied at the very least for the
purpose of asset preservation.
The SCMB Corridor and other
strategic logistics corridors
must be developed to become
seamless intermodal logistics
corridors.
The extension of the SCMB logistics corridor

farther to the north and to the south will also
be pursued. To support this, the viability of
establishing an efficient long-distance, highspeed mass rail transit system, integrated
with the mass transit commuter rail system
in Metro Manila, shall be explored alongside
the rationalization of the roles of various
National Competitiveness Council (NCC)
125
government agencies and entities concerned

with mass rail transport development. The
feasibility of freight-rail services for all strategic
logistics corridors will also be considered.
also exclude one of their major airports

during the period of exclusion of NAIA.
(Please refer to Chapter 2: Competitive
Industry and Services Sectors).
To address the overlapping and

conflicting functions of transport
Interisland logistics shall be enhanced by further and other concerned agencies
b. Improve the RRTS
developing the RRTS. Studies on the domestic

shipping industry shall also be undertaken to
identify concrete measures to lower interisland
shipping costs. Where needed, the maritime
regulator shall intervene to ensure competition
in the industry pursuant to RA 9295. Efforts
to improve performance and efficiency in port
operations shall likewise be pursued.
The dual roles of that
simultaneously serve as
regulators and operators shall
be addressed by establishing
a separate and independent
regulator (or regulators)
c. Explore ASEAN connectivity through sea linkages
The Philippine archipelagos proximity to other

Asian countries is an obvious reason to explore
the establishment of an ASEAN RORO
Network, a Philippine initiative adopted as
one of the flagship programs in the ASEAN
Connectivity Masterplan during the 17th
ASEAN Summit in Ha Noi, Viet Nam. In
support of this initiative, the government shall
study the development of existing RORO ports
to accommodate international RORO ships as
well as the necessary regulatory framework to
promote such service. The development of port
facilities through PPP to cater to cruise tourism,
both servicing interisland and international
cruise vessels, may also be explored.
d. Expand the Air Services
Full implementation of EO No. 219 shall be

pursued. The Philippines shall allow airlines
from foreign countries to fly to any airport in
the country except Ninoy Aquino International
Airport (NAIA), which is currently congested.
The Government shall ensure that each
participating foreign country shall reciprocate
by allowing airlines from the Philippines to fly
to any of its airports. Each foreign country may
126
4. Separate the regulatory and operation

functions of transport and other
concerned agencies
In line with the goal of separating the
operation and regulation functions of
transport agencies, the port, rail and
air transport organizations shall be
restructured. The dual roles of air, water,
and rail transport sector agencies, as well
as other government entities involved in
the provision of transport infrastructure
and services that simultaneously serve
as regulators and operators shall be
addressed by establishing a separate and
independent regulator (or regulators)
with jurisdiction over all airports, ports, or
railways.
In rail transport, the policy, planning, and
regulation functions shall be separated
from the delivery of train services,
which also serves to allow private sector
participation. In the previous plan, the
interim institutional strategy for the rail
subsector was to establish a Strategic
Rail Authority in the Department of
Transportation and Communications
(DOTC) for policy, strategy, and
regulation. However, the long-term plan
calls for an independent rail regulator. To
encourage private sector participation,
ROW acquisition and infrastructure
shall be subsidized by national
government appropriations, while private
concessionaires provide the rail services.
To ensure transport safety and

security
Crosscutting Issues and Strategies

in the Water Sector
5. Comply with safety and security

standards
Assessment, issues, and challenges
Standards on safety and security shall

be regularly upgraded and updated in
keeping with international standards and
practices and strictly implemented and
enforced. Maritime safety and security
will be enhanced through the ratification
of maritime safety and security-related
conventions. Road safety will be promoted
through the implementation of the Road
Safety Action Plan.
To promote development of
conflict-affected and highly
impoverished areas
6. Provide linkages to bring
communities into the mainstream of
progress and development
Transport networks in underdeveloped
regions and conflict-affected areas shall
be improved to open up economic
opportunities and help solve peace and
order problems.
Water
Water is a basic need and everyone has
the right to be provided with access to
basic services related to water. In addition,
economic growth itself must be supported,
specifically by meeting the needs of
priority growth and production centers
for water supply, sewerage, sanitation,
irrigation and flood management. The
water sectors greatest challenge is to
balance equity and efficiency in the
management of water resources to ensure
adequate, safe and sustainable water for
all. Efficient and effective management
of water resources is fundamental to
achieving inclusive economic growth
while ensuring a sustainable environment.
Access to potable water and basic

sanitation
MDG 7 commits the country to halving the
number of people without access to water and
basic sanitation by 2015. Meeting this target
is a major challenge for a number of reasons.
One, the lack of sector data presents a logistical
challenge in the determination of priority
waterless areas. Two, investments in water
supply and sanitation have also been significantly
low relative to overall public spending (World
Bank 2005), which may be due to the lack of
a coherent financing framework in the sector.
Three, public infrastructure spending by the
national government shows a bias for Metro
Manila and other urban areas, including
spending for water supply, sewerage and septage
management. And four, the absence of a clear
monitoring system makes it difficult to assess
and address the sustainability of developed
infrastructure.
Water is a basic need and

everyone has the right to be
provided with access to basic
services related to water. In
addition, economic growth itself
must be supported, specifically
by meeting the needs of priority
growth and production centers
for water supply, sewerage,
sanitation, irrigation and flood
management.
Inefficient and insufficient support for

growth and production centers
The absence of a single lead agency to coordinate
development in the water sector is one of the
major hurdles to the efficient implementation of
strategic water infrastructure. There are at least
30 agencies involved in the water sector, with
specific but often overlapping or conflicting
mandates for water supply, irrigation, flood
management, pollution control, watershed
management, financing, policy formulation
and coordination, among others. This situation
presents difficulties for effective coordination
and implementation of projects and programs
to sustainably meet water use and management.
(e.g., in meeting the needs of competing
users of water; linking water service provision
with basic sanitation services; and ensuring
effective and efficient flood risk reduction and
management).
127
While the National Water Resources Board

(NWRB) has the legal mandate for water
governance, its existing structure and budget
limit the exercise of its functions. To address
the existing leadership gaps, the mandate of the
Subcommittee on Water Resources (SCWR),
initially created under the Committee on
Infrastructure (INFRACOM) to ensure the
implementation of the Philippine Water
Supply Sector Roadmap, was expanded to
become the key policy coordination body for
the water sector. 6 Despite this, however, the
sector remains weak in terms of regulation and
allocation of water resources.
The absence of a single lead

agency to coordinate development
in the water sector is one of the
major hurdles to the efficient
implementation of strategic
water infrastructure. There are
at least 30 agencies involved in
the water sector, with specific but
often overlapping or conflicting
mandates for water supply,
irrigation, flood management,
pollution control, watershed
management, financing, policy
formulation and coordination
Furthermore, effective planning, targetsetting, monitoring and implementation

are impeded by the lack of up-to-date,
integrated, harmonized and comprehensive
data on the sector. Such data is significant in
the development of new water sources; and in
the design of CCA and DRRM mechanisms.
But initiatives to establish a knowledgesharing network among stakeholders in
water have so far proved unsustainable since
there is no clear framework and reliable
financing for the continuous updating and
improvement of access to information.

To address issues on equity and
efficiency of access to water
1. Practice Integrated Water Resources
Management (IWRM) in the sector
IWRM7 has been identified as the overall strategy for: (a) the effective protection
and regulation of water for security and
ecosystem health; (b) the provision of
responsive services for present and future
needs; (c) the improved effectiveness,

accountability and synergy among
water-related
institutions
and
stakeholders; and (d) adaptive and
proactive responses to emerging as
well as future challenges, such as CCA
and DRRM. While the concept is
widely accepted, however, IWRM
practices have not been mainstreamed
in policies, plans and programs.
Similarly, integrating the ecoefficient
approach8 to the development of
water infrastructure to support the
desired transgenerational outcomes
in the sector has yet to be realized.
The experience of numerous recent
instances of disasters, nonetheless, has
raised awareness and increased the
acknowledgement of the benefits of
IWRM. Now is an opportune time,
therefore, to implement coordinated
activities to mainstream IWRM
practices and promote the development
of ecoefficient water infrastructure.
Because of the fragmented nature of
the water sector, the establishment
of a comprehensive and accessible
information management system
is necessary to ensure coordinated
planning and implementation. Data
collection methodologies have to be
synchronized to support planning and
budgeting of key programs and projects.
Mechanisms that allow consistent
updating and harmonization of raw
data should be put in place alongside the
sharing of such data among the relevant
stakeholders, project developers, and
key policy-makers.
The SCWR is an inter-agency committee for the Water Resources Sector established through NEDA Board
Committee on Infrastructure (INFRACOM) Resolution No. 2, Series of 2008 composed of representatives from key
national government agencies, leagues of cities and municipalities, academe and civil society. Its key function is to
advise the NEDA Board and INFRACOM on policies and issues related to the Water Sector.
IWRM promotes the coordinated development and management of water, land and related resources in order to
maximize the resultant economic and social welfare in an equitable manner without compromising the sustainability
of vital ecosystems.
8
Ecoefficiency is having more value with less impact on the environment; it emphasizes monitoring of material and
energy flows of stocks and life cycle assessment. While ecoefficiency has been successfully integrated in industrial and
business processes, its application in water infrastructure development will require the establishment of both physical
and nonphysical infrastructures (i.e., policies, institutional framework, financing, etc).
128
2. Rationalize financing in the water

sector to fulfill MDG commitments
The low level of investments in the
water supply and sanitation sector
hinder the achievement of the
MDGs of the sector. The lack of a
coherent financing framework must be
addressed by rationalizing financing in
the water sector to make the fullest use
of limited public funds and encourage
concessional financing, and private
sector investments.
3. Work towards a lead agency for the
water sector
A lead agency for the entire water
sector should be ultimately developed.
The lead agency should be able to
assume the functions of policy making,
coordination, and resource regulation
for the sector. It shall be provided
with sufficient capacity and authority
to implement key policies, plans, and
projects in the water resources sector.
In the meantime, NWRB should be
strengthened so it can continue its
function as the sectors overall economic
and resource regulator.
4. Develop capacities of NGAs,
LGUs, and water-service providers
(WSPs) for the sustainable
management of infrastructure and
better service provision
The capacities of planning and
implementing
institutions
must
be developed to improve the
performance of various structural
and nonstructural infrastructures for
the water sector. NGAs and LGUs
should enhance their capacities in effective

water governance, sustainable use of water
resources, and planning for CCA, among
others. LGUs and WSPs should be assisted
in developing relevant, practical, and upto-date management tools that support
integrated water resources management
and technologies. Service providers should
likewise be capacitated in plan development,
budgeting and operations, among others, in
order to improve coverage, efficiency and
sustainability of infrastructure.
Water Supply
Assessment, Issues, Challenges
Limited access 9
Most assessments show a limited overall
coverage and low level of access to safe
drinking water in many areas of the country.
Among others, the World Bank (2005)
noted a decline in access to improved water
services from the late 1990s to 2002. The
2010 Report of the WHO/UNICEF Joint
Monitoring Program on the MDGs10
observed minimal increases in coverage over
the past two decades, particularly in urban
areas. Moreover, there is a wide disparity in
coverage between urban and rural areas (see
Table 5.1). Regional data further reveals a
broad inequity of access even among rural
areas.
The Philippines Progress Report on the
MDG 2010, on the other hand, suggests
that the sector is on track to attain its MDG
commitment (Figure 5.1). Nonetheless,
achieving 100-percent coverage remains
a challenge, since 15.73 million people
continue to have no access to a safe water
supply.
Data on the number of service providers
remain inconsistent and have not been
consolidated. Notwithstanding this, Table
9
Reasonable Access availability of at least 20 liters per day from a source within 1 kilometer of the dwelling ( World
Bank and UNICEF Joint Measurement Programme: www.wssinfo.org, accessed 22 November 2010)
10
The WHO/UNICEF Joint Monitoring Programme ( JMP) for Water Supply and Sanitation is the official United
Nations mechanism tasked with monitoring progress towards MDG-7 or halving the proportion of the population
without access to water and basic sanitation.
129
Figure 5.1. Percentage Access to Safe Water
PERCENTAGE (%)
90
85
80
75
70
1990
1995
2000
2005
2010
2015
YEAR
Source: Philippines Progress Report on the Millennium Development Goals 2010
Table 5.1. Estimated Coverage of Access to Water
Year
URBAN AREAS
Household
Total
Connections
RURAL AREAS
Household
Total
Connections
1990
93%
40%
76%
8%
1995
93%
46%
79%
13%
2000
93%
51%
82%
18%
2005
93%
57%
85%
23%
2008
93%
60%
87%
25%
Source: WHO/UNICEF JMP 2010 Report
5.2 shows the approximate proportion of

the population with access to clean drinking
water within the scope of certain groups
of formal service providers. Approximately
20 percent continue to rely on informal
access, which are generally not considered
sustainable.
Low investment levels and lack of

financing for waterless areas
Investment levels are too low to meet the
growing demand for water. Among the key
constraints to expanded coverage and improved
quality of service are the low tariffs which hinder
cost recovery and prevent the accumulation
of funds for new capital expenditures. While
cost recovery has been identified as a principle
of regulatory policy, there has been minimal
progress to achieve it. Regulatory oversight has
been highly fragmented, as exemplified by the
130
existence of: (a) three entitiesNWRB,

LWUA and the different LGUsthat
exercise primary regulatory functions;
and (b) specialized regulatory bodies
such as the Subic Bay Regulatory Board
and Metropolitan Waterworks and
Sewerage SystemRegulatory Office
(MWSS-RO). These institutions have
different regulatory practices, processes,
tariff-setting methodologies, and more
importantly, overlapping functions or
jurisdictions, resulting in variances in
regulatory rules and enforcement across
types of service providers. The lack of
a single independent regulator for the
water supply sector is a major reason
for the absence of a clear regulatory
framework with a credible and effective
tariff methodology that is shielded
from political intrusion, founded on
accountability to consumers, and
conducive to new investments to meet
supply needs.
The program for waterless areas, which
aims to provide water to 212 waterless
barangays in Metro Manila and 432
waterless municipalities outside Metro
Manila, has been allotted an annual
budget of PhP1.5 billion. Because
the administration of the funds was
largely discretionary, 40 percent (212
municipalities) of 432 municipalities
identified as beneficiaries of the fund were
not even part of the original list.
Table 5.2. Levels of Access to Safe Drinking Water
Access to FORMAL levels of service/a

Level 3:
45%
WDs:
20%
Level
10%
P O s : LGUs
and
5%
CBOs: 20%
Informal Access
2: Level 1:
25%
LGUs and CBOs:

35%
Self-provision through private

wells, tanked or vended water
supply or piped supply provided
by SSIPs
Note:
WDs: Water Districts
PO: Private Operators (e.g., concessionaires, private developers, etc.)
CBOs: Community-based Organizations (e.g., rural or barangay water service associations, cooperatives, etc.)
SSIPs: Small Scale Independent Providers
Source: WB Report, Philippines: Meeting Infrastructure Challenges, 2005, as quoted in the NEDA Philippine Water
Supply Sector Roadmap, 2010
(Footnotes)
/a As defined in NEDA Board Resolution No. 12, Series of 1995: Level I (point source) - a protected well or developed
spring system without a distribution system; Level II (communal faucet system or standpost) - a system composed of a
source, reservoir, distribution system and communal faucets; and Level III (waterworks system or individual household
connections) - a system composed of a source, reservoir, piped distribution system and household taps
Moreover, there is no clear policy

framework to guide the financing of water
supply programs and projects. Currently,
financing originates from a variety of
sources. National government financing is
primarily administered through LWUA
and MWSS or onlent through GFIs or
the Municipal Development Fund Office
(MDFO). Additionally, congressional
funds for water supply projects are
significant but uncoordinated and largely
allocated to areas based on political
considerations.
Local
government
funding, on the other hand, has mostly
been for operation and maintenance
rather than capital expenditures. (WB
2005) Private-sector financing has been
skewed towards Metro Manila, and, there
has been limited private investment by
water utilities and private households
outside Metro Manila.
Lack of new water sources to meet

existing and future demand in
growth centers
The rapid increase in population
resulting in the pollution of water
systems and, in some areas, the exhaustion

of groundwater reserves has quickly widened
the gap between supply and demand
for potable water, especially in tourism
destinations, industrial areas and highly
urbanized cities. Furthermore, extended
dry seasons as a result of climate change are
expected to exacerbate the demand for water.
New water sources must be identified and
developed to address this gap. The existence of
financially viable areas for water supply means
there is a good opportunity for the private
sector to be engaged in source development.
The Philippines Progress Report

on the MDG 2010, on the other
hand, suggests that the sector
is on track to attain its MDG
commitment. Nonetheless,
achieving 100-percent coverage
remains a challenge, since 15.73
million people continue to have no
access to a safe water supply.

To address equitable provision of
water supply and to ensure timely
provision of water to key growth
centers
The following strategies11 will be pursued:
1. Strengthen Economic Regulation
The creation of a single, independent economic
regulator for water supply services is a priority
strategy to address institutional fragmentation
11
The strategies herein identified are consistent with the Philippine Water Supply Sector Roadmap (PWSSR). The
PWSSR is the water supply sector plan and guide with long-term development outcomes supported by mediumterm strategies and annual operational plans formulated and subscribed to by the different national government
agencies, along with other stakeholders. Implementation of the strategies stated therein is crucial to achievement of the
development goal to provide access to safe, adequate and sustainable water supply for all.
131
The rapid increase in population

resulting in the pollution of water
systems and, in some areas,
the exhaustion of groundwater
reserves has quickly widened the
gap between supply and demand
for potable water, especially in
tourism destinations, industrial
areas and highly urbanized cities.
and the low level of investments in the sector.

Legislative action is required to resolve the
conflicting mandates of various agencies
involved in the regulation of water services.
Pending positive action from Congress,
however, NWRB must be strengthened to
allow partial resolution to the current situation.
This interim action must also be supported by
the formulation of a National Water Resources
Policy (NWRP) to provide a policy framework
for both economic and resource regulation in
the water supply subsector.
Resource regulation shall be strengthened

to ensure that surface and ground water
supply sources are sustainably developed
and utilized. Alternatives should also be
identified and prioritized based on a valueengineering perspective, which optimizes
options and timing of development to
provide value for money and minimize
cost to consumers.
2. Implement a priority program for

waterless areas
Consultations with stakeholders affirm the
need for a specific program that will ensure
the achievement of MDG 7 by 2015 and
continuing 100-percent access to water in the
medium term. Critical to the new program
for water supply, however, is identifying key
beneficiaries based on an updated assessment
and identification of remaining waterless
municipalities in the Philippines and ensuring
sustainability of water service provision.
Since LGUs are on the frontline in

the provision of services each local
government should be able to develop
its own local plans, strategies and
corresponding
budget
allotments,
consistent with national policies and
targets, including those identified in the
PWSSR and the MDG. This should help
harmonize and operationalize programs
to address existing implementation issues
and ensure the sustainable and efficient
delivery of water supply to waterless and
remote areas.
3. Develop sustainable new water sources

to meet demand
Sanitation, Sewerage, and

Septage Management
A comprehensive approach, adhering to the

IWRM framework for projecting the demandsupply gaps across the country and for planning
the development of new water sources should
be developed not only to support the growing
population, but also economic activity in
growth centers -based on a viable national
land-use plan. Extended dry seasons because
of climate change would further exacerbate the
demand for water, so that new water sources
must be developed in a timely manner to
ensure domestic water supply. This may adopt
ecoefficient12 measures, including the reuse of
excessive rainwater and recycled wastewater for
nonhousehold purposes to rationalize water
distribution.
4. Localize national policies to support

sustainable extension of water services
Weak sanitation governance

Many institutions are armed with
sanitation-related mandates, but not
one of them takes the lead in pushing
for reforms in the sector. Although
the DOH plays a key role due to the
impacts of poor sanitation on health,
only a small unit in the agency is
concerned with sanitation. Its role is
limited to policy formulation, thereby
causing significant gaps between policy
implementation and enforcement. In
particular there is an inability to deliver
commitments made under existing
laws. Moreover, the Sanitation Code
12
Ecoefficiency is having more value with less impact on the environment; it emphasizes monitoring of material and
energy flows of stocks and life cycle assessment. While eco-efficiency has been successfully integrated in industrial and
business processes, its application in water infrastructure development will require the establishment of both physical
and non-physical infrastructures (i.e., policies, institutional framework, financing, etc).
132
Figure 5.2. Percentage Access to Sanitary Toilets
PERCENTAGE (%)
90
85
80
75
70
1990
1995
2000
2005
2010
2015
YEAR
Source: Philippines Progress Report on the Millennium Development Goals 2010
Table 5.3. Estimated Coverage for Sanitation (in percent)
Year
URBAN AREAS
Improved Open Defecation
RURAL AREAS
Improved
Open Defecation
1990
70
46
23
1995
73
52
21
2000
76
59
18
2005
78
65
15
2008
80
69
14
Many institutions are armed with

sanitation-related mandates, but
not one of them takes the lead in
pushing for reforms in the sector.
Although the DOH plays a key
role due to the impacts of poor
sanitation on health, only a small
unit in the agency is concerned
with sanitation. Its role is limited to
policy formulation, thereby causing
significant gaps between policy
implementation and enforcement.
Source: WB/UNDP JMP 2010 Report
Inequitable access to basic

sanitation facilities and sewerage
and septage management
services
trend of improving13 coverage from 1990 to

2008, with corresponding reductions in open
defecation. From a 1990 baseline coverage
of about 55 percent, the MDG target is to
increase coverage to 84 percent by 2015. The
DOH, however, sets a higher national target
of 91 percent, with 96 percent for urban
areas and 86 percent for rural areas. Similar
to access to water supply, access to sanitation
is much lower in rural areas compared to
urban areas with a visible disparity amongst
regions as well.
As in the water supply subsector,

statistics
on
sanitation
are
uncoordinated and conflicting. This
notwithstanding,
WHO/UNICEF
JMP on the MDGs show a general
Based on WHO/UNICEF JMP estimates,

the Philippines is on track to meeting its
MDG target for sanitation. Data from
the DOH and 2010 Progress Report on
MDGs, however, show fluctuating year-
formulated in 1975 may no longer

be appropriate for the requirements
of a rapidly urbanizing population,
particularly increasing population
densities. The said code also does not
consider the anticipated complications
caused by climate change.
13
For MDG monitoring, an improved sanitation facility is defined as one that hygienically separates human excreta
from human contact.
133
on-year coverage due to low investment

levels, combined with a rapidly increasing
population and the increasing frequency of
natural disasters that affect the sustained
operations of existing facilities.
The Philippines is on track to

meeting its MDG target for
sanitation. Data from the DOH
and 2010 Progress Report on
MDGs, however, show fluctuating
year-on-year coverage due to low
investment levels, combined with
a rapidly increasing population
and the increasing frequency of
natural disasters that affect the
sustained operations of existing
facilities.
For sanitation facilities to be sustainable

and make an impact on health outcomes,
sewerage or septage management support is
required. Unfortunately, there have been few
investments in proper sewage collection and
treatment, especially outside Metro Manila.
Less than 10 percent of the population has
access to sewerage services. Outside Metro
Manila, selected highly urbanized cities
(HUCs) provide services to less than 3
percent of their respective area populations.
(WB 2005) This situation poses major health
and environmental problems, especially in
HUCs and during or after natural disasters
(i.e., at evacuation centers and during
rehabilitation of affected areas).
Low investment and financing

Despite several national sewerage and
sanitation policies like the Sanitation Code
of 1975 and the Clean Water Act, demand for
sanitation, sewerage and septage facilities, as
well as related investments, remain low. Open
defecation is still practiced in many areas,
especially is highly populated ones, resulting
in polluted waterways and the spread of fatal
and infectious diseases. Only 3 percent of
public investments in water supply are used
for sanitation. (PSSR 2010) Investments, by
LGUs are limited since few of them have the
capacity to implement, operate and maintain
these systems. Low investment is also due
in part to the low demand, which arose
from a lack of popular understanding on the
dangers of open defecation and open sewers.
Official development assistance (ODA) for
sanitation, septage and sewerage is largely
administered by DPWH, DENR or MWSS
for Metro Manila. Private sector investments
are likewise limited because sanitation,
sewerage and septage are perceived to be
14
nonrevenue services, with high capital

requirements relative to any projected
returns. Ideally, these services should
be linked to revenue-generating water
service provision to facilitate cost
recovery. Without a strong regulator
for water, sanitation, sewerage and
septage management services, there is
no imperative or incentive for water
service providers to extend the coverage
of sewerage services.
Lack of awareness of the value

of sanitation and its services
Most LGUs accord the lowest priority
and allot only minimal budgets for
sanitation, septage and sewerage
services because the benefits are
indirect at best. The low demand for
sanitation at local levels also extends
to wastewater collection and treatment,
thus further deferring the development
of necessary infrastructure.
Furthermore, research on innovative
technologies to provide economically
and ecologically efficient sanitation,
sewerage and septage facilities is lacking.
Technical capacity to plan, implement,
operate, and maintain these facilities
is also limited both at national and
local levels. Capacities to monitor the
extent and level of service are likewise
limited thereby adversely affecting
effective planning and budgeting for
the subsector.

To improve health outcomes and
effect a sustainable environment
through improved sanitation,
septage, and sewerage provision
The following strategies14 will be
pursued:
The strategies herein identified are consistent with the Philippine Sustainable Sanitation Roadmap (PSSR), Similar
to the PWSSR, the PSSR was developed and subscribed to by the different national government agencies, along with
other stakeholders. It presents the plan and guide with long-term development outcomes supported by mediumterm strategies and annual operational plans to be able to provide safe and adequate sustainable sanitation for all and
ensuring a clean and healthy Philippines.
134
1. Develop effective national

leadership and sanitation governance
An empowered lead entity at the
national level must be established to
ensure that sanitation, sewerage and
septage targets and plans are met and
that critical policies, including the
National Sanitation Code, are strictly
implemented.
Furthermore,
necessary
reforms
are needed to pull in investments
in sanitation, sewerage and septage
facilities throughout the country,
especially in highly urbanized cities
(HUCs). Thus, any amendment or
revision to existing national policies
should articulate specific national
targets and detailed strategies that
can eliminate open defecation as well as
facilitate local planning and budgeting
for expansion of coverage, among
others. This could be accompanied by
legislative action, if required.
2. Develop a regulatory framework
A single, independent economic
regulator for water supply, sewerage
and septage management should be
established to ensure the following:
(a) accountability of service-providers
to their customers; (b) sustainability
of facilities through improved tariff
methodologies; and (c) increased
coverage through the provision of
incentives and impetus for expansion
of services within their areas. (See also
strategies for water supply).
3. Rationalize investments and
financing to provide infrastructure in
strategic areas.
Because of the high capital requirements
of sewerage and septage management
projects, government intervention is
needed to support the private sector
in increasing service (septage and
sewerage) coverage. Thus, a financing
framework should be developed to
support sustainably the expected
increase in demand for sanitation, septage

and sewerage. Alternative PPP packages
may be considered, among others.
In the light of current constraints, it is
necessary to be deliberate, especially in the
implementation of septage and sewerage
programs and projects including the
development of septage/sewerage treatment
plants. Highly vulnerable areas such as
HUCs, which are population-dense and
susceptible to sanitation problems, should
be prioritized. However, it would also be
advantageous to include priority tourism
spots given their potential for economic
development.
The PSSR requires the formulation of
programs by other key NGAs and LGUs to
support the achievement of the envisioned
outcomes. This includes the incorporation
of sanitation measures in the design of
significant infrastructure, such as school
buildings and housing structures.
4. Mainstream sanitation in emergency/
disaster response
Water-induced or related calamities
resulting from climate change increase the
vulnerability of communities that lack proper
sanitation facilities. Hygiene promotion,
coupled with sanitation response measures,
should be mainstreamed in disaster relief
and rehabilitation efforts.
5. Improve service delivery through
vigorous communication
Only 3 percent of public

investments in water supply
are used for sanitation. Low
investment is also due in part to
the low demand, which arose from
a lack of popular understanding
on the dangers of open defecation
and open sewers.Without a
strong regulator for water,
sanitation, sewerage and septage
management services, there is no
imperative or incentive for water
service providers to extend the
coverage of sewerage services.
Most LGUs accord the lowest
priority and allot only minimal
budgets for sanitation, septage
and sewerage services because
the benefits are indirect at best.
To increase the effectiveness of national

policies, a comprehensive and vigorous
communication strategy must be undertaken
to educate the public and decision-makers
and increase demand for these services.
Information, education, and communication
(IEC) campaigns among others, are to be
developed. This includes dissemination
of information on sanitation technology
options and standards among LGUs and
service providers. These campaigns aim to
change behaviors towards proper hygiene
in order to increase utilization of household
sanitation infrastructure, such as sanitary
135
latrines and septage collection tanks.

Development planners and managers should
also be provided similar IEC materials with
added information on wastewater treatment
and disposal methodologies.
Irrigation
Assessment, Issues and Challenges
Inadequate provision of irrigation
Irrigation plays a vital role in the development
of agriculture as well as in the attainment
of food sufficiency. As of the end of 2009,
irrigated agriculture comprised about 1.54
million hectares of land or about 49 percent
of the estimated irrigable area of 3.126
million hectares. Around 765,000 hectares
are served by national irrigation systems
(NISs), while communal irrigation

systems (CISs) and private irrigation
systems (PISs) serve around 558,000
and 217,000 hectares, respectively.
According to the National Irrigation
Authority (NIA), it spent about PhP119
billion from 1983 to 2009, representing
around 78 percent of its total approved
appropriations for the same period.
Despite this, only less than half of the
total potential productive areas have
been irrigated (see Table 5.4)
While over 1.6 million hectares remain
undeveloped for agriculture, these
same areas are threatened by ongoing
changes in land use (e.g., conversion
into housing developments, golf
courses, etc.). It is unclear whether
such conversions are warranted by
Table 5.4. Status of Irrigation Development as of 31 December 2009 (in hectares)
Region
Service Area
Estimated
Total
National Communal Private
Irrigable Irrigation Irrigation Irrigation
Area
System
System
System
CAR
99,650
22,622
35,351
22,912
80,885
81
18,765
277,180
57,567
96,654
27,329
181,550
65
95,630
472,640
142,530
41,775
23,095
207,400
44
265,240
498,860
202,311
78,008
20,555
300,874
60
197,986
246,960
53,146
53,133
17,962
124,241
50
122,719
239,660
20,530
70,050
29,484
120,064
50
119,596
197,250
53,191
20,372
5,499
79,062
40
118,188
50,740
10,040
22,529
2,539
35,108
69
15,632
84,380
19,104
29,748
4,466
53,318
63
31,062
76,080
15,162
19,739
1,972
36,873
48
39,207
10
120,700
26,419
23,564
14,764
64,747
54
55,953
11
149,610
33,971
15,639
25,915
75,525
50
74,085
12
293,610
62,437
22,255
17,296
101,988
35
191,622
ARMM
156,720
16,520
7,095
225
23,840
15
133,440
CARAGA
162,300
29,427
21,719
3,316
54,462
34
107,838
3,126,340
764,977
557,631
217,329
1,539,937
49
1,586,963
TOTAL
Source: NIA as of June 2010
136
Total
Remaining
Irrigation Potential
Devt Area to be
Developed
(%)
real long-term development trends

or these are merely responses to the
artificially repressed state of agriculture
and the protractedly unsettled status
of property rights in agricultural
land. Therefore, it may be a prudent
course to protect productive land from
rapid and irreversible conversions to
nonagricultural uses.
Unsustainable use of irrigation

water
Because irrigation is the largest use
of water in the country, a primary
concern should be to optimize the
productive use of water in irrigated
agriculture to attain its full benefits
and minimize waste. There is currently
no incentive to conserve irrigation
water, although payments are made
on a per-hectare basis regardless of
the actual water consumption needs of
the crops. Subsidies disguise the true
cost of providing irrigation services.
In order to promote conservation and
the sustainable use, treating water as
an economic good provides the basis
for putting into place mechanisms that
capture its economic value, since water
is a finite and limited resource with
competing uses and users.
NIAs delicate system and

financial performance
NIAs operation has rarely been
profitable as the agencys operating
expenses far exceed its operating
income. In order to improve the
agencys fiscal position, strategies
to increase collection efficiency of
irrigation service fees (ISFs)15 were
implemented, particularly instituting
incentive policies on ISF back-account
collections. The net effect of such
schemes resulted in a steady increase in
NIAs corporate income, and although
the agency still runs annual net deficits
(cash and noncash expenses), the deficits

decreased from PhP648 million in 2000 to
only PhP24 million in 2009.
With respect to the agencys organizational
restructuring,
the
DBM-approved
Rationalization Plan is in its third year of
implementation (part of a five-year phased
implementation period). This saw the gradual
turnover of operation and maintenance
(O&M) activities, partially or wholly, from
NIA to irrigators associations (IAs). Despite
significant achievements over the years, NIA
still has to maintain momentum in order to
achieve the sustainable fiscal stability needed
to perform its mandate.
Weak performance of irrigation

systems
The performance of most of the NISs and
CISs has remained poor. Causes include
inadequate O&M, lack of routine repair and
ineffective management of available irrigation
water sources due to financial, technical and
institutional deficiencies. Irrigated cropping
intensity of NISs nationwide averaged far
less than the 200-percent target applied in
project preparation. In addition, most of the
service areas are dysfunctional and badly
need rehabilitation.
Irrigation plays a vital role in the

development of agriculture as
well as in the attainment of food
sufficiency.
Irrigation is the largest use of
water in the country, a primary
concern should be to optimize the
productive use of water in irrigated
agriculture to attain its full benefits
and minimize waste.

To provide basic support services
and infrastructure as well as critical
governance reforms in shaping a
sector responsive to the challenge of
ensuring food security for Filipinos
across generations
The following strategies will be pursued:
1. Rehabilitate existing irrigation systems
and construct new small-scale systems
Support services and infrastructure shall be
geared towards the rehabilitation, repair and
maintenance of existing irrigations systems.
15
ISF is a means to generate revenues to cover operations and maintenance (O&M) costs. Personnel costs account for
around 80 percent of NIAs operating expenses. Substantial staff resources (up to 40 percent of field staff time) are spent
on collecting ISF from individual farmers.
137
The performance of most of the

NISs and CISs has remained
poor. Causes include inadequate
O&M, lack of routine repair
and ineffective management of
available irrigation water sources
due to financial, technical and
institutional deficiencies.
A rationalized fund mechanism should be

implemented, specifically for the immediate
rehabilitation of damaged irrigation
facilities and systems, over and above the
allocation intended for regular maintenance
activities. Funding mechanisms envisioned
shall include a National Irrigation
Management Fund (NIMF), a Communal
Irrigation Development Fund (CIDF) and
a Patubigayan Trust Fund (PTF). These
shall serve as repositories of irrigation
funds intended for repair, rehabilitation and
improvement as well as extended financial
assistance to the irrigation sector. For
immediate rehabilitation works resulting
from disasters, calamity funds as a part of
NIAs appropriations may also be considered
for national systems.
Construction of new infrastructure shall
focus on small-scale irrigation and water
impounding systems (except multipurpose
systems) based on a viable national land use
plan. These systems are easier to implement
and are more cost-efficient than large
irrigation systems (except multipurpose
systems). The determination of locations for
new irrigation systems also factor in CCA
and DRRM considerations.
2. Protect irrigated and potential irrigable
lands
With the governments thrust to ensure food
sufficiency as well as the recognition of the
alarming rate of depletion of irrigable lands
due to conversion, a review of government
policies protecting productive land shall be
undertaken. To complement such initiative
and to clearly identify gaps, land-use
mapping indicating the extent of irrigable
areas vis--vis irrigated areas is required.
(Cross reference with Agriculture Chapter.)
3. Develop a volume-based pricing
mechanism
As part of a long-term strategy to ensure
its efficient use, wholesaling of water at the
resource at the headgate to IAs is expected
to drastically cut down collection expenses.
This would entail IAs paying only a single
fee, with the IAs taking responsibility for
138
collecting ISF from its members.

Volumetric (volume-based) pricing at
the headgate enhances accountability,
since it provides: (a) greater contract
assurances for service delivery by the
water supplier/s to the IAs and (b)
incentive to properly maintain the
distribution system, improve the equity
of head- and tail-end distribution and
conserve water resources. Pilot-testing
of volumetric pricing has revealed
constraints to implementation for
open canals, as such, therefore, this
will initially be introduced in NISs
where secondary irrigation facilities or
its components have been fully turned
over to IAs through the IMT program.
In the interim, NIA may adopt and
improve socially-acceptable demandmanagement strategies.
4. Implement irrigation management
transfer (IMT)
IMT aims to transfer to IAs the complete
O&M responsibility on secondary canals
and on-farm structures in larger systems,
and of entire systems covering more than
3,000 hectares. Under such a scheme, it
is estimated that the NIA will be left to
manage less than 10 percent of the total
NIS area, which should substantially
reduce the subsidies/operational costs
extended by the government. IMT
facilitates stakeholder participation in
decision-making and planning, provides
better access to services and training for
its members, produces some income from
ISF shares and ensures the equitability of
irrigation water delivery and distribution,
among others.
Flood and Drainage

Management
Inadequate disaster mitigation and
response
Table 5.5. 25-year Flood-related Impacts
Year
Casualties**
Dead
Missing
Injured
Damage Value*
(PhP M)
The country devotes a substantial portion

of its resources in the recovery efforts from
the effects of flooding. The cumulative
impact of floods on the loss of lives and
damage to properties and livelihood (see
Table 5.5) results in a deceleration, if not
a setback, of social progress and economic
activity in affected areas.
1980
36
55
1,472
1981
484
264
1,922
1,273
1982
337
223
347
1,754
1983
126
168
28
523
1984
1,979
4,426
732
416
1985
211
300
17
Furthermore, the countrys archipelagic

character, with many small islands, makes
it highly vulnerable to the effects of
climate change. Climate data for the past
50 years shows rising temperatures trends,
changing changes in rainfall patterns, and
an increasing number of extreme climate
events like cyclones, flooding, and drought.
(Philippine Strategy on Climate Change
Adaptation 2010)
1986
171
43
155
1,838
1987
1,020
213
1,455
8,763
1988
429
195
468
8,675
1989
382
89
1,088
4,494
1990
676
262
1,392
11,713
1991
5,201
4,278
357
74
1992
145
95
51
7,359
1993
814
214
1,637
25,038
1994
266
54
260
3,401
1995
1,255
669
3,027
57,781
1996
124
49
97
10,109
1997
199
28
66
4,842
1998
498
116
873
17,823
1999
56
25
1,555
2000
338
59
370
7,217
2001
431
134
418
6,924
2002
169
33
71
829
2003
139
28
182
4,567
2004**
1,046
437
836
7,679
2005**
62
36
51
2,487
16,594
12,420
15,980
198,609
Recent events like typhoons Ondoy and

Pepeng in 2009 which resulted in massive
damage to lives and properties were
wrought by unpredictable weather patterns
resulting from climate change. Existing
flood control structures in identified
high-risk areas nationwide have proved
inadequate in handling the unexpected
increase in stormwater discharge, which
often results in massive flooding both in
HUCs and rural areas.
Lack of financing
DPWH has identified several critical
flood control projects nationwide which,
owing to insufficient funds, cannot be
immediately implemented. This perennial
funding problem not only affects the
implementation of the hard infrastructure
component of projects, but also affects the
inherent activities such as the relocation
of informal settlers and the acquisition of
ROW.This also affects the implementation
of complementary nonstructural measures
Total
Source: Flood Risk Management Project Along Selected Principal Rivers, Implementation
Program, DPWH, September 2010
*Total damages in infrastructure, agriculture and private property in million pesos.
**Department of Social Welfare and Development (DSWD) data.
139
such as flood forecasting, warning, and

monitoring systems, evacuation plan, hazard
mapping and watershed management activities.
Additionally, O&M spending that depends
heavily on government allocation are not
exempt from funding constraints.
LGUs and other implementing agencies also
lack funds for regular O&M of existing flood
control programs. Since flood structures are
exposed annually to the brunt of typhoons,
regular maintenance works have to be carried
out to maintain optimal capacities of said
structures.
The country devotes a substantial

portion of its resources in the
recovery efforts from the effects
of flooding. The cumulative
impact of floods on the loss of
lives and damage to properties
and livelihood results in a
deceleration, if not a setback, of
social progress and economic
activity in affected areas.
Unsustainable operations and

maintenance of structural and
nonstructural infrastructures
Coordination among government agencies
and LGUs is a problem that affects the
implementation, operation and maintenance of
flood control structures. Once completed, flood
control structures should ideally be managed
and maintained by the LGUs, and for the case
of Metro Manila, MMDA, who have territorial
jurisdiction over the project, since these
directly benefit from them. However, owing
to inadequate financial support and capacity
to conduct O&M, not all LGUs and even
MMDA can fully commit to this responsibility.
The actual mandate for O&M also remains
unclear since no law or guideline exists that lays
down the sharing of responsibility between the
LGUs and government agencies.

To reduce adverse effects of flooding
occurrences by maintaining watersheds
and providing efficient and adequate
infrastructure
The following strategies will be pursued:
1. Prioritize the construction of flood
management structures in highly vulnerable
areas
Available financing for disaster risk reduction
and management of infrastructure in the event
of floods must be optimized. This involves the
development of hazard maps so that vulnerable
140
areas with high population concentrations

and important economic and agricultural
activities can be prioritized in the provision
of flood management infrastructure.
2. Apply CCA and DRRM strategies
in the planning and design of flood
management structures
Recognizing the effects of climate change
on the frequency of storms and rainfall
intensity, design criteria for flood control
structures should be revisited to ensure
that capacities of structures are adequate to
handle the expected increase in floodwater
volume. Protocols on dam-water release
during typhoons should also be reviewed.
Moreover, downstream interventions will
have to be complemented by upstream
activities such as watershed management
to minimize siltation which significantly
reduces effectiveness of flood control
structures, especially when left unabated.
The adoption and mainstreaming of
the eco-efficiency concept in water
infrastructure is an example of such an
adaptation strategy. Excess water during
rainy seasons can be impounded, stored
and then released for future use in sectors
such as irrigation and water supply.
Equally important are immediate postdisaster response and interventions. LGUs
and implementing agencies alike are
encouraged to adopt a proactive approach
in the conduct of DRRM. Emphasis
shall be given to preventive measures and
structures as well as in raising disasterpreparedness
among
stakeholders
to minimize damage to lives and
properties should a natural disaster occur.
Furthermore, nonstructural measures such
as flood forecasting and warning systems
as well as LGU preparedness plans, should
be developed accordingly.
3. Develop a mechanism to expedite
immediate financing for the rehabilitation
of flood management structures
A hindrance to prompt response is
the slow disbursement of funding to
implement immediate measures. To

expedite the process, it may be prudent
to provide annual appropriations within
DPWHs budget. Likewise, DPWH and
affected LGUs may opt to avail of various
financing mechanisms and instruments
designed especially for post-disaster
rehabilitation and repair work.
4. Increase local government and
community participation
Since flood-related risks and damages
are the immediate concern of local
communities,
their
cooperation
and participation in O&M of flood
management structures and measures
as well as disaster response should be
enhanced. Programs should incorporate
the participation of stakeholders and the
identification of their corresponding roles
in watershed protection, flood mitigation
and disaster preparedness and response
measures. With advocacy and capacitybuilding assistance from the DILG,
LGUs are expected at the forefront
of implementing localized CCA and
DRRM plans. The government would
be required to appropriate the resources
needed for both manpower and funding
to facilitate smoother operationalization.
Financing frameworks should also be
developed to provide for the necessary
capacity development programs as well as
O&M activities of flood control structures
and facilities.
Finally, the responsibilities among
stakeholders should be clearly defined
to promote greater coordination among
implementing agencies and LGUs,
particularly during the implementation
and O&M phases of flood control projects,
and to enhance accountabilities.
Energy
On Energy Security
Total primary energy supply (TPES) in 2009
reached 39.6 million tons of oil equivalent
(MTOE), with the production of indigenous
energy (oil, coal, natural gas, geothermal,
hydro, wind, solar, biomass, coco-methyl
ester [CME] and ethanol) increasing by 2.0
percent from levels of 2008. The countrys
self-sufficiency16 level thus increased from
56.7 percent in 2008 to 59.2 percent in 2009.
For 2009, oil accounted for the biggest
share of 34.0 percent in the energy supply
mix, followed by geothermal energy with its
share of 22.4 percent. Coal contributed 15.3
percent, while biomass added 13.59 percent.
The remaining shares in TPES were divided
between natural gas, hydro, wind, ethanol
and CME.
The transport sector accounts

for the highest share of the total
demand, with an average of 36.5
percent in 2009, while the industry
sector is projected to grow the
fastest at an annual average
growth rate of 5.1 percent
On the demand side, total final energy

consumption (TFEC) will grow to 24.9
MTOE by 2013 and 27.7 MTOE by the
end of 2016 from the 2009 demand level of
23.6 MTOE. TFEC for the period 20092016 is expected to grow annually at 2.3
percent on average.
The transport sector accounts for the highest
share of the total demand, with an average
of 36.5 percent in 2009, while the industry
sector is projected to grow the fastest at an
annual average growth rate (AAGR) of 5.1
percent as reflected in Table 5.6.
Power Generation
As of December 2009, the countrys installed
capacity stood at 15,610 megawatts (MW).
Fossil-fuel power plants, mostly located in
the Luzon grid, are still the dominant source.
The Mindanao grid is heavily dependent on
hydroelectric power plants. Coal-fired power
plants contributed 27.40 percent, followed by
oil-based ones with 20.46 percent and those
16
Self-sufficiency level refers to the use of indigenous energy composed of oil, coal, natural gas, geothermal, hydro, wind,
solar, biomass, Coco-Methyl Ester (CME) and ethanol
141
Figure 5.3. 2009 Primary Energy Mix

Imported Coal,
9.06%
Imported
Biofuels, 0.10%
Oil, 2.43%
Natural Gas, 8.11%
Coal, 6.24%
Hydro, 6.15%
Imported Oil,
31.61%
Indigenous Energy,
59.23%
Geothermal, 22.40%
Biomass, 13.59%
Wind/Solar, 0.01%
Biofuels, 0.30%
As of December 2009, the

countrys installed capacity stood
at 15,610 megawatts (MW).
The Mindanao grid is heavily
dependent on hydroelectric power
plants.
on natural gas, 18.14 percent. The installed

capacity from renewable energy increased
slightly with an additional 8 MW expansion of
Northwind Power Phase II in Bangui, Ilocos
Norte, which became operational in September
2008; the 2.5 MW Sevilla minihydro in Bohol
commissioned in November 2008; and the
two biomass plants in Negros Occidental
with an aggregate capacity of 29.3 MW. Total
dependable capacity of the entire grid was
at 13,319 MW, or 85.32 percent of the total
installed capacity.
Gross power generation in 2009 reached 61,934
gigawatt-hours (GWh), 1.83 percent higher
than 2008 level of 60,821GWh17. Natural gasfired power plants remain the top producer of
electricity, accounting for 32.11 percent of the
countrys total gross generation. Coal-fired
plants are second, with 26.60 percent share of
the mix. Oil-based generation only accounted
for 8.69 percent of the total gross generation
in 2009.
In mid-2010, the country was again hit by
several hours of rotating brown-outs because
of a power supply shortage equivalent to 185
MW. The supply deficit was due to the decrease
in dependable capacities of hydro plants caused
by El Nio and preventive maintenance
schedule of some power plants.
17
142
Petroleum products
The countrys total demand for
petroleum products in 2009 rose 6
percent from 101,199 million barrels
(MB) in 2008 to 107,299 MB, with
diesel accounting for the largest share
with 40.7 percent of demand mix.
The transport sector is the highest
petroleum product consumer followed
by industry, as shown in Figure 5.6.
To lessen the dependence on imported
petroleum
products, government
has been continuously promoting
the development and utilization of
alternative fuels.
Alternative Fuels
Biofuels Program. As of the first half
2010, the DOE had accredited 14
biofuel producers (12 for biodiesel
and 2 for bioethanol). The 12 biodiesel
producers have a combined production
capacity of 395.6 million liters per year.
The total sales of biodiesel (CME) blend
was 130.9 million liters in 2009 and
54.2 million liters in 2010. Actual diesel
fuel displacement from biodiesel in
2009 translates to an equivalent foreign
exchange savings of US$34.9 million.
GWh converted in MW is multiplied by the following factor: (1000)*(1/24)*(1/365)
Figure 5.4. 2009 Philippine Capacity and Gross Generation, in MW
INSTALLED CAPACITY
Wind
0.21%
Solar
0.01%
Hydro
21.09%
Biomass
0.19%
Wind
0.10%
Solar
0.01%
Biomass
0.02%
Hydro
15.80%
Coal
27.40%
Coal
26.60%
Geothermal
16.67%
Geothermal
13%
Natural Gas
18.14%
GROSS GENERATION
Oil-based
8.69%
Oil-based
20.46%
Natural Gas
32.11%
15,610 MW
7,070.10 MW
(61,934 GWh)
Includes embedded generator
Includes off-grid generation
Table 5.6. Projected Final Energy Consumption
Sector
2009-2016 (%)
AAGR (%)
Transport
36.5
2.1
Industry
28.1
5.1
Residential
24.1
-0.2
Commercial
9.7
1.4
Agriculture, fishery and forestry (AFF)
1.6
3.4
On the other hand, Leyte Agri

Corporation, the countrys first ethanol
facility, and San Carlos Bioenergy
Inc., Southeast Asias first dedicated
ethanol distillery with an integrated
co-generation power plant, have a
combined production capacity of
around 49 million liters of ethanol
annually. Both plants together sold
23.1 million liters in 2009, equivalent
to foreign exchange savings of US$10.1
million from gasoline displacement. In
the first half of 2010, 9.2 million liters
of ethanol were sold to oil companies.
By end-2010, Roxol Bioenergys
ethanol plant would have provided an
additional capacity of 30 million liters
per year, bringing total annual ethanol
production to about 79 million liters.
The countrys total demand for

petroleum products in 2009 rose
6 percent from 101,199 million
barrels (MB) in 2008 to 107,299
MB, with diesel accounting for the
largest share with 40.7 percent of
demand mix.
To meet the technical requirements of the

program and ensure continuous research and
development support, the DOE provided
counterpart funding of PhP50 million for
the establishment of a vehicle-testing facility
located at the Department of Mechanical
Engineering Laboratory, UP-Diliman.
Auto-LPG Program. In support of the
governments Auto-LPG Program, the
Development Bank of the Philippines
(DBP) has included the auto-LPG initiative
in its Clean Alternative Transport Fuel
Financing Program, which provides
reasonable financing packages for auto-LPG
related activities such as acquisition of autoLPG vehicles. The Land Transportation
Franchising Regulatory Board (LTFRB) also
extended by two years the franchise of taxis
143
Figure 5.5. 2009 Sectoral Oil Consumption, in KTOE

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

promote large-scale conversion of taxi fleets
and encourage new player participation in
the program.
As of first half of 2010, there were about 18,731
converted vehicles nationwide running on LPG
and 217 auto-LPG dispensing stations (72
garage-based). The sales growth of auto-LPG
products registered an equivalent reduction
of CO2 emissions by 214,664 metric tons
(MT) and 48,789 MT for 2009 and the first
quarter of 2010, respectively. Moreover, the
293 LPG-converted tricycles nationwide have
an equivalent reduction of 495,521 kilograms
(kg.) of carbon dioxide.
Natural Gas Vehicle Program for Public Transport
(NGVPPT). The alternative use of natural gas
in the transport sector is being pursued through
the NGVPPT. From a minimal volume
of CNG utilization in 2007 following the
inauguration of the pilot mother and daughter
refueling system, the total consumption of
natural gas for the transport sector already
reached 18.1 Million Standard Cubic Feet
(MMSCF) in 2009.
As of first half of 2010, there were 7 accredited
bus operators and 34 CNG buses plying the
routes of Southern Luzon and Metro Manila.
An additional 27 buses are under testing and
evaluation. The CNG daughter refueling
station operates in Barangay Sto. Tomas, Bian,
Laguna.
144
Transport
Agriculture
Residential
Non-energy use
To sustain developments in the industry,

a joint undertaking with the Polytechnic
University of the Philippines (PUP) was
initiated to establish the first Natural
Gas Institute in the country. The said
Institute is envisioned to develop the
industry and enhance local capacity
to support the emerging natural gas
industry and provide the necessary
capacity building needs of the industry.
Renewable energy
The Renewable Energy Act of 2008,
(RA 9513) sought to accelerate the
exploration and development of the
countrys renewable energy (RE) sources.
It also seeks to strengthen the DOE
policies on renewable energy programs
and expand the provision of fiscal and
nonfiscal incentives to encourage private
sector investment in the renewable energy
industry. The Implementing Rules and
Regulations (IRR) were signed on May
25, 2009. Consequently, the National
Renewable Energy Board (NREB) was
convened pursuant to Section 27 of RA
9513 to promulgate the said law and other
related policy and regulatory mechanisms
such as the Renewable Portfolio Standard
(RPS), Feed-in Tariff (FiT) System and
the National Renewable Energy Program
(NREP).
As of end-2009, total installed capacity

from RE stood at 5,309 MW. Figure
5.6 shows the breakdown of the RE
contribution to total power-generating
capacity for on-grid areas. Total
dependable capacity from RE resources
for ongrid areas stood at 4,278 MW.
RE technologies are relatively expensive
for local investors/developers. On the
other hand, foreign investments have
been slow to take up the slack because
of the issue of project ownership, which
is by law, stipulates majority Filipino
ownership.
The goal of reducing fossil fuel
consumption and promoting the
development and utilization of renewable
energy remains a major challenge. To
benefit fully from RA 9513, government
must institute certain changes, create new
and additional units of infrastructure, and
introduce new systems. Among the crosscutting issues raised on renewable energy
development during various energy
consultations are the following:
a. high cost of RE development due to

limited number of local manufacturers,
fabricators and suppliers of RE equipment
and components which are mainly imported;
b. limited options to optimize the
development of resources because of a lack
of an up-to-date database on RE resources;
c. lack of capacity-building and training
opportunities to enhance technical
capabilities of stakeholders and potential
developers;
d. need for stronger R&D on RE;
e. limited infrastructure support (i.e.,
transmission lines and submarine cables);
f. limited information and education
campaign activities on RE that includes
advocacy on its benefits;
g. absence of direct policy linkages with
grassroots groups; and
h. dependence on government initiative
and resources for the development of energy
projects.
As of end-2009, total installed

capacity from RE stood at 5,309
MW. Total dependable capacity
from RE resources for ongrid
areas stood at 4,278 MW.
The goal of reducing fossil fuel
consumption and promoting the
development and utilization of
renewable energy remains a
major challenge.
Figure 5.6. RE Contribution to Total Power Generating Capacity

2831
3193
4277
1953
3291
30
33
1
Coal
4,277 MW
(27.40%)
Geothermal
1,953 MW(12.51%)
Renewable
Energy
5,309 MW
(34.01%)
Oil
3,193 MW
(20.46%)
Natural Gas
2,831 MW
(18.14%)
raph should look like this >>>
Hydro
3,291 MW (21.08%)
Biomass
30 MW (0.19%)
Wind
33 MW (0.21%)
Solar
1MW (0.01%)
t, try reselecting the data

above. Just click&drag.
145
Electricity rates in the Philippines

are deemed among the highest
in Asia.
Fossil fuels
On Power
Oil and Gas. The country has 16 sedimentary

basins with a combined potential of
4,777 million barrels of fuel oil equivalent
(MMBFOE) or 689.8 MTOE of oil and
gas reserves.
Electricity
An additional 150 billion cubic feet (BCF)

of gas have been recovered from the seventh
well of the Malampaya which could fuel
a 300 MW natural gas power plant for
a period of 12 years. Existing oil and gas
fields yielded an output of 2.92 MMB of oil
coming mostly from the Galoc Field, which
began producing in October 2008. With
two production wells, Galoc Field has an
average daily production of 14,000 barrels.
Production for the first semester of 2010 was
registered at 1.75 MB of oil, 56.51 million
standard cubic feet (MMSCF) of gas and
2.16 MB of condensate.
Despite a favorable business experience
in the upstream energy sector, the social
acceptability of these projects still needs to
be addressed.
Coal. The Philippines currently has 13 coal
basins with a total resource potential of
2.4 billion metric tons (BMT). Indigenous
coal production in 2009 reached 4.7 million
metric tons (MMMT or 10,000 BTU/lb), a
29.9 percent increase over the 3.6 MMMT
produced in 2008. This is due to the robust
output of Semirara Mining Corporation,
which contributed 4.36 MMMT or 93.1
percent of the total coal production. As
of the first half of 2010, coal production
had reached 3.6 MMMT, which was 38.2
percent higher than the coal output during
the same period in 2009.
Social
acceptability,
environmental
sustainability, and the countrys low-grade
coal are challenges that need to be addressed.
18
146
Electricity to GDP (watt-hour/Php) is an Intensity Indicator
Electricity rates in the Philippines are

deemed among the highest in Asia.
Economic growth has been impeded by
an unreliable power supply as indicated
in the annual average growth rate of
-0.4 percent of electricity to GDP18
from 1999 to 2009.
Power demand and supply
With peak demand assumed to grow
annually at 4.5 percent for the planning
period 2009-2030, a total of 11,900
MW is needed for the Luzon grid;
2,150 MW for the Visayas grid; and
2,500 MW for the Mindanao grid.
The liberalized and market-based
power industry put in place by EPIRA
relies on the private sector to construct
generation plants to meet demand.
Private sector investments in power
generation, however, have been lower
than expected vis-a-vis projected
energy demand. Moreover, the usual
gestation period to build new electric
power plants is three to five years.
A 60-percent level in energy
independence is conservative given the
countrys natural resource endowments.
Electricity generated from indigenous
and renewable energy sources, however,
is more expensive despite
being
accorded priorities in light of their
environmentally benign characteristics.
Establishment of the Wholesale
Electricity Spot Market (WESM)
The WESM began commercial
operations in Luzon on June 26, 2006
to create a competitive electric power
industry for better and more efficient
electric service at a reasonable cost
to consumers. To date, 13 generating
companies participate directly in
the WESM with 11 distribution

utilities (DUs) and five registered
direct suppliers. WESM operations
in the Visayas region, while hindered
by inadequate capacity in both
transmission and generation facilities,
nonetheless commenced in December
2010. Market rules for Mindanao have
yet to be laid down.
Privatization of at least 70 percent of
NPC generating assets in Luzon and
Visayas.
As of June 2010, the government
was able to privatize 26 of its
generating or operating plants and
four decommissioned assets. 20 of
these assets comprise 91.7 percent
of PSALM-owned capacities in the
Luzon and Visayas, thus surpassing
the 70-percent condition for open
access and retail competition. The latest
successful bid was of the 150-MW
Bac-Man geothermal power plant.
Transfer of management and control
of at least 70 percent of total energy
output of power plants under contract
with NPC to Independent Power
Producer (IPP) Administrators
The government successfully bid out
3,345.75 MW of NPC-contracted
capacities to IPP Administrators,
equivalent to US$3.228 billion in
proceeds. This amounts to a cumulative
68.22 percent of total capacities
privatized, towards the 70 percent
required for the start of open access.
Privatization of the National
Transmission Corporation (TransCo)
The government on January 15, 2009
formally turned over the 25-year
concession of the National Transmission
Corporation (TransCo) to the NGCP.
The NGCP remitted US$987.5 million
to PSALM as its upfront payment
for the operation of the transmission
system and in compliance with the
provisions of the sale transaction. This
amount is 25 percent of the US$3.95 billion

purchase price paid for the concession
contract. This concessionaire of TransCo is
in charge of development, upgrading, and
rehabilitation of the electricity grid.
Divestment of Transcos sub-transmission
assets
The sale of TransCos subtransmission
assets involves some 131 sale packages
covering 107 interested DUs, mostly electric
cooperatives. In cases where more than one
DU is connected to a transmission line, the
connected and qualified DUs must form a
consortium to buy and thereafter operate
the asset. These subtransmission assets
include about 6,200 circuit kilometers (ckt)
comprising mostly 69kV transmission lines
and 1,600 MVA of substation capacity. The
cost of these assets is placed at about PhP7.6
billion (based on December 31, 2007 net
book values).
A total of 11,900 MW is needed

for the Luzon grid; 2,150 MW for
the Visayas grid; and 2,500 MW
for the Mindanao grid.
As of October 31, 2010, TransCo had

divested itself of PhP3.55 billion (69 sale
packages) worth of subtransmission assets
including 325 MVA transformers in favor
of 57 DUs. Included in the sale packages
are 40 Lease Purchase Agreements with
32 cooperatives under concessional terms
amounting to about PhP2.4 billion. The
balance of over PhP1.150 billion represents
sales to private distribution utilities. Thirtythree sale contracts have been approved by
the ERC amounting to PhP1.75 billion as
of October 31, 2010.
Use of privatization proceeds to reduce
borrowings
As of June 2010, actual privatization
proceeds collected by PSALM from the sale
of generation and transmission assets has
amounted to US$4.42 billion. This includes
other privatization-related fees such as lease
rental, assignment of ROW, purchase price
for land, and forfeiture of bonds.
The proceeds from the sale of National
Power assets are used to service the financial
obligations of National Power (e.g.,
prepayments of maturing debts, regular
147
Prepayments
US$1.297 billion
Regular NPC Debt

Servicing
US$1.600 billion
Servicing of IPP
Obligations
US$1.095 billion
performance and processes, suggesting

the creation of an independent search
committee as a mechanism for ERC
appointments. To date, no such
assessment and evaluation of the ERC
has been conducted. An independent
monitor of the regulatory setup of the
sector is necessary as part of a system of
checks and balances, especially once the
generation and transmission sectors are
privatized.
Privatization
Related Expenses
US$0.097 billion
On Electrification
Total
US$4.089 billion
Electric Cooperatives (ECs) are

private entities but receive sizeable
government subsidies. Some provisions
of the Magna Carta for Residential
Electricity Consumers have weakened
the implementation of the AntiPilferage Law, leading to an increase in
system losses and inefficiencies among
ECs. An example is Article 19 of the
Magna Carta, giving the consumer
the right to tender payment at the
point of disconnection or provide a
deposit representing the differential
billing. Article 20, moreover, obliges
the utility to continue providing service
despite arrears of previous occupants
of a building/dwelling place. Parts of
Articles 16-25 give the consumer a
reprieve from disconnection during
holidays, funerals, or if the consumer is
sick.
National Power debt servicing, servicing

of IPP obligations).Of the privatization
proceeds collected so far, PSALM has
utilized US$4.089 billion for the following
(as of June 30, 2010):
As of June 2010, actual

privatization proceeds collected
by PSALM from the sale of
generation and transmission
assets has amounted to US$4.42
billion.
Condonation of loans
The national government, through PSALM,
condoned the loans of electric cooperatives
(ECs) used for electrification purposes
amounting to PhP18.1 billion. This
resulted in a reduction in ECs rates in the
range of PhP0.0578/KWh to PhP1.3507/
KWh. As of October 31, 2010, the
government through PSALM had paid a
total of PhP10.696 billion worth of financial
obligations to LGUs and other government
agencies.
Mandatory Rate Reduction
From January to March 2010, NPC
granted a total of PhP358.1 million for
the Mandatory Rate Reduction (MRR),
in which the Luzon residential customers
accounted for 27 percent. Residential
customers of the Manila Electric Company
(Meralco) account for 20 percent. From
2001 to March 2010, NPC has already spent
a total cost PhP25.65 billion for the grant of
MRR.
Regulation
As stipulated in the EPIRA, members of
the Energy Regulatory Commission (ERC)
are appointed by political authorities. This
arrangement, however, has brought up issues
of transparency and independence. The
previous Plan (2004-2010) already contained
a planned reassessment of the ERCs
148
As of December 2010, the ERC has

been in the final stages of amending
both the Magna Carta for Residential
Electricity Consumers and the IRR
of the Anti-Pilferage Act. Earlier in
2009, the ERC had issued the Rules
to reduce systems losses of ECs from
14 percent to 13 percent, and of
private distribution utilities (PDUs)
from 9.5 percent to 8.5 percent. The
Rules for Setting EC Wheeling Rates
(RSEC-WR) were issued to encourage
efficiency and provide incentives for
the ECs performance.
Barangays. As of July 31, 2010,

99.87 percent of all barangays were
electrified, up from 99.39 percent
in 2009 leaving only 54 barangays
programmed for electrification until
the end of 2010. From January 2009 to
July 2010, the ECs provided electricity
to 847 rural barangays. The 119 ECs
in the country have achieved 99.94
percent energization relative to their
respective franchise areas. The Mearlco
and private investor-owned utilities
(PIOUs), together with LGUs, have
27 and 7 remaining unenergized
barangays, respectively.
Households. As of July 2010, the
household connection level in the
country had reached 74.0 percent.
This means 14.204 million out of a
total 17.534 million households19 have
electricity connections.
Missionary areas. Large portions of
the remaining unenergized barangays
are mostly remote and with dispersed
households that are difficult to
energize, requiring extensive resources,
time and effort. Electrification in some
barangays, particularly those covered by
solar projects, was found to be shortlived owing to the absence of a strong
sustainable mechanism.
Based on the 2009 Missionary
Electrification Development Plan
(MEDP), the total projected capacity
addition for Small Power Utilities
Group (SPUG) areas was 26.69
MW, of which only 6.61 MW was
added in 2009. For transmission and
substation projects, a total of 226.01
km. of 69kV transmission lines and
50-MVA substations were projected.
However, only 22.41 km. transmission
lines were put up while the rest were
in preconstruction stages. Likewise,
no substation was put up in 2009.
As for remote area electrification,
130 of 133 areas were electrified, an
accomplishment of 97.74 percent.
19
The delay in implementation was due

to limited funds, ROW problems for
transmission and substation projects,
deferment of T/L and S/S projects since
NPPs preferred distributed generation,
and failed biddings for the purchase of
equipment.
The NPC Main Grid is no longer able to
advance funds to finance the operations of
SPUG, including project implementation,
since the main grid plants were already sold.
SPUGs funds come from its revenues and
the UCME subsidy. In 2009, the UCME
was approved only on the latter part of the
year and was used for SPUGs operations
and payments for the subsidies of New
Power Providers (NPPs).
Of the latest approved UCME equivalent
to PhP2.7 billion for each year from 20102013, only PhP533 million is allotted for
capital spending. This amount is not enough
to fund all projects and additional funding
is required. SPUG is now looking for other
sources of funds.
The delay in implementation

was due to limited funds, ROW
problems for transmission and
substation projects, deferment of
T/L and S/S projects since NPPs
preferred distributed generation,
and failed biddings for the
purchase of equipment.
Under Rule 13 of the EPIRA-IRR, the

DOE in coordination with NPC, NEA,
NPPs, DUs and QTPs has prepared the
MEDP 2011 with two major components,
namely, missionary generation and remote
area electrification, which includes the
barangay and household electrification. This
outlines the governments plan to implement
policies and programs that will sustain
the provision of adequate, reliable, and
efficient supply of electricity in missionary
or offgrid and remote areas and to enable
these communities to receive the benefits of
electrification.
SPUG covers 284 plants in 214 areas, with
14 areas being candidates for privatization.
Of these 14 areas, the generation function
of two areas was successfully taken over by
private parties.
Missionary
generation.
Missionary
generation includes the existing generation
and associated delivery systems being
Total number of households is based on 2000 Census
149
managed by SPUG, NPPs and QTPs in

small islands and isolated grids. The program
involves improving reliability and efficiency
through the replacement of old generating
units and limiting the rental of units during
emergency.
Remote area electrification.
Consistent
with the overall objective of total barangay
electrification and household electrification,
all remaining unelectrified barangays in small
islands and isolated grids will be provided
with electricity service. A total of 1,760
households are programmed for remote area
electrification amounting to PhP169.714
million for the different missionary areas.
The Energy Reform Agenda for
2010-2016 is guided by the vision
of Energy access for more.
Accelerate exploration and
development contracts through
the Philippine Energy Contracting
Round
Intensify development and
utilization of renewable energy
and environmentfriendly
alternative energy resources/
technologies

The Energy Reform Agenda (ERA) for
2010-2016 is guided by the vision of Energy
access for more. Governments key priority
is to ensure sustainable, diverse and reliable
energy sources through consultation and
the participation of multiple stakeholders.
Increased economic efficiency in the use and
distribution of energy services is critical to
achieving energy access for the majority at
competitive rates.
The ERA will utilize PPPs to implement
critical infrastructure projects of the
government that will address the growing
energy needs of the country. Through PPPs,
the DOE can benefit from the technical
and financial support of its partners in
the private sector, including businesses,
investors, and nongovernment organizations
(NGOs). PPPs will cover all phases of
energy development and utilization.
To ensure energy security

Accelerate exploration and development
contracts through the Philippine Energy
Contracting Round (PECR)
First launched in 2006, the PECR shall
be continued. Aggressive promotion of
indigenous oil and gas resources and coal
prospect areas via competitive contracting
scheme under the PECR will be pursued.
150
Through PECR, the oil and gas sector

is expected to yield an additional 23
Service Contracts (SCs) and drilling of
35 wells by end of 2016. From 2010 to
2016, production targets for the oil and
gas fields are projected at 36.3 MMB of
oil, 1,029.5 BCF of gas and 37.8 MMB
of condensate. The biggest contribution
will be provided by the Malampaya oil
and gas fields, which will contribute
23.1 MMB of oil, 1,022 BCF of gas
and 37.2 MMB of condensate. New
geophysical data will also be acquired
to cover a total of 18,550 line/km. and
3,750 sq./km. of 2D and 3D seismic
data, respectively, by the end of 2016.
Intensify development and utilization
of renewable energy (RE) and
environmentfriendly alternative
energy resources/technologies
RE development is targeted with the
government gearing to be the world
leader in geothermal energy, the largest
producer of wind power, and the solar
manufacturing hub in Southeast Asia.
In addition, the harnessing of the
countrys hydropower and biomass
energy potentials shall be continued.
The National Renewable Energy
Program (NREP), to be drawn by
DOE in consultation with other
concerned stakeholders, will provide
the overall strategic policy directions in
the RE industry.
The government will pursue the research
and development of untapped RE
available such as ocean thermal energy
conversion (OTEC). To date, the
countrys potential sites for deep-ocean
power consist of 910 blocks equivalent
to 73,710 hectares. Deep Ocean Power
Philippines, Inc. (DOPPI) has already
filed its application for OTEC PreDevelopment Contract for 36 areas.
Existing RE-based power generation
capacities shall be increasingly utilized.
From the generation expansion
exercises used in the formulation of the
countrys power development program,

out of the 8,156.7 MW of total RE
potential, 4,701.96 MW is expected
to come in the next 30 years, broken
down as follows: (a) hydropower with
2,113.1 MW; (b) geothermal with
1,475 MW; (c) wind with 930 MW;
(d) biomass with 112.8 MW; and (e)
solar with 71 MW. Of these capacities,
around 57 MW is expected in the short
term, 130 MW in the mediumterm;
around 775 MW is expected to come in
between 2014 and 2016. The remaining
capacity is expected beyond 2016 and
up to 2030. The committed capacities
expected to be commercially operated
within the short term are: (a) 70 MW
from geothermal; (b) 50.5 MW from
hydro; and (c) 17.5 MW from biomass.
Harmonization is a critical factor in
the exploration and development of
geothermal resources, especially those
located inside protected areas, hence
the need to unify provisions of RA
7586 (National Integrated Protected
Areas System [NIPAS] of 1992) and
RA 8371 (Indigenous Peoples Rights
Act [IPRA] of 1997), with relevant
energy policies and programs for an
integrated response to environmental
and sociocultural concerns.
a. Implement higher biofuels blend from B2 to B5

to diesel, and E10 to all gasoline and corresponding
standards in phases subject to availability of
supply20
The National Biofuels Board (NBB) is set to

recommend the levels of biofuel blends based
on supply availability, price and quality of
biodiesel, including blending infrastructure
and logistics.
b. Conduct RD for other nonfood feedstock in
coordination with concerned agencies, academe &
research institutions
The government will broaden the coverage

of the Biofuels Program to identify other
feedstocks.
Techno-economic
studies
on palm and algae as potential biodiesel
feedstocks will be pursued, while cellulosic
technologies will be used to produce
bioethanol.
The academe and other research institutions,
which are among the partners in research
and study by the DOE, shall be encouraged
to continue their undertakings on nonfood
feedstock R&D activities.
Increase utilization of alternative

fuels.
Implement higher biofuels blend
from B2 to B5 to diesel, and E10
to all gasoline and corresponding
standards in phases subject to
availability of supply.
c. Continuously promote the use of alternative fuels

(i.e compressed natural gas, auto liquefied petroleum
gas) as well as other emerging energy technologies
such as electric vehicles in the transport sector
Increase utilization of alternative fuels

The governments policies and programs
on alternative energy are geared towards
reducing the countrys dependence
on price-volatile oil imports and
diversifying from conventional fuels
towards indigenous renewable and
environment-friendly energy resources.
The development of other feedstocks
for biodiesel and bioethanol (i.e.,
jatropha) is also encouraged through
research and commercial production.
It is important to develop alternative
energy sources, especially indigenous
and renewable forms, with an end view
of providing security of supply as well
as realizing savings from importation.
20
The promotion of natural gas use in industrial,

commercial, residential and agricultural
sectors will continue to be encouraged. The
conversion of existing and decommissioned
power plants to natural gas shall be pursued.
Active interaction with the downstream
energy sector shall be prioritized through
gas-to-market projects. The use of CNG in
vehicles will also be encouraged.
Given the benefits of CNG and LPG
over fossil fuels, the DOE will also renew
its efforts to promote the former in the
transport sector. The DOE will facilitate
the required policy support as well as the
availability of critical supply infrastructure
and facilities. The infrastructure of major gas
B2: 2% bio-diesel (coco-methyl ester [CME]) blend; B5: 5% bio-diesel (CME)blend; E10: 10% bio-ethanol
151
Conduct RD for other nonfood

feedstock in coordination with
concerned agencies, academe &
research institutions.
Continuously promote the use of
alternative fuels (i.e compressed
natural gas, auto liquefied
petroleum gas) as well as other
emerging energy technologies
such as electric vehicles in the
transport sector.
pipeline networks needs to be strengthened

and expanded to reach commercial
establishments and households.
5. Focus on demand aggregation

and contracting from Electric
Cooperatives;
DOE will work with the 15th Congress for

the passage of the Natural Gas Bill. With
regard to auto-LPG conversion, the DOE
will conduct technology validation for dual
fuel jeepneys and other motorized diesel/
gas engines and conduct capability building
for regulators and implementers to develop
available manpower expertise. Studies will
be conducted to determine the viability of
expanding the use of auto-LPG to other
types of engines, together with studies on
the necessary safety standards.
6. Implement the Transmission

Development Plan (TDP);
Pursue the enactment of a law on energy

efficiency and conservation
To expand the governments

electrification program
An Energy Efficiency and Conservation

Law is a critical measure to economize
the energy requirements of growth. The
proposed legislation should incorporate
policies and measures to develop local energy
auditors and energy managers, develop the
ESCO industry, encourage the development
of energy-efficient technologies/ buildings
and provide incentives for the effective
promotion of efficiency initiatives in the
energy market sector.
The following strategies shall be

pursued:
To achieve a reliable and secure

supply of electric power
The government shall pursue the following
strategies:
1. Diversify the countrys power sources,
especially in Mindanao, to address the
susceptibility of hydro power plants to
climate-change impacts;
2. Study alternative technologies in power
generation;
3. Assess the vulnerability of energy
facilities to climate change and natural
disasters (e.g. El Nio and La Nia);
4. Conduct a comparative study of similar
or related energy policies in the ASEAN;
152
7. Revisit EPIRA and its IRR (e.g.

the possibility of recommissioning
of power plants under preservation,
lifeline rates and cross subsidies
among others; and
8. Establish triggers to allow
government to build power plants in
face of weak private sector interest.
1. Pursue higher household

electrification. The government
intends to achieve 90 percent
household connection by 2017
through the expanded rural
electrification program using RE
Systems.
2. Rationalize the Universal Charge
for Missionary Electrification
(UCME) rates approved by ERC
in order to cover missionary
electrification;
3. Engage LGU support for the
missionary areas; and
4. Strengthen LGU capacity in power
project development and in accessing
available funds (i.e., ER 194).
Information And
Communications
Technology (ICT)
Infrastructure
Technological
innovations
and
commercial
developments
have
expanded growth opportunities in the
ICT sector, with private sector players
continuing to invest in developing
the countrys ICT infrastructure. The
government, for its part, has been
promoting the spread of ICT as a
means to interconnect the country,
even out social opportunities, raise
overall living standards and attain
global competitiveness.
The growth and dynamism of the ICT
sector has accommodated the existence
of 7 mobile operators, 73 localexchange carriers, 14 intercarrier service
providers, 11 international gateway
facility (IGF) operators, and 471
value-added service (VAS) providers21.
The availability of ICT services has
facilitated development through more
efficient and effective delivery of both
existing and novel applications in
business and commercial transactions,
general government, education and
health services, among others.
Current state of ICT

deployment and use
Service coverage
The scope of ICT technologies and
services in the country includes
fixed
telephone
lines, wireless
communications, and
broadband
Internet, among others. Cellular
21
mobile telephone service (CMTS) is by far

the dominant telecommunications service
in the market, covering 94.7 percent22 of
total municipalities, as compared with 53.9
percent23 coverage for fixed telephone
lines. Despite the continued expansion and
success in CMTS, a number of unserved
municipalities still exist. Coverage gaps need
to be addressed to achieve universal access
and service for telephony.
Meanwhile, the countrys fiber-based
backbone network provides for domestic and
international broadband connectivity with
about 63 provinces (79%) in the country
having fiber-based infrastructure. Further,
at least 761 cities and municipalities (about
50%) are considered to be covered with fixed
or mobile broadband Internet services.24
However, the presence and geographic
reach of mobile broadband (usually 3G
wireless technology) in said areas is still very
limited and only covers urban centers and
boundaries.
ICT Penetration (access and subscription)
Pursue the enactment of a

law on energy efficiency and
conservation
To achieve a reliable and secure
supply of electric power.
Achieve 90 percent household
connection by 2017
The increase in the number of CMTS

subscribers has been phenomenal, especially
as the short messaging service (SMS) or
more popularly known in the country as
text messaging, has become a way of life
for many Filipinos. Over two billion text
messages (sending and receiving) are being
handled daily by cellular mobile operators.
More advanced services are also becoming
prevalent, such as the multimedia messaging
service (MMS) and the third generation
(3G) mobile communication technology,
which were rolled out in 2004 and 2006.
The greater challenge, however, is for
Internet, particularly broadband access and
subscription, to also catch up and achieve
the same level of service with that of mobile
telephony, be it through wired (e.g., Digital
Source: National Telecommunications Commission (NTC), figures as of end of 2009
22
Source: COMELEC data, used as of last 2010 Automated Election, where 5.26 percent of municipalities were
identified to have not been covered by any mobile network service. It should be noted however that CMTS coverage in
some municipalities may only be referring to the town centers, with remote barangays and schools of such municipalities
still having no connection yet.
23
Source: NTC, 2009
24
Source: CICT
153
Figure 5.7. Growth in Number of Users/Subscribers of Major ICT Services, 2006-2010

User/Subscribers, in millions
100.000
90.000
80.000
70.000
60.000
50.000
40.000
30.000
20.000
10.000
0.000
2006
2007
2008
2009
CMTS (mobile telephony)
Internet Users
Household with access to broadband service
Fixed telephone line
2010
Source: CICT, NTC
Subscriber Line connection) or wireless

broadband access (e.g., 3G/ High Speed
Packet Access technology). Figure 5.7
shows signs of market concentration in the
sector with the continuous growth in mobile
telephony services, leaving other forms of
ICTs such as Internet and broadband access
far behind.
In terms of Internet connection speed, a
recent global broadband speed analysis
test shows that the Philippines average
download speed (i.e, the speed at which data
is sent from the Internet to your computer)
is at 2.34 megabits per second (Mbps), while
the average upload speed (i.e., the speed at
which data is sent from your computer to
the Internet) is at 0.65Mpbs.25 This ranks the
Philippines at 72nd in worldwide download
speed and 65th in worldwide upload speed.
At present, penetration of personal
computers (PC) in the country is still
considered low, especially in rural areas,
which may be attributable to infrastructure
limitations, availability of electricity access,
and cost of ownership or household financial
constraints. Since many Filipinos still do not
154
own PCs, other alternative places such

as Internet cafes, WiFi hotspots, offices,
and schools, among others, serve as
common Internet access points. There
are currently some 30,000 to 40,000
registered Internet cafes and an estimate
of 2,000 WiFi hotspots throughout
the country. The increase in number
of Internet cafes and the availability
of free WiFi access in public spaces
has led to competition and cheaper
rates. Although PC ownership levels
are quite low, utilization rates are much
higher considering that the countrys
social networking penetration rate is at
83.1 percent, which is higher than the
global average of 57.5 percent.26
The use of shared access facilities has
also helped increase Internet usage,
and made access to Internet services
more affordable, especially in poor
and underserved communities. Based
on the concept of shared facility, the
national government, in collaboration
with LGUs has established the
Philippine Community e-Center
(CeC) Program, which to date has
25
Source: Speedtest.net, 200
26
Source: Universal Mccann International Social Media Research Wave 3, March 2008
successfully connected over 1,200

communities to the Internet. The CeCs
also serve as common access points for
e-Government services.
Internet Connection in Public High
Schools
As of 2009, only 29 percent of the
countrys public high schools had an
Internet connection. Table 5.8 shows
that the least number of connected
public high schools are in the Cordillera
(CAR), Cagayan Valley (Region II)
and Bicol (Region V) regions. This
can be largely attributed to budgetary
constraints or the high cost of setting up
infrastructure, especially over difficult
terrain or geographical locations. Many
unconnected public high schools are
also located in areas not served by
private telecommunications companies
(telcos), which could indicate the
digital divide between urban and rural
areas across regions.
Broadcast Communications
As of end 2009, the broadcast sector
comprised 306 television (TV) stations,
905 cable television (CATV) operators,
386 AM stations, 676 FM stations,
and 5 direct-to-user (DTU) satellite
providers.
At present, the transition from
the traditional analogue to digital
television broadcasting is already
progressing in many developed
nations, or is otherwise being carefully
studied in many other countries all
over the world. To facilitate growth
in the broadcast sector, the country is
planning and preparing for the entry
of Digital Terrestrial Television (DTT)
broadcasting. In 2010, the National
Telecommunications
Commission
(NTC)
released
Memorandum
Circular No. 02-06-2010 that issued
the adoption of the Japanese digital
broadcast standard called Integrated
Services Digital Broadcast Terrestrial
(ISDB-T) for the countrys impending
migration to DTT broadcasting.

e-Government Systems
Current advancements in ICT services and
applications have driven a trend towards new
ways to link the government and its citizens.
This has opened opportunities to improve
the sharing of public information and to
enhance the delivery of public services.
As an indispensable step, various government
agencies have been developing and
enhancing their accessibility in the Internet,
among others. As of September 2010, 304 or
93.8 percent of NGAs had established their
own websites or portals and were in various
stages of enhancing their web-presence (see
Figure 5.8). A total of 14 NGAs (4.3%)
are in Stage 4 characterized as government
portals allowing for two-way transactional
interactions; 93 NGAs (28.7%), Stage 3
(with interactive features on the website,
including downloadable forms); 150 NGAs
(46.3 percent) are at Stage 2, with frequently
updated or dynamic websites; and 47
NGAs (14.5%) are at Stage 1 (comprises of
only an official website or static websites).
Based on the concept of shared

facility, the national government,
in collaboration with LGUs
has established the Philippine
Community e-Center Program,
which to date has successfully
connected over 1,200
communities to the Internet.
Issues, Gaps, and Challenges

Despite the significant progress in terms of
wider access and availability of ICT services,
a number of perennial issues and problems
continue to affect the Philippine ICT sector.
1. Gaps in communications and
information access/services, particularly,
low coverage, penetration, and uptake of
Internet and broadband
Despite growth in the ICT sector, the pattern
of this growth, particularly the rate of catchup, differs among the types of ICT services
and their deployment across the regions.
Among the available ICT services in the
market, CMTS has the biggest advantage
in terms of coverage and subscription, while
Internet, especially broadband access, still
lags.
155
The current infrastructure (backbone

network) already connects most of the
Philippines, but there are still gaps in
connecting a significant number of end
users, such as communities, households,
schools, as well as local units and agencies of
government, especially in the rural areas. This
suggests a wide disparity in the availability
and level of ICT infrastructure and services,
especially between major urban centers and
rural areas. Profitability issues and situations
in sparsely populated rural areas, including
lack of important infrastructure support
(e.g., availability of electricity and transport
system) and possible risks of lower demand
and subscriber base, preclude the entry of
private operators.
It is recognized that the task of

developing
the
countrys
ICT
infrastructure primarily resides with
the private sector. If broadband
connectivity, however, is fully left
to market mechanisms, it likely will
be deployed by the private sector to
urban centers only, with very limited
roll-out in rural areas. Moreover,
there is also a need to ensure that the
benefits of the Internet and related
technologies, including participation in
ICT investment and opportunities, is
made available into all segments of the
population, including those who are
disadvantaged due to education, age,
gender, disabilities, ethnicity, income
Table 5.7. Internet Connection in Public High Schools per Region, 2009
CONNECTED
WITHOUT CONNECTION
REGION
TOTAL NO. OF
PUBLIC HS
National
6650
1936
29.1
1150
3564
70.9
NCR
220
157
71.4
63
28.6
CAR
243
2.9
46
190
97.1
461
81
17.6
101
279
82.4
II
350
26
7.4
33
291
92.6
III
502
115
22.9
81
306
77.1
IV-A
578
214
37
118
246
63
IV-B
340
34
10
39
267
90
582
38
6.5
78
466
93.5
VI
603
139
23.1
185
279
76.9
VII
610
298
48.9
107
205
51.1
VIII
397
70
17.6
88
239
82.4
IX
330
144
43.6
21
165
56.4
278
154
55.4
55
69
44.6
XI
279
61
21.9
76
142
78.1
XII
332
233
70.2
16
83
29.8
XIII
297
64
21.5
34
199
78.5
ARMM
248
101
40.7
138
59.3
No. of HS
% Connected
Source: Japan International Cooperation Agency ( JICA) Study
156
w/in
Telco area
out of
Telco area
% Unconnected
and those who live in remote regions.

The growth in the countrys population
has also driven an increasing demand
for high-speed bandwidth and highcapacity application.
2. The legal and regulatory
environment may not be as conducive
for investments in ICT infrastructure
There is a need to pursue various
legal and regulatory reforms to ensure
that these do not bar nor impede
improved private sector investments
in ICT. Furthermore, institutional
reforms require that the policy and
regulatory bodies of the government be
strengthened and their independence
and autonomy, including provision of
well defined qualifications and fixed
term of the commissioner, be reinforced
as in the case of NTC.
While the ICT sector is and should
be private sector-led, government
must continue to cultivate an enabling
regulatory environment that ensures
competition and a level playing field for
the provision of ICT infrastructure and
services. The growing popularity and
importance of Internet and broadband
has also driven increased competition
and thus, poses a greater challenge on how

to make these services accessible to a larger
market base.
There is also lack of Green ICT policies
and initiatives to help manage the effects
of ICT on the environment and climate
change. With the rapid pace of technology
adoption, the practice of green ICT should
be more strongly instituted in all sectors, not
only in ICT.
3. Inadequate infrastructure support for
e-Government system
Despite previous e-government initiatives
undertaken by the government, there are still
a number of issues and inadequacies in the
current structure of government information
network and state of e-government system.
While web presence among NGAs are
continuously evolving through establishment
of web portals, LGUs especially in the local
areas are limited by lack of appropriate
infrastructure, technical features and
interface. For a developing country that has
a low level of Internet and broadband access,
the substantial benefits of true e-government
system would still be difficult to capture.
Furthermore, various government bodies
are currently developing and maintaining
individual telecommunications networks,
Figure 5.8. State of Web Presence among NGAs/a

Stage 4: Transactional Web Presence
14.5%
Stage 3: Interactive Web Presence
6.2%
46.3%
4.3%
Stage 2: Enhanced Web Presence

Stage 1: Emerging Presence
28.7%
Without Web Presence
Source: National Computer Center (NCC), as of September 2010

/a
Stages of Web presence based on the United Nations and the American Society of Public Administration
(UN-ASPA) standards
157
resulting
in
seemingly
fragmented
development
of
government
ICT
applications. The bigger challenge is to
develop a more integrated government
communications network that allows for
connecting and accessing ICT systems
of various regional, provincial and LGU
government offices nationwide.
A wide disparity in the availability

and level of ICT infrastructure
and services, especially between
major urban centers and rural
areas.
While the ICT sector is and should
be private sector-led, government
must continue to cultivate an
enabling regulatory environment
that ensures competition and a
level playing field for the provision
of ICT infrastructure and services.
There are still a number of
issues and inadequacies in the
current structure of government
information network and state of
e-government system.
Developing the ICT infrastructure is

significant to support the socioeconomic
growth requirements and opportunities of
the county. Under the current framework,
ICT infrastructure and services are primarily
provided by private telecommunications
operators, driven mainly by user demand.
There are areas, however, that are too remote
or difficult for private sector players to enter.
Thus, while private sector investments will
remain the key enabler, the governments
role is equally important in ensuring
provision of ICT access and services for all,
and in facilitating an enabling environment
through appropriate policy measures and
regulatory reforms to help sustain and
further encourage private sector initiatives.
To provide fast, reliable and

affordable access to communications
services and information
Driven by the increasing demand for highspeed and high capacity voice, video, and
data services and applications, the private
sector will continue to play a major role in
the sectoral growth. It will still provide the
bulk of investments towards the build-up
and expansion of the ICT infrastructure
networks and offer better and innovative
services to the public. Equally important
government interventions will include
ensuring that digital opportunities from
ICT are enjoyed by all Filipinos in both
urban and rural areas alike. Since telephony,
particularly though CMTS, has achieved
a greater advantage in terms of access and
usage, there is now a stronger focus on
27
achieving universal access and service

for Internet and broadband, especially
for providing digital opportunities in
the unserved and rural areas. Hence,
the following strategies will be pursued:
1. Provide incentives to facilitate
ICT infrastructure investments,
particularly in the rural and unserved
areas
Providing universal access to areas not
considered viable by the private sector
is not a new challenge. In these areas
therefore, the government can play
a more active role in supporting and
encouraging private initiatives.
Create a Universal Access and Service Fund
utilizing spectrum user fees (SUF)
The NTC already collects SUFs,

which telecommunications operators
pass on to consumers through service
fees (about PhP2 billion collected
annually and remitted to the National
Treasury). These funds can be used to
build ICT infrastructure in rural areas
by institutionalizing the use of SUFs to
create a Universal Access and Service
Fund (UASF).
Part of the UASF may be allocated
for providing smart subsidies27 to
aid prospective private operators in
investing in the rural and unserved
areas of the country. The fund may
also be used in developing various
broadband requirements of the public,
particularly in education, health and
for ICT awareness and capacitybuilding activities. In this initiative,
mechanisms to ensure transparency
and accountability, preferably with
multisectoral participation, would have
to be institutionalized.
Smart Subsidies are one-time financial incentives intended to help kick-start rural telecommunications roll-out. It
is not meant to cover the full cost of infrastructure roll-out, but rather to merely support investment, without creating
subsidy dependency.
158
2. Establish sustainable Community

e-Center (CeC) Program
With the currently low level of broadband
coverage and PC penetration, the
government can support establishment
of shared access facilities to cater for
rural and unserved areas. The CeC is
an example of a self-sustaining shared
facility providing affordable access to
ICT-enabled services and relevant
content. While a number of CeCs have
been successfully established across the
country, the government shall further
support their sustainability and further
expand to other access points, with
the objective of establishing a CeC
in every barangay. The government
will also push for capacity building
programs for CeC workers to develop
their business and entrepreneurial skills
in maintaining the facilities as well as
aggregating CeC needs and services to
increase awareness and private sector
interest.
3. Implement measures to ensure
security and privacy of data in
a network and the transmission
infrastructure
With the rising number of people,
institutions and organizations linked
online, as well as the increasing number
of ways by which people utilize the
Internet, safety, security and privacy
issues become of utmost importance.
Hence, the following shall be pursued:
a. Improve
the
countrys
cybersecurity threat prevention,
detection and response capabilities
for critical infrastructure, including
reliability and robustness to
withstand threats and damages
caused by natural disasters, terrorism,
and other threats
b. Constant audit of computer
systems and resources that should be
made mandatory by all institutions
using ICT;
c. Issuance of technical guidelines,

advisories and bulletins on the protection
of computer systems from hacking and
unauthorized access, among others; and
d. Maintain a pool of cybersecurity
experts in government agencies to extend
emergency technical assistance to solve
reconstruction of damaged data/systems
and possible reconstruction to prevent
recurrence of cybersecurity-related events.
To cultivate an enabling
environment to further attract and
sustain private sector investments in
ICT infrastructure development
Creating a legal and regulatory environment
that is more consistent, transparent and
conducive for investment will sustain
current efforts in spurring economic growth
and availing of digital opportunities in the
country.
Consistency, transparency, and predictability
of rules encourage investments that are
critical in sustaining the efforts to deploy
and promote ICTs for economic growth.
Regulatory reform will also help engage the
private sector, and enhance the prospects for
financial sustainability and viability of ICT
access points.
The regulatory environment should
facilitate a level playing field through clear
and updated policies, including review of
existing regulations on frequency and proper
spectrum allocation/distribution, to further
promote competition for existing operators
and new entrants. The following strategies
will be pursued to this end:
While private sector investments

will remain the key enabler, the
governments role is equally
important in ensuring provision
of ICT access and services for
all, and in facilitating an enabling
environment through appropriate
policy measures and regulatory
reforms to help sustain and
further encourage private sector
initiatives.
Since telephony, particularly
though CMTS, has achieved a
greater advantage in terms of
access and usage, there is now
a stronger focus on achieving
universal access and service
for Internet and broadband,
especially for providing digital
opportunities in the unserved and
rural areas.
1. Pursue legal, regulatory and policy

reforms
The following proposed legislations and
other regulatory and policy reforms shall be
pursued:
a. Establish the Department of Information
and Communications Technology (DICT)
(via the
DICT Bill).The DICT
shall be established to coordinate
159
and implement the national ICT

development agenda, policies, programs
and projects. Transforming the CICT
into the DICT should result in a
thorough implementation of the national
e-strategies cutting across other critical
sectors such as e-education and e-health,
and the countrys representation in
international and regional ICT bodies.
b. Strengthening
of
the
National
Telecommunications Commission (NTC)
through the NTC Reorganization Bill. The
NTC shall be strengthened by making its
charter responsive to technological and
market changes .
The CeC is an example of a selfsustaining shared facility providing
affordable access to ICT-enabled
services and relevant content.
The government shall further
support their sustainability and
further expand to other access
points, with the objective of
establishing a CeC in every
barangay.
It will also be strengthened by setting fixed

terms for qualified members of the collegial
body, vesting each member with authority
independent of any political and personal
influence during their term of office. The bodys
fiscal autonomy in the implementation of
sector plans and programs shall also be secured.
c. Competition Policy for the ICT Sector.
A competitive market is said to be the
most efficient mechanism for developing
a modern, ubiquitous, and affordable
information infrastructure. A competition
policy framework for the ICT Sector shall
be developed under the leadership of CICT
and with the full participation and support of
the sector stakeholders. This framework can
be used to correct the flaws in the regulatory
environment that restrain competition and
prevent markets from functioning efficiently.
This framework, moreover, will guide future
initiatives and decisions of both the regulator
and the private sector as they contemplate
competition-related issues. It will also guide the
NTC in the exercise of its regulatory functions
and as it attempts to balance various public
goals, including achieving universal service by
making affordable ICT services available to all
citizens, ensuring that consumers have access
to high-quality products and services, and
preventing the exercise of undue market power
by firms.
160
d. Reassessment of Republic Act No.

7925 or the Public Telecommunications
Policy Act of the Philippines, 1995.
While RA 7925, which currently
governs the ICT sector, is rightly
credited with fostering competition
and accelerating investments in the
sector, it has become superannuated
owing to new technologies (such as
the Internet and Voice over Internet
Protocol) and business models that
were not anticipated at the time the law
was passed. Other laws are similarly
outdated. The Radio Law (RA 3846),
for example, constrains the NTC in
the issuance of licenses and assignment
of radio spectra that could otherwise
help bridge the last mile in rural and
unserved areas. There is also a need to
revisit pre-Internet laws that, in the face
of rapid and continuing technological
change, now handicaps the NTC as
it struggles to respond to the sectors
needs and the public demand for
competitively priced and a wider choice
of ICT goods and services.
e. Convergence Bill / Information and
Communications Policy Act. The passage
of a Convergence bill must be pursued
in order to rationalize all pertinent laws;
provide a technology-neutral legal basis
and tool to encourage investment into
the ICT sector and the deployment
of infrastructure and services to the
rural and unserved areas; permit
the continued development of new
technlogies; and criminalize cable theft,
including theft of cable TV signals and
other infrastructure.
f. Frequency Spectrum Management.
There is a need for greater efficiency and
transparency in spectrum regulation
and allocation to better aid the private
sector efforts in providing ICT
infrastructure and services, particularly
in unserved and underserved areas. This
would also help facilitate allocating
frequencies for players that would be
interested in providing broadband
(e.g., WiMAX) and other wireless
technologies in unserved communities.
g. Intellectual Property Rights (IPR)

Reform. A strong and demonstrated
commitment to protect Intellectual
Property Rights will enhance national
competitiveness and encourage the
development of local innovations
and technologies. Efforts shall be
undertaken to enhance protection for
intellectual property thru antipiracy
campaigns and amendments to the
Copyright Law and the IP code. Such
laws and campaigns will also provide
for parallel support and initiatives
to ensure universal access to and
deployment of new technologies,
applications and knowledge.
h. Digital
Terrestrial
Television
(DTT)
Broadcasting
switchover.
Subsequent to the recent adoption of
the ISDB-T standard for the country,
the government, in coordination with
the broadcast industry and concerned
stakeholders, will embark on DTT
broadcasting migration, guided by
the issuance of the implementing
rules and regulations for the digital
switchover. The digital transition is
expected to help facilitate growth in
the broadcast sector through improved
quality of television broadcast systems
and programming, as well as for a more
efficient utilization of the broadcast
frequency spectrum.
i. Green ICT Policies. The adoption
of Green IT as a technology will reduce
the ill-effects of unregulated ICT
particularly to human health and the
environment. This includes exploring
how ICT applications can be used in
such a way as to conserve and optimize
energy use. For instance, it uses
computers that require lower power
input thereby producing less radiation
to the user and to the environment.
Green IT also deals with the proper
disposal of obsolete computers and IT
equipment, and pushes for a paperless
society.
Thus, crafting appropriate guidelines and

policies to address the negative impacts of ICT
infrastructures will be pursued, addressing
appropriate disposal of ICT equipment,
among others.
To achieve increased transparency,

efficiency and trust in Government
through enhancement of e
government systems
EGovernment systems serve as important
mechanisms for increased transparency,
efficiency and trust in government. Thus, the
following will be pursued:
Provide adequate and efficient
infrastructure support to enhance
e-government systems
Adequate and efficient infrastructure support
must be provided to enhance an e-government
system that will allow more effective exchange
and processing of data across NGAs and to
enhance governments capability to deliver
services electronically directly to citizens. This
involves further enhancing e-government
portals including the online payment
facility. A secured data center and public key
infrastructure (PKI) system for government
transactions would also need to be established
to encourage the use of the e-government
Portal towards seamless transaction across
agencies.
Creating a legal and regulatory

environment that is more
consistent, transparent and
conducive for investment will
sustain current efforts in spurring
economic growth and availing of
digital opportunities in the country.
E-government applications in the LGU

level should be promoted so that applications
such as those for real property, business
permitting, treasury and accounting, and other
applications would be used by all LGUs to
provide better services to their constituents
and increase their revenues.
Interoperability of information systems across
government bodies will also be pursued,
by adopting standards and policies for
interoperability and integration strategies.
This will enable easier, more efficient
exchanging and processing of data across
NGAs applications. (Please refer to Chapter
7, Good Governance and Rule of Law for
a more comprehensive discussion on good
governance).
161
Social Infrastructure
Waste Management
Solid Waste Management (SWM)
Adequate and efficient

infrastructure support must
be provided to enhance an
e-government system that will
allow more effective exchange
and processing of data
across NGAs and to enhance
governments capability to deliver
services electronically directly to
citizens.
In the pursuit of sustainable development,

the protection of public health and the
environment should not be neglected. The
proper management of waste is meant
to safeguard resources. To improve its
management of solid waste, the Philippines
enacted RA No. 9003, otherwise known
as the Philippine Ecological Solid Waste
Management Act (ESWMA) of 2000,
which enunciates the governments policy
of adopt[ing] a systematic, comprehensive
and ecological program of solid waste
management program. Some of the salient
provisions of the Implementing Rules and
Regulations (IRR) of the ESWMA pertain
to the following:
a. The creation of Solid Waste
Management (SWM) Board in Metro
Manila, every province, city and
municipality and a SWM Committee in
every barangay;
b. The formulation of a National Waste
Management Framework;
c. Submission of Local Government
Solid Waste Management Plans;
d. Conversion of open dumpsites into
controlled dumpsites;
e. Conversion of controlled dumpsites
into sanitary landfills; and
f. Establishment of a National Solid
Waste Management Fund.
The National Solid Waste Management
Framework provides for the reduction, reuse,
and recycling (3Rs) of municipal solid wastes
and treatment of the hazardous components
and residual waste management through
sanitary landfills or the use of alternative
technologies to process and or treat the
162
waste. The policy is people-centered,

where citizens are expected to play a
major role in segregating solid waste at
source (household level).
Compliance with the ESWMA,
however, has been weak and the targets
set therein have yet to be attained:
a. Only 338 LGUs have completed
their Solid Waste Management Plans
or 20.9 percent of the 1,610 cities
and municipalities have completed
their Solid Waste Management
Plans. In Metro Manila, only eight
out of 17 cities and municipalities
(47 percent) have complete plans;
b. Nationwide, only 7,680 out
of 42,000 barangays are covered
by Materials Recovery Facilities
(MRFs) for a compliance rate of
18.28 percent. In Metro Manila,
685 out of 897 barangays are covered
by MRFs, or a compliance rate of 76
percent; and
c. Of 1,205 disposal facilities in the
country, 1,172 are open and controlled
dumpsites, and only 33 are sanitary
landfills serving 75 LGUs nationwide,
for a compliance rate of only 2.7
percent. In Metro Manila, there are two
disposal facilities. There is a controlled
dumpsite in Payatas scheduled for
closure by the end of 2010; the other
is a sanitary landfill in Navotas. Most
Metro Manila LGUs dispose of their
residual wastes in sanitary landfills
outside the metropolitan area.
Each Filipino generates between 0.30 and
0.684 kg. of solid waste daily, depending
on where this occurs. NCR posted the
highest waste generation rate of about 0.7
kg per capita per day, while ARMM is
the lowest with 0.30 kg per capita per day.
Total waste generation is 35,154 tons per
day, or 12.83 million tons every year.
Upfront capital costs of SWM are high,
thus limiting the financial capacity of
LGUs to invest in such projects. The
limited investment capacity of LGUs and

the perceived low willingness of LGU
constituents to pay for SWM services
have been considered as the main reasons
for the underperformance in achieving the
ESWMA targets.
To augment the financial capability of
LGUs, the revised NG-LGU CostSharing Framework for SWM was
approved in 2009 allowing NG to provide
grants to LGUs of up to 40 percent of
the total cost of a SWM project. Table
5.8 shows the NG-LGU cost-sharing
framework.

To implement the provisions of RA 9003,
there is a need to address waste problems/
issues holistically. Each concerned area should
develop a concrete action plan to address the
challenges of the sector, provide the necessary
funds for the operation of SWM facilities, and
educate the public on the impact of SWM not
only as a means to protect the environment,
but also as a way to sustain and support social
development.
To ensure suitable/sustainable solid

waste management
Issues and Challenges
Fully implement the ESWMA
Notwithstanding various initiatives in

the sector, several issues and challenges
still remain to be addressed, notably the
following:
Pursue the closure and rehabilitation of

all open/controlled dumpsites and the
construction of sanitary landfills to increase
service coverage to more LGUs;
a. the slow progress in the

implementation of the ESWMA;
b. the lack of short- and long-term

solutions to properly address problems
on SWM;
Support the massive implementation of

the 3Rs through the establishment of more
MRFs and materials recovery systems
(MRS);
Assist LGUs in formulating their

respective 10-year SWM Plans; and
c. overlapping national and local

policies;
Establish a start-up fund to accelerate the

implementation of the ESWMA. National
funds are needed to start the different tasks
of the NEC and to implement the SWM
approaches.
d. the need for massive implementation

of 3Rs at the Household and Barangay
level;
e. the need to improve and upgrade
the national database for SWM;
f. the lack of sufficient trained
personnel at the national and local
level; and
g. the need to fully utilize the National
Ecology Center (NEC) and the
Regional Ecology Centers (RECs).
Compliance with the ESWMA,

however, has been weak and the
targets set therein have yet to be
attained.
Generate basic information for SWM

that can be used in different programs
and projects to properly implement the
provisions of RA 9003
Develop a framework for setting-up

baseline data/indicators on SWM at
the LGU level. These shall include
the establishment of a monitoring
and evaluation system through the
development of an accessible database on
waste characteristics, diversion rate, LGU
compliance, alternative technologies and
other parameters that will foster better
information exchange; and
163
Table 5.8. NGLGU CostSharing Framework (in %)
LGU Income Class
Municipalities and Provinces

NG Grant
LGU Share
NG Grant
LGU Share
1st and 2nd
20
80
40
60
3rd and 4th
40
60
25
75
5th and 6th
50
50
20
80
The limited investment capacity

of LGUs and the perceived low
willingness of LGU constituents to
pay for SWM services have been
considered as the main reasons
for the underperformance in
achieving the ESWMA targets.
Fully utilize NEC and RECs to act as

hubs for information, networking, and
technology showcasing and advocacy.
(Other detailed strategies are discussed

in Chapter 10 on the Conservation,
Protection, and Rehabilitation of Ensuring
Ecological Integrity Towards Sustainable
Development.)
Health Care Wastes (HCW)

There are around 2,100 public and private
hospitals nationwide with an approximate
capacity of 96,000 beds, generating 28,000
kg. of health care wastes (HCW) per day at
an average of 0.30 kg. per bed capacity per
day. On the other hand, there are around 680
public hospitals with an approximate capacity
of 44,000 beds generating 13,200 kg. of
HCW per day. The NCR has the largest bed
capacity (approximately 30,000 beds) which
can generate 9,000 kg. of HCW per day. The
volume does not include the amount of wastes
from small clinics, stand-alone laboratories,
research laboratories, municipal health centers
and barangay health stations, which generate
mostly general or domestic health care wastes.
The general distribution of health care wastes
is as follows: general or domestic wastes
(80%); pathological and infectious wastes
(15%); chemical and pharmaceutical wastes
(3% percent); sharps (1%); radioactive wastes,
cystostatic wastes, pressurized containers,
broken thermometers and used batteries (less
than 1%).
As the lead government agency in the
formulation of national guidelines for health
164
Cities
care waste management, the DOH

requires all health facilities to follow
correct procedures in the five-stage
process of health care waste management:
(a) waste minimization and segregation;
(b) waste handling and collection; (c)
waste internal transport and temporary
storage; (d) waste treatment; and (e) final
disposal.
Complying with the five-stage process
is a responsibility of HCW sources or
generators themselves, consisting mostly
of private and public hospitals. Private
hospitals are responsible for their own
investments in equipment operations
and personnel for HCW management.
Public hospitals, on the other hand, need
to justify and apply for an annual budget
for HCW.
Since the Clean Air Act (RA 8749)
of 1999 and its IRRs were issued, the
health sector has been limited to nonburn
technologies for the treatment of
HCW, such as wet thermal disinfection
or autoclaving, microwave, chemical
disinfection and the biological process.
The first two technologies are largely
imported and usually costly.
Hospitals must determine which
technology best meets the needs of
HCW management while minimizing
the impact to the environment and
enhancing the safety of the hospitals and
the general public.
Public and private hospitals in the
NCR contract out the treatment and
final disposal of their HCW to private
companies called Transport, Storage,
Disposal (TSD) facility operators. At

present, there are 10 accredited TSD
facility operators serving public and private
hospitals in the NCR and nearby regions.
Elsewhere in the country, however, TSD
facility operators are nonexistent and
public and private hospitals must rely on
inhouse options and technology for waste
treatment and disposal.
Of the 72 hospitals managed by the
DOH, 30 percent are located mostly in
Metro Manila and contract out their waste
treatment and disposal requirements.
Most use chemical disinfection for waste
treatment and have limited or no access to
a sanitary landfill for the final disposal of
treated wastes. Of these same 72 hospitals
managed by the DOH, 90 percent have
existing sewage treatment plants or are
currently in the process of installing these
facilities.

To ensure hygienic/sanitary
disposal of health care waste
1. Minimize the spread of health care
wastes at the source
Institutionalize HCW management
system in health facilities through
investment
in
training
and
communications. Schools that include
HCW management processes in their
technical curricula should be given
incentives; and
Ensure that mercury and other harmful
metals are not released to the environment
through the elimination of the use of
mercury-based medical equipment and
devices.
2. Enhance access of hospitals and
health facilities to technologies,
products and services to assure
compliance with health care waste
management guidelines
establishment of large-scale waste

treatment technologies. The development
of BOT projects for cooperative waste
treatment facilities and sanitary landfills is
a viable option;
Provide incentives to private investment

for the promotion of research, development
and manufacture of nonmercury-based
devices and technologies used in health
facilities and for health care; and
Encourage the development and

manufacturing of local waste treatment
technology and ensure their availability in
the market.
Toxic Chemicals and Hazardous

Wastes
Pursue the closure and

rehabilitation of all open/controlled
dumpsites and the construction
of sanitary landfills to increase
service coverage to more LGUs;
The DENR through the EMB regulates the

movement and disposal of toxic chemicals
and hazardous wastes in the country. There are
46,823 existing chemicals in the country in the
updated Philippine Inventory of Chemicals
and Chemical Substances (PICCS) and 48
toxic chemicals are not included in the Priority
Chemical List (PCL) for strict monitoring.
There are about 11,162 registered hazardous
waste generators (HWGs) and 262 registered
transporters. The top three hazardous wastes
generated are putrescible/organic wastes, waste
oil, and wastes with cyanide. Based on export
clearances issued by EMB, approximately
forty percent of those exported hazardous
wastes were sludge that contain copper,
silver, etc. There are some 111 TSD facilities
nationwide, most of which are in Luzon. Other
urban and industrialized regions have only a
limited capacity for treatment and disposal of
hazardous wastes, hence the problem of their
disposal.
The key challenge is how to properly track and
monitor the handling and disposal of toxic
chemicals and hazardous wastes.
Engage LGUs in PPP options

and financial schemes for the
165

To ensure proper and sustainable
disposal of toxic chemicals and
hazardous waste
1. Improve the hazardous waste management
of industries/establishments and increase
compliance with regulatory policies pertaining
to the importation of toxic chemicals and
substances and the transportation, storage,
handling and disposal of hazardous wastes
At present, there are 10

accredited TSD facility operators
serving public and private
hospitals in the NCR and nearby
regions. Elsewhere in the country,
however, TSD facility operators
are nonexistent and public and
private hospitals must rely on
inhouse options and technology
for waste treatment and disposal.
There are some 111 TSD facilities
nationwide, most of which are
in Luzon. Other urban and
industrialized regions have only a
limited capacity for treatment and
disposal of hazardous wastes,
hence the problem of their
disposal.
Develop an interactive database
to track chemicals and hazardous
wastes.
Strengthen the enforcement and

implementation of RA 6969 on the
control of toxic chemicals and hazardous
wastes through survey and monitoring
activities; and
Develop an interactive database to
track chemicals and hazardous wastes.
2. Minimize chemical-related incidents and the
risks to the environment and to public health posed
by improper management of hazardous wastes by
industries
Develop a national plan for chemical
incident prevention; and
Embark on a massive information and
education campaign and continuously
coordinate with LGUs and other
government agencies and
Housing
The National Urban Development and Housing
Framework (NUDHF) 2009-2016 finds the
housing problem to be serious and is a largely
urban phenomenon. The magnitude of housing
need, defined as the housing backlog plus new
households, is enormous and is estimated to
reach about 5.8 million housing units in 2016
(Chapter on Social Development). In Metro
Manila, the total backlog has been projected
to reach 496,928 housing units. Innovative
28
166
and high-density housing strategies are

required if the housing deficit is to be
effectively addressed.
Beyond the public sector providing
housing and the auxiliary services, new
approaches are needed in the face of
continuing rural-urban migration that
is bound to exacerbate the housing
problem. The affordability of and access
to government housing programs by the
poor will also continue to pose a major
challenge in the near future.
The housing problem is evident in the
proliferation of slums and informal
settlements in the urban areas. Recent
estimates show that more than a third of
urban populations are slum dwellers. In
Metro Manila there were about 581,059
informal settlers (data from HUDCC as
of July 26, 2010). These communities are
characterized by unsanitary conditions,
congestion, and limited access to basic
urban services (e.g., health centers,
schools, waste disposal, safe water supply).
Resettlement and relocation programs
have been implemented but have attained
limited success in providing employment,
livelihood opportunities, and adequate
services to many of the relocatees.
Government has allocated less than
1.0 percent of the total government
expenditures for the housing sector
in recent years, or less than one-tenth
of a percent of GDP on the average.
This makes Philippine public spending
on housing one of the lowest in Asia.
(Habito, 2009)28
The role of government in providing
access to housing opportunities and
services must be clarified. In the last four
decades, government response to the
housing problem has failed to rectify the
fundamental issues of providing shelter,
especially for the poor.
This is based on Habitos 2009 paper for the Asian Development Bank (ADB).

The housing sector is guided by the
theme: Gaganda ang buhay kung may
bahay at hanap-buhay (Life will improve
with housing and livelihood.) The
vision is to provide a holistic framework
of a home and eventually a harmonious
community through provision of housing
infrastructure, integration of basic services,
and implementation of appropriate
housing/construction standards. It targets
the provision of some 1.47 million
housing units for the Plan period 20112016.29
To address the housing needs

and gaps in basic services,
especially for the poor and
marginalized
a. Accelerate mass housing programs
with alternative housing technologies,
schemes and approaches to ensure
decent and affordable homes. In
relation to this, the following will also
be undertaken:
Employ
labor-intensive
method in the implementation of
housing projects wherever feasible
to generate employment in the
beneficiary communities;
Develop and implement the
appropriate standards in the
construction of the housing units to
incorporate DRRM and CCA;
Explore vertical expansion in
the construction of housing units
taking into consideration the
basic geographical location, soil
quality and other environmental
considerations; and
Explore the use of indigenous
and recyclable materials as
environment-friendly alternatives
to reduce cost in building houses.
29
b. Integrate basic infrastructure support to

resettlement sites and emerging regional
sustainable communities, such as provision
of potable water, safe and sufficient electricity,
access roads to the nearest commercial
centers, and ICT, among others;
c. Ensure that all government infrastructure
projects integrate the relocation and
resettlement requirements of affected
families into their plans and costing in
collaboration with other concerned agencies;
d. Develop a financing framework for
relocation and resettlement, including
workable PPP schemes for socialized
housing development; and
e. Support LGUs efforts to develop a system
of land inventory to better identify areas for
urban growth and planned areas for human
settlements through their Comprehensive
Land Use Plans (CLUPs).
Health Facilities
Although health facilities have become
available and accessible in most communities,
many remain unaware of the services offered
and consequently seek more specialized care
in hospitals rather than their Rural Health
Units (RHUs) or Barangay Health Stations
(BHS). Government primary health facilities
are conveniently located, with 94 percent of
households being within 15-minute walking
distance to an RHU or BHS. Such facilities
are frequently bypassed, however, for more
specialized care. RHU resources remain
underutilized, while higher level facilities are
overcrowded, unnecessarily causing a state of
inaccessibility.
The magnitude of housing need,

defined as the housing backlog
plus new households, is enormous
and is estimated to reach about
5.8 million housing units in 2016.
Accelerate mass housing
programs with alternative housing
technologies, schemes and
approaches to ensure decent and
affordable homes.
Integrate basic infrastructure
support to resettlement sites and
emerging regional sustainable
communities, such as provision of
potable water, safe and sufficient
electricity, access roads to the
nearest commercial centers, and
ICT, among others;
In terms of health facility utilization, the

Filipino Report Card on Pro-Poor Services
in 2000 showed that 77 percent of households
surveyed used health facilities of one type or
another. Compared with rural households,
urban households tended to use health facility
See Table 8.10 under Housing section of Chapter 7: Social Development.
167
services more. Because of the lower cost of

health services, patients more frequently
utilized government facilities than private
facilities. Rich households and urban dwellers
were the predominant users of private facilities.
From 2007 to 2010, the government allotted
PhP8.43 Billion to upgrade around 1,176
health facilities nationwide.

For 2011, infrastructure in the health sector
will require additional funding because of
limited funds for health facilities such as Basic
and Comprehensive Emergency Obstretic
and Neonatal Care (B/CEmONC) facilities,
in addition to the DOH-retained and

-maintained hospitals.

To improve access to and quality
of health facilities
1. Ensure coordinated and
appropriate planning and
development
Invest in the Health Facility
Enhancement Program (HFEP)
that defines a unified and
rationalized health facility blueprint
covering both public and private
health facilities;
Table 5.9. Summary of DOH Infrastructure and Equipment

RHU-BHS
NCR
Level 1
Level 2
Level 4
Others
TOTAL
18
1.5
CHD 1
21
39
3.3
CHD 2
102
11
10
126
10.7
CAR
112
10
14
137
11.6
46
59
5.0
CHD 4A
14
10
30
2.6
CHD 4B
82
14
14
110
9.4
CHD 5
16
15
40
3.4
CHD 6
76
29
117
9.9
CHD 7
17
10
14
45
3.8
CHD 8
42
14
20
79
6.7
CHD 9
33
10
54
4.6
CHD 10
36
20
11
71
6.0
CHD 11
53
15
80
6.8
CHD 12
64
17
92
7.8
23
2.0
27
12
44
3.7
12
1.0
696
183
230
19
34
14
1176
100.0
CHD 3
CARAGA
ARMM
MM HOSP
TOTAL
Source: DOH
168
Level 3
Link provincial or city plans

to the national allocation of
investments for health, including
acquisition of ROW and lands set
aside for the construction of health
facilities;
Improve access to specialized
services in subnational health
facilities and enhance the qualityassurance system for public health
facilities like the RHUs and BHSs.
Provision of necessary access road to
the RHUs and BHSs, especially in
the remote areas, must be considered
in the planning and development of
health facilities;
Increase the percentage of public
and private hospitals for Continuous
Quality Improvement (CQI);
Strengthen the gate-keeping
function of lower level facilities; and
Integrate the provision of proper
waste-management systems (e.g.,
hospital, toxic and solid waste)
in the plans of all proposed and
existing health facilities.
2. Facilitate project/program
financing
Increase public investment for
health and rationalize the use of
all sources of funds for health,
including the national and local
government budgets and resources
from Philippine Amusement and
Gaming Corporation (PAGCOR),
Philippine Charity Sweepstakes
Office (PCSO) and other extrabudgetary resources for health.
These resources should be utilized
to ensure that available accredited
facilities are accessible to each
Filipino family while improving the
health service packages provided
to them, including catastrophic
spending; and
Enforce fiscal and administrative

autonomy in all DOH-retained facilities
in exchange for capital outlay support
and progressive and well-calibrated reallocation of hospital budgets to public
health priorities. This will promote
efficiency and improve healthcare services
as well as secure investments. This can be
achieved at the national level by pursuing
corporate-style management in DOHretained hospitals and promoting income
retention at the LGU hospitals.
3. Improve project implementation and
encourage the use of alternative materials
and technologies
Explore the use of indigenous and
recyclable materials that are environmentfriendly to reduce costs and incorporate
DRRM and CCA concepts in building
health facilities;
Employ labor-intensive methods
in implementing health infrastructure
projects as a means to generate
employment
in
the
beneficiary
communities; and
Explore the possibilities of entering
into PPPs in the construction, structural
retrofitting, rehabilitation, maintenance
and management of health facilities.
Education
The country is exerting all efforts to attain its
education targets under the MDGs to improve
quality, access and efficiency of education. Even
as education has been identified as the central
strategy for investing in people, reducing
poverty, and building national competitiveness,
the country has been cited as a particularly
striking example of under-performance in
educational reforms in the 2010 Education For
All (EFA) Global Monitoring Report. Current
policies have been cited as failing to make a
difference in improving the education of the
poorest Filipinos.
169
Table 5.10. 2011 DBM Budget Gaps, in PhP Billion
Purpose
DOH Request
DBMApproved
(Required for MDGs) (within DOH ceiling
for 2011)
BEmONC, 2754 units
9.6
5.75
3.85
CEmONC, 300 units
9.6
1.39
8.21
28.2
7.14
21.06
DOH Hospital Upgrading

(66 Hospitals)
Invest in the Health Facility

Enhancement Program that
defines a unified and rationalized
health facility blueprint covering
both public and private health
facilities.
Increase public investment
for health and rationalize the
use of all sources of funds for
health, including the national
and local government budgets
and resources from Philippine
Amusement and Gaming
Corporation, Philippine Charity
Sweepstakes Office and other
extra-budgetary resources for
health.
Among its other challenges, the Department of

Education (DepEd) has perennially confronted
the problem of classroom shortage. In SY 20092010 alone, the Department has a total of 18.2
million enrollees but was deficient by more
than 100,000 classrooms in both elementary
and secondary public schools. Budget
allocations for classroom construction have
never fully covered the needs of an increasing
school population. The problem of shortage
is exacerbated by damage to school buildings
wrought by typhoons and other disasters.
As the DepEd intensifies its campaign to
enroll all school-age children, in line with its
commitment to achieve universal participation,
classroom requirements will rise even more. An
additional challenge is the prospective passage
of the bill on mandatory preschool education,
which will require the construction of even
more classrooms to accommodate incoming
learners.

Adequate classrooms are necessary for
quality education. Several means have been
employed to address this concern, but with
a fast-growing population, shortages have
never been eradicated. Since 2004, a total
of 76,710 classrooms (elementary and high
school combined) have been put up. This
was achieved through the combined efforts
of DepEd, DPWH, the local governments,
private sector donors, school principals and
members of Congress. Another response
to reduce the pressure on infrastructure has
been the use of alternative delivery modes
(ADM) of education, such as the use of ICT.
The availability of a database on ADM (e.g.,
the share of ADM to the total number of all
170
GAP
learning delivery modes) will facilitate in

determining the number of classroom
required.
Despite continuing efforts to build new
schools and make the most of what is
present, the shortage persists. This is
especially true in far-flung and remote
areas. The total classroom requirement
is 152,569 for all levels. For next school
year, the estimated requirement for public
schools is some 113,000 new classrooms,
with an estimated cost of over PhP77
billion. This does not include the need for
major repairs on 14 percent of existing
classrooms estimated to cost PhP14
billion in 2011. The large demand for new
classrooms makes the need for innovative
approaches to the provision of classrooms
even more urgent.
The damage caused by various calamities
hitting the country present a further
challenge to maintaining an adequate
number of classrooms. This is also related
to the typical use of public schools as
temporary shelters for those affected by
disasters.
To date, not all schools have adequate
sanitation facilities, a fact that may lead to
the degradation of students health. This,
in turn, may adversely affect the academic
performance of students.
Closing the classroom gap and improving
the quality of educational facilities
will not only provide learners with the
needed infrastructure for education, but
also a conducive and suitable learning
Figure 5.9. New Classroom Construction and Repairs Undertaken,

FY 20042010
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
2004
2005
2006
New Construction
environment that will enhance the

teaching-learning process, contributing
to the improvement of their academic
performance. Through this indirect but
obvious way, addressing the infrastructure
deficits in education contributes to
economic growth and social development.
Strategic Plans and Focus

To ensure adequate and
equitable provision of quality
educational facilities
1. Close the classroom gap
Sustain the DepEd School
Building Program through the
Basic Education Facilities Fund
under the GAA and other funding
sources.
Provide continuing financial
support for the construction of
schoolbuildings in areas with acute
shortages and for other programs
under the Basic Education Facilities
Fund; dilapidated or unusable school
buildings, and those damaged by
2007
2008
2009
2010
Repairs Undertaken
The problem of shortage is

exacerbated by damage to school
buildings wrought by typhoons
and other disasters.
fire and other natural hazards, should also

be rebuilt;
Explore
various
procurement
modalities under the governments PPP
Program;
Explore
NG-LGU
matching
schemes for school building construction.
Under this scheme, every school building
constructed by NG in a certain area will
be matched by the concerned LGU with
the same number;
Maximize classroom use of through
class-shifts. The adoption of double-shift
classes must be continued as long as it is
needed in order to alleviate overcrowding
in classrooms and to support efforts at
addressing the classroom gap; and
Explore the use of indigenous and
recyclable materials as environmentfriendly alternatives to reduce the cost of
building classrooms.
171
2. Improve the quality of educational

facilities
Despite continuing efforts to build

new schools and make the most
of what is present, the shortage
persists.
Closing the classroom gap
and improving the quality of
educational facilities will not only
provide learners with the needed
infrastructure for education, but
also a conducive and suitable
learning environment that will
enhance the teaching-learning
process, contributing to the
improvement of their academic
performance.
172
Pursue the construction of disasterresilient classrooms. It will be ensured that

classrooms in areas prone to typhoons,
earthquakes, and other natural hazards
will be specially designed to withstand
such calamities. This will minimize the
need to rebuild and rehabilitate damaged
classrooms, saving resources for other
expenditures.In addition,schools are often
used as temporary shelter for displaced,
thus there is a need to strengthen and
improve their design. School buildings
shall be designed not only to be disasterresilient but also so that these can be used
as adequate evacuation centers to support
the defense policy of providing tents and
mobile trucks during calamities; and
Provide for sufficient water and
sanitation facilities in school construction.
The recent outbreak of several diseases
shows the need to focus on promoting
proper hygiene and sanitation in schools.
Schools should include adequate
WATSAN facilities to protect the health
of children and teachers. Additional
funding will be allotted for this purpose.
06
Towards a
Resilient
and Inclusive
Financial
Sector
Towards a Resilient and Inclusive Financial Sector
173
Towards a Resilient and

Inclusive Financial Sector
The financial sector intermediates claims between savings and investors. The credibility
and stability of financial institutions and the relative attractiveness of various financial
instruments to borrowers and lenders alike determine how much saving will mobilized,
how much it stays in the country to be invested, and how this is to be allocated
among the various firms and industries. Together with the state of confidence and
long-term expectation, therefore, the stability and performance of financial institutions
such as banks, equity and bonds markets, insurance companies, and other financial
entities have an indirect but vital bearing on investment and the growth of output and
employment in the country.
Assessment
The Philippine financial
system manifested its strength
with a steady improvement
in the balance sheet of the
banking industry, the issuance
and listing of corporate bonds,
and the underwriting of
insurance contracts.
The Philippine financial system manifested

its strength over the past decade, including
the period of recent global financial crisis.
After significant dislocations in prior crises
in the 1980s and 1990s as well as the 1997
Asian Financial Crisis, the system saw a
steady improvement in the balance sheet of
the banking industry, the issuance and listing
of corporate bonds, and the underwriting
of insurance contracts. Moving forward,
however, the system will need to address
concerns about the sustainability of its
performance if it is to contribute significantly
to development.
Parallel to these, policymakers pursued
broad-based financial sector reforms
centered on restructuring the banking sector,
institutionalizing corporate governance
reforms, improving risk management and
strengthening the supervisory oversight
of financial regulators1 in the early

2000s. Together with improved
macroeconomic conditions, the steady
inflow of remittances from OFWs,
a minimal investment exposure to
foreign structured products and a low
dependence on exports, these reforms
allowed the financial system to avoid
the worst difficulties encountered by
other economies during the 2007-2008
financial crisis.
The financial systems performance
has been positively reviewed by third
parties.2 Stress tests conducted on banks
also confirm the strength of the banking
systems capitalization even with
extreme test parameters. For inclusive
finance advocacy, local supervisory
initiatives have also been repeatedly
acknowledged
by
international
These include the re-establishment Bangko Sentral ng Pilipinas (General Banking Law of 2000 or RA 8791) as the
supervisor of the banking sector, Securities and Exchange Commission (Securities Regulation Code of 2001 or RA
8799, as amended) as the supervisor of the corporate sector and domestic capital market, Insurance Commission (PD
612) as the supervisor of the insurance and pre-need industries and Cooperative Development Authority (RA 6939)
as the supervisor of cooperatives in the Philippines. The CDA Charter was enacted on March 10, 1990 and subsequent
enhancements were similarly pursued in early 2000s but amendments of the Charter are still pending in Congress.
2
This is evident from the Financial Sector Assessment Program (FSAP) report of the International Monetary Fund
(IMF) in early 2010.
174
institutions.3 These external validations

of the improvements in the financial
sector culminated in the sovereign
ratings or outlook upgrades from some
the major ratings firms.
their market maturity, branch network and

capitalization. The comparative market shares
of key banking groups are summarized in
Table 6.1.
Current Structure of the

Financial System
Meanwhile, the market share of non-bank

financial institutions remains relatively
small, accounting for about 18 percent
of total assets of the financial system and
17 percent of economic output in 2010.
The Insurance Commission (IC), for
instance, reports that only 13.9 percent of
the Philippine population has private life
insurance coverage. In 2008, the private
insurers penetration rate or the proportion
of the premiums to the countrys GDP was
only 1.1 percent. Among the reasons cited
for the low insurance coverage is the lack of
priority being placed on insurance products
by the citizenry and the low financial
literacy level among low income households
including the informal sector.
The Philippine financial system is

primarily bank-based rather than
capital market-based. The banking
sector, whose total assets accounted
for more than 80 percent of the total
resources of the financial system4 and
of GDP in 2010, plays the primary role
in financial intermediation and is the
main source of credit in the economy.
Across banking groups, universal and
commercial banks continued to hold the
lions share of key balance sheet accounts
of the banking system on account of
The Philippine financial system

is primarily bank-based rather
than capital market-based.
Table 6.1. Comparative Market Shares of Key Banking Subgroups in the Philippines: 2009 and 2010*
Selected Performance Indicators
Period Bank Category
Core Loans
Assets
(TLP, net of
IBL and RRP
with BSP)
End-September
2009
Universal and
88.5
83.8
Commercial Banks
Thrift Banks
8.7
11.6
Rural and
2.8
4.6
Cooperative Banks
All Banks
100.0
100.0
Universal and
88.3
83.8
Commercial Banks
Thrift Banks
9.0
11.9
Rural and
2.7
4.3
Cooperative Banks
All Banks
100.0
100.0
*Preliminary data; as of End-September 2010
End-September
2010*
Physical Composition
Deposits
Capital
Net Profit
88.2
86.8
91.3
9.2
9.2
2.5
Head Office
Branches
Total
4.8
57.3
52.4
3.3
9.2
16.1
15.4
4.0
5.4
86.1
26.6
32.2
100.0
100.0
100.0
100.0
100.0
100.0
87.8
87.9
90.2
5.0
57.4
52.8
9.6
8.5
5.7
9.6
16.6
16.0
2.5
3.6
4.1
85.5
26.0
31.2
100.0
100.0
100.0
100.0
100.0
100.0
3
The Economist Intelligence Unit (EIU), for example, has ranked the countrys inclusive finance policy framework as the
best worldwide.
4
Excludes the assets of BSP. Likewise, other non-bank financial institutions not under BSP supervision such as investment
houses and financing companies without quasi-banking functions and/or trust authorities or are not subsidiaries or affiliates
of banks and quasi-banks, lending investors, insurance companies and other government financial institutions (GFI) such as
the Social Security System (SSS) and Government Service Insurance System (GSIS) are excluded in the computation of total
assets of the financial system due to data constraints.
175
Figure 6.1. Comparative Market Share of the Insurance Industry: End-December 2009
The insurance industrys total assets reached

P528.2 billion as of end-December 2009
with 122 market players. Life insurers
captured the bulk of the insurance market
at 79% while non-life insurers at 19% and
professional reinsurers at 2 percent.
Meanwhile, the number of companies listed
in the Philippine Stock Exchange (PSE)
grew to 259 companies in 2011 from just
12 companies in 2003. Despite the rise in
the number of listed companies, market
capitalization as a percentage of economic
output remained small (except Indonesia)
compared to other ASEAN-5 economies. In
2009, market capitalization dropped to 45.8
percent of GDP from 54 percent in 2002.
This reflects that the market remains illiquid
and the free float of listed companies in the
PSE still limited.
dealers and investment companies

where largest of them in terms of asset
size are either subsidiaries or affiliates
of banks.
In view of this unbalanced development
of the financial sector, the countrys
M2-to-GDP ratio6 of less than 50
percent over the last decade has been
below the ASEAN-5 average and
second lowest to Indonesia since 2006
(Figure 6.2). Meanwhile, Malaysia and
Thailand have financial depth ratios of
more than 100 percent.
The domestic capital market and
non-bank sector composed of
investment houses, securities brokers
or dealers, financing companies and
insurance companies also remain
small compared to regional peers.
Mutual funds, with market size likewise

smallest in Asia,5 are managed by broker-
Cf: April 2010 FSAP Report: An Update on the Philippines

This refers to the measure of broad money which consists of currency in circulation, peso demand deposits or M1 and
peso savings and time deposits. This is the ratio of which over economic output is a common measure of financial depth.
176
Table 6.2. Philippine Stock ExchangeListed Companies: as of 25 February 2011
Company Group
Total No. of Firms

per Sector
Banks
Chemicals
Construction, infrastructure
& allied services
Diversified industrials
Diversified services
Education
Electricity, energy, power
& water
Food, beverage & tobacco
Holding firms
Hotel & leisure
Information Technology
Media
Mining
Oil
Other financial institutions
Preferred
Property
SMEs
Telecoms
Transport
Total
16
8
16
10
10
3
13
23
41
8
11
5
17
5
14
1
41
2
6
9
259
Foreign participation in the financial

system remains limited. The banking
sector was liberalized and opened
to foreign participation following
the enactment of the Foreign Banks
Law or RA 7721 in 1994. Since then
foreign banks have been allowed in
principle to establish branches with full
banking authority, to invest in up to 60
percent of the voting stock of a new
banking subsidiary, or to invest in up
to 60 percent of the voting stock of an
existing domestic bank.7 The first mode
of entry has been closed, however, while
the second is also suspended pending
a moratorium on the establishment of
new banks, except for those engaged
primarily in microfinance. In practice,
foreign banks may only pursue the
third route of foreign entry, which is
the acquisition of 60 percent voting
interest in an existing domestic bank.
Notwithstanding the liberalization
of the banking sector, foreign banks
to date account for only 11.9 percent
of the banking systems total assets8
although they have a stronger foothold
in countrys credit card business.
Foreign participation in the

financial system remains limited.
Source: Philippine Stock Exchange

Figure 6.2. Financial Deepening in ASEAN-5
Source: IMF Statistics, NSCB

7
Article 99, Chapter XIII of the Cooperative Code of the Philippines (RA 6938) limits the ownership of a cooperative
bank to duly established and registered cooperatives in the Philippines, including another cooperative bank.
8
Section 3 of the Foreign Banks Law or RA 7721 limits the aggregate share of foreign banks to 30 percent of banking
systems total assets.
177
Table 6.3. Structure of Financial Systems in ASEAN-5, Averages: 2000-2009
Economy
Indonesia
Malaysia
Philippines
Singapore
Thailand
Domestic Credit
Provided by
Banking Sector
Equity Market
Capitalization
(% GDP)
Foreign Currency
Bonds Outstanding
54.0
129.6
56.9
91.0
130.2
26.6
135.7
45.8
182.2
55.8
2.0
16.2
25.9
25.3
6.1
Source: IMF, World Bank and Asian Bonds Online
Table 6.4. Extent of Bank Access Customer Reach: 2010
Country
Indonesia
Malaysia
Philippines
Singapore
Thailand
Deposit accounts per ATMs per 100,000

100,000 people
people
504.7
2,063.3
499.1
2,236.3
1,448.8
14.4
54.0
14.3
49.8
71.3
Branches per
100,000 people
7.7
11.4
11.8
10.5
11
Source: World Bank
The current geographical

distribution of financial
service providers shows a
growing concentration in the
high-income and urbanized
areas of NCR, Central Luzon
and CALABARZON.
Compared to the ASEAN-5,

the Philippines lags behind in
terms of customer reach
The current geographical distribution of

financial service providers shows a growing
concentration in the high-income and
urbanized areas of NCR, Central Luzon
and CALABARZON (Cavite, Laguna,
Batangas, Rizal and Quezon). Bank
density is heavily skewed towards these
three regions and the nationwide density
ratio of five banks per city or municipality
has been largely unchanged for the last
decade. Consequently, about 37 percent9 of
municipalities in the Philippines do not even
have a banking office and can be considered
either unserved or underserved with respect
to a broad range of critical financial services
such as credit, savings, payment transfers,
remittances and insurance. Compared to the
ASEAN-5, the Philippines lags behind in
terms of customer reach (Table 6.4.).
The agenda to develop a robust capital

market is of long standing, and has been
previously analyzed extensively, yet
many of the critical components remain
unresolved. To attain the objective of a
regionally-responsive
developmentoriented financial system, there must be
a clear acceptance that a thriving capital
market is not an optional appendage
but a crucial complement to the
traditional bank deposit-loan market.
The local bond market continues to be
dominated by government securities
and is largely fragmented, with the
presence of too many tenor buckets and
a longer maturity profile10 compared to
other ASEAN economies (Figure 6.3).
The ratio may be lower if the client reach of non-bank microfinance institutions (MFI) and non-government
organization/civil society organization (NGO/CSO)-oriented cooperatives are included.
10
Largely used as a debt management tool of the government to ensure liquidity for its deficit financing needs.
178
Figure 6.3. Comparative Benchmark Yield Curves, ASEAN+3
In view of this unbalanced

development of the financial sector,
the countrys M2-to-GDP ratio of
less than 50 percent over the last
decade has been below the ASEAN-5
average and second lowest to
Indonesia since 2006
Source: Bloomberg, Asian Bonds Online
Condition and Performance

Banking Sector
The Philippine banking system, which
remains the core of the financial
system and primary source of credit
for the economy, continues to manifest
sustained resilience for the last decade
at par with its ASEAN-5 neighbors.11
11
Key performance indicators (Figure 6.4)

showed steady growth in assets, lending,
deposits and capital accounts. While credit
expansion has been modest, averaging 6
percent in over a decade, this was due less
to a lack of liquidiy in the system and more
to developments in the capital market that
allowed some highly rated companies to tap
alternative funding. Alongside this, credit
The Philippine banking

system continues to manifest
sustained resilience for the
last decade at par with its
ASEAN-5 neighbors.
Cf: Attachment 1
179
Figure 6.4. Selected Performance Indicators of the Banking System
Source: Bangko Sentral ng Pilipinas
The countrys stock market

also showed signs of
recovering from depressed
global market sentiments in
2007-2009.
underwriting standards were strengthened,

which ultimately allowed banks to improve
their asset quality and maintain prudent loanto-deposit ratios. Bank solvency remains
above the BSP regulatory requirement of
10 percent and the international standard
of 8 percent; the country fully adopted the
risk-based capital adequacy framework12
under Basel II in 2007. Core earnings grew
together with modest, credit expansion and
a general improvement in asset quality.
12
Equities Market
The countrys stock market also showed
signs of recovering from depressed
global market sentiments in 20072009 particularly during the worst
period of the U.S. subprime crisis in
2008. The Philippine Stock Exchange
index (PSEi) surged 37.6 percent to
close at 4,201 points at end-year 2010,
the fourth biggest annual percentage
increase in the last ten years.
Prior to the banking systems adoption of Basel 1, Philippine banks were required to maintain a net worth-to-risk
assets (NWRA) ratio of at least 10%. On July 1, 2001, the NWRA ratio was replaced by a 10 percent BIS-type risk
weighted capital ratio when the banking system adopted the Basel 1 framework for bank capital (BSP Circular No. 280)
180
Figure 6.5. Selected Stock Market Performance Indicators

MARKET TURNOVER AND P/E RATIO
(For End-Periods Indicated In Billion Pesos)
NET FOREIGN TRANSACTIONS AND STOCK MARKET CAPITALIZATION

(For End-Periods Indicated In Billion Pesos)
Source: Philippine Stock Exchange
For its performance in 2010 alone, the

PSEi advanced by 1,148 points yearon-year from its level of 3,053 in 2009.
During this period, the PSEi peaked
at 4,413 points on November 5, 2010
while its lowest level was recorded at
2,788 on February 9, 2010. The broader
All-Shares index also rose by 56.7
percent to 3,006 points in 2010 from
the previous years 1,910. All sector
specific indices also increased, led by
the Holding Firms index followed by
the Industrials, Property, Financials,
Mining and Oil, and Services, in
declining order.
Other stock market indicators similarly
showed positive sentiments on the local
bourse with an uptrend in overall stock
market capitalization and average price
per earnings ratio.
13
14
Fixed Income Market

Total volume traded at the Philippine
Dealing and Exchange Corporation
(PDEx) for 2010 amounted to P5.4 trillion
year-to-date (YTD), more than double its

previous YTDs level of P2.6 trillion. This
is composed of treasury bills, fixed income
notes, retail treasury bonds, zero coupon
bonds and special purpose treasury bonds.
On March 16, 2010, PDEx trading volume
reached an all time high of P53.8 billion
(daily average) in its five-year history.
However, government securities accounted
for 99.2 percent of all fixed income
instruments in the FIE. It is composed of
treasury bills (8.9%), fixed income notes
(78.8%), retail treasury bonds (11.5%), zero
coupon13 bonds and special purpose treasury
bonds.14 Meanwhile, corporate bonds made
up the remaining 0.8 percent.
Total volume traded at the

Philippine Dealing and
Exchange Corporation more
than double its previous YTDs
level of P2.6 trillion.
The domestic financial market

has started to realize gains
from improving market and
investor sentiments. The peso
strengthened against the US
Dollar while sovereign credit
spreads tightened.
Negligible share
Negligible share
181
Figure 6.6. Summary of Financial Market Performance
Source: Bangko Sentral ng Pilipinas, Bloomberg and Philippine Stock Exchange
Foreign Exchange and Bond Markets
To nurture a thriving financial

system, the challenge is to
mobilize local saving and
deploy the resources as may
be needed throughout the
archipelago.
Overall, the domestic financial market

remains generally stable and has started to
realize gains from improving market and
investor sentiments. The peso strengthened
against the US Dollar while sovereign credit
spreads tightened during this period (Figure
6.6).
Also, figure 6.6 summarizes the performance
of Philippine financial markets post
crisis and improved investor sentiment as
evidenced by the general strengthening of
the peso against the US dollar, rebound of
the domestic equities market and tightening
of sovereign debt spreads.
15
182
Attachment 2
Challenges
Notwithstanding the improvements
previously cited, some policy and
structural issues continue to deter the
further development of the financial
system. If the financial system must
positioned to serve the current and
future needs of the public, these issues
must be resolved:
Institutionalized generation
of savings and mobilization
of resources
As an archipelago the country must
live with demographic and economic
diversity across regions.15 To nurture a
thriving financial system, the challenge

is to mobilize local saving and deploy
the resources as may be needed
throughout the archipelago. This
provides for a regionally-responsive,
development-oriented
financial
system that nurtures saving at its
source while recognizing how some
regions may have greater credit needs
than others. Further strengthening the
financial inclusion framework and its
infrastructure support are key elements in
providing the necessary financial services
and in bridging the spatial gaps between
regions.
Available savings are

primarily lodged in shortterm instruments
Economic priorities and projects
normally require long-term funds
but available savings is placed mostly
in short-term instruments such as
savings deposits16 and treasury bills.
This tenor gap cannot be addressed
by a simple pricing solution. There
is a need to develop an outright
long-term funds market. Put
differently, savers must be provided
the opportunity to become investors,
and this will require an enabling
environment that includes prudential
guidelines, infrastructure support, a
robust capital market and a national
financial education program.
Lack of a thriving capital

market
The business of finance is impossible
without the dynamics of trading.
To establish an outright long-term
funds market, the capital market must
undergo fundamental changes. This
includes defining a credible valuation
benchmark, providing for forward
16
17
markets, strengthening the cash market,

and addressing the fragmentation of the
government securities market. The latter
raises the inherent tension between the
market development function of government
securities versus the mandate to minimize
the cost of government debt financing.
Improving the financial

governance framework
Rapidly changing market conditions and
the publics evolving requirements increase
the pressure on the governance structure
of the market. The supervisory framework
must pro-actively stay ahead of these market
pressures. Regulatory and supervisory
authorities must ensure that their mandates
are aligned with international best-practice
and standards applicable in a domestic
context. In the current regime of multiple
regulators, the authorities must ensure
consistency and comparability across their
respective governance frameworks. Some
of these will require legislative intervention
while the rest will depend heavily on the
working relationship between regulators and
regulated entities.
FIs concentration in urban

areas
The uneven distribution of regional
income and savings has led to the
concentration of financial institutions
and delivery of financial services in highincome and urbanized areas. Bank density,
for instance, has remained at five banking
offices per city or municipality for the last
decade, leaving some 37 percent17 of the
countrys municipalities either unserved or
underserved.
Attachment 3
Exclusive of client reach of non-bank MFIs and NGO/CSO-oriented cooperatives.
183
Need for legislative support in

critical reform areas
Critical financial sector reforms cannot
be implemented by financial supervisors
alone. Legislative support is necessary to
provide for the required legal and regulatory
environment for these reform objectives.
Close coordination with Congress as well as
active participation in the legislative process
remain pivotal.
In line with the national

agenda and with Plan targets,
a broad range of financial
sector reforms will be pursued
to further deepen the financial
system and enable it to
contribute to sustainable and
inclusive growth.
These policy and structural issues are

known to most stakeholders. What is
missing, however, is a holistic framework
that ties them into a common strategic and
tactical plan. This is ultimately a challenge
of orderly execution and the need for an
uncompromising commitment among
stakeholders to adhere to the plan.
Strategic Framework
Vision for the Financial Sector
A regionally responsive, developmentoriented and inclusive financial system
which provides for the evolving needs of its
diverse public. It is guided by the following
precepts:
Bottom-up development
Top-down infrastructure support
Prices that fully reflect relevant information
Enabling environment for the effective
management of risks
Medium-Term Development
Plan for the Financial Sector
(MTDPFS)
on a conducive policy and regulatory

environment, progressive adoption
of international standards and best
practices,18 good governance, and
transparency for the effective delivery
of financial services.
Key Reform Objectives and

Targets
Over the medium term, the
government aims to (1) achieve a 7
to 8 percent growth in the countrys
economic output beginning 2011,
with a minimum of 5 percent growth
annually for six years, (2) increase per
capita income to US$3,000 over the
six-year period and (3) reduce poverty
incidence by 10 percent per year.
In line with the national agenda
and with Plan targets, a broad range
of financial sector reforms will be
pursued to further deepen the financial
system and enable it to contribute
to sustainable and inclusive growth.
This shall be achieved by effectively
mobilizing and intermediating funds
within a framework of inclusive finance
to best address the evolving needs of
all constituents. Key reforms will focus
on: (a) promoting savings generation at
the regional level but institutionalizing
deployment of resources at national
level; (b) developing an enabling
environment for long-term savings;
(c) strengthening the governance
framework of the financial system in
line with international standards and
best practices, and (d) establishing a
strong legal framework for financial
sector development.
An array of reforms in the domestic financial

system will be pursued to further deepen
the financial system through a balanced
development of the banking system and
capital market. These shall be anchored
18
184
With prior consideration to applicability on domestic conditions.
Specific Reform Strategies

A. Promote a regionally responsive
and inclusive financial system through
institutionalized savings generation
and resource mobilization.
The high-growth trajectory
the macroeconomy puts
on the financial system to
the necessary resources to
heightened economic activity.
set for
pressure
generate
support
Moreover, technological innovation in

mobile and electronic delivery channels
has also helped in improving efficiency
and availability of financial services. All
these have been made possible through the
establishment of an enabling policy and
regulatory environment that encourages a
market-oriented approach to the provision
of financial services to previously excluded
segments of the population like the
enterprising poor.
This provides the strongest justification

for positioning the financial system
to be regionally-responsive and
development-oriented.
These notwithstanding, there remains to

be room for improvement for Philippine
financial inclusion and the following reform
strategies shall be pursued to attain this:
In order to engender sustainable

and equitable growth, those in the
margins of society must be part and
take benefit from the nation building
process. As things stand, their access
to financial services has been limited
by physical incapacity,19 geographic
distance, high cost of credit and
stringent documentary requirements.
Consequently, these sectors remain
vulnerable and their need for
consumption smoothing persists.
1. Establish a conducive and regulatory

environment that balances financial inclusion
objectives with financial stability goals.
One way to address this is through the

promotion of inclusive finance wherein
everyone has access to all financial
services including, but not limited to
deposit account services, credit services,
remittances, and insurance services.
To this end, the Philippines has already
made great strides in its effort to make
financial services available to everyone
not only through banks and insurance
firms but also through other institutions
such as cooperatives and microfinance
non-government
organizations.
a) Institutionalize market-based policy

through issuance of law anchored on
the greater role of the private sector in
the provision of financial services and
market-oriented interest rates with the
National Strategy for Microfinance as a
foundation.
b) Craft a national financial inclusion
strategy20 that officially defines financial
inclusion, the medium-term strategies
to be undertaken and the responsibilities
or accountabilities of all stakeholders
both government and private.
2. Promote the use of alternative products and
delivery of financial services in underserved
and unserved areas of the country such as:
a) Microinsurance21
The promotion of microinsurance
products and services, for instance,
aims to expand the delivery of simple
and affordable risk protection oriented
financial products to the less privileged
19
Refers to persons with disability (PWD)

National Strategy for Microfinance was formulated in 1998 and initiatives to institutionalize microentrepreneurship
for poverty reduction and inclusive economic development were reemphasized as a policy statement in the latest speech
of President Benigno S. Aquino III before the PinoyME People Powered Markets on 22 February 2011.
21
The Microinsurance Regulatory Framework (MRF) was launched in January 2010 to provide a policy and regulatory
environment that will facilitate the participation of the private sector in providing risk protection for the poor and
ensure that the rights and priveleges of the poor are protected.
20
185
and the informal sector against financial

distress and other unfortunate events
i.e., typhoon devastation on crops.
Specific action
following:
plans
include
the
Formulate performance standards for

microinsurance;
Foster public-private partnership on
microinsurance product development;
and
Institutionalize
microinsurance
financial literacy program.
b) Credit Surety Fund Program (CSF)
The CSF is a program that involves
the creation of a trust fund contributed
by cooperatives from a province and
its provincial government intended
primarily to make micro, small and
medium enterprises (MSME) bankable
by giving them access to formal sources
of financing by means of a surety cover
as a substitute for collateral.
c) Microhousing
According to data from the Housing
and Urban Development Coordinating
Council (HUDCC), the projected
housing needs of the Philippines plus
projected new households by 2010 is
655,821.
It used to be that banks are not able
to compete with the rates provided by
government housing programs because
they are subsidized, but lately, the
government has been trying to shift
towards a market-oriented housing
finance system. Thus, the development
of micro-housing finance schemes

could help alleviate the situation of
the homeless poor.
3. Explore other facets of inclusive
finance framework such as agent
banking and use of non-bank financial
institutions as delivery channels.
In pursuit of this specific reform
objective, there is a prior requirement
to promote evidence-based policy
making and impact measurement by
establishing a systematic method of
collection, monitoring and analysis
of financial inclusion related data to
address the need for accurate, reliable,
and consolidated statistical data on
various financial inclusion issues
and required innovations. This shall
integrate existing financial inclusion
statistics as well as address gaps in the
current statistical environment through
information exchange and cooperative
arrangements with other concerned
agencies.22
4. Adopt a holistic approach to financial
literacy and consumer education.
5. Encourage 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 (PWDs).
Unlike other borrowers, the target
market for microfinance products23 such
as those belonging to the agriculture
sector might have cash flows that are
different from those observed from
the usual borrower. Likewise, there
is a wide variety in the purpose of
their loan application: consumption
smoothing, financing for educational
needs and funds for migration purposes
such as placement fees, document
22
These include the National Confederation of Co-operatives (NATCCO), CDA, APPEND and other microfinance
or cooperative related organizations involved in the inclusive finance agenda.
23
Based on existing laws and BSP regulations, microfinance loans are those granted to farmer-peasants, artisanal
fisherfolk, workers in the informal sector, migrant workers, indigenous groups of people and cultural communities,
differently-abled persons, senior citizens, victims of calamities and disasters, youth and students, children and urban
poor.
186
processing fees. Hence, these warrant

the introduction of financial products
specifically designed for this group of
borrowers.
In terms of the delivery of financial
services, the need to expand the
number of ATMs and other banking
products including announcements or
financial literacy materials in Braille24
to cater to the unique requirements of
the blind remains a going concern. At
present, most ATMs have a dot on the
number 5 digit (middle digit in a 3x3
matrix consisting of nine numbers) of
the ATM console to guide the visually
impaired and only a small number of
ATMS has the digits 1-9 in complete
Braille. There is also a need for bank
forms to be available in Braille or
to be read aloud by a dedicated staff
to a blind client. For the physically
challenged, greater compliance of
institutions, including banks to install
facilities and devices within their
premises that enhances the mobility
of disabled persons pursuant to Batas
Pambansa Bilang (BP) 344 needs to be
ensured. This includes the installation
of appropriate ramps and lowering the
keypad console of ATM machines to
aid the access of depositors who are in
wheelchair.
B. Develop an enabling environment
for long-term investments.
In order to encourage long-term savings
and investment, the following specific
reform strategies shall be pursued:
1. Develop auxiliary markets through
forwards and cash markets.
The development of the domestic capital
market cannot be fully consummated
only by the presence of liquidity and
higher investor participation reflected
in the volume of transactions. A
capital market that promotes price
discovery mechanism, that allows investors

to manage resources efficiently, and that
provides the avenue to protect investments,
is the necessary infrastructure to provide
alternative financing to the countrys
economic development. Toward this end,
there is a need to develop auxiliary market
through forwards and cash markets.
Specific reform shall be pursued to:
a. Institutionalize repurchase agreements
(repos) and securities lending and
borrowing (SLB) as a second-layer
platform for the trading of government
securities (GS). Repos and SLBs
provide another means for short-term
financing and can provide the inventory
of GS to avoid failed trades. Putting
this in place would require an efficient
infrastructure that would ensure proper
tagging of securities (i.e., once used in
a repo or SLB, it cannot be used for
subsequent transactions unless released
by the contracting parties) and would
need common ground rules to govern
the securities trading.
b. Develop a derivative forwards market to
formalize the mechanism for investors
to hedge their investments and manage
their risk exposures. With the presence
of a derivatives market, the volatility
currently generated by abrupt spot trades
can be addressed and provide the market
with the necessary time to adjust to the
required future volumes while using the
forward rates as a valuation guide.
2. Establish a reliable capital market
infrastructure
The flow of resources from those with excess
funds to those with better use for funds will
not be fully consummated in the absence or
the lack of infrastructure that would ensure
the sanctity of transactions, the protection
of capital as well as encourage their
economic use. It is therefore desirable to
24
The Braille system, developed by a blind Frenchman Louis Braille in 1825, is a widely used method of reading and
writing for the blind.
187
set in place a reliable market infrastructure

as foundation for saving and investment.
This would require the development of legal
and regulatory frameworks to govern the
exchange of capital which entails crafting
of appropriate enabling laws to encourage
savings, disseminate credit information,
strengthen regulatory supervision and
protect the rights of investors.
As an archipelago, a market infrastructure
that can integrate the physically segregated
markets across regions is important.
Technology is available to allow for a central
board that can present a uniform price for
an issue regardless of the location of the
purchaser.
Thus, reforms shall be undertaken to create
a market infrastructure that provides for
the following: (1) default arrangement, (2)
elimination of clearing and settlement risks
and (3) availability of access to other retail
clearing or settlement processes.
3. Support faster integration of the financial
system into the ASEAN region.
Increased exposure to the Asian-wide
financial markets can serve as an additional
momentum to further deepen the domestic
financial markets. It can also encourage the
rapid growth of the countrys economy by
improving the efficiency of savings allocation
and providing additional financing to the
domestic industries and businesses.
Specific reform strategies on ASEAN
financial integration shall be pursued to:
a) Liberalize
services;
financial
products
and
b) Further liberalize capital account25:

(1) Continue the assessment and
formulation
of
measures
or
regulations in the Philippines for
25
foreign direct and portfolio

investments as well as other
foreign
exchange
flows.
This will further removal of
restrictions in inward and
outward capital flows while
ensuring consistency with
member countries national
agenda and readiness of the
economy and allowing adequate
safeguards against potential
macroeconomic instability and
systemic risk that may arise
from the liberalization process;
and
(2) Participate in the mutual
assessment
process,
identification and formulation
of measures or rules to
promote freer flow of foreign
direct investments, portfolio
investments and other foreign
exchange flows, including the
strengthening of monitoring
and oversight systems to
improve the management of
large and volatile capital flows
under the ASEAN Finance
Process.
c) Support the regional capital
market development through the
following:
(1) Participate in the region-wide
capacity building initiatives26
to collectively enhance liquidity
and efficiency in Asian capital
markets.
(2) Further develop long-term
capital market infrastructure
comparable and attuned with
those in other Asian countries.
Cf: eStandards Forum: Business Indicator Report (August, 2010). In its Country Commercial Guide, the US
Department of Commerce describes the Philippines as open to portfolio investment.
26
Participation in regional negotiations should be supported by regular consultations with domestic stakeholders such
as the National Government, the private sector and non-government organizations.
188
(3) Enhance
capital
market
access, linkages and liquidity
by participating in proposed
regional initiatives such as the
ASEAN Exchange linkages
and Bond Market linkages.
(4) Promote
credit
ratings
comparability
between
domestic and international
credit rating agencies.
d) Harmonize
payment
settlement system.
1. Pursue sustained capacity building for

financial regulators.
This shall be done together with the passage
of amendments to strengthen the legislative
mandates of the BSP, SEC, IC and CDA
charters.
2. Harmonize regulatory and supervisory
oversight through cooperative arrangements
among domestic and international financial
regulators.
and
This
specifically
includes
participation in the harmonization
of the payment and settlement
systems in the region to facilitate
efficient, secure and reliable cross
border transactions.
e) Strengthen regional monitoring
and surveillance initiatives.
This generally aims to support
the strengthening of regional
monitoring and surveillance
initiatives within existing regional
arrangements
through
the
ASEAN Economic Community
Blueprint27 to boost resilience
against external shocks.
C. Strengthen the governance
framework of the financial system in
line with best practices and standards.
Since the global financial crisis, there
has been a growing consensus on the
importance of international standards
and codes, particularly on elements of
good governance for financial regulators.
3. Promote mechanisms and processes such

as stronger cooperative arrangements among
domestic and international regulators of the
financial system to address the growth of
financial conglomerates.28
4. Develop the risk-based capital adequacy
(RBCA) framework for providers of financial
services and products under SEC and IC
regulation and supervision.
Risk-sensitive approaches for determining
minimum capital requirements for non-bank
financial institutions will afford stronger
protection to clients, and induce providers to
better manage risk.
5. Promote market discipline and price
discovery through effective corporate
governance framework for all supervised and
regulated financial institutions.
a) Expand the scope of duties and
responsibilities of the Board of
Directors and officers of supervised
and regulated financial institutions
of BSP, SEC, IC and CDA to
make them fully accountable to
shareholders and the public for their
decision-making processes.
Specific reforms are to:

b) Reinforce the proper rules governing
the selection and appointment of
27
Cf: www.aseansec.org
In its 2010 FSAP Report, the IMF cites financial conglomerates as an important feature of the Philippine economy. About
60 percent of bank assets and 75 percent of effective market capitalization of listed companies belong to conglomerates.
Cf: International Monetary Fund (April, 2010). Philippines: Financial System Stability Assessment Update. IMF Country
Report 10/90. Washington, D.C.: International Monetary Fund
28
189
Table 6.5. Legislative and Regulatory Priorities for the Financial System
Phase 2
(2011-2014)
Phase 1
(2011-2012)
Cooperative Code
CISA
CIMS
PERA
REIT
MSME
Agri-Agra
FRIA
Phase 3
(2011-2016)
BSP Charter
Securities Regulation Code
IC Charter
CDA Charter
Corporation Code
Financial Stability Framework

Financial Sector Neutrality
Tax
Payment System Act
CISL
Chattel Mortgage Law
Central Registry for Movable
Assets
officers, trustees and members of the

Board of all supervised and regulated
financial institutions of BSP, SEC,
IC and CDA to effectively deal
with interlocking directorships and
connected party lending at the onset
of increasing cross-ownership and
growth of financial conglomerates
in the Philippines. For government
pension funds,29 adopt a merit system
including a clear and de-politicized
appointment process for the boards
of directors of these funds;
with both houses of Congress and

through active participation in the
legislative process.
c) Continuously align local accounting

and reporting standards30 with
international standards and best
practices; and
Phase 2 - Legislative and

regulatory reforms in the process of
implementation or enacted between
2011 and 2014; and
d) Extend the use of corporate

governance scorecard to all supervised
and regulated financial institutions in
the Philippines to promote a deeper
culture of fairness, accountability and
transparency in financial transactions
and reporting.
Phase 3 - Legislative and regulatory

reforms in the early developmental
stage between 2011 and 2016.
D. Establish a strong legal framework for

financial sector development.
An enabling regulatory and legal environment
for financial sector development must give
priority to financial stability, supervisory
oversight, inclusive finance and capital
market development. These reform priorities,
however, require legislative support, which can
be achieved only through close coordination
29
Reform priorities shall be phased in

every two years based on the following
considerations:
Phase 1 - Legislative and regulatory
reforms with existing legal and
regulatory framework but saddled
with some implementations issues
between 2011 and 2012.
1. Establish a framework for financial

stability to limit the costs of financial
distress to the economy in times of crisis
by adopting a macro-micro approach to
supervision.
Reforms shall be pursued to:
a) Include an explicit financial
stability objective in the charters
of financial sector supervisors. This
will set a coordinated objective
and shared responsibility among
Refers to the GSIS and SSS

The Philippines aligned its accounting and reporting practices with international accounting standards and international
financial reporting standards with the adoption of Philippine accounting standards and Philippine financial reporting
standards in 2005.
30
190
supervisors and regulators of

the financial sector to keep the
domestic financial system in good
shape.
reform package, should be adopted to

promote convergence with the global
regulatory framework for a more
resilient banking system.
b) Adopt a macro and micro

prudential
approach
to
supervision. The existing microprudential approach needs to
be supplemented with macroprudential policies to ensure the
resilience of the financial system.
A consolidated and risk-based
approach to supervision should
be implemented to effectively
supervise financial institutions and
the financial system as a whole.
e) Provide institutional support for

financial stability. Exchange of
information and coordination among
domestic and overseas regulators
should be strengthened. Projects
formulated by Financial Sector Forum
members should be reinforced. These
measures will ensure harmonized
regulation throughout the system. The
establishment of a more permanent
and dedicated institutional support for
financial stability shall be explored.
c) Improve existing macro and micro

surveillance tools and technology.
There is a need to upgrade
examination approaches, revise or
update rating systems of financial
institutions, and
implement
necessary infrastructure for data
and information warehousing.
Technology must be harnessed
to improve micro- and macrosurveillance of financial sector
developments and other financial
stability issues. Some innovations
that can be immediately explored
are the active use of online surveys
in-between examinations for
macro and micro economic and
financial variables, and the pursuit
of
new
information-sharing
agreements with knowledge-based
participants such as the non-bank
sector such as cooperative, CSO,31
NGO, informal, services and other
corporate sectors, including inputs
from national consultations.
f ) Strengthen financial safety nets, such as

the establishment of a crisis management
framework for the financial system.
A crisis management framework that
is anchored on crisis prevention and
crisis resolution is essential. This should
provide liquidity and restore normality
in the most expedient and transparent
manner during a crisis.
d) Continue to align the existing

regulatory
and
supervisory
framework with international
standards and practices. In the
banking sector, elements of
Basel II that have not been fully
implemented, including features
of the recently released Basel III
2. Strengthen the supervisory oversight of

financial regulators to enable them to keep pace
with the increasing sophistication of the global
financial services industry.
Specific reforms shall be pursued to:
a) Strengthen BSPs role as a supervisor of
the financial system primarily through
the amendment the BSP Charter (RA
7653).
b) Reinforce the SECs role as capital
market regulator primarily through
the amendment of the Securities
Regulation Code (RA 8799);
c) Strengthen the IC as an independent
and effective regulator of the
insurance industry. An amendment
of the Insurance Code (PD 1460, as
amended); and
31
The countrys Chattel Mortgage Law or RA 1508 was enacted on July 2, 1906. The law defines chattel mortgage as a
conditional sale of personal property as security for the payment of a debt, or the performance of some other obligation,
the condition being that the sale shall be void upon the seller paying to the purchaser a sum of money or doing some
other act named. If the condition is performed according to its terms, the mortgage and sale immediately become void
and the mortgagee is thereby divested of his title.
191
d) Strengthen the organization and

regulatory or supervisory functions of
the CDA to cover cooperatives engaged
in savings and credit operations. This
will be accomplished by amending the
CDAs Charter (RA 6939, as amended).
3. Provide a legal framework for the
acceptance of movable assets as collateral.
Specific reforms shall be pursued to:
a) Review and amend the more than
century-old Chattel Mortgage Law in
the Philippines.32
b) Establish a central registry of moveable
assets offered as collateral, which are
currently recorded in separate registries
for real estate mortgages, chattel
mortgages and quedans.
c) Review the rules on other collateral
items such as quedan.
4. Provide an adequate legal framework
to encourage greater investor participation,
address financial taxation and effective
oversight of the national payments systems.
Specific reform strategies are primarily geared
at expanding non-bank initiatives through
the passage of some important capital market
development bills such as:
a) A Collective Investment Schemes
Law (CISL) to broaden investor
participation in the securities market,
including participation by Overseas
Filipinos;
b) A Financial Sector Tax Neutrality Act
(FinTax) to minimize distortion costs in
financial transactions; and
c) A Payment System Act (PSA) for
the effective oversight of the countrys
national payment and settlement
system.
5. Create an environment for the

efficient operations of cooperatives in
the Philippines following the enactment
of the Cooperative Code (RA 9520) on
February 17, 2009.
The cooperative sector together with
non-bank microfinance institutions33
has been involved in grassroots
development and financial inclusion
in the Philippines for the past decade.
There is a lack of an effective legal
framework and supervisory oversight.
However, has led to the fragmentation
of developmental efforts and a poor
database on the actual performance and
contribution of the sector.
6. Empower the IC to effectively
supervise and regulate pre-need
companies, including, among others,
reviewing the management of pre-need
companies for better protection of plan
holders and beneficiaries following the
enactment of the Pre-Need Code (RA
9829).
7. Address funding and other operational
requirements for the establishment of the
Central Credit Information Corporation
to improve the ability of financial
institutions to access credit history data
for debtors, thereby bringing down the
money and time cost of loan underwriting
following the signing into law of the
Credit Information System Act (RA
9510) on October 31, 2008.
Alongside this, there is a need to develop
a system to monitor, control and manage
collaterals submitted by banks and
other financial institutions as security
for their loans. One example of such
system is the Collateral Information
and Management System (CIMS) to
be implemented within the BSP, which
should allow authorized users to obtain
information electronically on the status
of collateral documents, particularly the
32
The countrys Chattel Mortgage Law or Act No. 1508 was enacted on July, 1906. The law defines chattel mortgage asa conditional
sale of personal property as security for the payment of a debt, or the performance of some other obligation, the condition being that the
sale shall be void upon the seller paying to the purchaser a sum of money or doing some other act named. If the condition is perfomed
according to its terms, the mortgage and sale immediately become void and the mortgagee is thereby divested of his title.
33
Microfinance NGOs and microfinance-oriented banks offer loans, savings facilities, housing, community development projects e.g.,
insurance products in partnership with license insurance companies to less privileged Filipinos particularly in depressed and remote
areas in the countryside.
192
collateral positions of borrower banks

and end-borrowers.
8. Introduce alternative savings
and investment products through the
following specific reforms:
a) Encourage voluntary personal
savings and investments through
the establishment of a multipillar retirement income structure
as embodied in the provisions of
Personal Equity and Retirement
Account Act of 2008 or PERA
Law (RA 9505) enacted on
August 22, 2008.
b) Address the needs of the resurgent
real estate industry by providing
funds for infrastructure projects,
widening access to investment in
real estate projects, broadening
the participation of the public,
including OFs, in the ownership
of real estate, and protecting the
investing public from abuses of real
estate investment trusts pursuant
to provisions of the Real Estate
Investment Trust or REIT Act of
2009 (RA 9856).
9. Establish a policy framework in
support of the governments social agenda
of reducing poverty through mandated
credit to certain sectors of the economy such
as MSMEs and the agriculture sector.
Specific reform strategies shall be

pursued to:
a) Strengthen and encourage the growth
and development of micro, small, and
medium-sized enterprises (MSMEs)
in all productive sectors of the
economy, particularly rural and agrobased enterprises, through the effective
implementation of the Magna Carta
for MSMEs (RA 6977, as amended).
34
b) Enhance the access of the rural

agricultural sector to financial services
and programs that increase market
efficiency and promote modernization
in the rural agricultural sector through
the implementation of the Agri-Agra
Reform Credit Act of 2009 (RA 10000),
passed into law on February 23, 2010.
10.
Expand investor and creditor
protection mechanisms cognizant of recent
demands of modern banking and finance
standards through the following specific reform
measures:
a) Introduce improvements in company
registration and monitoring rules or
procedures, including the institution
of stiffer penalties for corporate
malfeasance through the amendment
of the Corporation Code of the
Philippines (BP 68); and
b) Ensure an effective and efficient
rehabilitation of liquidation of
debtors as embodied in the Financial
Rehabilitation and Insolvency Act
(FRIA) of 2010 or Republic Act No.
10142 which was lapsed34 into law on
July 19, 2010.
11.
Empowerment of Filipino
consumers through strong consumer protection
mechanisms and financial literacy or education
programs.
a) Promote greater financial literacy of
the population, including those in
the countryside and OFW-rich areas
abroad by encouraging the participation
of non-government and private sector
organizations in the delivery of financial
education programs; and
b) Strengthen consumer protection by
improving the implementation of
existing consumer protection laws and
regulations on transparency, disclosure,
consumer assistance and redress or
grievance mechanisms.
Op.cit.
193
Attachment 1
Selected Financial Stability Indicators in ASEAN-5
Country
Consolidated Capital Adequacy

Ratio (CAR)
Non-performing Loan (NPL)

Ratio of Commercial Banks
8.91/
3.21/
Indonesia
Malaysia
Philippines
Singapore
Thailand
14.4
16.03/
16.71/
16.52/
Source: Asian Regional Integration Center, IMF and Central Bank websites
1/
May 2010; 2/December 2009; 3/As of March 2010; 4/June 2010
1.91/
3.34/
4.4
2.32/
Attachment 2
Average Income, Expenditure, Saving and Saving Rate of Families, at Current Prices by Region: 2003 and 2006
Region
Income
2003 (in billions)

Expenditure Saving
2006 (in billions)

Expenditure Saving
Saving Rate
Income
Philippines
NCR
148
124
24
16.2
173
147
26
15.0
266
218
48
18.1
311
258
53
17.0
CAR
152
126
26
17.1
192
151
42
21.9
124
102
22
17.7
142
124
19
13.4
II
126
99
27
21.4
143
118
25
17.5
III
IV-A
IV-B
V
VI
VII
VIII
IX
X
XI
XII
XIII
ARMM
160
184
103
109
111
121
103
93
109
117
113
90
83
138
158
84
94
98
102
84
75
91
100
85
78
67
22
26
19
15
14
19
19
18
18
18
28
12
16
13.8
14.1
18.4
13.8
12.6
15.7
18.4
19.4
16.5
15.4
24.8
13.3
19.3
198
210
109
125
130
144
126
125
142
135
114
118
89
170
186
93
110
116
124
104
99
117
115
96
100
75
27
23
16
15
14
21
22
27
25
19
18
18
14
13.6
11.0
14.7
12.0
10.8
14.6
17.5
21.6
17.6
14.1
15.8
15.3
15.7
194
Saving Rate
Attachment 2 contd.
Regions with the Highest or Lowest Saving Rates, by FIES year
FIES Year
Highest Saving
Rate
Region
Lowest Saving
Rate
1991
1994
1997
2000
2003
2006
25.7
24.8
22.9
21.2
21.5
21.9
CAR
Eastern Visayas
Western Mindanao*
Eastern Visayas*
Cagayan Valley
CAR
10.6
9.7
9.4
13.4
12.3
10.8
Region
Western Visayas
Western Visayas
Western Visayas
Bicol**
Western Visayas
Western Visayas
Notes:
*The saving rates of CAR in 1997 and 2000 were close to the highest rate.
**The saving rate of Western Visayas is hardly differed from the lowest rate.
Source: For 1991-2003, Bersales and Mapa (2006); for 2006, FIES data.
Average Income, Expenditure, Saving and Saving Rate of Families at Current Prices by Income Decile: 2006 and 2009
2006 (in billion pesos)

Philippines
First Decile
Second Decile
Third Decile
Fourth Decile
Fifth Decile
Sixth Decile
Seventh Decile
Eighth Decile
Ninth Decile
Tenth Decile
Bottom 30%
Upper 70%
2009 (in billion pesos)
Income
173
32
51
65
81
100
124
156
205
292
622
Expenditure
147
35
52
66
79
95
116
143
181
244
460
Saving
26
-3
-2
(*)
2
5
8
13
24
47
162
Saving Rate
14.8
-8.9
-3.4
-0.9
2.1
4.6
6.1
8.5
11.5
16.1
26.1
Income
206
41
64
81
100
122
150
189
244
342
728
Expenditure
176
43
66
81
97
116
139
171
216
288
535
Saving
31
-3
-2
(*)
3
6
11
18
28
53
193
Saving Rate
14.9
-6.7
-3.4
0.0
2.7
4.4
7.2
9.2
11.5
15.7
26.5
49
226
51
188
-2
38
-0.0
0.2
62
268
64
224
-2
44
-0.0
0.2
Source: National Statistics Office, 2009 FIES Preliminary Results

Attachment 3
Philippine Banking System, Deposit Mix
2010
PESO DEPOSITS
End-June
2009
2010
2009
FOREIGN CURRENCY DEPOSITS

End-June
2010
2009
2010
2009
3,609.2
1,015.6
3,263.3
999.9
100.0%
28.1%
100.0%
30.6%
1,144.8
672.9
1,055.5
649.2
100.0%
58.8%
100.0%
61.5%
2,593.5
2,263.3
71.9%
69.4%
472.0
406.2
41.2%
38.5%
Deposit Liabilities
Total
Time Deposits
Demand, NOW &
Savings Deposits
Source: Bangko Sentral ng Pilipinas
195
196
07
Good
Governance
and the Rule
of Law
Good Governance and the Rule of Law
197
Good Governance and

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

best created islands of
good governance in certain
sectors, some national
agencies, and some local
government units. But these
have failed to translate into
improvements in the countrys
overall state of governance,
nor have any significant social
impact.
The countrys recent history has been plagued

by questions of legitimacy, accountability, and
allegations of grand corruption. The 1986
EDSA revolution established a framework
of constitutional democracy and civil rights,
but deep social and political divisions have
persisted alongside problems of inefficiency
and corruption in government. The failure
to address governance issues has given rise
in recent years to marked political instability,
bordering on threats to constitutional
government, and a deepening cynicism and
mistrust of formal political institutions.
Political instability and widespread corruption
have also had serious repercussions on the
investment climate. The successful and
credible transfer of power in 2010 through
the prescribed constitutional processes and
a renewed public concern for government
accountability and transparency are important
first steps in restoring the credibility of the
nations institutions. But they are not enough.
1
Efforts until now have at best created

islands of good governance1 in
certain sectors, some national agencies,
and LGUs. But these have failed to
translate into improvements in the
countrys overall state of governance,
nor have any significant social impact.
These islands are easily swamped
by high tides of impunity and
venality. The overall miserable state of
governance in the country was attested
by different measures. The countrys
percentile rank in the six dimensions
of governance in the Worldwide
Governance Indicators (WGI) until
2009 remained mostly within the
lower half. The worst performance was
in political stability, as the conduct
and results of previous national
elections were sharply contested
amid allegations of corruption.
The result was an alienation of the
people from their government and
an open invitation to several extraconstitutional attempts to seize power.
A phrase used by a former World Bank country director in an article of September 5, 2007.
198
Figure 7.1. Worldwide Governance Indicators
Source: World Bank (http://info.worldbank.org/governance/wgi/sc_chart.asp)
The country also failed to hurdle

major
indicators
under
the
Millennium Challenge Corporation
(MCC), which relies on the WGI
for measuring policy improvements
in three dimensions of governance.2
This picture is repeated in the Global
Competitiveness Index (GCI), where
the country was ranked 87th in 20092010 and 85th in 2010-2011.3 Even
though the countrys competitiveness
slightly improved from last year,
the country continues to lag behind
most Southeast Asian neighbors. The
Global Competitiveness Index Report
for 2010-2011 listed corruption and
inefficient government bureaucracy
as the top two most problematic
factors for doing business in the
Philippines. The countrys corruption

problem is again highlighted in the 2010
Corruption Perception Index where the
Philippines ranked below 75 percent
of all the countries surveyed (134th out
of 178 countries)4 and last among the
ASEAN-6. The countrys standing from
all these measures signals the need for
more substantial actions to strengthen
governance in the country. This only
shows that good governance cannot be
achieved partially or piecemeal, but must
be attained decisively and systematically.
Political instability, corruption, and weak
rule of law have had severe negative effects
on investment,5 which partly explains the
countrys low rate of capital formation. Public
investment is stymied when corruption
The MCC is a bilateral grant program of the US. Eligibility criteria include 17 different governance measures, among
which, however, the control of corruption is the only hard or strictly binding condition. When the Philippines
transited from the low-income to lower-middle-income category in 2010, it fell below the threshold of the corruption
indicator appropriate for the new peer group, with a 26th percentile ranking.
3
The Global Competitiveness Report 2010-2011 (World Economic Forum)
4
The Corruption Perception Index is a composite Report prepared by Transparency International which measures the
perceived level of public sector corruption in 178 countries and territories based on 13 expert and business surveys.
5
Philippines: Critical Development Constraints (ADB)
199
Cumbersome government
procedures slow down the
delivery of public service and
increase transaction costs. The
same arduous government
processes also provide the
venues for corruption, given
the natural tendency to avoid
the bureaucratic red tape.
in revenue-collection efforts deprives the

government of needed funds. Overpricing
and funds-diversion in spending distort
priorities and wastes public resources. But
even private investment is affected; first, by
the uncertainty of administrations whose
legitimacy is questioned, and second, by
the prospect and reality of biased rules and
extortive practices, which raise the costs
of doing business and discourage new
business entrants and contract-bidders from
providing real competition. In the end, the
resulting poor growth and fiscal inability
to support social programs severely impair
poverty-reduction programs. Corruption and
lack of transparency are major constraints to
the achievement of the MDGs.6 To say that
corruption and poor governance abet and
worsen poverty is no exaggeration. Kung
walang corrupt, walang mahirap.
Figure 7.2. CES Occupancy
Public Service Delivery

The delivery of public services must
be prompt and adequate to citizens
needs. Cumbersome government
procedures slow down the delivery of
public service and increase transaction
costs. The same arduous government
processes also provide the venues for
corruption, given the natural tendency
to avoid the bureaucratic red tape.
The Anti-Red Tape Act (ARTA)
of 2007 already requires national
departments, agencies, and LGUs to
set up their respective service standards
known as Citizens Charters (CCs), to
simplify procedures, and to facilitate
transactions. As of August 30, 2010,
74 percent of agencies (4,253 of 5,716)
nationwide had complied with the
drafting and promulgation of CCs. As
a means to develop citizens awareness
of their rights vis--vis government
and encouraging citizens criticisms
when aggrieved, this is one step
towards cutting red tape and reducing
corruption. However, This is unlikely to
be sufficient.
Impersonal online services can reduce
the face-to-face transactions that
typically provide the occasion for
extortion and corruption, and some
agencies have provided such services.
These include the Land Transportation
Office (LTO), the Securities and
Exchange Commission (SEC), the
Bureau of Internal Revenue (BIR), and
the Government Service Insurance
System (GSIS). The government has
also selected 120 LGUs to become
Sparkplugs for Governance and
Economic Development by, among
others, streamlining their business
permit and licensing system to reduce
opportunities for bribery and other
forms of corruption.7 These reforms
need to be harmonized and well-
Source: CESB
6
7
200
Philippine Progress Report on the Millennium Development Goals 2010

Philippines Policy Improvement Process Plan of Action 2010
established, however, for significant

results to be achieved. Moreover, in the
Ease of Doing Business index, the
Philippines remained in the bottom
fifth of the economies surveyed (rank
148 out of 183 economies surveyed).8
Various initiatives have also been
undertaken to provide a more
competitive compensation system
in the government to improve the
economic wellbeing of civil servants
and raise their morale, with a view
to better service provision. The pay
of government personnel covered
by the Compensation and Position
Classification under RA 6758, as
amended, was adjusted in 2007 and
2008 through an additional 10 percent
increase in basic monthly salaries.
To rationalize the Government
Compensation
and
Position
Classification
System,
a
Joint
Resolution of Congress was passed
in 2009 increasing the salaries of
government workers by an average of
50 percent over four years. Increases
in compensation were implemented to
continually uplift the living standards
and welfare of government employees.
The new pay package aims to attract
more qualified and upright people
to work for government, address
the compensation gap between
the public and private sectors, and
encourage qualified incumbents to
stay longer in public service. It puts
a premium on positions with more
complex and difficult tasks and greater
responsibilities. It also eliminates
the overlapping of salaries between
consecutive salary grades. Meanwhile,
this effort is always threatened and
undermined by legislation seeking to
provide higher pay for specific agencies.
The integrity of the civil service has been

perennially undermined by appointments
based on political accommodation rather
than on merit and fitness, a phenomenon that
is partly an offshoot of the presidents vast
powers of appointment and discretion. This
is true across the board but particularly in
third-level positions and in the appointment
of teachers, police, and treasurers. The
eligibility requirement is only weakly
enforced in the career executive service, in
which 47 percent of the occupied positions
are held by noneligible individuals.
Local governments confront rising public
expectations regarding the delivery of services.
Despite almost two decades of implementation
of the 1991 Local Government Code (LGC),
however, local governments still face various
challenges in the exercise of their devolved
service delivery functions. Foremost among
these is the raising of sufficient funds for
local development. A majority of the local
governments still lack the ability or the
will to raise adequate local revenues. LGUs
have become unduly dependent on Internal
Revenue Allotment (IRA) transfers from
the national government and have failed to
manage their financial resources effectively
and sustainably. These persistent issues are
a significant hurdle in the realization of
the goals of local autonomy and devolution
through good local governance and effective
service delivery. Owing to loopholes in the
LGC, as well as the lack of capacities of local
governments in assuming devolved functions,
national government agencies (NGAs)
continue to deliver certain services despite
the transfer of these services to the local
governments. The confused and overlapping
performance of functions compromises the
lines of accountability for local services.
The size and scope of the bureaucracy has
expanded through time and has led to
overlaps and redundancies in functions and
Doing Business 2011 (IFC and WB); The Ease of Doing Business index measures business regulation relevant to the life
of a domestic small to medium-sized firm: starting a business; dealing with construction permits; employing workers;
registering property; getting credit; protecting investors; paying taxes; trading across borders; enforcing contracts; and
closing a business. The Philippine ranking is based on the experience of firms dealing with Manila City Government
on three dimensions starting a business, dealing with construction permits, and registering property. The 2011 edition
refers to the period June 2009 to May 2010.
201
Table 7.1. Status of Submission and Evaluation of Rationalization Plans: as of 31 December 2010
No. of
Organizations
No. of RPs
Approved
No. of RPs
Returned for
Revision
No. of
RPs Being
Evaluated
No. of RPs Not

Yet Submitted
134
25
57
216
47
17
21
85
7
3
0
10
71
4
17
92
9
1
19
29
Departments/Agencies
OEOs
GOCCs
Total
Source: DBM
operations of departments/agencies. The
executive branch pursued a rationalization
program in 2004, but this remains
uncompleted. As of December 31, 2010,
177 (82%) of the 216 departments/agencies,
other executive offices (OEOs) and GOCCs
have submitted their Rationalization Plans
(RPs) to the DBM, of which 85 have been
approved. The abolition of 15,485 regular,
contractual, or casual positions has resulted in
savings in Personal Services (PS) amounting
to PhP2.39 billion annually, while on the
other hand incentives and terminal-leave
benefits paid to those retiring or separated
from government service amounted to
PhP1.396 billion.
As long as staffing in some agencies is
excessive and redundant, and the quality
of existing personnel is poor, there will be
political resistance and public cynicism
about across-the-board attempts to improve
the pay and morale of the civil service. On
the other hand, RPs need to consider the
real needs of front-line agencies especially
in promoting the rule of law. While a scrap
and build policy is sensible for addressing
the internal structure, it cannot address the
emerging personnel resource gaps to respond
to increasing population and demand for
higher-quality service delivery.
Integrity
The law assigns the Office of the Ombudsman
(OMB) a pivotal role in ensuring integrity
and deterring corruption in the public
sector. The threat of prosecution and

conviction of public wrong-doers is a
potent sanction against corruption. This
will not be regarded as a credible threat
without a reliable and effective OMB
that demonstrates credible leadership
and publicly measurable success in a
sustained anticorruption effort.
The OMB has far spearheaded the
National Anticorruption Plan of Action
(NACPA), the collective response of
different sectors to the problem of
corruption,integrating and strengthening
the anticorruption initiatives and
commitments of the OMB itself, other
constitutional bodies, the three branches
of government, LGUs, civil society,
the business sector, non-government
professional groups, and the foreign
donor community. Its five programme
components consist of: (a) public policy
advocacy; (b) convergence development
and management; (c) performance
measurement and management; (d)
knowledge management and capacitybuilding; and (e) resource mobilization.
The NACPA is implemented through
the Multi-Sectoral Anticorruption
Council (MSACC), a multisectoral
mechanism chaired by the OMB.9
Priority NACPA programmes and
projects include enhancing the
framework of legislation and local
policies against corruption, the adoption
and customization of the APEC Code
9
These include, among others, the Concerned Citizens of Abra for Good Government, Inc., the Northern Luzon Coalition
for Good Governance, the Evelio B. Javier Foundation, Inc., Moral Recovery Officers Foundation, Inc., the Federation of
Filipino Chinese Chamber of Commerce and Industry, and the Employers Confederation of the Philippines.
202
of Conduct for Business, an integrity

development review of LGUs, capacitybuilding
on
UNCAC-compliant
investigative techniques, anticorruption
planning workshops for professional
groups, including accountants and
engineers, and the establishment of
the Centre for Asian Integrity, an
anticorruption learning center.
Such important efforts notwithstanding,
the bureaucracys vulnerability to
corruption appears only to have
increased. The Commission on
Audit (COA) in 2009 noted a rising
incidence of irregular, illegal, wasteful
and anomalous disbursements of huge
amounts of public funds and disposal
of public property that it reinstituted
the selective preaudit on government
transactions.10 Public clamor has also
been loud and insistent for a speedy
resolution and closure in a growing
number of highly-visible cases of
grand corruption involving high-level
politicians and bureaucrats. This public
sentiment has had political and electoral
repercussions and cannot be ignored.
The deterioration is also evident in
cross-country comparisons. Of six
governance dimensions in the WGI,
the countrys score in control of
corruption has consistently been
the second lowest, next only to
political instability. In Transparency
Internationals Corruption Perception
Index, the Philippines ranked 134
out of 178 countries in 2010. Investors
have pointed to corruption as the most
problematic factor for doing business.11
In the 2008 Global Integrity Report,
the Philippines received a moderate overall

ranking, gaining a score of 71 points in its
Integrity Indicator Scorecard, only four
points better than its 2007 standing. Its
lowest scores were in Elections (59), Civil
Society, Public Information and Media (68),
and Government Accountability (70).12
A massive rethinking and renewal of effort
by all agencies involved in the fight against
corruption is clearly needed if any real
progress is to be made in this aspect.
Rule of Law
The Commission on Audit

in 2009 noted a rising
incidence of irregular, illegal,
wasteful and anomalous
disbursements of huge
amounts of public funds and
disposal of public property.
Investors have pointed
to corruption as the most
problematic factor for doing
business in the Philippines.
Justice is no less important a public good

than basic education and primary health
care. The framework of the rule of law serves
as the foundation for a democratic society.
Its effect on economic performance, social
development and integrity infrastructure
of the country is pervasive. Otherwise
stated, the rule of law is a cornerstone to
the improvement of public health, the
safeguarding of citizens participation, of
security and of the fight against poverty13
(World Justice Project). According to the
World Justice Project Rule of Law Index
2010, however, the Philippines ranked last
or close to the bottom among seven indexed
Asian countries. The country ranked last in
such factors such as order and security,
fundamental rights, and effective criminal
justice; it was second to the last in the
absence of corruption, clear, publicized
and stable laws, regulatory enforcement,
and access to civil justice.14
The weak rule of law and an unresponsive
justice
system
hinder
economic
development.
Delays
in
resolving
corruption cases, the high cost of litigation,
10
COA Circular No. 2009-002

Global Competitiveness Report 2010-2011 (World Economic Forum)
12
The Global Integrity Report is a tool for understanding governance and anti-corruption mechanisms at the national
level. It is generated by local researchers and journalists. The scorecard contains various points that extensively measure the
effectiveness of local policies and implementations.
13
World Justice Project Rule of Law Index 2010
14
Even the Philippines best score in open government, which is fifth of seven, was unremarkable and below expectations
of one of the oldest democracies in the region.
11
203
Delays in resolving corruption

cases, the high cost of litigation,
and the long and arduous legal
process have resulted in the
diminution of public trust and
confidence in government and
the justice system.
The government also partners

with CSOs in promoting
transparency, accountability
and public participation in the
preparation, authorization,
execution and monitoring of
the national budget. These
efforts must be sustained and,
in some cases, deepened.
and the long and arduous legal process

have resulted in the diminution of public
trust and confidence in government and
the justice system. Another factor affecting
investors confidence pertains to disputes
arising from unmet contractual obligations
and the proper enforcement of property
rights, including those of foreigners.15 Major
reasons for the lack of responsiveness of the
justice system include its fragmentation,
the presence of archaic laws and rules, and
low funding support.
The first order of business must be to address
resource constraints. High vacancy rates
persist in law enforcement, prosecution,
public defense despite efforts to increase
compensation. Low salaries coupled with
unrealistic qualification standards result
in funded but unfilled positions. There is
frequently no recourse but to hire casual
and contractual employees who cannot be
held accountable and do not benefit from
the continuous training programs which are
required and essential. Huge case backlogs
and high case loads are direct consequences.
Moreover facilities for justice-sector agencies
and the courts are dispersed, inadequately
staffed and supplied, and beset at times by
cumbersome rules. Reforms in organization
and logistics chains are needed to strengthen
the support to regional or local offices,
agencies, and courts, where the first line of
defence is drawn.
In an attempt to reduce the load of the
courts, the Alternative Dispute Resolution
(ADR) Act (RA 9285) was passed in 2004.
However, there is a need to continuously
encourage and actively promote the use of
ADR for it to live up to its promise as an
important means to achieve speedy and
efficient resolution of disputes.16
Citizens Participation
Citizens participation has been one of
the strengths of Philippine governance.
Partnerships between government and
CSOs facilitate the promotion of good
governance. The OMB collaborates
with the Concerned Citizens of Abra
for Good Governance and Government
Watch for anticorruption efforts in
government procurement and project
monitoring; and with the Society
of Jesus for the conduct of integrity
seminars. The government also partners
with CSOs in promoting transparency,
accountability and public participation
in the preparation, authorization,
execution and monitoring of the
national budget. These efforts must be
sustained and, in some cases, deepened.
It is also noted that while citizens
participation in local development
councils and special bodies is mandated,
CSOs claim that most of these are
either inoperative or nominal.17
While the country is famous for
the large number of CSOs that
could, in principle, play a leading
role
in
anticorruption
efforts,
such organizations themselves are
heterogeneous and face various
hindrances that affect and challenge
their
development
effectiveness.
Internal challenges include capacitybuilding, shortage of funds for CSOs
continuous operation and sustainability
of programs, ensuring priority and
reach of sectors most in need. There
is also a need for lifestyle check as
well as drawing lessons on the best
practices where other CSOs can learn
from. External challenges include:
15
The country, for instance, has been in the US watch list of countries that inadequately protect intellectual property
rights, a fact that has potential implications for the continued favorable treatment of Philippine exports to the US under
the Generalized System of Preferences (Arangkada Philippines 2010: A Business Perspective, Joint Foreign Chamber
of the Philippines, published by The American Chamber of Commerce of the Philippines, December 2010).
16
Section 2, RA 9285
17
Citizens Roadmap for Poverty Reduction and Achieving the MDGs, 2010 (CODE-NGO, FDC and UNDP)
204
(a) conflicts of policies and laws with

actual practice; (b) weak human rights
protection and culture of impunity; (c)
intervention of some local government
units in CSO affairs; and (d) the
threatening presence of military that
deters peoples participation to their
own programs and CSO initiatives.18
Although citizens have a legal right
of access to communication, there is
no established legal route for citizens
to petition to obtain government
records. The actual practice of
many citizens testifies to the highly
uneven willingness or preparedness
of government offices to provide
information as well as the poor quality
of the information provided, if at all.
This is also seen from the countrys low
score for the 2008 Global Integrity
Report under the category of Civil
Society, Public Information and Media
category, which even dropped one
point from the 2007 score of 69. The
proposed Freedom of Information Act
is an important step towards addressing
this problem.
Political Processes and

Systems
Various scholars and other impartial
observers19 have long observed that
the problems of lack of accountability
and corruption in governance are
ultimately traceable to the countrys
historically evolved political processes
and traditions. These include: (a) the
dominance of elite interests both local
and national in politics and political
contests; (b) the absence of political
parties that exact accountability
from individual politicians based on
principled party platforms; (c) the
weakness and subservience of the
bureaucracy relative to the political class; (d)

the unprecedented power and discretion of
the executive branch that encourages both
patronage politics and grand corruption;
and (e) the corruption of elections through
patronage and money politics. As the
President stated in his Social Contract, it
would appear that the country has no vision
of governance beyond political survival and
self-enrichment, which is why the country
is in need of transformational change.
The problems of lack of

accountability and corruption
in governance are ultimately
traceable to the countrys
historically evolved political
processes and traditions.
But while constitutional changes to institute

crucial political and economic reforms may
be in order, it is inadvisable to do so in an
atmosphere of public mistrust and suspicion
that such changes will be self-serving to the
incumbents. As the government performs
creditably, the matter of constitutional
reform may be taken up. Even short of
constitutional change, however, important
reforms should be put in place by statute. A
first priority must be to restore and maintain
the record of peaceful, efficient, and credible
popular elections, which already happened
in 2010. Legislation to encourage the
formation of stable political parties and
organizations may also be considered,
including campaign-finance reforms and
stricter minimum formal numerical and
reportorial requirements for political
accreditation. Reforms in the disbursement
of discretionary funds of both Congress and
the executive can help weaken the culture of
patronage. A reform of the internal revenue
allotment (IRA) scheme which is currently
a very passive and automatic mechanism,
to elicit greater local revenue effort among
local governments will also help reduce
fiscal mendicancy among local leaders, and
make them more accountable to their own
constituents instead.
18
Report of the Philippine Open Forum on CSO Development Effectiveness, August 2010
For a recent example of such an assessment, see Philippines Country Report (2009) Gtersloh: Bertelsmann Stiftung.
See also B. Anderson (1988) Cacique Democracy in the Philippines, New Left Review 3-31; P. Hutchcroft (1995) Booty
capitalism. Ateneo de Manila Press; and E. de Dios (2007) Local Politics, Local Economy, in A. Balisacan and H. Hill.
The Dynamics of Regional Development. Edward Elgar.
19
205
Gender Roles in Governance

Structures
The fact that women remain politically
marginalized is both an indicator of their
failure to advance as well as a reason for
it (UNDP 2000). For the ability to claim
entitlements and exercise rights is itself based
on gender roles and relations of unequal
power. Womens gendered interests (for
example health needs, the raising of children,
and the prevention of domestic violence)
cannot be interpreted generically as the
community or nations common good but
as issues arising from the specific inequality
of power between men and women (Sever
2005).20 These needs and deprivations cannot
be addressed therefore without redressing
gender inequality itself.
The Philippines has made some progress in
reducing gender inequality, particularly with
the passage of RA 7192 or the Women in
Nation Building Act of 1992, which set forth
the indispensable role of women in all aspects
of national development and asserted the
fundamental equality of women and men.
With the enactment of the Magna Carta
of Women (RA 9710) in August 2009, the
gender and development (GAD) budget
became a key institutional mechanism to
mainstream gender and promote womens
human rights, and eliminate gender
discrimination. The same law requires
monitoring and evaluation of GAD
programs through annual audit by COA.
Major progress has been slow, however, as
seen in more recent international gender
assessments. The Gender Development
Index in the 2009 Human Development
Report of the UNDP and the Country
Gender Assessment of the ADB in 2008
showed similar findings that the Philippines
workforce continues to be dominated by
males, despite increasing numbers of women
having higher educational attainment.
Women continue to be burdened by the
debilitating impact of poverty and the
lingering economic crisis and out-migration
20
206
among women remains high, with

many in service and domestic
occupations. The challenge remains for
government to ensure that statutory
mandates relating to gender and
development concerns are observed and
implemented efficiently and effectively
by all concerned sectors.
This assessment of governance and the
rule of law easily yields a wide-ranging
and disparate set of issues and concerns.
How these challenges are to be met
and addressed requires a governance
framework and a plan of action for the
rule of law.
Strategic Framework
In response to these challenges, this
Plan aims to promote effective and
honest governance to create an enabling
environment for citizens and the private
sector to reach their full potential.
Effective and honest governance will
be promoted and practised through the
following four strategies:
1. Ensure high-quality, efficient,
transparent, accountable, financially
and
physically
accessible
and
nondiscriminatory delivery of public
service;
2. Curb both bureaucratic and political
corruption;
3. Strengthen the rule of law; and
4. Enhance
information
governance.
citizens access
and participation
The delivery of public goods

and services essential to citizens
development will be enhanced in terms
of physical and economic accessibility,
availability, acceptability, quality and
safety, and without discrimination.
This will be done by: (a) integrating
The Gender, Poverty, Governance Nexus: Key issues and current debates, Charlie Sever, BRIDGE, September 2005
to
in
services according to the needs of

the citizens; (b) professionalizing
the bureaucracy as duty-bearers;
(c) enhancing the transparency of
government transactions; (d) making
government focus on its core functions;
(e) standardizing the quality of public
service delivery; (f ) devising a common
measurement tool and methodology
to solicit citizens feedback; and (g)
improving the financial management
system in government.
Corruption will be curbed to ensure
that resources are effectively and
efficiently used for priority public
goods and services. To achieve this, the
government will: (a) intensify efforts
to detect and prevent corruption; (b)
resolve pending corruption cases with
dispatch; (c) adopt a comprehensive
anticorruption program; (d) enhance
the legal and policy framework for
corruption prevention; (e) strengthen
integrity mechanisms and control
structures; (f ) enhance partnership
structures and mechanisms and
international linkages; and (g) conduct
anticorruption advocacy campaigns.
The rule of law shall be reinforced
to ensure the impartial protection of
rights and enforcement of obligations.
Policies will be instituted to curb
or discourage influence-peddling.
Disputes must be impartially resolved
based on facts and existing laws,
free from influence or pressure. The
strict and impartial enforcement of
laws, rules and public policies will
safeguard the rights of the citizens
and will ensure that public interest
will be upheld at all times. A swift
and efficient system of resolving cases
involving issues of property rights
and contractual obligations shall be
pursued to enhance the business and
investment climate.
Citizens access to information and
participation in governance will
be enhanced by creating space for
free, active, voluntary and genuine
participation in policy making, decision

making and development planning. Towards
this end, efforts will be focused on: (a)
pursuing the passage of the Freedom of
Information Bill; (b) ensuring open and
transparent search process in the selection
of appointees in independent bodies; (c)
promoting and implementing multisectoral
NACPA programmes and projects; and (d)
ensuring budget transparency.
There will be an accessible and transparent
mechanism for redress and accountability,
including fair, prompt and immediate
investigation of violation of right to equal
access to public service and equal access to
justice.
Ensure High-Quality, Effective,

Efficient, Transparent,
Accountable, Economically
and Physically Accessible and
Nondiscriminatory Delivery of
Public Service
1. Improve Public Services Access and
Delivery through Connected Government
Citizens and their needs shall be the
focus of government, particularly the
delivery of public services and the publics
other transactions with government (e.g.,
applications for birth certificates, passports,
police clearances, and tax-filing).
Agencies need to overcome bureaucratic
turfing and fragmentation to deliver public
services more efficiently, quickly, and flexibly.
Efforts must go beyond the past desultory
and sporadic efforts at one-stop shops for
certain transactions and must give way to a
systematic horizontal integration of related
services based on a studied assessments of
the flow of citizens needs.
Government services should cluster around
the business life-cycle (from start up to closing
of business) and the life-cycle of citizens (from
birth to death), and establish corresponding
single-window service channels.
Government processes should be reviewed,
coordinated, and simplified in order to
207
reduce processing time and to make it easier

for citizens to transact with government.
To achieve this, government should use
information and communications technology
(ICT) to the fullest, to facilitate electronic
access to public services. Virtual singlewindows can be provided via the Internet
by interconnecting online public services of
government. Such virtual coordination must
be underpinned, however, by real coordination,
information-sharing, and cross-checking
among various agencies of government as
citizens complete their transactions.
This should lead to the elimination of
redundant and repetitive information
requirements in government forms, among
others.
2. Professionalize the Bureaucracy to
become Duty-Bearers
Competence,
professionalism,
and
integrity in the civil service can be raised
if appointments are depoliticized, and a
purposive, program-based and integrated
professional development for career
executives and personnel is implemented.
This is in line with the vision of public
service values, and thrust of the Philippine
government, as captured in the phrase
Gawing lingkod-bayani ang bawat kawani.
a) Formulate a Strategic and Integrated HRD
Program for the Philippine bureaucracy
from entry to exit from government service
(based on Competency Needs Assessment).
The government should devise a more
comprehensive, programmatic
and
integrated HRD program to raise the
level of professionalism, competence,
commitment to service, and integrity
of
government
personnel.
This
medium-term strategy should include
an Induction Program at entry level,
Workplace Basics for the rank and file,
Functional Competency Development
for specialists, Supervisory Development
for supervisors, Executive Development
and Strategic Management for career
executives, Governance and Public
Leadership for senior officials. To
ensure progression and full coverage,
a ladderized HRD program should be
208
established with certification and

links to promotion. A percentage
of the government budget should
ideally be set aside for the purpose.
This HRD program may be
implemented through the Civil
Service Academy. Human-rights
education shall also be integrated in
the HRD program at all levels.
b) Pursue the passage of the Career
Executive System (CES) bill. The
CES bill seeks to strengthen
professionalism in the executive
and managerial levels and in
highly specialized and technical
positions in the government. It
identifies career and noncareer
positions and provides transparent
performance-based
promotions
and appointments, balancing the
exercise of presidential appointing
power with the preservation of
meritocracy in the civil service.
Its aim is a unified bureaucracy
in which the first, second and
third levels are under the Civil
Service Commission as the central
personnel agency.
c) Align
individual
performance
with organizational performance.
Organizational and individual
performance goals must be aligned.
Employees should appreciate the
significance of their contribution
to their organizations performance
before they find satisfaction in
what they do. Thus, the linkage and
government-wide implementation
of the Organizational Performance
Indicators Framework (OPIF) and
the Performance Management
System (PMS) need to be
pursued. This seeks to align the
programs, projects and activities
of the departments or agencies
with the desired objectives or
goals of the government, and
the individual performance goals
with the organizations strategic
vision and goals. This will also
ensure organizational effectiveness
by
cascading
institutional
accountabilities to the various levels
of the organizations hierarchy, and
have a performance management
linked to rewards and incentives,
among others.
The PMS of the government
institutions shall be reviewed
and reformulated to establish
clear
performance
objectives
and standards and to promote a
culture where the performance and
contribution of the employees are
recognized and rewarded accurately
and fairly. The Balanced Scorecard
is one PMS platform or approach
that has been proven to create an
effective alignment.
d) Pursue the effective implementation
of the Magna Carta of Women,
particularly the targeting of 50 percent
of women in third level positions. All
concerned agencies of government
should ensure that there shall be
an incremental increase in the
recruitment and training of women
in the police force, forensics and
medico-legal, legal services, and
social work services.
3. Enhance the Transparency of
Government-to-Business and
Government-to-Citizen Transactions
a) Enforce full compliance with the
provisions of the Anti-Red Tape Act
including the formulation, adoption
and effective implementation of
Citizens Charters in all government
agencies and LGUs. In line with the
Anti-Red Tape Act (ARTA) of
2007 (RA 9485), all government
entities with frontline services
shall have developed their Citizens
Charter which serve as a service
charter or pledge that describes
the step-by-step procedure for
availing of a particular service, and
the guaranteed performance level
that the public may expect for
that service. Information such as
procedures to avail of the service,
responsible person/office, processing

time,
documentary
requirements,
applicable fees or charges, and procedures
for filing complaints are reflected in
the CC. Despite the September 2009
deadline set by ARTA, more than a
thousand entities, particularly local
governments, still have to comply with
the law. ARTA mandates the review
and reengineering of frontline services
to cut red tape and enhance efficiency,
transparency, and accountability in the
delivery of public services. It requires
the formulation and publication of
CCs and the establishment of Public
Assistance Desks to receive feedback and
handle complaints from the transacting
public. In order to remain responsive
to the need of citizens, agencies must
continually improve their systems and
standards through the publication and
implementation of Citizens Charters,
Citizens Feedback Surveys, and
Transactions Reengineering.
b) Create a single website/portal for
government information. To facilitate
access to government information and
services, a common website/portal should
be established where citizens can obtain
vital information and services from
different government agencies. This portal
should also serve as a channel for citizens
to report incidents or provide feedback on
the performance of government agencies,
including complaints against erring
officials and employees.
LGUs must develop and expand the
e-governance services available on
their websites, from providing general
information to discharging routine
transactions, and encourage transparency
by making information on budgets and
procurement available. A common basic
template should be followed by all LGUs
so that a minimum set of common
information and services is provided on
their portals.
The government will set up a
communication
plan.
Through
faster communications technology,
209
bureaucracies must be able to adopt and

evolve into listening and communicating
organizations. Press officers and official
spokespersons will be adequately
equipped to counter negative or malicious
information and to constructively
engage media partners. A simple yet
comprehensive communication plan is
a cornerstone of getting the message of
governance across.
c) Pursue the passage of a Freedom of
Information Act. A law on freedom
of information is a cornerstone
of transparent and accountable
governance. Its intent is to provide
the citizenry, especially media, with
access to information pertaining to
all transactions and communications
that are of legitimate public interest.
Its existence should encourage probity
and prudence in all national and local
government negotiations relating to
loans, treaties, service contracts, and
similar transactions. It also seeks to
protect the civil rights of law-abiding
citizens and organizations against
potential abuses of governments police
and intelligence-gathering powers
(already partly affirmed through the
writ of amparo). A future law must
stipulate how these aims are to be
achieved maximally while recognizing
the states legitimate right to reserve
information affecting national security.
210
need to complete a strategic review

of their respective operations and
organization and implement their
RP upon approval of the DBM.
b) Institute zero-based budgeting (ZBB)
in program evaluation. To attain
the administrations commitment
to lift the nation from poverty,
instituting ZBB approach to
program evaluation is vital. The
ZBB approach involves the review
of ongoing major programs and
projects by different offices in order
to: (a) establish the continued
relevance of program objectives
given the current developments;
(b) assess whether or not the
program objectives are being
achieved; (c) ascertain alternative
or more effective and efficient
ways of achieving the objectives;
and (d) guide decision-makers on
whether or not the resources for
the programs should continue at
its present level, or be increased,
reduced or discontinued.
4. Focus Government Efforts on its Vital

Functions and Eliminate Redundancies,
and Overlaps in Functions and Operations
Under this initiative, government

shall terminate or cut back on
programs that have been inefficient
or
ineffective
in
delivering
outcomes, or withhold funding
for others pending reforms in
implementation and procurement.
More importantly, it allows the
expansion of the implementation of
the well-performing programs that
address critical gaps.
a) Complete the implementation of the

Rationalization Program (RP). The
completion of the implementation of
the RP, as mandated under EO 366, s.
2004, will be pursued to: focus efforts
on governments vital/core functions
and priority programs and projects, and
channel resources to these core public
services; and improve service delivery
by cutting red tape through systems
and organizational improvements, and
elimination of redundancies and overlaps in
functions and operations. In transforming
the Executive Branch, government offices
c) Review the extent of devolution

of services to LGUs. The extent of
power devolution as well as the
transfer of assets and resources to
local governments from national
government agencies in consonance
with the Local Government Code
shall be reviewed. The review
must yield appropriate policy
recommendations to eliminate
confusing or unnecessary overlaps
in the service-delivery functions
across levels of government.
5. Enhance and Standardize the

Quality of Public Service Delivery
to become Consistent with the
International Organization for
Standardization (ISO) Quality
Management System (QMS)
a) Adopt the ISO 9001:2008 QMS in
the delivery of priority government
services. Government processes,
systems, and operations shall be made
consistent with the ISO QMS through
the continual institutionalization
of the Government Quality
Management Program (GQMP)
in all departments and agencies
of government, spearheaded by
the GQMP. In the pursuit of this
program, the ISO 9001:2008 QMS
shall be adopted in the delivery of
priority government services.
b) Refine the Government Quality
Management Systems Standards
(GQMSS) to become consistent with
ISO 9001:2008 QMS for the use of the
different departments and agencies of
the Executive Branch. The GQMSS
consistent with ISO 9001:2008
QMS shall likewise be refined
for the use of different Executive
Branch departments and agencies.
QMS processes shall be installed
in certain critical government-tobusiness, government-to-citizens,
LGU-to-business, LGU-to-citizen,
and
government-to-government
transactions.
c) Activate Quality Class category of the
PQA for the Public Sector. The PQA
for the Public Sector (mandated per
RA 9013) provides a framework for
public service excellence. Global
benchmarks on public service
excellence like Canada, Singapore,
and even Malaysia, succeeded
in building a culture of service
excellence through the wide-scale
adoption of business excellence
models such as the PQA. The
PQA Quality Class will encourage
self-assessment vis-a-vis the PQA
performance excellence framework
and promote improvement of processes

to achieve excellence in public service
delivery. This will boost the countrys
competitiveness.
6. Citizen-Centered Government
The bottom line for government is the
welfare and satisfaction of its citizens.
Government shall devise a common
measuring tool and methodology to solicit
feedback from the citizens and determine
their requirements. A National Citizen
Satisfaction Index (NCIS) should be
developed that will serve as common
measuring tool of efficiency, effectiveness,
accessibility, integrity, transparency and
accountability of government agencies in the
delivery of public services.
7. Improve the Financial Management
System in Government
a) Develop a Government Integrated
Financial Management Information
System (GIFMIS). A vital reform
initiative is the strengthening of the
public financial management (PFM)
system. PFM is a system of rules,
procedures and practices for government
to manage its public finances. PFM
includes not only sound budgeting but
also management of public debt, assets,
and revenues, fiscal relations between
levels of government or between
government and public enterprises, and a
system of public reporting on the public
sectors financial operations.
A major undertaking will be the
development and installation of a
GIFMIS, an application that shall
automate routine financial operations
and reporting of the national
government, particularly
financial
planning and budgeting, treasury, and
accounting functions. The GIFMIS will
link budget preparation and execution
to accounting, cash management,
reporting, and auditing. Once installed,
it will enable the government to
implement improved systems for public
financial management.
211
b) Empower LGUs and promote public

accountability. Policy reforms to advance
local autonomy and decentralization shall
be pursued. Service delivery functions
have been vested in LGUs on the premise
that they would respond better to diverse
and changing local conditions, and thus
more effectively meet the needs of their
constituents. Emerging issues and needs
of LGUs related to their devolved service
delivery functions shall be continuously
identified. Proposed legislation shall
likewise be reviewed and appropriate
recommendations will be provided to
ensure that LGU needs are met and
there is no reversal of decentralization.
Efforts to enhance the capacities of
LGUs shall be intensified to improve
their ability to deliver public services.
The capacity needs of LGUs shall be
identified and appropriate interventions
provided. Knowledge management
activities, including the sharing of good
practices in local governance, shall be
undertaken to enhance informationsharing among localities and help
improve LGU performance.
c) Enhance LGU accountability mechanisms.
Improved accountability of local officials
induces responsible leadership and
ensures that efficient and responsive
services are delivered. In promoting local
government accountability, the following
strategies shall be undertaken:
Implementation of systems to
determine performance of LGUs in
terms of their state of local governance
and compliance with policies;
Public disclosure of LGU performance;
and
Institution of performance-based
LGU incentives or awards.
Curb Corruption Decisively

A comprehensive and integrated
Anticorruption
Framework
and
Program will be an essential part of the
administrations commitment to fight
corruption. This framework shall be
the anchor of the strategic objectives
identified in this section and provide
focus and direction in achieving
the vision that the administration
has committed for its people. It will
contain key result packages with the
corresponding set of anticorruption
projects
and
implementation
mechanisms to ensure success. As a
starting point, a comprehensive and
integrated anticorruption program will
be established for the prosecution of
corrupt officials, beginning with case
build-up all the way up to conviction,
including ancillary remedies (i.e.,
freezing of assets) and recovery of
property. Corrupt officials shall be
prosecuted and dismissed, with the
highest priority accorded to highprofile cases.
1. Intensify Corruption Prevention
a) Honestly reassess the progress,
priorities, and capacities of the
main anticorruption agencies. All
government agencies involved
in
anticorruption
efforts,
beginning with the Office of the
Ombudsman, need to reexamine
whether their track records match
public expectations and the scale
of the problem of corruption.
Shortfalls and inadequacies in
personnel and strategies must be
urgently addressed if any further
progress is to be made. The results
of such reassessments should be
made public in the interest of
transparency;
b) Strictly enforce and observe
anticorruption laws and policies.
These include the Anti-Graft and
Corrupt Practices Act; the AntiRed Tape Act; National Guidelines
on Internal Control System
212
(NGICS); the Procurement law

(RA 9184); mandatory provisions
of UNCAC; the Code of Conduct
and Ethical Standards for Public
Officials and Employees (RA
6713); and the Anti-Money
Laundering Act (AMLA).The
legal and policy framework for
corruption prevention will be
enhanced through compliance with
the United Nations Convention
against Corruption (UNCAC)
and other international standards.
Anticorruption advocacy campaigns
will be conducted through the
rollout of an integrated integrity
and anticorruption promotion
program. This will also include
monitoring in the implementation
of anticorruption programs, projects
and activities;
c) Strengthen
information-exchange
among all government agencies to
prevent corruption and privatepublic sector collusion.
Data
possessed by revenue agencies, line
agencies involved in contracting
(e.g., DPWH, DOTC), local
governments (residences and
business permits),and the AMLAC,
can be potentially assembled and
mined to build anticorruption
cases based on lifestyle-checks and
possibly fraudulent tax returns. The
availability of such information
serves as a powerful deterrent
against
corruption
involving
collusion between private persons
and public officials;
d) Support private sector initiatives to
police its own ranks and discourage
corrupt relations with government
agencies in revenue collection and
procurement. The Compliance and
Integrity Programs for Business
(CIPB) are an initiative of the
Joint Foreign Chambers of the
Philippines to ensure the pledge of
their members not to bribe public
officials, to report corruption,
and to embed standard corporate
practice. The private sector has also

committed to intensify its efforts
to improve corporate governance
through training of directors and
requiring compliance with higher
standards of corporate governance;
e) Implement fundamental reforms in
public procurement and in budget
releases to close off opportunities for
corruption and to promote transparency,
competition, and cost-effectiveness
through the following measures:
Roll out an enhanced Philippine
Government Electronic Procurement
System (PhilGEPS) in order to
minimize discretion and intervention
in procurement. The new PhilGEPS
features shall include: (a) a virtual
store; (b) an expanded supplier
registry; (c) an electronic payment
facility; (d) a facility for electronic
bid submissions to the virtual store;
and (e) annual procurement plans;
Expand the use of the PhilGEPS
E-Bidding system to improve
the efficiency and transparency of
government agencies procurement
activities, government contracts,
and other procurement related
electronic transactions, thereby
reducing spending on print media
advertisements;
Review the guidelines for blacklisting
unscrupulous
contractors
and
suppliers.
The
Government
Procurement Policy Board (GPPB)
shall streamline procedures and
strengthen policies to facilitate
the collection and presentation of
evidence of bid-rigging, overpricing,
and underprovision against corrupt
contractors and suppliers for
blacklisting;
Create an independent body to
review appeals filed by bidders. An
independent body, composed of
procurement and legal experts shall
be formed by the GPPB to review
213
and resolve protests and appeals filed

by participating bidders;
Prevent the diversion of unspent funds
from vacated positions by releasing PS
allotments only for filled positions,
with special attention to large serviceorganizations such as the military and
the police;
Prevent the conversion of MOOE
and CO outlays by standardizing
and disclosing MOOE and CO
requirements including those of
military camps and other facilities;
Conduct technical visits to validate the
budgetary status of programs, projects
and activities;
f ) Invite the participation and scrutiny
of CSOs and individual citizens with
respect to government performance through
institutional means and through the
provision of information. This will cover
the following measures:
Expand the pool of CSOs that serve
as observers in the bids and awards
committees (BACs) of various agencies
to ensure civil society representation;
Invite the regular participation of citizen
groups in the budget-preparation
process for the evaluation of existing
government programs and for them to
provide inputs to ZBB; and
Make available to the public the
accountability reports of all agencies,
including the DND and the AFP, on
the DBM website.
g) Empower citizens to directly and
confidentially report either exemplary
performance or corrupt practices of
employees through dedicated portals, such as
the DOFs Pera ng Bayan website (http://
perangbayan.com), which also entertains
information regarding tax evaders and
smugglers.
214
2. Speedy Resolution of Corruption

Cases, with Special Cases of Grand
Corruption
Laws and rules provide reglementary
periods to be observed in the filing
and prosecution of corruption cases.
The strict observance of these rules
will highly contribute to the speedy
resolution of corruption cases and
serve as a deterrent and a proof of
the governments sincerity in its
commitment to fight corruption.
a) Review policies and procedures on
speedy disposition of cases. Courts are
required to submit their decisions
within 90-calendar days from the
time the case was submitted for
resolution. This period excludes
litigation proper where delays are
common. Thus, it is suggested that
a review of existing laws and rules
be done to address the problem;
b) Strictly implement the reglementary
period provided for by laws and
rules for the immediate resolution of
administrative and corruption cases.
After the policies and procedures
on the speedy disposition of cases
has been reviewed and improved,
strict compliance with the periods
set forth by laws and rules must be
ensured;
c) Pursue corruption cases resolutely
based on principle and to set a
public example. Especially in wellknown cases of grand corruption,
the government shall use all
instrumentalities to ensure that
solid evidence is gathered,
prepared, and preserved so that
cases are not compromised but
rather pursued in accordance
with the full force of the law. As
a result, this may serve as serious
deterrents to future grafters;
d) Amend the COA Charter to provide

for the recovery of illegally-disbursed
public funds. The COA Charter21
amendments must solve the
problem of issuance of writ of
execution of decisions rendered
final and executory by the
Supreme Court in cases on notice
of disallowances for illegal or
irregular disbursements or notice
of charge for under collection
or underassessment of revenues
applying to natural or juridical
persons. Under the Constitution,
COA decisions are directly
appealable to the Supreme Court.
However, the COA Charter, Rules
of Procedures and other issuances
do not contain any provision on
how to execute these decisions
and collect COA disallowances
and charges from private persons
or entities. Alternatively, Supreme
Court rules of procedures in
execution of judgments on COA
appealed cases may be reviewed;
e) Nationwide implementation of the
case tracking monitoring system.
All justice sector agencies should
be interconnected through the
National Justice Information
System;
f ) Pursue the enactment of a
Whistleblower Protection Law.
A credible means to protect key
informants is urgent, particularly
when the impartiality of judicial
and law enforcement agents is in
question; and
g) Pursue the enactment of a law on
campaign finance reform regulating
campaign contributions. There
should be a law limiting campaign
contributions.
Unregulated
campaign funds often results
in the corrupting influence of
campaign contributors to an
21
elected candidate. Our election laws

impose limits on the amount and
type of campaign expenditures, and
candidates are required to report all
contributions but there is nothing that
regulates the excess contribution.
3. Adopt a comprehensive anticorruption
program
The tedious process of getting a final
resolution is a major obstacle to people
filing complaints against corruption. A
single window for filing and monitoring
corruption cases, lodged in a credible agency,
will encourage people to file complaints
against erring officials and employees, and
eventually help curtail corruption. This will
also promote the seamless coordination of
investigation, prosecution and other bodies in
the expeditious resolution of corruption cases.
a) Review rules of procedure on
administrative/civil/criminal
actions
on corruption-related cases. Due to
the relatively low conviction rate in
corruption cases, existing procedures
should be reviewed and evaluated
to determine the need for further
refinements in the procedures applicable
to corruption-related cases and make
them more effective; and
b) Review policies and procedures on case
monitoring and records management.
Existing policies and procedures
for monitoring of cases and records
management should be reviewed and, if
necessary, revised to adapt to the present
condition. Monitoring of cases from
filing up to the execution of decisions/
judgments is important to verify if
justice has been fully served.
4. Enhance the Legal and Policy
Framework for Corruption Prevention
Comply with the UNCAC on corruption
prevention and other international standards.
5. Strengthen Integrity Mechanisms and
Control Structures
P.D. No. 1445, Government Auditing Code of the Philippines.
215
Development
Strengthen the Rule of Law
b) Institute a public reporting mechanism

on adherence to anticorruption policies.
This will be achieved by creating an
independent joint NG and NGO
Committee with appropriate human
capital and financial support; and
The strict implementation of the rule

of law indicates the governments
seriousness in carrying out its
responsibilities and obligations in
a democratic environment, while
extracting from the citizens the needed
cooperation through compliance with
existing laws and public policies.
a) Expand the
Review;
Integrity
c) Execute memoranda of agreement

for partnerships in transparency and
accountability in LGUs. Parties to these
memoranda should include LGUs
themselves,
national
government
agencies and CSOs.
6. Enhance Partnership Structures and
Mechanisms and International Linkages
a) Expand CSO and private sector
participation in the Multi-Sectoral
Anticorruption Council (MSACC);
b) Strengthen interagency coordination; and
c) Comply with international and regional
commitments (e.g., UNCAC, ADBOECD
Anticorruption
Initiative
for Asia and the Pacific, APEC
Anticorruption Plan of Action).
7. Conduct anticorruption advocacy
campaigns
a) Roll-out an integrated promotion program
for integrity and against anticorruption;
b) Enhance values formation and moral
recovery for all government officials and
employees in close collaboration with CSOs;
and
c) Wage a massive educational campaign on
the law, rules, and regulations relating to
good governance.
1. Strengthen the Oversight Bodies

a) Expand OMB powers. The powers
of the OMB shall be expanded
to include examination of bank
accounts, and the establishment
of witness protection and benefits
program under the office. The
compensation and benefits for
OMB employees themselves
should likewise be enhanced,
specifically,
their
exemption
from the salary standardization
law, ranking, retirement benefits
(survivorship),
and
special
allowances for lawyers; and
b) Pursue the passage of a charter for
the Commission on Human Rights
(CHR). Enable CHR to perform
its comprehensive monitoring
function independently, which will
contribute to the strengthening
of the rule of law, government
accountability and transparency.
Examining
performance
of
the executive, legislative and
judicial, and other government
functions against international
norms and standards will lead to
reforms and changes in policies,
programs, and actions consistent
with international human rights
instruments.
2. Effective and Speedy Resolution of
Cases in Courts and Quasi-Judicial
Bodies
a) Improve investigative abilities
of law enforcement agencies. The
investigative capacity of law
enforcement units, especially the
216
NBI, needs to be raised dramatically.

A greater availability of sciencebased evidence from law enforcers
can only enhance the quality of
final judicial outcomes. This will be
attained through the establishment
of world-class forensic laboratories
in major regional centers and cities;
b) Rules for preliminary investigation
reviewed and codified. The rules on
preliminary investigation shall be
restudied and codified to consider
the expeditious resolution of cases;
c) Establish policy and guidelines in
the determination of probable cause.
The policy and guidelines on
the elements and parameters of
probable cause should be issued
based on laws and jurisprudence to
avoid the frivolous filing of cases
and to reduce the currently high
rate of dismissed cases. In this way,
courts can focus on resolving highimpact cases while avoiding delays;
d) Strictly implement the reglementary
period provided for by the rules for
the resolution of cases. Timelines in
the disposition of cases should be
defined, strictly monitored and
complied with. Delayed resolution
of cases does not only wastes
limited government resources but
also harms the interest of all parties
involved in the dispute;
e) Establish a case-monitoring system
covering the entire justice system.
A justice system infrastructure
should be established to be able
to
comprehensively
monitor
the progress of cases from one
agency to another. The system
will interconnect existing casemonitoring systems for efficient
and effective case management
such as the Warrant of Arrest
Information System (WAIS) of
the PNP; the CDIS of the NBI;
the electronic Prosecution Case
Management of the DOJ; the Judiciary

Case Management System ( JCMS) of
the Supreme Court; and the Inmate
Information System of the Bureau of
Corrections, the Board of Pardons and
Parole, and the Parole and Probation
Administration. An effective monitoring
system enforces accountability among
service providers and thus encourage
them to resolve their cases within the
timelines provided by existing rules; and
f ) Complete APJR projects on docket
decongestion and judicial systems and
procedures. The Supreme Court must
complete its APJR project on docket
decongestion and judicial systems
and procedures, e.g., the Expansion of
Court-Annexed Mediation; Expansion
of e-JOW ( Justice on Wheels Project);
diminish caseload for each Court of
Appeals (CA) Justice (Zero Backlog
Project); nationwide implementation of
the Enhanced Case Flow Management
(eCFM) System which monitors the
status of the cases to see whether
they are proceeding as scheduled; full
computerization of courts from Bangued,
Abra to Tacurong, Sultan Kudarat;
Pending integration of eCFM with
Court Administration Management
Information System (CAMIS); full
coordination of all three CMIS stations
of the CA; capacity building to enable
electronic filing; Enhancement and
expansion of the Case Management
Information System (CMIS) project.
3. Reduce the Cost of Litigation
a) Study the reduction of filing fees for cases;
and
b) Adopt a standard format of transcript of
stenographic notes (TSNs) to reduce the cost
of litigation. This reduces the discretion
of stenographers in the length of the
transcripts.
4. Avoid Law Suits Involving Government
Contracts
a) Government contracts should be consistent
with international instruments, existing
laws, and public interest. The issuance of
217
legal opinions by the Legal Staff and the

Office of the Government Corporate
Counsel of the DOJ should be free from
political interference and should be
reviewed in accordance with domestic
laws and public policies; and
b) Review and ensure that FTAs are
consistent with national laws and public
interest. These FTAs will be disseminated
through a massive information campaign.
5. Enhance the Integrity and Competence
of Justices, Judges, Court Personnel and all
other Officers of the Judiciary and QuasiJudicial Bodies
To reaffirm the peoples faith in the judiciary,
there is a need to enhance the integrity
and competence of justices, judges, court
personnel and all other officers of the
judiciary and quasi-judicial bodies by:
a) Weeding out the undesirables, both from the
Bench and the Bar. To maintain public
confidence in the competence and
integrity of members of the judiciary,
the government will intensify its efforts
to weed out misfit and undesirable
officials and personnel who fail to
uphold the dignity and integrity of the
legal profession;
b) Continuing the Court Cleansing
Initiative. The continuance of the
court cleansing initiative will further
strengthen the integrity of the judiciary
and hopefully achieve an ethical judiciary
that is above suspicion as envisioned by
the Supreme Court;
c) Strengthening the Integrity of the
Judiciary and the Integrity Development
Review. Besides adjudicating cases and
promulgating rules, the Supreme Court
also has the power of administrative
supervision over all courts and their
personnel, including the power to take
disciplinary action against them when
warranted. (CONST., Art. VIII, sec.
6). In 2009, it disciplined 66 Regional
Trial Court judges; 27 Metropolitan
Trial Court, Municipal Trial Court in
218
Cities, Municipal Trial Court, and

Municipal Circuit Trial Court
judges; and 181 first and secondlevel court personnel. Nor has
the Supreme Court spared the
rod in its own ranks. In 2009 it
administratively disciplined 19
SC employees and dropped three
others from the roll for being
absent without leave.
In
an
unprecedented
and
unanimous per curiam decision,
the Supreme Court also imposed
a PhP500,000 fine on a retired
SC justice for grave misconduct
for leaking a confidential internal
document of the Court (AM No.
09-2-19-SC, In Re: Undated
Letter of Mr. Louis C. Biraogo,
February 24, 2009).
The SC has also disciplined 129
members of the Bar for various
administrative offenses. In response
to the pervasive drug menace, it
has approved mandatory drug
testing for all Judiciary employees
as recommended by its Committee
on Security (AM No. 09-3013-SC,
Mandatory Drug Testing of All
Supreme Court Employees, March
24, 2009. Information lifted from
the 2009 Supreme Court Annual
Report); and
d) Strictly implement agency-specific
Codes of Conduct for law enforcers,
prosecutors and judges. The specific
administrative rules of conduct and
behavior for various government
agencies will be strictly enforced to
maintain a competent workforce in
government service.
6. Increase Resources for Justice Sector
Agencies and Quasi-Judicial Bodies
a) Renew efforts to address the human
capital shortage. A proactive and
enhanced recruitment program
shall be developed to attract
brilliant young lawyers to justice
sector agencies;
b) Implement continued capacitybuilding and updating of skills of law

enforcers, prosecutors, public defenders
and judges, and corrections officers.
The government will complement
the continued influx of knowledge
and information with a sturdy
policy of skills-enhancement and
capacity-building of the members
of our law enforcement units and
the justice sector; and
c) Modernize and upgrade facilities
for law enforcers such as the PNP
and the NBI crime laboratories,
forensic investigation facilities and
equipment. Improve capacities
of prosecutors and law enforcers
particularly NBI agents in the
investigation and prosecution of
special cases involving economic or
white-collar crimes such as money
laundering, tax evasion, smuggling,
human trafficking, violations of
intellectual property rights and
antitrust laws, illegal drugs and
even cases involving extralegal
killings and other human rights
violations as well as violation of
environmental laws.
7. Improve Access to Justice of All
Sectors of Society particularly the
Vulnerable Groups
Citizens should be made aware of their
fundamental rights and be taught on
how to access the services of government
institutions involved in justice delivery
when their rights are violated or when
the enforcement of these rights are
sought. This is the essence of democracy
and good governance when people are
empowered to exercise their rights and
attain the progressive fulfilment of their
needs.
a) Make full use of the services of
government lawyers by deputizing
them. Lawyers employed in
various government agencies and
instrumentalities will be imbued
with the necessary authority
to defend public interests in
congruence with the functions of the

OSG;
b) Provide tax credits for lawyers representing
IPs and other vulnerable groups. Tax
incentives will be provided for lawyers
representing societys vulnerable groups to
encourage them to render adequate legal
assistance and at the same time, promote
equal access in the justice system;
c) Strengthen the Katarungang Pambarangay
Law to resolve cases at the local level.
The strengthening of the Katarungang
Pambarangay Law will result in the
speedy resolution of cases at the local
level without going through the rigors
of court processes. This will substantially
improve the delivery of justice and
facilitate the declogging of court
dockets; and
d) Conduct training among judges, court
personnel, prosecutors, public defenders
and other pillars of the justice system in
handling gender-sensitive cases, especially
those involving violence against women
and children (VAWC).
8. Promote the Use of Alternative Dispute
Resolution (ADR)
The government shall encourage and
actively promote the use of ADR. Resorting
to ADR could help decongest both court
and prosecution dockets of cases which may
be subject of ADR and allow the courts and
the prosecution to dedicate their resources
in resolving equally important cases brought
before them. It will also spare both the parties
and the government from litigation costs
and the tedious judicial and administrative
processes thus helping the parties achieve
speedy and impartial justice.
a) Disseminate information on ADR.
ADR will also develop potential active
citizens participation since most ADR
institutions are private-led. They promote
the culture of peaceful negotiation and
resolution of disputes by discouraging the
adversarial manner of resolving conflicts
such as court litigation;
219
b) Strengthen and support institutions

involving ADR. Efforts should be
stepped up to communicate and
disseminate information about ADR
as well as strengthen and support
institutions involved;
1. Pursue the Passage of the Freedom

of Information Bill
c) Strengthen DOJ-OADR. The Office

of Alternative Dispute Resolution
(OADR), an agency recently created
under the DOJ, shall be strengthened
to be able to monitor and assess existing
ADR mechanisms in the country and
ensure that ADR programs conform
with international standards and best
practices. With an effective and efficient
ADR mechanism in place, the country
can join countries like Singapore as an
arbitration hub in the region; and
The Freedom of Information Bill is

intended to give the citizenry access to
information by allowing full disclosure
of all transactions which are of public
interest. It aims to institute transparency
in the national and local governments
undertakings relative to loans, treaties,
contacts and other similar transactions.
d) Establishment
of
prosecution-level
mediation. Resolving cases subject to
ADR can help declog prosecution and
court dockets as cases will be resolved
before information is filed in court.
3. Ensure Open and Transparent

Search Process in the Selection
of Appointees in Constitutional
Commissions, Regulatory Bodies and
other Independent Bodies (e.g., CSC,
CHR, JBC etc.)
9. Institutionalize Existing Justice Sector

Coordinating Mechanisms
Justice sector coordinating mechanisms
such as the Judiciary, Executive and
Legislative Advisory & Consultative
Council ( JELACC) and the Justice Sector
Coordinating Council ( JSCC) shall be
institutionalized.
The JELACC serves as a forum for the
discussion of issues relating to resource
needs, recognizing the fact that there is a
need to dialogue on cross-cutting issues
relating to justice sector performance.
On the other hand, the JSCC, which is
composed of the Supreme Court, DOJ,
DILG, PNP, BJMP and the DBM, is
another forum for dialogue and preparation
of joint justice sector reform programs and
initiatives.
220
Enhance Citizens Access

to Information and
Participation in Governance
2. Issue an Executive-Wide Policy

on Public Access to Information
Pending the Passing of the Right to
Information Act
A credible multisectoral committee

should be engaged in the nomination
and appointment of members of
constitutional commissions, regulatory
bodies, independent commissions and
other oversight bodies. The criteria for
the selection, the candidates and their
qualifications and those endorsing them,
should be made public. The feedback of
the public should also be considered.
4. Promote and Implement the
NACPA
In order to push forward the
national anticorruption agenda and
contribute towards the attainment
of sustainable and inclusive growth,
the OMB and its partners from the
MSACC, should continue to pursue
its priority programmes and projects
under the NACPA. These include the
enhancement of the anticorruption
legislative framework and local
policies, adoption and customization
of the APEC Code of Conduct for
Business, integrity development review
of LGUs, capacity-building on the

UNCAC, anticorruption workshops
for professional groups, including
engineers and accounts, for assistance
in case build-up and prosecution.
5. Intensify Peoples Engagement in

Local Governance
Increasing participation of CSOs
in local development processes
reinforces
responsiveness and
accountability among local officials.
Local governments will therefore be
encouraged to create opportunities
for citizens to continuously engage
with them in an inclusionary and
participatory manner. Representation
of CSOs in the Local Special Bodies in
accordance with the Local Government
Code will be strictly enforced. Likewise,
the forging of LGU-CSO/Private
Sector partnership will be promoted.
By collaborating with CSOs and the
private sector in the implementation
of local governments development
projects, not only are financial
resources shared, but also knowledge
and experiences, which increases the
chances for local development.
6. Ensure Budget Transparency

a) Mandatory publication in agency
or department websites of major
information on budgets, finance, and
performance indicators. A strategic
program to restore public trust
and to enhance disbursement of
funds and their utilization is the
establishment of transparency
and accountability requirements
in the budget. Specific budget
provisions shall require DBM and
other agencies to publish in their
websites detailed information on
the allocation, disbursement and
status of programs and projects,
including the following:
approved budgets;
performance measures and
targets;
major
programs/projects
implemented/to be pursued;
annual procurement plan;

contracts awarded and the name of
contractors/suppliers/consultants;
targeted and actual beneficiaries;
status of implementation and fund
utilization; and
program/project evaluation and/or
assessment reports;
b) Posting of fund releases on the DBM

website. Information technology will
be leveraged to achieve transparency
and accountability. This facilitates the
process of fund release and strengthens
security while promoting transparency
and accountability. Fund releases (e.g.,
congressional allocations chargeable
against priority development assistance
fund, financial assistance to LGUs,
school building program, and internal
revenue allotment) and other pertinent
budgetary releases shall be posted on the
DBM website; and
c)
Constructively engaging CSOs in the

budget process. The involvement of CSOs
in the budget process is being pursued
to institutionalize greater transparency
and accountability in government and
enhance participatory governance. The
government and concerned CSOs shall
have a constructive engagement to advocate
good governance in the government
budgeting process. This partnership aims
to promote transparency, accountability,
and public participation in the preparation,
authorization, execution and monitoring of
the national budget. This effort allows the
public full access to government budget
information, thereby increasing their
capacity to understand the budget process
and analyze its policy implications.
A communication and advocacy plan will
be developed to ensure that all stakeholders
understand the budget process and
pertinent
budgetary
information.
Training will also be conducted to
facilitate a fuller understanding of
budget documents among legislators
and legislative staff. Finally, a healthy
relationship between government and
media shall be maintained to ensure
221
continuous public discussion regarding

governments programs and projects.
7. Full Disclosure of Local Budget and
Finances, and Bids and Public Offerings
The declared policy of promoting good local
governance calls for the posting of budgets,
expenditures, contracts and loans, and
procurement plans of LGUs in conspicuous
places within public buildings in the locality, on
the web, and in print media with local or general
circulation, specifically including the following:
222
annual budgets;
quarterly statements of cash flows;
statements
of
receipts
and
expenditures;
trust fund (PDAF) utilization;
Special Education Fund utilization;
utilization of the 20 percent
Development Fund component of
the IRA;
Gender and Development Fund
Utilization;
statement of debt service;
annual procurement plan and
procurement list;
items to bid;
bid results on civil works and goods
and services; and
abstract of bids as calculated.
08
Social
Development
Social Development
223
Social Development
Social development has improved the access of Filipinos to quality basic social
service delivery in education, training and culture; health and nutrition; population and
development; housing; social protection; and asset reform. The country is on track in
pursuing the Millennium Development Goals (MDGs) on poverty, gender and equality,
child health, disease control and sanitation. However, the country lags in achieving
universal primary education, improving maternal health, and combating HIV/AIDS.
Moreover, large discrepancies across regions need to be addressed by the social
development sector in the next six years.
The social development sector shall focus on ensuring an enabling policy environment
for inclusive growth, poverty reduction, convergence of service delivery, maximized
synergies and active multistakeholder participation. Priority strategies include: (a)
attaining the MDGs; (b) providing direct conditional cash transfers (CCT) to the poor;
(c) achieving universal coverage in health and basic education; (d) adopting the
community-driven development (CDD) approach; (e) converging social protection
programs for priority beneficiaries and target areas; (f) accelerating asset reform;
(g) mainstreaming climate change adaptation and disaster risk reduction in social
development; (h) mainstreaming gender and development; (i) strengthening civil societybasic sector participation and public-private partnership; (j) adopting volunteerism; and
(k) developing and enhancing competence of the bureaucracy and institutions.
The Plan translates the Presidents Social Contract with the Filipinos in ensuring
inclusive growth and equitable access to quality basic social services, especially by
the poor and vulnerable.
Assessment and
Challenges
Assessment
The social development sector has generally
shown improved access to quality service
delivery in health, nutrition and population;
education, training and culture; housing;
social protection; and asset reform efforts
and initiatives. The Philippines is on track
in meeting the MDGs on food poverty,
gender equality in education, child mortality,
malaria, tuberculosis, and access to sanitary
toilet facilities (Annex 8.1). However, the
country lags in achieving universal primary
education, improving maternal health, and
combating HIV/AIDS. Moreover, large
224
discrepancies across regions need to be

addressed in the next six years.
The poverty incidence of families
slightly decreased from 21.1 percent in
2006 to 20.9 percent in 2009, or from
26.4 percent of the population in 2006
to 26.5 percent in 2009. However, this
improvement is limited, considering
the slow growth of incomes, increase in
household formation, natural disasters
and inflationary pressures mainly from
rising fuel and food prices. In 2009,
more than a quarter of the 23.1 million
poor Filipinos lived in four regions
(Annex 8.2). While only one-third of
poor Filipinos came from Mindanao,
more than half of the provinces in the
bottom cluster are located in the island
Poverty Incidence (in %)
Figure 8.1. Poverty Incidence in Southeast Asia
Source: ADB, 2009

group (Annex 8.3). This situation can
be attributed to the armed conflict and
unsettled peace and order situation.
Using the US$1.25-a-day poverty
threshold (at 2005 prices), the
Philippines, with a headcount poverty
index of 22.6 percent (adjusted for
2005 purchasing power parity), ranked
better than Cambodia (40.2%), Lao
PDR (35.7%) and Vietnam (22.8%),
but trailed behind Indonesia (21.4%),
Malaysia (0.5%) and Thailand (0.4%)
(Figure 8.1).
Income inequality remains high. The
Gini concentration ratios1 showed only
slight and slow improvements, from
0.4605 in 2003 to 0.4580 in 2006 and
0.4484 in 2009. The regions with the
most unequally distributed income are
Regions 7, 8, 9, 10 and 13 (CARAGA),
as these regions have Gini ratios higher than

0.45 (Annex 8.4).
Trends in the Human Development Index
(HDI)2 showed slight improvements. The
HDI for the Philippines rose from 0.744 in
2005 to 0.751 in 2007, placing the country in
the medium-HDI category (i.e., HDI values
between 0.50 and 0.80). The Philippines
ranked 105th among 182 countries. However,
the countrys Gender Development Index
(GDI) decreased from 0.768 in 2005 to 0.748
in 2007. Likewise, the Gender Empowerment
Measure (GEM) fell from 0.590 in 2005 to
0.560 in 2007 (United Nations Development
Programme, 2007, 2009).
Income gap3, poverty gap4, and severity of
poverty5 varied in a narrow range from 2006
to 2009. In 2009, Region 9 recorded the
highest income gap at 30.8 percent, with
National Capital Region (NCR) the lowest
1
The Gini concentration ratio measures the inequality in income distribution, where zero means perfect equality and a
value of 1 implies perfect inequality.
2
The HDI measures quality of life or wellbeing in terms of health, education and income.
3
Income gap refers to the average income shortfall expressed as a proportion to the poverty line of families with income
below the poverty threshold.
4
Poverty gap is the total income shortfall of families with income below the poverty threshold, divided by the number
of families.
5
Severity of poverty measure is the total of the squared income shortfall of families with income below the poverty
threshold, divided by the total number of families.
Social Development
225
Percentage Share
Figure 8.2. Share of Social Services in Total National Government Expenditures
Year
Source: DBM
While the Philippines is on

target for most of its MDGs, it
lags behind in terms of reducing
the maternal mortality ratio.
at 16.9 percent. The NCR also had the

lowest gap at 0.4 percent, with CARAGA
the highest at 12.1 percent (Annex 8.5).
It has been estimated that the national
government and the LGUs must boost
their budget for basic education and health
by PhP348.9 billion (or 0.45% of GDP)
and PhP45.0 billion (or 0.04% of GDP),
respectively, if the MDG targets are to be
met by 2015 (Manasan, 2009). This implies
a huge financial requirement that should be
allocated by the government, if it is to invest
in the two most important human capital
forming subsectors.
The slow rate of progress in the social sector
may be partly attributed to the compression
of expenditure at the national level in
previous years, in response to balancing the
budget due to declining revenue efforts. The
combined share of social services in total
national government expenditures exhibited
a well defined downtrend from 1998 to 2005
(Figure 8.2).
Health, Nutrition and Population

The countrys health status is best
summarized in the progress towards the
MDGs. While the Philippines is on target
6
for most of its MDGs, it lags behind

in terms of reducing the maternal
mortality ratio (MMR). The decline in
neonatal mortality has also been very
slow, as neonatal deaths comprise the
majority of infant deaths. The MMR
and infant mortality rate (IMR) were
still at 95 to 163 per 100,000 live births
in 20106, and 25 per 1,000 live births in
2008 (National Statistics Office, 2008),
as against the MDG targets of 52 and
19, respectively.
For communicable diseases, the target for
the tuberculosis (TB) case detection rate
has been met, while a total of 22 provinces
were declared malaria-free in 2008. The
prevalence of HIV and AIDS remains
below one percent of total population,
although the number of HIV cases has
been increasing annually. As in previous
years, most of the ten leading causes of
morbidity in 2008 were communicable
diseases; in contrast, the leading causes
of mortality in the country have mainly
been noncommunicable diseases. There
is a wide variance in the outcomes and
program performance of priority public
health programs, due to demand side
problems related to health care access
especially by the poor, such as geographical
NSCB Resolution No. 11, Series of 2010 - Adopting the Interim Estimation Methodology Used in Generating NationalLevel Estimates of Maternal Mortality Ratios for 1990 and 2000-2010.
226
barriers, financial constraints, and limited

information on family health risks.
While it is urgent to address the
slow progress in meeting MDGs,
the health sector also needs to focus
on the prevention and treatment of
chronic and degenerative diseases and
traumatic injuries, which are now the
fourth leading cause of mortality. Many
such deaths are untimely and financially
catastrophic, affecting mostly the
working-age population and causing
large intergenerational effects.
In health care financing, the 2007
Philippine National Health Accounts
(PNHA) revealed that 54 percent of
the total health expenditure comprised
out-of-pocket expenses, and only 9
percent from social health insurance.
Total health expenditure was only
PhP234.3 billion, or 3.2 percent of
the GDP, which is below the World
Health
Organizations
(WHO)
benchmark of 5 percent of GDP for
developing countries.
High out-of-pocket expenses and
low prepayment schemes reflect an
unevenness, if not an inequity, in
health care financing. The results
of the Benefit Delivery Review by
the Department of Health (DOH)
and Philippine Health Insurance
Corporation (PHIC) highlighted the
need for PHIC to increase its enrolment
coverage, improve the availment of
its benefits and increase the support
value for its claims, for the National
Health Insurance Program (NHIP)
to provide Filipinos with financial
risk protection. Moreover, benefit
delivery for the sponsored program is
lowest among member groups. To date,
the nationwide benefit delivery ratio
(BDR)7 is only 8 percent (Annex 8.6).
Public hospitals and primary health facilities

cannot provide adequate services and quality
care. Recent data show that only 977 out of
1,073 of DOH-licensed private hospitals
(91%) and 631 out of 711 of DOH-licensed
government hospitals (88%) are accredited
by PHIC. These ratios are expected to
decline once PhilHealth raises accreditation
standards to globally competitive levels.
The deterioration and poor quality of
many government health facilities, which is
particularly disadvantageous to the poor, is
due to: (a) backlogs in upgrading of existing
facilities, including those required to make
public hospitals safe from disasters; and (b)
the inability of the total capacity of public
health facilities to meet demands from an
increasing population base.
While the Philippines produces a globallycompetitive medical and allied health
workforce, many parts of the country,
especially far-flung and depressed areas,
remain underserved. Human resources in
the health sector are concentrated in urban
areas, with fast staff turnover and oversupply
of personnel.
54 percent of the total health

expenditure comprised outof-pocket expenses, and only
9 percent from social health
insurance.
On nutrition, underweight, stunting,

wasting and thinness continue to be serious
problems. The proportion of underweight
children under-five decreased from 27.3
percent in 1990 to 20.6 percent in 2008, or
an average annual percentage point reduction
of 0.352. However, this is only 67.2 percent
of the desired rate of decline to achieve the
MDG of 13.7 percent. In addition, stunting8
among under-fives (32.2%) and wasting9
(7.5%) are at high levels. Thinness is also
prevalent among school-age children (8.1%).
About 26.3 percent of pregnant women are
nutritionally at-risk, with low weight-forheight levels.
Overweight and obesity is prevalent among
adults, at 26.6 percent based on the National
Nutrition Survey of 2008 (Annex 8.7). The
7
BDR refers to the cumulative likelihood that any Filipino is (a) eligible to claim; (b) aware of entitlements and is able
to access and avail of health services from accredited providers; and (c) is fully reimbursed by PHIC as far as total health
care expenditures are concerned.
8
Stunting is an indication of prolonged deprivation of food and frequent bouts of infections.
9
Wasting is an indication of lack of food or infection in the immediate past.
Social Development
227
prevalence of overweight and obesity among

children less than five years old has increased
three-fold between 1990 (1.1%) and 2008
(3.5%). Among children aged 6-10 years
old, overweight and obesity increased from
0.1 percent to 1.1 percent in 2008 (based on
International Reference Standards).
Micronutrient deficiencies continue to be
a public health concern, especially among
young children and pregnant women. About
15.2 percent of children 6 months to 5
years old were vitamin A-deficient (Food
and Nutrition Research Institute, 2008).
Iron deficiency anemia among various
groups remains very high (based on WHO
classification), specifically among infants
6-11 months old (55.7%); children 12-23
months old (41.0%); and pregnant women
(42.5%). Iodine deficiency is another public
health problem among pregnant and lactating
women, with the average of 105 ug/L median
urinary iodine excretion not reaching the
WHO-recommended level of 150 ug/L.
The countrys current population

growth rate of 2.04 percent
remains high and means an
additional 1.8 million Filipinos
every year.
Hunger is another serious concern. While

the percentage of Filipino households
with inadequate caloric intake decreased
from 69.4 percent in 1990 to 66.9 percent
in 2008, quarterly surveys on hunger by
the Social Weather Stations (SWS) since
1998 showed that the hunger situation has
been volatile within a year, characterized by
spikes and dips. However, the subsistence
incidence10 of families decreased from 8.7
percent in 2006 to 7.9 percent in 2009, or
from 11.7 percent of the population in 2006
to 10.8 percent in 2009.
The current population growth rate (PGR)
of 2.04 percent remains high and means
1.8 million Filipinos are added every year.
At this rate, the population will double in
34 years. This has also contributed to the
high dependency ratio of 69 percent as of
2000, with a youth dependency ratio at
62.6 percent and an elderly dependency
ratio of 6.5 percent. This means that every
10
100 persons in the working age group

(15-64 years) have to support about
63 young dependents and about six
elderly
dependents. Dependency
reduces growth in savings and funds for
investment in productive capacity. In
turn, underinvestment reduces overall
economic growth and prospects for
poverty reduction.11
The actual fertility rate of 3.3 children
is one child higher than the desired
fertility rate of 2.4. The biggest
difference between actual and wanted
fertility is most evident among women
with lower education achievement and
incomes. Based on the 2008 National
Demographic and Health Survey
(NDHS), the countrys contraceptive
prevalence rate (CPR) was only 51
percent. It is a source of concern that
the level of unmet need has increased
from 17 percent in 2003 to 22 percent
in 2008.
Although the DOH has continued
to implement reforms, more effective
mechanisms are needed to further
enhance the health system. Areas
needing improvements include health
financing in local health facilities
and medical centers, and preventive
measures to reduce noncommunicable
diseases, such as diabetes mellitus,
hypertension and trauma. Moreover, the
health information system, including
research, should be strengthened,
in order to ensure that policies and
programs are based on evidence and
limited resources are used effectively
and efficiently.
Education, Training and Culture

Based on the 2008 Functional Literacy,
Education and Mass Media Survey
(FLEMMS), about 58 million out of
the estimated 67 million Filipinos aged
Subsistence incidence refers to the proportion of families (or population) with per capita income less than the per
capita food threshold to the total number of families (population). (NSCB)
11
See The Population-Poverty Nexus by Balisacan, Mapa & Tubianosa, 2004.
228
10 to 64 years old (86.4%). This is a slight

increase from 84.1 percent in 2003. Basic
literacy, on the other hand was estimated at
95.6 percent. Literacy is much higher among
those in the highest income stratum and
who have completed high school or higher
education. Some Filipinos who have little or
no formal schooling, however, may have also
gained functional literacy through alternative
learning sources, such as the media.
Despite past efforts to increase access
to formal basic education, the country
continues to confront the challenge of
ensuring greater participation of all schoolaged children, especially in the elementary
level. In school year (SY) 2009-2010, the Net
Enrolment Rates (NER) at the elementary
and secondary levels were 85.0 percent and
62.4 percent, respectively, which is far below
the MDG and Education For All (EFA)
targets. The cohort survival rate reached 74.4
percent for elementary and 78.5 percent for
secondary in 2009, with completion rates
recorded at 72.2 percent for elementary and
73.7 percent for secondary education
The elementary completion rate level was
still far from the EFA target of 81.0 percent
in 2015, but the secondary completion rate
almost reached the 2015 EFA target of
75.27 percent. The drop-out rate, on the
other hand, was still a high of 6.3 percent for
the elementary level and 8.0 percent for high
school, despite free provision of education at
those levels. This was due to poverty, poor
health, peace and order problems in some
areas, and the prevalence of child labor.
The National Achievement Test (NAT)
results for the elementary level showed
a substantial improvement from a mean
percentage score (MPS) of 58.7 in 2004 to
68.0 in 2009. In contrast, the NAT MPS in
high school declined slightly from 46.8 to
45.6 during the same period.
A total of 76,710 new classrooms were
constructed from 2004 to 2010, exceeding the
yearly minimum target of 6,000. However,
classroom gaps still persist due to the
increasing student population and damages
caused by natural disasters. Classroom
shortage in 2011 is estimated at

113,000. Moreover, there were wide
disparities in classroom-student ratios
across regions, with a 1:78 ratio in
elementary in NCR and 1:82 in high
school in the Autonomous Region in
Muslim Mindanao in SY 2009-2010.
The national average of teacher-student
ratios in SY 2009-2010 stood at 1:36
for elementary and 1:38 for secondary
levels, but wide disparities again existed
across schools.
Based on the 2008 Functional

Literacy, Education and Mass
Media Survey, about 58 million
out of the estimated 67 million
Filipinos aged 10 to 64 years old
(86.4%). This is a slight increase
from 84.1 percent in 2003. Basic
literacy, on the other hand was
estimated at 95.6 percent.
The number of barangays without

access to elementary school was reduced
significantly from 1,617 in 2001 to
only 227 in 2008. Access also improved
dure to more high school students
benefitting from the Education Service
Contracting scheme and the Education
Voucher System. Of the 250,000 target
beneficiaries for the period of 2004 to
2009, a total of 153,694 grantees (62%)
benefited from these programs.
In line with the institutionalization
of the Early Childhood Care and
Development (ECCD) Law, 99
percent of provinces and all cities
already implemented ECCD in varying
degrees. However, the actual gross
enrolment rate in public and private
preschools for 4-5 years old reached
only 24.69 percent in 2008, up from
19.23 percent in 2004. The Department
of Education (DepEd), for its part,
provided preschool education to around
1.4 million children. Over the same
period, the percentage of Grade 1 pupils
with ECCD experience improved from
55.98 percent to 64.62 percent.
There was a steady increase in the
number of learners served by both the
DepEd and various alternative learning
system (ALS) providers. From 2005 to
2009, 631,914 and 418,108 enrollees
were recorded under the DepEddelivered and DepEd-procured ALS
programs, respectively. However, only
74 percent of these enrollees completed
the DepEd-delivered and 72 percent
the DepEd-procured ALS programs.
Social Development
229
Table 8.1. Formal Basic Education Performance Indicators, by Sex: 2004-2009
Indicators
2004
ELEMENTARY
Net Intake Rate in Grade 1
41.3
Male
37.5
Female
45.3
Gross Enrolment Rate
104.2
Male
104.9
Female
103.5
Net Enrolment Ratio
87.1
Male
86.17
Female
88.08
71.3
Male
66.1
Female
77.2
Completion Rate
69.1
Male
63.6
Female
75.2
Dropout Rate (School Leaver)
7
Male
8.4
Female
5.4
Achievement Rate (Grade 6 NAT MPS )
58.73
Male
57.10
Female
60.29
SECONDARY
Gross Enrolment Rate
83.9
Male
80.2
Female
87.8
Net Enrolment Ratio
60
Male
55.0
Female
65.0
78.1
Male
73.3
Female
82.8
Completion Rate
72.4
Male
66.9
Female
77.8
Dropout Rate (School Leaver)
8
Male
9.9
Female
6.1
Achievement Rate (Year II NAT MPS)*
46.80
Male
45.83
Female
47.61
Source: DepEd; *Administered to 4th year students in 2004
230
2005
2006
2007
2008
2009
36.6
33
40.5
101.1
101.9
100.3
84.4
83.56
85.35
70
65.5
75.0
68.1
63.3
73.5
7.3
8.6
6
54.66
52.89
56.58
39.7
36.2
43.5
99.9
100.7
99.0
83.2
82.39
84.08
73.4
68.8
78.6
71.7
67.3
76.7
6.4
7.6
5
59.94
58.59
61.81
45.6
43.4
48.0
102
102.9
101.1
84.8
84.01
85.72
75.3
70.9
80.1
73.1
68.4
78.3
6
7.2
4.7
64.81
63.73
65.87
48.4
46.4
50.5
102.1
103.3
100.8
85.1
84.86
85.71
75.4
71.5
79.7
73.3
69.1
77.9
6
7.1
4.9
66.33
64.38
66.72
56.3
54.6
58.0
100.8
102.1
99.5
85
85.0
85.0
74.4
69.9
79.4
72.2
67.4
77.5
6.3
7.5
4.9
68.00
66.65
69.36
80.5
77.0
84.1
58.5
53.7
63.5
67.3
61.5
73.0
61.7
55.1
68.1
12.5
15
10.1
46.97
45.44
48.31
79.5
76.4
82.6
58.6
53.9
63.4
77.3
72.7
81.8
72.1
67.2
77.0
6.6
7.5
5.9
46.64
44.81
48.29
81.4
78.7
84.2
61.9
57.4
66.6
79.9
75.21
84.5
78.7
71.6
86.0
7.5
9.3
5.6
49.26
47.84
50.45
82.9
80.6
85.3
60.7
56.4
65.2
79.7
75.5
83.9
75.2
70.4
79.9
7.5
9.1
5.8
47.4
44.89
48.32
82.2
80.2
84.1
62.4
57.9
67.0
78.5
74.2
82.8
73.7
69.1
78.3
8.0
9.7
6.2
45.55
43.95
46.98
Despite its vast potential, the ALS has

yet to maximize the full potential of
nonschool-based learning schemes in
universalizing functional literacy.
In culture and the arts, the National
Heritage Act (RA 10066) was enacted in
2009 to protect, preserve, conserve and
promote the nations cultural heritage,
its property and histories, and the
ethnicity of local communities; establish
and strengthen cultural institutions;
protect cultural workers and ensure their
professional development and wellbeing.
Moreover, more than 2,000 projects
nationwide were approved to be funded
by the National Endowment Fund for
Culture and the Arts (NEFCA) from
2007 to 2010.
In sports, the Short-Term Philippine
Sports Development Plan: 2008-2010
was formulated to carry out systemic
institutional reforms that rationalized
resource allocation. While the Plan
was approved through Resolution No.
2, Series of 2008 by the NEDA-Social
Development Committee, most of the
envisioned institutional reforms have
not been implemented due to changes
in leadership.
Enrolment in middle-level human
resource development via technical
and vocational education and training
(TVET) increased by 27.38 percent,
from 1.68 million in 2004 to 2.14
million in 2007. However, it declined
to 2 million in 2008 and 1.98 million
in 2009, as a result of efforts to improve
quality assurance. On the other hand,
enrolment in higher education rose
moderately from 2.40 million in 2004
to 2.62 million in 2009. The number
of graduates across all disciplines
likewise increased from 409,628 to
around 469,654 in the same period, or
by 14.65 percent.
12
Based on the 2008 Impact Evaluation

Study (IES) commissioned by TESDA, the
absorption rate12 of TVET graduates (as
a percentage of the labor force) was 55.1
percent, which is less than the 2005 figure of
64.6 percent. The decline can be attributed,
among others, to the effects of the global
financial crisis that slowed down economic
activities and resulted in job losses, skills
mismatch between the requirements of the
available jobs and the skills possessed by
workers, and geographical mismatch between
locations of job opening and job seekers.
Increased access to higher education and
middle-level skills development was made
possible through the provision of various
scholarships and student financial assistance
programs by CHED and TESDA, such as
the Private Education Student Financial
Assistance Program (PESFA), ADBassisted Technical Education and Skills
Development Program (TESDP), President
Gloria Scholarship (PGS) Program and
Ladderized Education Program (LEP).
The PGS, a scholarship program intended
to provide interventions to meet the need
for critical skills and drive TVET provision
to highly in-demand jobs, reached more
than one million scholars from 2006
to 2009. The program was provided an
increased budget of PhP5.6 billion in 2009,
in view of the governments commitment to
job generation through skills enhancement
and investment in human capital. However,
the PGS had its own share of operational
problems and drawbacks, ranging from
increased dropout rate and low employment
of graduates. There is a need to introduce
reforms in the targeting and selection
of beneficiaries, fund disbursement,
accountability and program management.
Another major accomplishment in the
subsector is the institutionalization of
the ladderized system between TVET
and higher education through EO 358 in
Absorption rate refers to the ratio of employed and the total number of TVET graduates.
Social Development
231
Table 8.2. Enrolment in Tertiary Level of Education by Sex: Academic Years 2004-2009
Year
TESDA
Male
Female
Total Enrolees
Graduates
Academic Year
CHED
2005
673,353
1,010,029
1,683,382
1,154,333
2006
694,745
1,042,120
1,736,865
1,340,620
2007
856,965
1,315,449
2,142,414
1,702,307
2008
805,567
1,208,353
2,013,920
1,812,528
2009
893,091
1,091,555
1,982,435
1,903,793
2004-2005 2005-2006 2006-2007 2007-2008 2008-2009
Male
Female
Total Enrolees
Graduates
1,100,199
1,302,116
2,402,315
409,628
1,130,360
1,352,914
2,483,274
421,444
1,194,701
1,409,748
2,604,449
444,427
1,211,108
1,443,186
2,654,294
444,815
1,199,247
1,426,138
2,625,385
469,654
Sources: TESDA, CHED

2005. The LEP covered 1,330 ladderized
education programs in eight priority
disciplines
(information
technology,
hotel and restaurant management and
tourism, engineering, health, education,
maritime, agriculture, and criminology).
Complementing this is the DOST-SEI,
which
administered
demand-oriented
science and technology (S&T) scholarships
through their Merit Scholarship and financial
assistance programs. The latter supports the
education of poor, talented and deserving
students in the priority degree courses of
basic and applied sciences, engineering
and science teaching. In 2009, about 4,257
scholarship qualifiers nationwide were
announced, thus increasing the number to a
total of 11,428 scholars.
Faced with the challenge

of competitiveness and the
diversifying industry needs,
the government continuously
instituted programs and
provided the critical resources
for skills upgrading and
intensification in both highand middle-level professions.
To ensure a competent workforce responsive

to the quality standards of industries,
the TVET subsector through TESDA
implemented quality assurance measures
through a mandatory assessment of
TVET graduates in programs covered
by the promulgated training regulations.
The number of trainees who underwent
competency assessment and certification
peaked to 836,131 in 2009. Of these, a total
of 690,836 workers were certified across all
occupations, representing a certification rate
of 82.62 percent.
According to the 2007 Annual Poverty
Indicators Survey (APIS), the proportion
of dropouts was worst at the tertiary
232
level, or among the 16-24 age group,

particularly in degree programs, at 65.8
percent. This was mainly due to the high
cost of education that had to be fully
shouldered by the households. Access
to tertiary education for students from
poor families was possible through
publicly-funded scholarships and other
student financial assistance programs.
The challenge for the tertiary education
is not just broadening but rationalizing
the access of the economically
and
socially-disadvantaged
and
potentially-restive population. The
CHED recently rationalized and
streamlined the guidelines of its
student financial assistance programs
(StuFAPs). However, these guidelines
only subsumed CHED-administered
StuFAPs, and do not substantially
address
major
government-wide
scholarship issues. Particularly, the
efficacy, usefulness and viability of
student loan programs have not
improved remarkably through the years.
Significantly, the need to produce
enough competent and skilled workforce
that will match domestic needs has
become much more compelling. Faced
with the challenge of competitiveness
and the diversifying industry needs, the
government continuously instituted
programs and provided the critical
resources for skills upgrading and
and relevance of education and training

programs, alongside lower absorptive
capacity of the economy.
intensification in both high- and

middle-level professions. Post-basic
education funding has pointed to the
need for students to be channeled to
fields that have clear local demand, such
as emerging and critical S&T fields.
Housing and Urban Development
The education and training sector

remains confronted with the following
issues and challenges: (a) limited
participation of the industry sector in
developing competency standards and
curricula; (b) societal bias against TVET
and insufficient social marketing,
particularly among basic education
students and their parents; (c) the
need to upgrade the quality of higher
education programs, including S&T
courses, and make them internationally
comparable; and (d) continuing jobskills mismatches, owing to low quality
With an enormous total housing need of 3.7

million as of 2010, a total of 812,463 housing
and shelter security units (i.e., house and/or
lot) were provided from 2004 to 2010.
Indirect housing assistance, such as provision
of retail and developmental guaranties,
issuance of licenses-to-sell, and assistance in
comprehensive land use planning, delivered
mixed accomplishments. Against a target of
115,556 retail and developmental guaranties,
the Home Guaranty Corporation (HGC)
only guaranteed a total of 62,418 housing
loans (54.01%). However, the Housing and
Land Use Regulatory Board (HLURB)
Table 8.3. Direct Housing Accomplishments
Program
(in households assisted)

Direct Housing Provision
1. NHA Housing Production
Resettlement
Slum Upgrading
Sites and Services
Core Housing
Medium-Rise Housing
Other Housing Assistance
2. Community Mortgage
Program (CMP)
3. Retail and Developmental
Financing
End-User Financing
2004
2005
2006
Year
2007
2008
2009
2010
Total
NHA
20,180
11,760
1,395
2,036
2,871
0
2,118
39,786
16,960
4,136
1,192
1,033
0
16,465
37,601
15,390
1,338
2,061
927
105
17,780
41,528
28,655
3,707
4,036
721
60
4,349
47,112
36,830
6,231
1,361
41
0
2,649
29,413
22,044
2,187
1,463
456
0
3,263
23,276
18,740
2,068
1,142
572
0
754
238,896
150,379
21,062
13,291
6,621
165
47,378
SHFC
14,129
14,199
13,783
11,819
9,169
10,022
7,109
80,230
44,614
39,138
33,427
48,020
62,846
75,328
118,785
422,158
39,562
37,175
33,066
47,367
62,507
74,973
56,696
351,346
LBP
78
37
65
103
186
281
243
993
SSS
187
91
47
37
62
74
50
548
DBP
66
220
16
11,300
11,602
GSIS
4,721
1,835
249
293
75
50,496
57,669
44,248
11,784
15,082
51,668
6,504
5,286
100
134,672
123,171
104,907
99,893
153,035
125,631
120,049
149,270
875,956
Agency
HDMF
GFIs End-User
Financing
4. Provision of Secure
Tenure
Proclamations
Total Direct Housing
Provision
HUDCC
Source: HUDCC
Social Development
233
issued a total of 767,872 licenses-tosell, indicating a robust construction

and completion of housing units. The
HLURB also provided assistance to 419
LGUs in updating and formulating their
Comprehensive Land Use Plans (CLUPs)
against a target of 432 LGUs (Table 8.4).
The government provided housing tenure
assistance through the following reform
measures: (a) loan interest-rate reductions
that brought down the lowest socialized

housing package to 3 percent per
annum; (b) extension of payment terms
for all housing loans from 25 up to 30
years; (c) reduction of loan requirements
from 15 to eight; and (d) reduction of
loan processing time from three months
to seven working days for developer
accounts with buy-back guarantee, and
30 days for retail and developer accounts
without buy-back guarantee.
Table 8.4. Indirect Housing Accomplishments
Program
Agency
2004
2005
Indirect Housing Provision

1. Home Guaranty Corporation
Retail Guaranty
HGC
5,493
Developmental Guaranty
157
Securization
2. Housing and Land Use Regulatory Board
License To Sell
HLURB
167,229
CLUP Assistance (LGUs)
104
2006
Year
2007
2008
2009
2010
Total
12,356
32
16,282
5,217
15,680
925
12,089
311
11,897
17
24,678
55,948
6,470
187,001
106
172,967
102
220,756
104
200,124
103
174,025
110
767,872
419
Source: HUDCC
Table 8.5. Total Housing Need: 2011-2016
Region
Philippines
NCR
CAR
I Ilocos
II Cagayan Valley
III Central Luzon
IV-A CALABARZON
IV-B MIMAROPA
V Bicol
VI Western Visayas
VII Central Visayas
VIII Eastern Visayas
IX Zamboanga Peninsula
X Northern Mindanao
XI Davao
XII SOCCSKARGEN
XIII CARAGA
ARMM
2011
2012
1,380,537
1,173,456
418,328
10,035
48,323
29,582
112,675
158,723
27,696
66,307
90,111
78,934
44,759
30,199
54,446
67,911
47,291
38,025
57,191
355,579
8,530
41,075
25,145
95,774
134,915
23,542
56,361
76,594
67,094
38,045
25,669
46,279
57,724
40,197
32,321
48,612
Source: HUDCC
234
Year
2013
Total
2014
2015
2016
997,438
847,822
720,649
612,552
5,732,454
302,242
7,250
34,913
21,373
81,408
114,677
20,010
47,907
65,105
57,030
32,338
21,819
39,337
49,066
34,168
27,473
41,320
256,906
6,163
29,676
18,167
69,197
97,476
17,009
40,721
55,339
48,475
27,488
18,546
33,437
41,706
29,043
23,352
35,122
218,370
5,238
25,225
15,442
58,817
82,854
14,457
34,613
47,039
41,204
23,364
15,764
28,421
35,450
24,686
19,849
29,854
185,614
4,453
21,441
13,126
49,994
70,426
12,289
29,421
39,983
35,023
19,860
13,399
24,158
30,132
20,983
16,872
25,376
1,737,039
41,669
200,653
122,834
467,865
659,071
115,003
275,329
374,171
327,761
185,854
125,396
226,078
281,989
196,368
157,893
237,476
Table 8.6. Proportion of Households in Informal Settlements
2000
All Households
Philippines
Urban
Metro Manila
3.60
3.48
5.30
2006
3.80
5.65
9.60
Growth (in %)
5.55
62.35
81.13
Sources: FIES, NSO
The housing sector, however, confronts

the following key challenges:
Strained Basic Shelter, and Urban Services

and Fiscal Constraints
Meeting the Enormous Housing

Need and Demand
The phenomenon of urban slums and

informal settlements have been characterized
by unsanitary conditions, congestion and
limited access to basic urban services, like
health centers, schools, waste disposal and
safe water supply. While the housing sector
is expected to contribute in attaining the
MDG target on improving the lives of at
least 100 million slum dwellers worldwide
by 2020, the formulation of the National
Slum Upgrading Strategy and the setting
of national targets for urban renewal and
slum upgrading efforts should allow a more
systematic and detailed assessment of the
Philippines contribution to the global goal
in the coming years.
Total housing need, which includes

housing backlog and housing for new
households, is estimated to reach about
5.8 million units by 2016 (Table 8.5).
The National Urban Development and
Housing Framework (NUDHF) 20092016 indicates that Regions 3, 4B and
NCR account for about half of the total
housing need.
Rapid Growth of Informal
Households and Settlements
Informal settlements have grown by
leaps and bounds. In Metro Manila,
households in informal settlements
increased by more than 81 percent
between 2000 and 2006. With ruralurban migration expected to continue,
and six out of ten Filipinos living in
urban areas, addressing the housing
problem must be embedded within a
larger urban development framework
for
environmental
sustainability.
While the MDGs on access to safe
drinking water and sanitary toilets
have already been achieved, land use
and green technology for housing
construction have can be tackled only
within an action plan for climate
change adaptation including disaster
risk management.
The annual public expenditure for housing

in the Philippines, which is approximately
less than 1 percent of the total government
expenditures, accounts for less than 0.1
percent of GDP, which is one of the lowest
in Asia (Habito, 2009). The limited budget,
unclear compliance of the provision of the
Urban Development and Housing Act (i.e.,
allocation of at least 20 percent of total
project cost in every housing development
for socialized housing finance), and
reliance to the social insurance system to
finance housing needs effectively limit the
access of the poor to housing assistance.
Government shelter strategies are focused
on increasing housing production either by
direct provision of housing units/loans or
by giving incentives to developers who cater
Social Development
235
mainly to the formal sector and the middle/

high-income households. These approaches
do not address the fundamental issues
of land supply constraints and financing,
weak institutional mechanisms in housing
construction and the financial environment,
and unclear focus on poverty reduction
(Ballesteros, 2010).
The HGC must be strengthened through
equity infusion from the government to
establish a stronger guaranty system that will
encourage the funding of socialized and lowcost housing projects by the private sector
and housing developers. Funds for housing
can be secured and sustained, only if there
is a viable system of guarantees for both the
government and private financial institutions
that cater to the funding requirements of
housing production and end-user financing.
The HGC can guaranty loans granted by
financial institutions and developers for
housing up to 20 times its net worth.
Social Protection
The number of poor Filipinos increased
from 22.2 million in 2006 to 23.1 million
in 2009. Filipinos unable to meet their daily
dietary requirements slightly decreased from
9.9 million in 2006 to 9.4 million in 2009.
The poverty incidence and the number of
the poor from all sectors increased between
2003 and 2006 (Annex 8.8).
The slow rate of poverty
reduction drew greater attention
to the need to protect the poor
and vulnerable.
Fisherfolk, farmers and children were the

three poorest population subcategories
in 2006, with poverty incidences of 49.9
percent, 44 percent and 40.8 percent,
respectively. Children and women accounted
for the largest number of the poor, at 14.4
and 12.8 million respectively in 2006 (Annex
8.8). The slow rate of poverty reduction drew
greater attention to the need to protect the
poor and vulnerable.
Wide disparities across regions were
also evident. Among regions, ARMM
had the highest poverty incidence in
2006 according to six basic sector

categories, namely children, farmers,
youth, urban population, and senior
citizens. CARAGA had the highest
poverty incidence under fisherfolk and
migrant and formal sectors (Annex
8.9). Meanwhile, NCR posted the
lowest poverty incidence in five sectors,
namely children, women, youth, senior
citizens and migrant and formal sector
workers (NSCB, 2006).
In terms of number, the children,
women and urban sectors headed the
list of poor basic sectors (Annex 8.10).
Disparities across regions were also
evident. Region 5 had the most number
of poor children and women; ARMM
had the most number of poor farmers
and fisherfolk; Region 6 had the most
number of poor youth and migrant and
formal workers; NCR had the most
number of urban poor; and Region 7
had the most number of poor senior
citizens. Meanwhile, CAR had the
least number of poor children, women,
youth and urban poor.
The increase in poverty incidence
was accompanied by the rise in the
percentage of vulnerable households13
(Albert & Ramos, 2010). The percentage
of the population belonging to highly
vulnerable households rose from 36.21
percent in 2003 to 50.70 percent in
2006. Conversely, the percentage who
were not vulnerable declined sharply
from 31.44 percent in 2003 to 18.99
percent in 2006. This trend implies that
individuals and households, whether
poor or nonpoor, face various social risks
and vulnerabilities (e.g., loss of income,
unemployment, natural disaster, among
others), especially during economic
downturns and crises that can push them
down to poverty. Owing to the lack or
absence of appropriate social protection
intervention, households resorted to
coping strategies that tend to erode
13
Households are classified as vulnerable if the probability of their becoming poor is greater than the national poverty
incidence. The vulnerable are further categorized into highly vulnerable if the probability of their being poor is greater
50 percent and relatively vulnerable otherwise.
236
human capital, such as reducing food

consumption, withdrawing children
from school, reducing health care
investments, selling assets and using up
savings, among others (Ahmed, et al.,
2004)
Moreover, impact assessment of many

programs is difficult, due to their lack
of built-in monitoring and evaluation
components. There is a dearth of up-to-date
and disaggregated data on vulnerable groups,
often making them invisible in statistics.
The current social protection system is

characterized by a series of fragmented
and
uncoordinated
programs.
The multiplicity of programs and
government agencies involved often
result in poor coordination, redundancy
in providing services or overlapping of
program beneficiaries. For example,
21 agencies were involved in the
implementation of 65 social protection
programs and projects (Development
Academy of the Philippines, 2009).
Social protection programs were
found to be inadequately funded, and
most are short-lived (Manasan, 2009).
The countrys national government
spending on social protection was much
lower (0.8% of GDP in 2007) than
the mean spending of 87 developing
and transition countries on safety nets
(1.9% of their GDP from 1996-2006)
(Weigand & Grosh Survey, 2008).
The industrial and occupational adjustments

necessitated by industrial restructuring, the
globalized system of production, various
international agreements, and the damage
wrought on incomes and livelihoods by
natural calamities highlight the need to
protect those in contractual employment, in
seasonal work, and at risk from displacement
or facing potential income losses. The limited
coverage of the social security schemes (i.e.,
Government Service Insurance System,
Social Security System or SSS) means that
the larger part of the workforce found in
the informal and vulnerable occupations
are marginalized. Although there have been
attempts by PhilHealth to cover the poor
and unemployed, as well as workers in the
informal sector (IS) and those working
overseas, universal membership has yet to
be achieved. Social welfare and safety nets
also need to improve programs and services
standards, and focus on the poorest among
the basic sectors.
The benefits of existing social protection

programs are compromised by weak
targeting systems resulting in high
leakage to the nonpoor, undercoverage
of the poor, low program impact
and wastage of scarce resources. For
example, the National Food Authority
(NFA) rice price subsidy showed a high
leakage rate of 71 percent, because it is
an untargeted program that benefits all
households (Manasan, 20).
Existing social protection programs
are inadequate in terms of coverage.
While partnership with nongovernment
organizations (NGOs) and other
stakeholders have succeeded in making
social services accessible to the poor,
NGOs tend to flock to selected
advocacies like childrens causes, leaving
behind other sectors, such as the disabled
and elderly wanting (ADB, 2009).
To improve the effectiveness and efficiency

of the social protection interventions, the
government launched the CCT program
called the Pantawid Pamilyang Pilipino
Program. Further work is needed, however,
to consolidate social protection programs
and complement these with the CCT. The
bigger challenge is the expansion of the
CCT to make it the core program in the
convergence of social protection initiatives
to ensure sustainability of beneficiaries gains.
The bigger challenge is the

expansion of the CCT to make
it the core program in the
convergence of social protection
initiatives to ensure sustainability
of beneficiaries gains.
Children
Children accounted for the largest number
of poor persons among the basic sectors,
at 13.4 million in 2003 and 14.4 million
in 2006. The proportion of poor children
living in rural areas was twice as much
as those living in urban areas. The Child
Social Development
237
Development Index (CDI)14 fell from 0.779

in 2003 to 0.729 in 2006 (NSCB). Children
in especially difficult circumstances include
street children, victims of child abuse and
commercial sexual exploitation, child victims
of prostitution and pornography, children in
conflict with the law, children in situations
of armed conflict, children with disabilities,
child victims of illegal recruitment and
trafficking, and child laborers.
Working children are a significant portion of
the Filipino workforce. There are about 2.1
million economically active children in the
Philippines, aged 5-17 years old, majority
of whom were males between 15-17 years
old (DOLE-BLES). Across industries,
55.6 percent of the working children were
engaged in agriculture, hunting and forestry.
A significant portion numbering around
201,000 were employed in private household,
a majority of them working as laborers and
unskilled workers. Child work affects the
performance of children in school resulting
in low grades, absenteeism, tardiness, and
lack of interest.
Women
While Filipino women may be considered
as relatively advanced vis-a-vis women in
other developing countries (e.g., in the
areas of education, profession, politics
and legislation), they also suffer from
domestic violence, economic disadvantages,
discrimination at the workplace, exploitation
as migrant workers and prostituted women,
and displacement brought about by the
intermittent wars in conflict-affected areas.
In general, women are in disadvantaged
position due to differences in gender roles
that limit their access to productive resources
and basic services.
The number of employed women
million) was lower than that of
(21.3 million) in the 2009 Labor
Survey. There was an increasing
14
(13.3
men
Force
trend
of unpaid workers, 55.8 percent of

whom were women. In 2008, 54.7
percent of the total number of female
OFWs were laborers and unskilled
workers, including domestic helpers,
cleaners, and manufacturing laborers.
Remittances from female OFWs
worldwide were relatively lower than
from their male counterparts.
Around 18 percent of elected posts in
2010 were won by women candidates.
However, in the judiciary, only 20
percent of total incumbent judges
were women. While women were
predominant in the government
bureaucracy, these occupied mostly the
technical or second-level positions.
Regarding violence against women
(VAW), the number of cases reported
to the police rose 37.4 percent from
2008 to 2009 (Philippine Commission
on Women, 2010). While there was
a decreasing trend in reported cases
from 2001 to 2006, the number rose
from 2007 to 2009, with 10,440 VAW
cases occurring in 2009. The increase
in reported cases may be attributed to
more women having been emboldened
to report, due to the passage of laws
that address sexual and gender-based
violence. Still, it should be noted that
the data reflect only what is reported to
the PNP, and there could still be other
unreported cases.
The incidence of physical injuries and/
or wife battering reported to the PNP
has been decreasing since its peak in
2001, with 5,668 reported cases. The
decrease may be partly attributed to
the enactment of RA 9262, which
penalizes abusive husbands and live-in
partners. Data on the number of women
in extremely difficult circumstances
(WEDC) served by DSWD also show
a downward direction, from 7,763
CDI is a composite index measuring average achievement in the three basic dimensions captured in the human
development index, adjusted to account inequalities between women and men (UNICEF, 2010).
238
cases in 1999 to 5,549 cases in 2007.

However, this may have been due to a
decrease in the budget of DWSD for
WEDC rather than an improvement in
the plight of WEDC.
Table 8.7. Summary of Actual OFW Membership
Institution
Number of OFW
SSS
184,000 (2009)
Elderly
OWWA
2.2 million (November 2010)
In 2003 and 2006, the number of elderly

people in the Philippines was estimated
at about 5.2 million and 6.3 million,
respectively. Some of the risks and
vulnerabilities of the elderly included
loss of income as a result of retirement,
disability and impairment of functions
affecting their quality of life, lack of or
inadequate health care insurance and lack
of adequate living conditions for those
who live alone. There was also a rise in
the number of elderly persons who were
victims of violence and abandonment
due to in and out migration of younger
family members.
PHIC
2.1 million (2009)
Sources: SSS, OWWA, PHIC
through, its program entitled Support

for Policy and Programme Development
(SPPD), identified strategic issues
confronting the IS. These are the: (a)
invisibility of the IS in government
statistics and representation in policymaking bodies; (b) lack of access to health
and other social protection interventions;
(c) lack of access to productive resources;
and (d) the need to be organized.
Persons with Disability

Overseas Filipino Workers (OFWs)
There were about one million persons
with disability (PWDs) or 1.23 percent
of the total 88 million population in
2007 (NSO, 2007). Of these, 50.24
percent were females. It was also
estimated that 30 to 40 percent of
PWDs were children. PWDs remain
among the poorest of the poor.
They have insufficient access to the
mainstream labor market because they
are disproportionately undereducated,
untrained, and socially excluded.
Workers in the Informal Sector15
The IS comprises a major portion of the
countrys labor force and is recognized
as major contributor to the economy.
Over the years, however, the informal
sector has constantly been confronted
with issues. In 2001, the Department
of Labor and Employment (DOLE)
Social security and protection of OFWs are

growing concerns, given the limited coverage
of the SSS, PHIC and Overseas Workers
Welfare Administration (OWWA). Out
of 8.6 million overseas Filipinos (OFs) in
2009, 4 million are permanent migrants, 3.9
million are temporary OFWs and 658,370
are irregular migrants. Table 8.7 summarizes
the actual OFW membership to institutions
that provide social security benefits.
There is, therefore, a need to review the
viability of current social security and welfare
fund schemes, given the limited capacity and
resources of the countrys social security and
welfare fund institutions. Another challenge
is the exclusion of domestic workers, the
top occupational category with respect to
deployment of landbased OFWs, in most
of the social security laws particularly in top
destination countries (see Figure 8.3).
There is, therefore, a need to

review the viability of current
social security and welfare fund
schemes
15
Informal sector refers to unincorporated household enterprises, consisting of both informal own-account and
enterprises of informal employers (NSCB, 2002).
Social Development
239
g y
Figure 8.3. Deployed Landbased OFWs by Top Occupational Category: 2009

Household Service Workers
Nurse Professional
Waiters, Bartenders
Charworkers, Cleaners
Wiremen Electrical
Caregivers and Caretakers
Laborers/Helpers General
Plumbers and Pipe Fitter
Welders and Flame-cutters
Housekeeping and related
71
13465
11977
10056
9752
9228
8099
7722
5910
5127
Source: Overseas Employment Statistics, Philippine Overseas Employment Administration
Displaced Workers
Natural and man-made disasters

are major causes of poverty and
vulnerability in the country.
In 2007 and 2008, around 52,000 workers

were permanently displaced due to
economic shocks (DOLE-BLES). About
213,417 workers were retrenched by 1,836
firms as a result of the global financial
crisis, with 58.1 percent (124,006) being
placed under flexible work arrangements,
18.1 percent (38,556) temporarily laid off,
and 23.8 percent (50,855) permanently
terminated.
While the global financial crisis had a
minimal impact on the deployment of
OFWs, OWWA and POEA data indicated
that 6,957 workers in 327 companies
lost their jobs mostly from factories in
Taiwan and South Korea. Of this number,
nearly two-thirds (4,495) returned to the
Philippines (See also Chapter 2).
has both social and labor implications,

particularly because they affect the most
productive segment of the labor force.
Victims of Disasters
Natural and man-made disasters
are major causes of poverty and
vulnerability in the country. An average
of 20 typhoons visit the country a year,
owing to climate change the effects
have become more devastating. The
most vulnerable areas of the country
are Eastern Visayas, and Southern,
Central and Northern Luzon. Victims
of disasters, mostly from typhoons and
floods, doubled from an average of four
million in 1994-1996 to eight million
in 2004-2006, most of them in rural
areas (ADB, 2007).
Indigenous Peoples
Workers with HIV and AIDS

From 1984 to January 2011, there were 6,167
reported HIV Ab sero-positive cases in the
country based on the DOH National HIV
and AIDS Registry. The 25-29 age group
registered the most number of cases at 25
percent. Statistics also showed that 25 percent,
or 1,539 of those listed in the registry are
OFWs, of which 267 were full-blown AIDS
cases. This is an indication that HIV and
AIDS might be a biomedical problem that
240
In 2009, there were about 110 ethnolinguistic groups in the Philippines

consisting of approximately 14 million
indigenous people (IP). IPs are among
the discriminated, vulnerable, and
marginalized groups, a fact not only
seen from various smaller studies
but also suggested by the correlation
between low human development
indicators and high concentration of
IPs (Stavenhagen, 2002). The National
Commission on Indigenous Peoples

(NCIP) reported that provinces with
most IPs have high poverty incidence.
The lack of power and access to decision
making and management processes
contribute to the impoverishment of
IPs, who mostly live in mountains
and have limited access to sustainable
livelihood and basic services. They are
often victims of armed conflict and
human rights abuse.
Asset Reform
Land Acquisition and Distribution
Performance in land tenure improvement
(LTI) took an uncertain turn due to the
national governments successive budget
reenactments and the lapse of the
appropriation cover provided under RA
8532 or the Act Strengthening Further
the Comprehensive Agrarian Reform
Program (CARP) Law of 1988. The
declaration of over one million hectares
of the land acquisition and distribution
(LAD) balance provided policy shifts
in the CARP implementation for the
next five years. With the signing of
the CARP Extension with Reforms
(CARPer) Law in 2009, an additional
PhP150 billion has been appropriated
for the completion of CARPers LAD
balance of 1,034,661 hectares net of
retention16 to be distributed in five years
starting from July 2009. At least 40
percent of the said amount has been set
aside for the delivery of support services
to the beneficiaries. The CARPer Law
also stipulates that support services,
agrarian justice delivery, and operational
requirements of CARP implementing
agencies (CIAs) shall be continued
even after completion of the LAD
component of the CARP.
From 2004 to 2008, the Department of

Agrarian Reforms (DAR) average annual
LAD accomplishment rate hit 102 percent
against its funded target. In 2009, only 69
percent of the reduced annual LAD target of
85,764 hectares was accomplished.
Operational bottlenecks were encountered,
including longer processing due to
compliance with the new acquisition
requirements imposed under CARPer.
Such requirements include landowners
attestation, Barangay Agrarian Reform
Committee (BARC) certification, and oathtaking before the City/Municipal Court
Judge. The need to intensify the synergy
among CIAs in delivering land distribution
commitments continues to be an issue.
Related to LAD is the delivery of agrarian
justice, which involves the adjudication
of agrarian cases and representation of
Agrarian Reform Beneficiaries (ARBs)
before quasi-judicial bodies and regular
courts. The performance of DARs delivery
of agrarian justice during the past years
has been commendable in terms of solving
cases on coverage, land use conversions,
land exemptions or exclusions, installation
of ARBs to awarded lands, and provision
of legal assistance to ARBs despite some
challenges, such as lack of personnel,
resolution of backlog cases, and budgetary
constraints.
Studies have confirmed that ARBs are more
productive and better off than non-ARBs.17
Agrarian reform communities (ARCs),
when properly established and supported,
improved their economic conditions,
social capital, civic entrepreneurship and
democratic participation. Furthermore, the
study of Habito, et. al. (2010)18 confirmed
that consolidation of output does not
require consolidation of ownership in order
16
PARC Executive Committee Resolution No. SP-2010-04 establishing and firming up the CARPER gross land
acquisition and distribute balance at 1,281,033 hectares of which 1,034,661 is estimated to be net of retention
17
These include the CARP-Impact Assessment Study (Phase I) conducted in 2000, a re-validation of the said study
under CARP-Impact Assessment Study (Phase II), the DAR-German Technical Cooperation (GTZ) Study on PostLAD Scenarios in 2006, the Asset Reform CARD Study by Dr. Cielito Habito in 2008, and the CIRDAP study on
Access to Land and Rural Development in the Philippines
18
A Comprehensive Study on the Appropriate Economically Viable Land Size by Type of Crop Category Under Varying BioClimatic Zones and Technological Conditions, led by Dr. Cielito Habito.
Social Development
241
to realize economic gains from processing

or marketing. Institutional arrangements
through tie-ups with collective organizations
of farmer-beneficiaries are viable alternatives.
Ancestral Domains and Lands
In 1997, the Indigenous Peoples Rights Act
(IPRA) was passed, embodying the rights
and aspirations of Indigenous Peoples (IPs)
and providing the legal framework for the
protection and development of Indigenous
Cultural Communities (ICCs). Among
the rights sought by IPs is the recognition
of their ancestral domains (ADs) through
the issuance of the certificates of ancestral
domain titles (CADTs) and certificate of
ancestral land titles (CALTs). CADTs are
titles that formally recognize the rights of
possession and ownership of ICCs/IPs over
their ancestral domains as identified and
delineated in accordance with this law, while
CALTs refer to titles formally recognizing
the rights of indigenous cultural communities
(ICCs)/IPs over their ancestral lands.
As of July 2010, 156 out of 286 CADT
applications have been approved by the
NCIP, while 130 are still in various stages of
the titling process. The NCIP also approved
258 CALTs with 8,609 right holders.
The Ancestral Domain Sustainable
Development
and
Protection
Plan
(ADSDPP) is a long term comprehensive
spatial and development plan with identifiesd
programs and projects that strengthen selfgovernance, build lasting peace and genuine
development within ancestral domains of
particular ICCs or IP groups. It serves as
the community development framework
that ensures a participatory process of
mainstreaming IP issues and concerns.
However, the ICCs/IPs still need technical
and financial assistance in the formulation of
the ADSDPPs and their integration in the
CLUPs and local development plans. The
NCIP had already assisted 87 ICCs/IPs in
the formulation of their ADSDPPs.
The NCIP also formulated and implemented
the guidelines on the Free, Prior and
Informed Consent (FPIC). FPIC refers to
242
the consensus of all concerned members

of the ICCs/IPs that is determined
in accordance with their respective
customary laws and practices free from
any external manipulation, interference
and coercion and obtained after fully
disclosing the intent and scope of the
project. To date, the NCIP has issued a
total of 296 Certificates of Compliance
and 1,368 Certificates without Overlap
(CEB/Certificates of Non-Overlap)
related to FPIC. Concerns exist,
however, over the duration of the FPIC
process, as well as the internal conflicts
within the ICCs utilization of royalties,
and the non-implementation by
companies operating within ADs of the
terms indicated in the memorandum of
agreement with the ICCs.
Further, NCIP is mandated to provide
legal assistance to enforce the right of
IPs to resolve conflicts in accordance
with their customary laws pertaining
to property rights, claims, ownership,
hereditary succession and settlement of
land disputes within ancestral domains/
lands. NCIP handled 8,767 legal
assistance to ICCs/IPs before judicial
and quasi-judicial bodies since 2004.
There are still 265 cases pending before
the NCIP regional hearing officers.
Basic services for IPs within their
ancestral domains were delivered
in accordance with their rights and
entitlements. These covered educational
assistance; strengthening IP education
starting with indigenization of
curriculum and learning materials,
as well as cultural sensitivity training
for teachers; assistance to IP-serving
community schools; traditional crafts;
livelihood
and
entrepreneurship;
support to cultural festivals/congresses;
medical missions and referral system;
assistance in emergency situations;
and documentation of activities for
traditional knowledge and traditional
cultural expressions, customary laws
and children in armed conflict (CIAC).
The delivery of these socioeconomic
services was anchored on indigenous
knowledge systems and practices

(IKSPs) and based on the principles
of human rights, cultural sensitivity,
gender equality, people empowerment,
and sustainable development.
Most IPs/ICCs, however, still lack
adequate access to social protection and
basic services within their localities and
among their particular tribal groups.
They also need the negotiation skills
and technical know-how on risk and
impact assessments, to ensure equitable
access-benefit sharing agreements,
and the necessary funds for the
management and preservation of their
ancestral domains.
The representation of IPs in various
legislative bodies and other special
bodies, as provided under the IPRA, as
well as the convening and sustainability
of their multilevel consultative bodies,
are priority concerns that still need to
be fully addressed.
There is also a need for a more updated
and disaggregated data on IPs that
can serve as basis in the formulation
of more appropriate, targeted and
updated policies and programs for IPs.
Coastal and Marine Settlement
Based on the 2009 data of the National
Mapping and Resource Information
Authority (NAMRIA), more than
900 coastal municipalities completed
their municipal water delineation.
Unfortunately, only 30 of these
municipalities passed ordinances on
municipal water delineation. Thus, the
delineation of municipal waters, as
stipulated under the Fisheries Code,
has still not been implemented in most
coastal municipalities 12 years after its
enactment. In areas where municipal
waters have been delineated, marked
improvements in fish catch and small
fishers income and illegal fishing
apprehension have been observed.
Furthermore, the delineation process
facilitated the resolution of boundary
conflicts among contiguous municipalities,

which in turn improved resource
management.
The National Anti-Poverty Commission
(NAPC) previously advocated the signing
of an Executive Order (EO) establishing
a task force on fisherfolk settlement, to
address the sectors need for decent human
settlement. This was endorsed by the
National Agriculture and Fishery CouncilCommittee on Fisheries and Aquaculture
(NAFC-CFA), a private-sector led
consultative arm of DA. However, the said
EO was not issued.
It is widely acknowledged that climate
change will accentuate the damage in
low lying coastal communities, as strong
typhoons become more frequent and
dangerous. The Fourth Assessment Report
of the Inter-governmental Panel for Climate
Change (IPCC) predicts that low lying
regions, particularly in tropical and coastal
communities, are likely to be adversely
affected by the sea-level rise and temperature
increase attributed to climate change.
The privatization and commercialization
of foreshore areas and the indiscriminate
designation of freeports and economic zones
adds pressure on the coastal communitys
productivity and social cohesion, which
dislocates small fishing settlements. The
government needs data to anticipate adverse
consequences and minimize the damage
brought about by natural disasters. The
absence of mechanisms addressing both the
productive and reproductive needs of women
fisherfolk is also a concern.
The lack of financial resources and manpower
also poses a constraint in the development
of the fishery industry, despite the industrys
significant contribution to agricultures gross
value added.
Urban asset reform deals with

the provision of security of land
tenure to the poor and vulnerable
including informal settler families
in urban areas.
Urban Asset Reform

Urban asset reform deals with the provision
of security of land tenure to the poor and
vulnerable including informal settler
families in urban areas. These interventions
include presidential proclamations of sites
Social Development
243
for socialized housing, onsite development

and services, and resettlement, among
others. Presidential proclamations identify
and proclaim idle government lands as
socialized housing sites for disposition
to qualified beneficiaries. Since 2001, the
government, through the Housing and
Urban Development Coordinating Council
(HUDCC), has issued 113 proclamations
covering 27,000 hectares, providing security
of tenure to about 280,000 informal settler
families.
In resettlement, the overriding policy is
to improve the quality of life of informal
settlers while ensuring maximum retention
and minimum dislocation. The national
government has implemented a number
of resettlement programs, namely the
North and South Rail Project, the North
Luzon
ExpresswayC5South
Luzon
Expressway, and the relocation of typhoonrelated victims. As of November 2010, the
government has relocated almost 88,000
families, or 93 percent of total families living
along the rail rights-of-way in North Luzon
and South Luzon (which are danger zones),
paving the way for development of new
transport systems and to provide safer and
better homes.
Challenges
Against this backdrop, the Philippines
faces the following challenges in the social
development sector:
Unsustained Poverty Reduction. While
the Philippines was able to reduce
poverty from 1991 to 1997, progress
from 1997 to 2009 was sluggish and
erratic. From 2006 to 2009, poverty
incidence among families decreased
from 21.1 to 20.9 percent. In the
same period, poverty incidence among
population rose slightly from 26.4 to
26.5 percent. This outcome is attributed
to the slow growth of incomes, increase
in household formation, natural disasters
and inflationary pressures mainly from
rising fuel and food prices. Moreover,
wide disparities across regions, provinces
and municipalities continue to exist.
244
There is a need to enhance the

governments overall antipoverty
framework and strategy to ensure
complementation and synergy of
antipoverty programs and projects,
and to put in place a unified
targeting system that would result
in greater impact.
Slow
Progress
towards
the
Attainment of the MDGs. There are
still huge gaps in terms of achieving
the MDGs. The Philippines lags
in achieving universal primary
education, improving maternal
health and combating HIV and
AIDS. At the national level, the
Philippines is on track to meet
the targets on food poverty,
gender equality in education,
reducing child mortality, reversing
the incidence of and death rate
associated with malaria; detection,
treatment success and cure rates
of tuberculosis cases; and access to
sanitary toilet facilities.
Inadequate Financing for Social
Services. The share of the social
development in the governments
expenditure increased slightly
from 28.9 percent in 2004 to 31.71
percent in 2009. Through the years,
education has received the bulk
of the share, although it has not
satisfactorily met the requirements
of access and quality. Meanwhile,
the housing sector had less than
one percent of the national
budget. Competing claims within
the social sector also require
more rigorous prioritization and
efficient resource utilization for
equitable access to social services
and assets that will contribute to
poverty reduction, job creation
and inclusive growth.
High Population Growth Rate.
Although the average annual
population growth rate of the
country from 2000-2007 decreased
to 2.04 percent from 2.34 percent
in 1990-2000, the population is

still expected to double in 34 years.
Such a high population growth is
likely to worsen existing poverty
by absorbing scarce resources
that might otherwise be directed
to investment and productive
activities. The limited government
may
encounter
increasing
difficulties in raising the quality
of basic services provision, when
its resources are already strained
to cover a rapidly growing
population.
Lack of Access to Productive Resources
and Employment Opportunities.
Poverty is largely caused by the lack
of access to productive resources,
employment
and
livelihood
opportunities. From a double-digit
unemployment rate of 11.9 percent
in 2004, the unemployment rate
declined to 7.1 percent in October
2010. The underemployment rate
has also slightly improved from
19.0 percent in 2009 to 18.5 percent
in July 2010. To effectively reduce
poverty and inequality, however,
generation of an increasing
number of highly productive and
quality jobs and entrepreneurial
opportunities needs to be sustained.
Adverse Effects of Disasters and
Shocks. The confluence of natural
and man-made disasters and
calamities reverse the pace of
development and require the
allocation of more resources for
relief and rehabilitation efforts.
Natural disasters (e.g., typhoons,
earthquakes, volcanic eruptions)
and the onslaught of extreme
weather conditions (e.g., El Nio
and La Nia) caused by global
warming and climate change,
coupled with man-made conflicts
fueled by insurgency and unpeace,
disrupt
the
socioeconomic
progress in conflict-stricken areas
of the country.
Strategic Framework
Goals
The overriding goal of social development is
to improve the quality of life of all Filipinos.
In pursuit of the MDGs, the social sector
shall seek to reduce poverty and inequality,
universalize elementary education and
health care, achieve gender equality, ensure
environmental sustainability, and foster a
global partnership for development.
Universal Health Care shall be directed
towards ensuring the achievement of better
health outcomes, fair health financing and
responsive health system that provide all
Filipinos, especially the disadvantaged groups,
with equitable access to quality health care.
The goals of education, training and
cultural development are to: (a) make
every Filipino functionally literate both
through the schools and non-school
learning modalities; (b) achieve a higher
level of productivity, international
competitiveness, industry relevance and
social responsiveness in the development
of both middle-level skills and the highlevel professions; and (c) develop, promote
and inculcate a strong sense of nationalism
by utilizing the media, arts and sports
in strengthening ownership of cultural
heritage and tradition.
Housing and urban development envisions
to provide families not just with the
infrastructure of a house, but the framework
of a home; to build not just a neighborhood,
but a real harmonious community. The
theme Gaganda ang buhay kung may
bahay at hanapbuhay emphasizes the
need for security of tenure and livelihood
opportunities in human settlements. The
promotion of local shelter development
and strengthening of public-private
partnerships (PPPs) are expected to help
achieve sustainable communities, urban
competitiveness, housing affordability,
effective
governance
and
poverty
reduction. Moreover, the housing sector
The theme Gaganda ang

buhay kung may bahay at
hanapbuhay emphasizes the
need for security of tenure and
livelihood opportunities in human
settlements.
Social Development
245
aims to achieve the MDG of significantly

improving the lives of at least 100 million
slum dwellers worldwide by 2020. With
the formulation of the National Slum
Upgrading Strategy, a systematic focusing
of programs and coordination of efforts is
expected to be realized.
The goal of social protection is to empower
and protect the poor, vulnerable and
disadvantaged individuals, families and
communities from individual life cycle,
economic, environmental and social risks.
Social protection sector shall

ensure the empowerment and
protection of the poor, vulnerable
and disadvantaged individuals
from all types of risks.
Finally, the goal of asset reform is to recognize,

protect and empower ICCs/IPs rights and
welfare, as well as to improve and guarantee
the security of land tenure of ARBs.
Targets
This Philippine Development Plan affirms
the governments commitment to attain
the MDGs. One of the main thrusts of the
Universal Health Care approach is geared
towards this end, including program targets
on lifestyle-related diseases. Other targets
pertain to programs on health insurance,
nutrition and reproductive health.

By 2016, the country shall achieve a universal
and at least a 93 percent participation or
net enrolment rate in the elementary and
secondary levels, respectively. A gender parity
index (GPI) of 1 shall be targeted in basic
education indicators. Likewise, TVET and
higher education subsector shall also increase
enrolment and graduation rate by 2016.

The housing sector targets the provision of
1.47 million units of direct housing assistance
from 2011 to 2016. This target for direct and
indirect housing provision is identified in
Table 8.10.
The global MDG on ensuring environmental
sustainability aims to achieve significant
246
improvement in the lives of at least

100 million slum dwellers worldwide
by 2020. This will guide the plans and
programs on urban renewal or slum
upgrading, which is a key component
of the socialized housing program.
The identification and development of
new relocation/resettlement sites for
the marginalized and vulnerable sectors
will be adopted, and program targets
will likewise be set. The National
Slum Upgrading Strategy that will be
formulated will identify the national
targets for the programs addressing the
needs of slum dwellers.
Social Protection
The social protection sector shall
ensure the empowerment and
protection of the poor, vulnerable
and disadvantaged individuals from
all types of risks. The convergence of
Pantawid Pamilyang Pilipino Program,
the Kapit-Bisig Laban sa Kahirapan
Comprehensive
and
Integrated
Delivery of Social Services (KALAHICIDSS)
and
Self-Employment
AssistanceKaunlaran (SEA-K) shall
cover 53 provinces, while the National
Household Targeting System for
Poverty Reduction (NHTS-PR)
shall update its database by 2014 in
identifying at least 5.6 million poor
households. Other targets are listed in
Table 8.11.
Asset Reform
DAR and DENR shall effectively
synchronize the targets of the land
acquisition and distribution component
of the CARP. It shall distribute an
estimated 1.5 million hectares to about
1.1 million beneficiaries from 2011 to
2014.
CARPs target has been revised based
on the updated database as of December
2010. It shall be noted that the
remaining balance of 1,102,095 hectares
represent the gross landholdings that
Table 8.8. Health, Nutrition and Population Targets: 2011-2016
Indicators
Baseline
2011
2012
2013
2014
2015
2016
Prevalence of underweight children under five years of

age (in %)
20.6 (2008)
17.6
16.6
15.6
14.6
13.7
12.7
Proportion of households with per capita intake below

100% dietary energy requirement (in %)
66.9 (2008)
54.1
49.9
45.6
41.4
37.1
32.8
Under 5 mortality rate

(per 1,000 live births)
34 (2008)
31.6
30.4
29.2
28
26.7
25.5
Infant mortality rate

25 (2008)
23
22
21
20
19.0
17
95-163
(2010, NSCB)
97
84
70
61
52
50
MDG Indicators
Maternal mortality ratio

Contraceptive Prevalence Rate
(all methods)
51 (2008)
56.2
57.9
59.7
61.4
63
Proportion of births attended by a health professional

(in %)
62 (2008)
69
72
75
80
85
90
Proportion of births delivered in health facilities (in %)
44 (2008)
Less than 1%
(2009)
22 (2009)
0.03 (2009)
486 (2008)
41 (2007)
73 (2008)
79 (2008)
69
72
75
80
85
90
<1%
<1%
<1%
<1%
<1%
<1%
16.9
<.03
446
36
79
82
14.3
<.03
434
35
81
83
11.8
<.03
422
35
83
83
9.2
<.03
410
34
84
84
6.6
<.03
398
33
85
85
4
<.03
387
33
85
85
HIV Prevalence*
Malaria morbidity rate per 100,000
Malaria mortality rate
TB prevalence rate per 100,000
TB mortality rate per 100,000
TB case detection rate
TB cure rate
Proportion of population with access to safe water
(households) (in %)
82.3 (FHSIS
2008)
83
84
85
86
86.9
88
Proportion of population with access to sanitary toilet

facilities (households) (in %)
76.8 (FHSIS
2008)
79
81
83
84
85.9
88
Population with access to affordable essential drugs

(in %)
73 (2009)
75
78
82
84
85
95
Other Indicators
Population Growth Rate
Total Fertility Rate
Percentage of out of pocket payment from total health
care expenditure
Benefit Delivery Rate (NHIP)
National Health Insurance Program (NHIP) Coverage
NHIP Enrollment rate
Ratio of accredited health facilities to total number of
licensed health facilities
2.04 (20002007)
3.3 (2008)
Prevalence (in %) of wasted under-five children

Prevalence (in %) of thin children 6-10 years old
Percent of pregnant women who are nutritionally-atrisk
2.4-2.96
54.3 (2007)
41
35
7.7 (2008)
53 (2008)
74 (2010)
70
85
85
90
15
100
100
100
100
100
100
30
100
100
90 (2010)
95
95
95
95
95
95
32.2 (2008)
7.5 (2008)
8.1 (2008)
2% ann.
reduction
28.0
6.5
6.9
2% ann.
reduction
26.6
6.2
6.5
2% ann.
reduction
25.2
5.9
6.1
2% ann.
reduction
23.8
5.6
5.7
2% ann.
reduction
22.3
5.2
5.3
2% ann.
reduction
20.9
<5
<5
26.3 (2008)
24.8
24.3
23.9
23.4
22.9
22.4
Mortality rate from lifestyle related and non

communicable diseases (in %)
Prevalence (in %) of stunted under-five children
1.48-1.82
Sources: DOH, NNC, POPCOM and NSCB

*For the specific annual targets, please refer to the 5th AIDS Medium Term Plan (AMTP). The 5th AMTP goal states that by 2016, the country
will maintain the prevalence of less than 66 HIV cases per 100,000 population.
Social Development
247
Table 8.9. Education Targets: 2011-2016
Indicators
Baseline
2011
2012
2013
2014
2015
2016
Literacy
Simple Literacy Rate (10 yrs. old and above)a/
Functional Literacy Rate (10-64 yrs. old)
a/
95.6 (2008)
86.4 (2008)
98.1
90.1
Early Childhood Education

Gross Enrolment Rate of 3-4 years old children in Day
Care Service
19.45
20.00
Gross Enrolment Rate - Kindergartenb/ c/
68.41
48.23
67.40
74.73
81.05
87.36
93.68
100.00
100.00
58.58
68.94
79.29
89.65
100.00
100.00
73.92
80.44
86.96
93.48
100.00
100.00
Net Enrolment Rate - Kindergarten (5 yrs. old) b/ c/

Percentage of Grade 1 entrants with ECE experience
30.00
40.00
50.00
60.00
70.00
Elementary
Net Intake Rate in Grade 1b/
Gross Enrolment Rateb/
Net Enrolment Rate
b/

Completion Rated/
Achievement Rate (Grade 6 NAT MPS )
58.61
105.37
88.09
74.38
72.18
68.0
65.89
73.17
80.44
87.72
95.00
100.00
108.30
111.22
114.15
117.07
120.00
122.93
90.09
92.09
94.10
96.10
98.10
100.00
76.45
78.51
80.57
82.64
84.67
86.76
75.13
76.61
78.09
79.56
81.04
82.52
70.9
71.7
72.5
73.3
74.2
75.0
81.03
59.52
78.44
73.74
45.6
86.83
92.62
98.41
104.21
110.00
115.79
65.16
70.79
76.43
82.06
87.70
93.34
79.35
80.27
81.18
82.09
83.00
83.91
74.25
74.51
74.76
75.02
75.27
75.53
54.6
58.7
62.7
66.8
70.9
75.0
1,984,646
893,091
1,091,555
1,903,793
856,708
1,047,085
836,131
690,836
82.62
1,100,000
1,210,000
1,331,000
1,464,000
1,610,510
1,771,560
531,300
586,850
649,528
720,288
805,255
885,780
Secondary
Gross Enrolment Rateb/
Net Enrolment Rateb/
Completion Rated/
Achievement Rate (Year II NAT MPS)
TVET
Enrolment
Male
Female
Graduates
Male
Female
568,700
623,150
681,472
743,712
805,255
885,780
1,000,000
1,100,000
1,210,000
1,331,000
1,464,100
1,610,510
494,000
545,600
602,580
664,169
732,050
805,255
506,000
554,400
607,420
666,831
732,050
805,255
600,000
660,000
726,000
798,600
878,460
966,306
510,000
564,300
624,360
690,789
764,260
845,518
85.00
85.50
86.00
86.50
87.00
87.50
23,299
13,800
13,800
13,800
13,800
13,800
13,800
Enrolment
2,770,965
2,881,352
2,955,949
3,021,059
3,080,827
3,155,616
3,220,987
Male
1,255,839
1,305,170
1,335,880
1,361,395
1,388,337
1,418,062
1,445,247
No. of Persons Assessed

No. of Persons Certified
Certification Rate (%)
Private Education Students Financial Assistance
(PESFA) Number of TVET beneficiaries
Higher Education
Female
1,515,126
1,576,182
1,620,069
1,659,664
1,692,490
1,737,554
1,775,740
Graduates
481,026
509,707
524,054
538,397
552,735
567,083
581,425
Male
206,015
219,503
226,249
232,994
239,737
246,482
253,228
275,011
290,204
297,805
305,403
312,998
320,601
328,197
35.04
9.69
40
45
50
55
60
65
10
13
16
20
25
30
Female
Faculty Qualification
% Masters Degree
% Doctorate Degree
248
Table 8.9. Education Targets: 2011-2016 (contd.)
Indicators
Baseline
2011
2012
2013
2014
2015
2016
Accreditation
Percent of higher education institutions with
accredited programs
20
20
23
26
29
32
35
200
800
800
800
800
800
800
42,000
44,000
44,000
44,000
44,000
44,000
44,000
34 (2008)
30
32
34
36
38
40
36.26
45.84
47.04
48.39
49.72
50.94
52.53
2014
2015
2016
Expanded Tertiary Accreditation and Equivalency

Program (ETEEAP) Graduates
Student Financial Assistance Programs (STUFAPs)
Number of HE beneficiaries
Percent of higher education institutions with
Ladderized Education Program (LEP)
National Passing Percentage in Licensure Exams
Sources: DepEd, TESDA, CHED, NSO and the National ECCD Council
a/ Data from the FLEMMS conducted by the NSO every five years
b/ Based on the 2000 Census of Population using the growth rate of the 2007 Census which is 2.04%
c/ Excludes preschool enrolment in summer classes
d/ The definition and formula for completion rate is currently being reviewed
Table 8.10. Housing Targets by Program/Agency: 2011-2016
Program
Total
2012
20,003
18,740
2,068
70,000
42,000
20,000
70,000
46,000
10,000
70,000
58,000
10,000
72,000
58,000
10,000
73,000
58,000
10,000
75,000
70,000
--
430,000
332,000
60,000
1,142
--
--
--
--
--
--
--
-572
-7,109
120,465
8,000
--20,000
100,000
12,000
1,000
1,000
25,000
150,000
-1,000
1,000
30,000
150,000
-2,000
2,000
40,000
150,000
-3,000
2,000
40,000
150,000
-3,000
2,000
40,000
150,000
20,000
10,000
8,000
195,000
850,000
HDMF End-User Financing
56,696
100,000
150,000
150,000
150,000
150,000
150,000
850,000
GFIs End-User Financing
63,769
243
50
11,300
50,496
147,577
190,000
50,500
245,000
57,065
250,000
64,484
262,000
72,866
263,000
82,339
265,000
93,044
1,475,000
420,298
166,500
125
167,000
125
167,500
130
166,800
130
168,500
135
169,000
135
1,005,300
780
930
820
2,433
2,267
3,267
2,838
12,555
5,000
5,000
5,000
5,000
5,000
5,000
30,000
Sites and Services
I. Direct Housing Provision
Year
2013
2011
1. NHA Housing Production

Resettlement
Slum Upgrading
Local Housing
Core Housing
Medium-Rise Housing
2. SHFC Community Mortgage Program
3. Retail & Developmental Financing
LBP
SSS
DBP
GSIS
II. Indirect Housing Provision
Baseline
2010
Total Direct Housing Provision

1. HGC
Retail Guaranty
Development Guaranty
Securitization
2. HLURB
License to Sell
CLUP Assistance (LGUs)
3. NHMFC
Purchase of Mortgages
4. HUDCC
Pre-Proclamations
15,709
17
24,678
174,025
110
Source: HUDCC
Social Development
249
Table 8.11. Social Protection Targets: 2011-2016
Indicators
Baseline
No. of Pantawid Pamilya household

beneficiaries reached1
1.0 million (2010)

1,197,720
Households
(2009)
No. of KALAHI-CIDSS household

beneficiaries reached
2011
2012
2013
2014
2015
2016
2.3
million2
3.0
million3
3.7
million4
4.0
million5
3.5
million6
2.9
million7
571,725b
382,950b
323,325b
323,325b
274,275b
16,2908
17,9108
19,6958
21,6608
23,8208
26,2058
1,7608
1,8408
1,9208
2,0008
2,1208
2,2408
No. of families provided with capital

seed fund (SEA-K)
151,454
(2009)
7,532
(2009)
Level I
Level II
National Health Insurance Coverage
See targets on health section
Source: DSWD
1
Total number of beneficiaries per year. The declining number is due to the expected graduation of beneficiaries after 5 years.
2
Includes Sets 1, 2, 3 and 4.
3
Additional 0.7 million target HHs in 2012 (Set 5)
4
Additional 0.7 million target HHs in 2012 (Set 6); Additional 0.7 million target HHs in 2013 (Set 7); the combined total target of Sets 1, 2, 3,
4, 5, 6 and 7 will reach 4.3 million HHs (to include the 320,411 HH beneficiaries graduated in 2013)
5
By 2014, Sets 1,2 and part of Set 3 with a total of 435,718 HH beneficiaries would have completed the 5-year program
6
By 2015, Set 3 remaining HHs and part of Set 4 with a total of 613,439 HH beneficiaries would have completed the 5-year program
7
By 2016, Set 4 remaining HHs and Set 5 HH beneficiaries with a total of 1,677,152 HHs would have completed the 5-year program
8
Additional beneficiaries per year
Table 8.12. Agrarian Reform Targets, by Land Distribution and CARP Beneficiaries: 2011-2016
Year
DAR
DENR
No. of Hectares
No. of
Beneficiaries
200,000
240,274
334,928
326,920
1,102,095
121,070
141,322
197,016
192,306
651,714
2011
2012
2013
2014
Total
Total
No. of Hectares
No. of
Beneficiaries
No. of Hectares
No. of
Beneficiaries
100,000
100,000
100,000
97,461
397,461
129,747
129,747
129,747
126,455
515,696
300,000
340,247
434,928
429,476
1,504,651
250,817
271,069
326,763
325,496
1,174,145
Source: Revised CARP Targets 2011-2014 under RA 9700 as presented to PARC Executive Committee on March 31, 2011
Table 8.13. Ancestral Domain and Lands Targets: 2011-2016
Baseline
No. of CADTs issued
No. of CALTs issued
No. of ADSDPPs
formulated
2011
2012
2014
12 (250,000 12 (250,000 12 (250,000 12 (250,000

hectares
hectares
hectares
hectares
covered)
covered)
covered)
covered)
12 (250,000 12 (250,000 12 (250,000 12 (250,000
hectares
hectares
hectares
hectares
covered)
covered)
covered)
covered)
1
Source: NCIP
250
2013
2015
2016
Total
48 (1 million
hectares
covered)
48 (1 million
hectares
covered)
6
Table 8.14. Urban Asset Reform Targets: 2011-2016
Program
Provision of Secure Tenure
1. SHFC Community Mortgage
Program (CMP)
2. HUDCC Pre-Proclamations
Baseline
2010
7,109
2011
2012
20,000
25,000
5,000
5,000
Year
2013
Total
2014
2015
2016
30,000
40,000
40,000
40,000
195,000
5,000
5,000
5,000
5,000
30,000
Source: HUDCC
shall be covered by DAR. The gross

area includes the retention areas of
the landowners, since it is impossible
to identify specific landholdings
for retention, unless petitioned for
retention while landholding is in the
process of coverage. Targets for 2013
and 2014 are still very high, since RA
9700 mandates that Phase 3A lands
(above 10 hectares) can only be covered
starting July 2012 and Phase 3B lands
(above 5 hectares) starting July 2013.
DARs commitment to provide
legal assistance to agrarian reform
beneficiaries shall continue to be
prioritized. The aim is to resolve 70,941
cases under adjudication of agrarian
cases, provide legal assistance services
in 45,487 cases filed at the judicial and
quasi-judicial courts, and mediate and
conciliate 131,099 agrarian-related
conflicts.
From 2011 to 2016, DAR shall provide
legal assistance to agrarian reform
beneficiaries, with 780,000 targeted
cases to be resolved, disposed or
submitted for resolution. These cases
include those for adjudication, on
agrarian law implementation, filed at
the judicial and quasi-judicial courts,
and for mediation and conciliation.
Meanwhile, the NCIP shall issue 48
CADTs and 48 CALTs until 2014
covering one million hectares. It will
also formulate one ADSDPP each year
until 2016.
The housing sector, led by the Housing and

Urban Development Coordinating Council
(HUDCC) and key shelter agencies, targets
the provision of security of tenure to informal
settlers as listed in Table 8.14.
Policies and Strategies

Cross-Cutting Policies and Strategies
The social development sector shall focus
its efforts on ensuring an enabling policy
environment for inclusive growth, poverty
reduction, convergence of service delivery,
maximized synergies, and active and strategic
participation of stakeholders. The following
policies and strategies that cut across the
social sector shall be given priority:
Attaining the MDGs
The government is committed to attain the
MDGs by 2015 through accelerated programs
and affirmative action in education, health,
nutrition, gender and development, housing,
and social protection interventions. It shall
be the priority consideration in planning,
policy formulation and programming of
programs, activities, projects in the social
sector, with particular emphasis on MDGs
where the country is lagging.
Providing Direct CCTs to the Poor
Direct CCTs to the poor through the
Pantawid Pamilyang Pilipino Program shall
be the cornerstone of the governments
strategy to fight poverty and attain the
MDGs. Regular school attendance of
Social Development
251
children, health visits and immunizations

shall be the conditions for the continuing
direct cash assistance. Such transfers are
not doles, as they are based on poor families
fulfillment of responsibility of investing in
their childrens health and education. The
direct nature of such transfers will minimize
administrative costs and corruption,
and fulfill the governments thrust of
transparency and efficiency. Similarly, the
integrity and political independence of the
NHTS used to identify CCT beneficiaries
shall be safeguarded at all times and its
technical and professional capabilities
constantly upgraded.
Achieving Universal Coverage in Health
and Basic Education
Universal Health Care shall be adopted as the
approach to improve, streamline, and scale
up the health sector reform strategies. This
shall address inequities in health outcomes
by ensuring that all Filipinos, especially the
poor, have equitable access to quality health
care. No Filipino will be denied health care,
even those without the means to pay.
The National Health Insurance Program
(NHIP) shall be strengthened as the prime
mover in improving financial risk protection,
generating resources to modernize and
sustain health facilities, improving the
provision of health services to achieve the
MDGs, and reducing the risks of lifestylerelated illnesses. The NHIPs limited
resources shall be augmented through PPPs.
To attain universal participation in primary
education, the government shall provide
adequate basic educational inputs, expand
alternative learning systems (ALS) and
alternative delivery modes (ADM), and
improve facilities. Alongside efforts that
address disparities in access and equity,
gaps in quality shall be closed by enhancing
learning
efficiency
through
strong
partnership with various stakeholders. A
convergence of efforts shall be ensured.
The CCT program shall be a crucial
component of the strategy for universal
health care and education for all. Providing
252
incentives to families to keep their

children in school and to seek regular
health care creates the demand for the
social services government provides.
Adopting the CDD approach
Wherever applicable, social development
programs shall adopt the CDD approach,
wherein local communities take control
in the planning, implementing and
resource investments. CDD ensures
that programs integrate the principles
of local empowerment, participatory
governance, demand-responsiveness,
administrative
autonomy,
greater
downward accountability, and enhanced
local capacity. Programs adopting
this approach, such as the KALAHICIDSS, have been found to be more
responsive to the needs of the poor and
the vulnerable.
Converging Social Protection
Programs for Priority Beneficiaries
and Target Areas
Social protection programs shall
converge in terms of strategies, target
beneficiaries and geographic areas, to
fully maximize resources and create
more impact to beneficiaries. The
Pantawid Pamilyang Pilipino Program
shall form the backbone of this
convergence, with complementation
from other social protection programs
that ensure job generation, livelihood/
microfinance, CDD and asset reform.
Accelerating Asset Reform in the
Agrarian, Ancestral Domain, Coastal
Marine and Settlement, and Urban
Sectors
The government shall complete the
CARP, as amended by CARPer,
by 2014. Large tracts of private
agricultural lands shall be prioritized,
with the government improving its
efficiency in resolving cases, hastening
land distribution and ensuring equity.
IPRA shall be fully implemented,
ensuring IPs ownership and priori
rights to their ancestral domains

and access to basic services. The
government shall ensure the effective
implementation of policies and laws
concerning fisherfolk, and their coastal
and marine settlement. Stakeholder
engagement and convergence of efforts
shall be emphasized in asset reform.
Urban asset reform shall be
strengthened through the utilization
of idle and underutilized government
lands and the expedited issuance of
land titles to intended beneficiaries
in all housing proclamation projects.
New sustainable communities or
townsites shall be created to de-crowd
the urban population. Extensive slum
upgrading will be pursued as a strategy,
with a holistic perspective in relation
to basic elements such as relocation,
resettlement, livelihood, and financing
for slum communities.
Mainstreaming Climate Change
Adaptation and Disaster Risk
Reduction in Social Development
Interventions
The frequency of natural disasters in
the Philippines makes such events
a question of survival not only for
the poor but for all Filipinos. The
mainstreaming of climate change
adaptation and disaster risk reduction
in social development interventions
will proceed from ongoing research
on the impact of climate change on
diseases, like dengue. Responses to
climate change shall be introduced
in the school curricula, alongside
the promotion of green technology
in constructing houses and social
infrastructure and social safety nets
for vulnerable groups, like farmers
dependent on agriculture.
Mainstreaming Gender in the Social
Development Process
The government shall mainstream
gender and development concerns
in planning, policy formulation,
program and project development and

implementation, and monitoring and
evaluation. It shall address the differentiated
needs of women and men, so they can
equally participate in and benefit from the
development process.
Strengthening Civil Society-Basic Sector
Participation and PPP
In education, partnerships with the
private sector, particularly with industry
chambers, employers associations, technical
panels and other relevant bodies shall be
strengthened. Such partnerships shall work
on developing standards and curricula,
monitoring indicators, and providing
relevant hands-on education and training
that are up to international standards. This
will help close gaps in access and quality
across regions, between urban and rural
areas, between girls and boys, and among
the vulnerable groups. The PPP and the
national-local government collaboration
shall be encouraged in addressing critical
and basic educational inputs. These include
the outsourced delivery of basic education
services through instructional and other
management services by qualified private
providers, in order to improve access,
efficiency and student achievement and to
promote education fiscal reform.
In health, adequate incentives and
regulations shall be put in place to attract
private investments needed to upgrade public
health facilities, and to encourage existing
private facilities and providers to address the
needs of underserved populations. National
health budgets and subsidies can promote
PPP for health by: (a) increasing value for
money of PhilHealth premium subsidies; (b)
using national to local transfers to leverage
PPP at the local health system level; and (c)
providing direct incentives for private sector
participation. In addition, the DOH shall
expand partnerships with private tertiary
medical centers through the Philippine
Medical Tourism Program (PMTP). A
percentage of income from medical tourism
shall be channeled as benefits for the poor
through a fund that subsidizes insurance
premiums.
Social Development
253
In the housing sector, an investment-friendly

environment shall be created through PPPs,
even as tax and fiscal incentives to private
developers or investors are rationalized. The
private sector shall be encouraged to develop
ecofriendly, socially and economically viable
land for new communities. Social protection
schemes involving PPPs that reduce poverty
and vulnerability of workers shall likewise
be developed.
Adopting Volunteerism
The implementation of the

Universal Health Care (UHC)
shall ensure better health
conditions, fair financing and a
responsive health system.
The government shall reinforce the practice

of volunteerism in the delivery of social
services, provision of technical assistance,
responding to disasters, and undertaking
humanitarian efforts, especially in the
remote and unserved areas. The sector shall
mobilize the talents, expertise, time and
energies of volunteers from the academe,
corporate sector, NGOs, government and
foreign volunteer organizations.
Developing and Enhancing the
Competence of the Bureaucracy and
Institutions, to Improve Quality and
Equitable Access to Social Services
Capacity development shall be intensified at
all levels of government, especially among
LGU officials and staffs across the gamut
of social sector activities, such as planning,
programming, coordination, monitoring and
evaluation. Targeting and delivery shall be
improved to achieve the needed synergy and
optimal results. At the same time, the sector
and its institutions shall ensure optimized
and judicious use of available resources
the government and development partners
through fiscal reforms and participatory
local processes.
Sectoral Policies and Strategies

Health
Achieving universal health care shall be
pursued under the Aquino Health Agenda
(AHA). This aims to improve, streamline,
254
and scale up reform interventions

espoused in the Health Sector Reform
Agenda (HSRA) and implemented
under FOURmula One (F1) for health,
with particular focus on the poor. This
will ensure that as health reforms move
forward, the poor are not left behind. The
successful implementation of the AHA
will restructure the following health
system components: good leadership
and governance practices; accurate and
timely information and feedback on
performance; financing that reduces the
burden of health spending especially
among the poorest, the marginalized IS
and the middle class; a well-performing
workforce; affordable and high quality
medical products and technologies; and
appropriately delivered essential services.
The implementation of the Universal
Health Care (UHC) shall ensure better
health conditions, fair financing and a
responsive health system. The objective
UHC is to promote equity in health
through the provision of full financial
protection and improvement of access
to priority public health programs and
quality hospital care, especially for the
poor. Its strategic thrusts are as follows:
1. Protect the poor from the financial
burden of health care use by improving
the BDR of the National Health
Insurance Program (NHIP):
a) Redirect PhilHealth operations
towards the improvement of the
national and regional BDRs;
b) Attain and sustain universal
coverage of NHIP (expansion of
coverage to include the poor and
the informal sector);
c) Promote availment of quality
outpatient and inpatient services
at accredited facilities through
reformed capitation, with no
balance billing or zero co-payment
arrangements
for
sponsored
members; and
d) Increase the support value of health

insurance for the poor through ICT
upgrading to fast track Philhealth
claims processing.
2. Improve access to quality hospitals
and health care facilities by upgrading
or expanding government-owned and
-operated hospitals and health facilities
as well as providing quality services
to help attain the MDGs; attending
to traumatic injuries and other
types of emergencies; and managing
noncommunicable diseases and their
complications:
a) Deploy Community Health Teams to

actively assist families in assessing and
acting on their health needs;
b) Utilize the life-cycle approach when
providing needed services, such as
family planning, antenatal care, delivery
in health facilities, essential newborn
care, immediate postpartum care, and
Garantisadong Pambata package for
children 0-14 years of age;
c) Aggressively promote healthy lifestyle
changes to minimize noncommunicable
diseases;
a) Enhance targeted health facility

programs that shall leverage funds
to improve facility preparedness
for trauma and the most common
causes of mortality and morbidity;
d) Ensure adequate surveillance and

preparedness for emerging diseases; and
b) Provide grant mechanisms from

PPPs to support immediate repair
and rehabilitation of selected
priority facilities;
To achieve the above strategic thrusts, the

following instruments shall be utilized:
c) Promote fiscal autonomy and

income retention schemes for
government hospitals and health
facilities;
d) Unify and streamline DOH
licensing
and
PhilHealth
accreditation for hospitals and
facilities; and
e) Cluster referral networks by region
to address the fragmentation of
services.
3. Attain the MDGs for health by
focusing public health programs
on maternal and child mortality;
morbidity and mortality from TB,
dengue and malaria, and the prevalence
of HIV-AIDS, in addition to emerging
diseases; and prevention and control of
noncommunicable diseases, particularly
cardiovascular diseases, cancer, diabetes
mellitus, and end-stage renal disease.
e) Harness the strengths of interagency

and intersectoral approaches to health.
1. Health Financing. This increases resources

for health that will be effectively allocated
and utilized to improve the financial risk
protection of the poor and the vulnerable
sectors. Strategies and activities include
achieving universal health insurance
coverage, increasing public investments
for health, allocating health resources to
appropriate financing agent, and securing
fiscal autonomy of government health
facilities and shifting to new provider
payment mechanism.
2. Service Delivery. This seeks to transform
the health service delivery structure to
address variations in health service utilization
and health outcomes across socioeconomic
variables and across geographic boundaries.
Strategies and activities will aim to ensure
that appropriate health services are available
at all levels of health care by:
a) Transforming the health service delivery
system from providing several individual
health providers or facilities to service
delivery network;
Social Development
255
b) Enhancing the service packages

delivered by the service delivery
network to achieve the countrys MDG
commitments,
eliminate
endemic
diseases as public health threats, intensify
disease prevention and control for both
communicable and noncommunicable
diseases, and manage health emergencies
and disasters; and
and reliable procurement and

distribution systems; improving the
affordability of essential medicines
through assured delivery of
entitlements to specific treatment
packages; linking the PhP100
Program with PhilHealth benefit
package in all levels of care; and
promoting generics;
c) Investing in a health facility

enhancement program that defines a
unified and rationalized health facility
blueprint; strengthening the gatekeeping function of lower level facilities;
increasing the capacities of centers
of excellence for specialty hospitals;
enhancing the quality assurance system
for public outpatient facilities like rural
health units (RHU)s and barangay health
stations (BHS); ensuring that hospitals
are safe from disasters; and providing
incentives to promote PPP ranging from
investments for tertiary care to involving
private practice midwives in the delivery
of primary services;
b) Monitoring and boosting the

rational use of drugs and technology
through implementation of clinical
practice guidelines; regulating
over-the-counter
nonessential
drugs,
nutraceuticals
and
alternative health services; and
regulating product and health
service advertisements, to reduce
the risk of misleading and biased
promotional information reaching
the consumers and professionals;
3. Human Resources for Health. This will

ensure that all Filipinos have access to
professional health care providers to meet
their health needs at the appropriate level
of care. Strategies include ensuring that
each family has assigned competent primary
health care providers and producing health
professionals responsive to the current needs
of the health sector. To address distribution
concerns of health human resources,
the following strategies will be pursued:
providing incentives for deployment in
underserved areas; using ICT to direct health
workers to local job offerings; and using of
global market forces like medical tourism
to keep highly-trained health workers and
reduce turnover rates.
4) Policy, Standards and Regulation. These
instruments aim to ensure equitable access
to essential medicines, health services and
technologies of good quality, availability and
safety. Strategies include:
a) Increasing the availability of cheaper
quality medicines through efficient
256
c) Ensuring the quality of essential

medicines, food, technology and
services by strengthening regulatory
agencies of DOH, such as the Food
and Drug Administration (FDA)
and the Bureau of Health Facilities
and Services (BHFS), and the postmarketing surveillance system;
d) Strengthening the regulatory
functions of DOH agencies
standards and processes for
licensing,
certification
and
accreditation of public and private
health facilities, such as lying-in
clinics, Basic Emergency Obstetric
and Neonatal Care (BEmONC),
Comprehensive
Emergency
Obstetric and Neonatal Care
(CEmONC) and hospitals; and
e) Reviewing and updating the laws
and guidelines governing practice
by health professionals to allow
flexibility in the delivery of health
services, especially in resourcepoor areas (e.g., performance of
lifesaving functions by midwives).
5. Governance for Health. This

establishes
the
mechanisms
for efficiency, transparency and
accountability, thus preventing fraud.
Under this instrument, initiatives
shall
be
undertaken
towards
enhancing the health system to better
respond to inequities in health. The
institutionalization of the Sectorwide Development Approach for
Health (SDAH) systems shall also be
undertaken aside from strengthening
the governance structures for managing
the health sector at the national
and local levels. Better performance,
accountability
and
internal
management control mechanisms and
stronger client-centered services shall
also be undertaken.
6. Health Information. The instrument
to establish a modern information
system that will provide evidence
for policy and program development
to improve performance levels,
distribution and equity, and support
for immediate and efficient provision
of health care and management of
province-wide health systems. ICT
shall be used to implement UHC,
together with reliable and timely
data. Investments on the automation
of health information in all health
facilities shall be encouraged.
To support the Health Information
System, core agencies and partners
of the Philippine National Health
Research System (PNHRS) shall
share their resources and mutually
complement their health research. The
following specific strategies shall be
adopted by the PNHRS:
a) The science community shall
address the gaps in the access
to essential medical products,
vaccines and technology, and the
health information system. Health
technology development shall focus
on diagnostics, vaccines, drugs, use
of ICT in health care (telehealth),
and traditional and alternative
health care. For health information

systems, the science community shall
focus on building information content
and providing access to relevant, current,
and accurate health information;
b) CHED shall focus on education-related
research to produce competent health
workforce, while the DOH will focus on
health systems and operations research,
to address health services, health
financing, leadership and governance;
and
c) To create and sustain a critical mass
of researchers and mentors, capacitybuilding programs that involve local and
international scholarships, fellowships,
training and twinning arrangements
shall be continued and enhanced. These
shall focus on expertise in the research
continuum, from conceptualization
and stakeholder engagement, to
writing, implementation, dissemination
of research results, and technology
commercialization, where applicable,
in order to increase research relevance
and visibility, and translate results into
policies and actions.
Nutrition
1. Reduce disparities in nutrition by
focusing on population groups and areas
highly affected by or at risk of malnutrition,
specifically pregnant women, infants,
children 1-2 years old, underweight
children 0-5 years old, and LGUs with high
levels of child undernutrition or at risk of
undernutrition.
2. Devote more resources to interventions
with a greater impact on undernutrition
among children underfive, including the
following:
a) Optimum infant feeding and youngchild feeding practices anchored on
breastfeeding during the first six months
of life;
b) Calorie-, nutrient-dense and safe solid
and semi-solid foods (complementary
Social Development
257
foods) from the sixth month of life

onward, with continued breastfeeding
up to two years of age;
c) Sanitary practices, including personal
hygiene and handwashing;
d) Supplementation with Vitamin A,
zinc for diarrhea management, iron
for pregnant women and infants, and
iodine in areas where iodine deficiency
disorders are endemic;
e) Deworming;
f ) Appropriate medical and dietary
management of acute malnutrition; and
g) Iron fortification of rice and flour,
iodization of salt, and Vitamin A
fortification of other staples.
3. Revive, identify, adopt, and propagate
good practices and models for nutrition
improvement;
4. Increase food supply at the community
level through food production programs
and development and the maintenance of
facilities to allow efficient distribution of
food (refer also to Chapter 4);
5. Improve access to food by generating
employment and building capacities for
higher employability;
The following objectives support this

long-term goal:
Help couples and parents exercise
responsible parenting to achieve
the desired number, timing and
spacing of children and improve
maternal, neonatal and child
health, and nutrition status;
Help adolescents and youth
avoid premarital sex, teenage
pregnancies, early
marriages,
sexually transmitted infections and
other psychosocial concerns; and
Contribute to policies, plans and
programs to attain population
growth and distribution consistent
with economic activities and
sustainable development.
The following major strategies shall be
undertaken:
6. Protect the vulnerable from food

insecurity through food-based safety nets,
e.g. direct distribution of rice, emergency
employment; and
1. Work
for
universal
access
(accessibility,
availability,
and
affordability) of all medically, ethically,
and legally approved family planning
methods and services to help parents
plan their families consistent with their
plans and decisions;
7. Strengthen and nurture interagency

structures for integrated and coordinated
implementation of nutrition and related
services at national and local levels.
2. Promote male responsibility in

Responsible Parenting and Family
Planning (RP/FP) programs, in the
context of gender equality and equity;
Population
3. Continue to utilize community

organizing and participatory strategies
(e.g., Responsible Parenting Movement,
community-based volunteerism) to
sustain and broaden the acceptance of
responsible parenting as a social norm;
The Directional Plan for Population 20112016 addresses the challenge of poverty
alleviation, as this is affected by fertility and
parenting choices. Its long term goal is to
contribute to improving the quality of life
258
of all Filipinos through responsible

parenting, and outcomes in health,
education, and population that are in
harmony with available resources and
sustainable environment conditions,
thus reducing poverty and inequalities
in human development opportunities.
4. Provide age- and culture-appropriate

and gender-responsive human sexuality
education for the youth through the
formal and nonformal educational
systems; and educate parents in
appropriate skills and information
regarding adolescent health and human
concerns;
5. Intensify communication, education,
and advocacy campaigns for population
and
development
and
RP/FP
programs by broadening alliances and
strengthening networks with program
stakeholders, LGUs, NGOs, business
community, the academe, the media
and faith-based organizations, among
others; and
6. Advocate increased investment in
the population program by the national
government, and coordinate with LGUs
to mobilize support for the population
program through ordinances, executive
issuances, and budgetary allocations
that strengthen local population and
RP/FP programs.
With the slow decline in population
growth, the country must contend
with continually rising demands
for educational and employment
opportunities, other basic human
rights-based entitlements, and a
more extensive participation in the
era of internationally-shared human
resources. The national education and
other learning systems must respond to
the above challenges, even as it attends
to the socioeconomic requirements of a
peaceful and progressive nation and a
globally competitive economy.
The following policies and strategies
shall be pursued:
1. Reaffirm the highest priority for
basic education as a right that should
be enjoyed by all Filipinos;
2. Harness private-sector resources in the

delivery and monitoring of, social marketing
and advocacy for education, especially higher
education;
3. Make education and training truly
inclusive and expand opportunities for
lifelong learning through: (a) better and
broader provision of basic educational
inputs,
especially
in
traditionally
lagging areas by using ADMs in formal
education and ALS for out-of-school
youths and adults; (b) maximal learning
opportunities for mentally challenged
individuals (e.g. autistic, attention deficit
hyperactivity disorder, etc.) by providing
special instructional services and facilities;
(c) improved and safe school buildings
and facilities, to ensure accessibility of
PWDs and consider disaster risks; and (d)
strengthened Madrasah, education of IPs,
and other vulnerable groups;
4. Accelerate the implementation of
the Basic Education Sector Reform
Agendas five key reform areas towards
the attainment of the goals of EFA and
the MDGs: (a) school-based management
(SBM); (b) national learning strategies;
(c) quality assurance and accountability;
(d) complementary interventions; and (e)
institutional culture change. The SBM
system shall be fully operationalized to
ensure direct access to resources of public
schools as a means of achieving educational
devolution and decentralization;
Reaffirm the highest priority for

basic education as a right that
should be enjoyed by all Filipinos
5. Enhance learning efficiency in the early

grades through the use of the mother
tongue as the language of learning, and
improve student retention, completion and
achievement rates, with strong support from
parents, the community, and civil society;
6. Pursue a focused program for the health,
nutritional and physical well-being of
learners as the foundation of improved
attendance and performance, in coordination
with the expanded CCT Program;
Social Development
259
7. Align the pedagogy of science

and mathematics education with the
requirements of the global environment;
strike a strong balance between technology
and livelihood education on both elementary
and secondary levels; and expand the use of
ICT in technology-based student learning
packages to enhance the teaching-learning
approach in basic education (e.g., indexing
of curriculum concepts and competencies
for systematic development of e-learning
materials);
8. Ensure that the structure and program of
formal basic education, within the framework
of Kindergarten to 12 Years (K+12) Basic
Education Program, are adequate and
sufficiently responsive to: meet legal and
other formal requirements of employment;
pass the test of global comparability and
prepare students for employability and for
higher levels of learning; and reinforce career
consciousness among students, and provide
guidance and counselling throughout the
K+12 Basic Education Program;
9. Strengthen, streamline, and improve the
learner assessment system based on the
expanded definition of Functional Literacy,
utilizing it as a mechanism for: (a) a more
comprehensive measurement of system
performance; (b) curriculum development
and instructional delivery; (c) further
learning and training enhancement; (d)
career and skills aptitude and job readiness;
and (e) actual entry into employment;
10.
Institutionalize
preservice
education, in-service training, hiring,
licensure, promotion and performance
assessment of teachers, fully anchoring on
the National Competency-Based Teacher
Standards (NCBTS) and the expanded
definition of functional literacy as firm
foundations of all quality enhancement and
professionalism; and establish an effective
system for the two-track career paths of
teachers (teaching and management) that
guarantees attractive remuneration and
professional growth, alongside awards,
incentives and recognition that may be
provided through PPPs;
260
11.
Support and institutionalize
cultural and values-oriented projects
on TV, radio, print and Internet
through partnership with media and
other private-sector and civil society
entities; produce TV documentaries
and
infomercials, to
highlight
positive Filipino values and promote
sustainable development, peace and
human security, good governance,
disaster-risk reduction and climatechange preparedness. The development
communication policy framework
of the Philippine Information
Agency (PIA) shall be adopted, with
the convergence of traditional and
multimedia platforms, as well as online
and social media, in engaging wider
clientele and audiences at all levels;
12.
Embed the development
communication approach espoused by
the PIA in all government information
programs and projects, from policy
formulation
to
implementation,
monitoring and evaluation. The
private media, academe, civil society
organizations and business sector shall
be encouraged to join in the various
development communication efforts of
government, to inspire the citizenry and
instill in them an active commitment
as stakeholders in building better
citizenry and stronger and self reliant
communities;
13.
Sustain heritage conservation
approaches to nurture countrys history
and preserve the patrimony of biocultural diversity;
14.
Develop a sporting culture
that views grassroots and mass-based
sports as an important mechanism in
promoting human development and
peace, and as a source for development
of athletes by: (a) strengthening
the national centerpiece program
for grassroots and sports for all;
(b) harnessing high-level training
towards developing Filipino athletes
who will be at par with the worlds
best; and (c) enforcing the mandates,

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

higher education subsystem and
institutions with strong external
governance,
management,
and
financing
(including
locally-funded and maintained
institutions) and demonstrating
desired socioeconomic impact,
responding to the imperatives of
globalization but reaching out to
politicallychallenged areas and
communities.
22.
Integrate human rights concepts
and principles in the educational system,
to empower students, faculty and education
staff to uphold their rights and prevent any
discrimination;
Social Development
261
23.
Strengthen social cohesion and
solidarity (i.e. unity in diversity) among the
different ethnolinguistic groups and faith
communities in the country and within
the ASEAN community by enhancing
awareness and understanding of common
cultural, economic, and political interests;
promote intercultural and interfaith
dialogues alongside informal and nonformal
modalities, to train communities and leaders
in the art and practice of conflict resolution;
24.
Balance
the
demands
of
globalization through a locally-adapted/
indigenized curricula that promote and
preserve indigenous knowledge by: (a)
expanding and upgrading the capacity to
teach foreign languages in response to the
requirements of internationally-shared
human resources and emerging needs in the
ASEAN region; (b) integrating balanced
messages of migration and development in
the Philippine education, both in the formal
and alternative learning system; (c) making
the education system responsive to the needs
of the global community, while minimizing
brain drain, encouraging brain gain and
protecting the Filipino family from the social
costs of migration; and (d) encouraging
Filipinos overseas to remain rooted in their
culture through an appreciation of Filipino
languages, culture and heritage.
262
LGUs shall lead the efforts in shelter

planning, since housing and human
settlements will be localized in terms of
identifying solutions and programming.
Thus, LGUs shall develop a land
inventory system to identify areas
for urban growth and planned areas
for human settlements through their
Comprehensive Land Use Plans (CLUPs).
Building capacity for effective urban
planning systems, data management,
and disaster risk management especially
among the LGUs shall be established.
The following policies and strategies
shall be pursued:
Housing
To rapidly address the housing problem,

particularly the proliferation of slums and
informal settlements, the government shall
formulate a National Slum Upgrading
Strategy that will set the targets for slum
upgrading programs. Expanded slum
upgrading, onsite upgrading or incity
resettlement shall be pursued as strategies by
government and stakeholders.
1. Create alternative funds and mobilize

resources, to spur housing production
through the revival of the SSS, GSIS and
GFIs contribution in the housing sector
pool; reinstate the entitlements of the
housing sector under the Comprehensive
and Integrated Shelter Finance Act (RA
7835); involve rural banks, cooperatives
and microfinance institutions in
implementing a housing micro-finance
program, catering to the marginalized
sector and rural homebuyers; and
develop an effective and viable secondary
mortgage market and rationalization of
the guarantee system;
Government shall pursue the following

reforms to scale up and sustain slum
upgrading: (a) supporting other forms or
modalities of security of tenure such as
usufruct and lease rights; (b) developing
PPPs for onsite upgrading and resettlement;
(c) stimulating housing microfinance for
end-user financing; and (d) strengthening
2. Build
strong
partnerships
with LGUs to accelerate housing
production through land use and local
shelter planning, land inventory and
creation of Local Housing Boards
(LHB); re-channel development funds
to LGUs for housing projects for their
constituents; and set aside lands for

To rapidly address the housing
problem,
particularly
the
proliferation of slums and informal
settlements, the government
shall formulate a National Slum
Upgrading Strategy that will set
the targets for slum upgrading
programs.
community
partnerships
and
stakeholdership through capacity
development. Through the PPPs,
urban renewal shall also be promoted
for sustainable urban development, to
ensure balanced provision of revitalized
infrastructure that would support social
sectors, including socialized housing.
socialized housing in accordance with

the Urban Development and Housing
Act (RA 7279);
Social Protection
Social protection policies and strategies shall

be guided by an operational framework of
3. Engage NGOs (e.g., Gawad Kalinga, reducing poverty and vulnerability through
Habitat for Humanity, ABS-CBN interventions in four major areas: labor
Foundation) and the private sector market, social welfare, safety nets, and
in building and scaling up socialized social insurance. A convergence of social
protection programs, through partnershiphousing projects;
building, and participatory governance, shall
4. Promote the use of green be implemented.
technology and materials in housing
construction and in building disaster- Cross-Cutting Issues
resilient homes; and
1. Improve the targeting of social protection
5. Develop a strong, cohesive and programs:
responsive shelter team (e.g., key shelter
a) Ensure the integrity and the use of the
agencies and stakeholders) to bring
NHTS-PR to target social protection
significant changes and institutional
programs for the poor, such as the CCT
reforms, including simplifying loan
program and the PhilHealth Indigent
application procesing for development
Program, to maximize coverage and
and homebuyers loans, and reducing
minimize leakages;
red tape in the issuance of land titles and
housing and development permits, at
b) Consolidate, maintain, and update the
the national and local levels; and ensure
NHTS-PR system and database;
transparency and good governance in
the housing sector.
c) Make the NHTS-PR available to all
agencies and entities at the national
Urban Development
and local levels; and
1. Formulate
an
action
plan
d) Complement NHTS-PR with the
implementing
the
National
Community-Based Monitoring System
Urban Development and Housing
(CBMS) available at the LGU level.
Framework (NUDHF) 2009-2016,
to achieve urban competitiveness and
sustainability, housing affordability, 2. Provide adequate funding for social
poverty alleviation, and effective and protection:
performance-oriented
governance
a) Redirect public spending from less
through a participatory process; and
effective to more effective and efficient
social protection programs;
2. Prioritize
slum
improvement
under a policy of maximum retention
b) Increase and sustain the budget for social
and minimum dislocation; and
protection programs; and
vigorously implement the National
Slum Upgrading Strategy through a
c) Intensify advocacy among LGUs
National Slum Improvement Action
to reinforce political will and
Plan for 2011-2016 that comprise
improve their commitment to the
specific targets, programs and activities
implementation of social protection
to provide secured tenure to urban
programs and projects.
informal settlers, especially those in
danger areas.
Social protection policies and

strategies shall be guided by
an operational framework of
reducing poverty and vulnerability
through interventions in four
major areas: labor market, social
welfare, safety nets, and social
insurance.
Social Development
263
3. Improve policy coordination and program

implementation of social protection
measures:
Strengthen
the
Emergency
Community
Employment
Program (ECEP) to create
jobs and sustain labor market
programs by adhering to decent
work standards
a) Ensure that the necessary institutional

arrangements to implement the
programs are in place;
b) Ensure the coherence and coordination
among national government agencies,
LGUs, key private sector organizations,
NGOs and international development
agencies for greater financing, coverage
and convergence; and
c) Raise the capacity of government
agencies involved in social protection,
particularly in implementation and
monitoring.
4. Establish a monitoring and evaluation
scheme:
a) Establish a reliable and responsive
monitoring and evaluation system
to regularly assess impact, identify
successes, improve program features and
performance, win political commitment
for program sustainability, and inform
program administrators of changes in
the status of beneficiaries; and
b) Revisit program designs regularly to
check their consistency with objectives,
desired outcomes and the adequacy of
coverage.
5. Improve the database on vulnerable
population groups to help form the basis for
sound policies and effective programs; and
6. Guarantee the inclusion of the vulnerable
groups in local development plans through
their representation in local development
councils and their participation in
the
formulation, development, and
implementation of policies and programs.
Labor Market Interventions
1. Establish
emergency
employment/
guaranteed employment programs for
workers affected by crisis, the seasonally
264
jobless and the long-term unemployed,

particularly the youth and women;
2. Strengthen
the
Emergency
Community Employment Program
(ECEP) to create jobs and sustain labor
market programs by adhering to decent
work standards, to prevent the effects
of sudden loss of income and to enable
vulnerable workers, especially women,
to attain economic security:
a) Intensify advocacy
employment
and
programs;
for self
livelihood
b) Promote workers cooperatives

in the community for mutual
assistance
(e.g.,
damayan,
paluwagan);
c) Make workers relief and
rehabilitation contingent
to
relocation to safer habitats and
more sustainable livelihood;
d) Guarantee
the
availability
of suitable housing, jobs and
livelihood in relocation areas;
e) Promote paradigm shift during
crisis from response to mitigation
to preparedness interventions; and
f ) Establish
a
multipurpose
Emergency Fund for crisisaffected workers.
3. Implement active labor market
policies and programs to enhance the
employability of vulnerable workers,
such as those affected by crisis, workers
in the informal economy, displaced and
distressed OFWs, internally displaced
people, the youth and women:
a) Improve access, availability and
affordability of training in new
skills and occupations;
b) Expand training opportunities for
vulnerable workers; and
c) Facilitate
the
reintegration
of returning OFWs through
appropriate training, investment
and savings programs.
4. Initiate
policy
interventions,
programs, projects and other measures
to ensure the transformation of
the brain-drain into a brain-gain
phenomenon, and enhance the earning
capabilities and entrepreneurship
opportunities of returnees.
5. Intensify workforce-focused occupational
safety and health (OSH) programs:
by giving priority to the socially and

economically disadvantaged residents of the
project areas;
8. Make Public Employment Services
Office (PESO) more responsive to the needs
of job seekers; and
9. Promote the integration of PWDs
in
mainstream
vocational
training,
employment, and livelihood schemes, with
particular attention to the participation of
women with disabilities.
Social Insurance
a) Improve
OSH
compliance,
particularly
in
high-risk
industries, such as construction;
1. Achieve and sustain universal coverage of

the poorest and vulnerable sectors, including
the IS and OFWs who can afford to pay:
b) Strengthen industrial tripartite

councils for business process
outsourcing;
a) Enrol the poorest families in

PhilHealth by utilizing the NHTSPR;
c) Sustain dialogues to strengthen

interaction and cooperation
between labor and management,
to promote OSH programs at
the enterprise level, particularly
in industries identified as key
employment
generators
or
industry winners;
b) Expand coverage of IS workers, and

pursue legislation that mandates the
enrolment among of IS workers who
can afford to pay;
d) Integrate
OSH
in
local
development plans and in school
curricula;
e) Intensify the campaign for family
welfare programs; and
f ) Implement
gender-responsive
OSH programs (e.g. breastfeeding
in the workplace).
6. Strengthen measures against child
labor and exploitation through strategic
partnerships, and intensify advocacy
and action at all levels while improving
access to quality and integrated services;
7. Use labor-intensive techniques,
whenever appropriate, in implementing
government infrastructure projects
Achieve and sustain universal

coverage of the poorest and
vulnerable sectors, including
the IS and OFWs who can
afford to pay
c) Provide effective membership services;

and
d) Secure access to critical outpatient
services at accredited rural health
units and health centers, and to critical
inpatient services at the national and
local hospitals.
2. Develop enhanced social insurance
measures for vulnerable groups against
economic and natural shocks particularly for
laid-off workers:
a) Implement employment insurance for
workers in the private sector and IS;
b) Implement indigenous microinsurance
schemes and integrate microinsurance
into microfinance lending;
c) Re-examine whether the SSS
contributions required of IS workers
remain affordable and realistic; and
Social Development
265
d) Implement mandatory SSS coverage

for landbased OFWs, and include
SSS enrolment as prerequisite in the
issuance of the Overseas Employment
Certificate.
3. Reform the provider payment mechanism
and benefit packages in the NHIP, to
improve private health insurance schemes
and financial risk protection of members;
4. Promote hazard insurance coverage for
vulnerable groups.
Social Welfare
1. Expand and strengthen the CCT program
to cover all poor households in the country:
a) Maintain and enhance the CCT support
systems, such as compliance verification,
beneficiaries update, payment system,
targeting, regular spot checking and
monitoring; and
b) Implement
supply-side
reforms
and adjustments (basic health and
education services), and coordinate
with provider agencies to improve
compliance among CCT beneficiaries.
Complement the CCT program
with other social protection
programs, to ensure it is linked
with programs on job generation,
livelihood, or asset reform.
2. Complement the CCT program with

other social protection programs, to ensure
it is linked with programs on job generation,
livelihood, or asset reform;
3. Develop and implement appropriate,
adequate and cost-effective social welfare
interventions, to address the needs of the
poorest and the most vulnerable;
4. Sustain and expand the gains achieved in
CDD projects, such as KALAHI-CIDSS,
and facilitate environmental protection
and conservation through CDD and
participatory development projects, such
as rainforest rehabilitation, reforestation,
biodiversity
conservation,
watershed
management, river basin management,
coastal and lakes protection;
266
5. Provide sustainable microfinance

services:
a) Expand and enhance microfinance
programs and services, especially
in areas with low saturation rate,
complementing the CCT Program;
b) Provide capacity development
for microfinance institutions to
effectively and viably implement
microfinance programs;
c) Develop and enhance the
entrepreneurial skills of target
end-clients; and
d) Operate
and
manage
microenterprises sustainably.
6. Strengthen
regulation
and
enforcement of social welfare and
development (SWD) standards for
both public and private organizations
engaged in SWD;
7. Strengthen
measures
against
human trafficking and provide support
for its victims;
8. Fully implement the laws protecting
and promoting the rights of vulnerable
groups, (e.g., IPRA, Expanded Senior
Citizens Act, Amended Magna Carta
for PWDs, Magna Carta of Women,
Magna Carta of Migrant Workers,
Anti-Trafficking in Persons Act, Juvenile
Justice Welfare Act, Anti-Violence
against Women and their Children Act);
9. Monitor and ensure the countrys
compliance with various international
treaties, conventions and protocols that
protect and promote the rights of the
vulnerable groups;
10.
Campaign for other countries to
ratify international conventions, treaties,
standards and protocols that are relevant
to the protection and promotion of the
rights and wellbeing of OFs;
11.
Promote service-delivery models,
such as partnership with faith-based
organizations and NGOs, in providing
SWD services and cost-sharing
between NGAs and LGUs or NGOs.
Safety Nets
1. Develop safety net programs that are
readily available and can be scaled up
during financial and economic crisis,
calamities, emergencies and disasters
(e.g., public workfare program);
2. Allocate quick-disbursing funds at
the national and local levels, to assist
victims of calamities and disasters;
To achieve inclusive growth and sustainable

socioeconomic development, the completion
of agrarian reform must be prioritized as the
governments antipoverty and social justice
program. Completing the CARP by 2014
will be a historic milestone of this Plan. The
country will finally put to rest the greatest
property issue once property relations in
agriculture are clarified.
The DAR, as the lead CARP implementing
agency, shall adopt the following strategic
directions in improving land tenure security
of the landless farmers:
1. Complete LAD of private agricultural
lands (PAL) in the CARPer balance:
3. Implement an emergency response

income-support program through
employment creation in distressed
areas, to respond to contingencies such
as recessions, natural and man-made
disasters or sudden income shocks;
and put in place a regular monitoring
mechanism to ensure the readiness of
relevant agencies during natural and
man-made disasters;
a) Focus on large private agricultural

lands;
4. Reform the NFA Rice Subsidy

program, to effectively target the poor
and to support the CCT and other
anti-poverty and social protection
programs; and
2. Continue the distribution of public

alienable and disposable lands;
5. Strengthen safety nets for OFWs:
4. Establish and operationalize strategic

partnership with CSOs, particularly on the
coverage of large private agricultural lands.
a) Intensify the effort for OWWA

membership enrolment and
renewal; and
b) Institute dialogues and forge
agreements to further strengthen
cooperation with labor-receiving
countries
towards
mutual
protection and benefits for the
OFWs.
Asset Reform
(LAD)
To
achieve
inclusive
growth
and
sustainable
socioeconomic development,
the completion of agrarian
reform must be prioritized as
the governments antipoverty
and social justice program.
b) Streamline processes and procedures

by
utilizing
technology-enabled
information tracking systems; and
c) Enhance the database of landholdings
for ease in targeting and monitoring
land acquisition and distribution.
3. Synergize the efforts of CIAs in all LAD

processes; and
Agrarian Justice Delivery

1. Prioritize cases with higher number of
affected ARBs;
2. Enhance the case-tracking system for
the inventory of cases and flowcharting of
existing systems;
3. Speed up decisions of cases through the
development of templates, proper docketing
and establishment of central servers for
monitoring;
Social Development
267
4. Ensure transparency by streamlining

administrative orders and utilizing the web
links to case resolution; and
5. Develop new training programs for
Program Beneficiaries Development (PBD)
to support enterprise management of ARBs.
Ancestral Domains and Lands
1. Intensify the information, education,
and communication drive on IPRA and the
NCIPs delineation and titling program in
all levels of government;
2. Fasttrack the identification, delineation,
titling and registration of ancestral domain
claims;
3. Continue the coordination and dialogue
among government agencies, such as the
DENR, DA, LRA, DAR and NCIP, on
land and tenurial conflicts and overlapping
claims involving ancestral lands;
4. Review and simplify existing NCIP
policies, circulars, issuances, and guidelines,
including the guidelines on the issuance of
the FPIC, without sacrificing the welfare
and concerns of IPs. The inclusive and full
participation of IPs in the process shall be
ensured while maintaining a meaningful
collaboration/partnership with CSOs, the
private sector, national government agencies,
and LGUs;
5. Improve and facilitate IP access to justice
and traditional decision-making processes
on the settlement of conflicts by the elders.
Traditional practices and processes shall
be documented and serve as reference for
transfer of knowledge on conflict resolution,
to strengthen IP decision making processes.
Coordination among the DOJ, the Public
Attorneys Office (PAO) and the Supreme
Court, as well as the civil society, shall also
be pursued towards advocating indigenous
rights and increasing access by IPs to free
and immediate legal services;
6. Assist ICCs/IPs in documenting cases
resolved under indigenous justice systems,
conflict resolution mechanisms and peace
268
building processes, for NCIP to

adequately defend the indigenous
litigants. Documentation of cases is
essential as written evidence is required
by regular courts in cases filed against
IPs;
7. Consider the IPRA provisions
in discussions regarding Reducing
Emissions from Deforestation and
Forest Degradation (REDD) and
other carbon forest engagements in the
national and international arena;
8. Encourage ecotourism as a source of
alternative or supplementary income,
subject to community protocols on
protection of indigenous knowledge
systems and practices. Watershed
management and the planning of
ancestral waters to enhance biodiversity
shall be considered in ancestral domain
planning;
9. Ensure that IP data and statistics are
up-to-date by including IP indicators,
particularly the ethnicity variable, in the
national censuses and related surveys
and by ensuring the involvement of the
NCIP from the preparatory activities
up to the validation of the collected IPrelated statistics. The NCIP shall also
take the lead in orienting LGUs with
IP population on gathering IP ethnicity
variable statistics, and utilizing these in
formulating socioeconomic profiles. The
NCIP shall ensure that institutional
coordination and agreement on this
concern is established; and
10.
Strengthen partnership among
ICCs, LGUs, NGAs and CSOs to
ensure synergy in activities for IPs.
Partnerships shall be tapped in: ensuring
compliance with the FPIC process;
formulating and implementating
ADSDPPs and their integration in
CLUPs and local development plans;
and providing capacity building and
training in entrepreneurial skills
enhancement, business management,
bookkeeping, communication, product
development, training and marketing.
Coastal and Marine Settlement

1. The delineation of municipal waters
shall be fasttracked and completed
during this Plan period through the
following strategies:
a) In partnership with NGOs
and fishersmens federations at
the local and national levels,
deploy at least one trained
community organizer in each
of the remaining 873 coastal
municipalities, to: facilitate the
organization, education, and
mobilization of the small fishers
in the municipality; speed up the
delineation of municipal waters;
and facilitate the implementation
of coastal resource management
planning and the Fisheries Code;
b) Issue a Memo Circular (from DABFAR and DILG) to local chief
executives advocating the swift
implementation of the Fisheries
Code, especially the delineation
of municipal waters, as a means to
help 1.5 million small fishermen
and increase the LGU tax base;
c) Explore the granting of incentives
to small fishers participating
in the process, in the form of
their immediate registration and
licensing as municipal fishers, and
provision of settlement sites and
land tenure security; and
d) Provide technical assistance
through DILG and relevant
agencies in delineating and
validating municipal waters,
especially among municipalities
with territorial conflicts.
3. Ensure that 40 percent of women are

represented in all management structures,
both nationally and locally, as provided in
RA 9710 or the Magna Carta for Women;
4. Set aside sufficient funds for the
implementation of the Comprehensive
National Fishery Industry Development
Plan (CNFIDP), which is the 25-year
development plan initiated by the DABFAR by virtue of the Philippine Fisheries
Code of 1998; and
5. Conduct vulnerability risk assessments
of coastal communities through DA-BFAR
and DENR, in coordination with LGUs, and
provide the necessary funds for the activity.
Urban Asset Reform
1. Increase funding for proven housing
programs and institutions, scale up the
Community Mortgage Programs success
and strength, and fasttrack the issuance of
Presidential proclamations for socialized
housing;
2. Provide incentives to unlock land for
affordable housing through resource
generation for socialized or low-cost
housing and private sector-guided
redevelopment of public land (e.g.,
redevelopment of NHA land to raise funds
for relocation and construction of socialized
housing facilities); and
3. Provide and encourage access to land for
affordable housing through the alternative
land access modes, such as long-term lease
and usufruct rights, including putting in place
basic infrastructure ahead of settlements and
making the accessed land in the periphery
available for mass housing.
2. Explore a moratorium on all

approvals
of
Foreshore
Lease
Agreements, except on ensuring the
settlement of small fisherfolks, and set
up a task force on fisherfolk settlement,
to begin providing land tenure security
to small fisherfolk households;
Social Development
269
Legislative Agenda
Health Financing
Amendment of RA 7875, or the National
Health Insurance Act of 1995
A roadmap towards universal health care
through a refocused PhilHealth, this seeks
to modify national-local government
premium sharing for the Sponsored
Program and full subsidy scheme for the
lowest income bracket of the population
(5 million families); sustain membership
to PhilHealth for all Filipinos; include
membership to PhilHealth as requirement
for government transactions, such as
application of business permit, drivers
license, marriage certificate; strengthen the
visitorial powers of PhilHealth; and define
offenses and abuses against the NHIP.
Restructuring the Excise Tax on Alcohol and
Tobacco Products and Earmarking Portions of
Incremental Revenue for Health Programs
This seeks to increase the resources for health
promotion and disease control programs of
DOH and Philhealths coverage of indigent
households, by amending Sections 141,
142, 143, 144, 145 and 288 of the National
Internal Revenue Code of 1997, as amended.
Income Retention of National Government
Hospitals
This seeks to authorize all national
government hospitals to utilize all its
income for hospital operations, particularly
the capital outlay, maintenance and other
operating expenses, and allow them to
invest their funds in high yield investment
instruments. The coverage shall include all
government hospitals at national and local
levels.
Service Delivery
A National Policy on Reproductive Health,
Responsible Parenthood and Population
Development
270
This seeks to strengthen governments

efforts towards the protection of
womens rights and the realization
of the peoples vital role in family
health, among others; and compel the
State to guarantee universal access to
medically-safe, legal, affordable and
quality reproductive health services,
methods, devices, supplies and relevant
information for responsible parenthood.
Strengthening of the Philippine
comprehensive policy on the prevention
and control of AIDS
This seeks to enhance existing HIV and
AIDS information and educational
program to increase the level of
awareness of the citizens; provide
mandatory disclosure of HIV and
AIDS status to spouse; and strengthen
the Philippine National AIDS Council
Secretariat.
Regulation on the Donation and
Transplantation of Human Organs
and Tissues from Living and Deceased
Donors
This seeks to promote access to organs
and tissues for transplantation for
patients with end-stage diseases, and
regulates the donation of human organs
and tissues from living and deceased
donors; develop and maintain a national
registry and reporting system of donors
and recipients of human organs and
tissues, and continuous evaluation of
the system.
Establishment of a Philippine Center for
Specialized Health Care (PCHSC)
This seeks to establishe the Philippine
Center for Specialized Health Care,
composed of Philippine Heart Center
for Asia, Lung Center of the Philippines,
Natonal Kidney & Transplant Institute,
Philippine Childrens Medical Center,
and East Avenue Medical Center, to
provide specialized medical services,
professional and advanced medical
training.
Human Resources
Improved Management Systems in

Human Resources for Health (HRH)
Basic Education
This seeks to institutionalize the

Human Resources for Health Network
as a structure to support human
resources for health development in the
Philippines.
Amendment of the Medical Act of 1959
This seeks to amend or include the
following provisions: classification
and/or reclassification of all existing
allowances, including magna carta
for health workers; creation of the
Council on Medical Education;
admission requirements; creation of
the Professional Regulatory Board for
Medicine; examination, registration
and licensure; regulation of the practice
of medical profession (suspension or
revocation); and foreign reciprocity.
Amendment of the Midwifery Act
This seeks to allow midwives to
administer
vaccination
during
immunization campaigns, as well as
routine immunization at the barangay
health stations, and administer lifesaving drugs in emergency cases.
Regulation
Bureau of Health Facilities and Services
(BHFS) strengthening
This seeks to strengthen the licensing
of health facilities and services under
BHFS.
Health Information System
Notifiable Disease Act
This seeks to improve reporting
of important communicable and
noncommunicable diseases, including
injuries and trauma, and strengthen the
use of ICT for data collection.
Amendments to the Education Provisions of

the Local Government Code
This seeks to amend the education
provisions of the Local Government Code
of 1991, including: mandating the broader
and better use of the Special Education
Fund; reorienting the roles of the LGUs
in the local management and quality
assurance of basic education; and changing
the composition of the Local School
Board, which shall be renamed Local Basic
Education Board, to promote greater roles,
synchrony and check-and-balance among
local stakeholders, thus following the
constitutional priority accorded to basic
education.
Amendments to Magna Carta for Teachers
This seeks to balance the enjoyment of
rights and privileges with the exercise of
responsibility and accountability, in order to
expediently implement the developmental
objectives of the DepEd in promoting
equity and quality in the provision of basic
education.
An Act Establishing a Multilingual
Education and Literacy Policy
This seeks to mandate a permanent policy
that institutionalizes within the DepEd
the use of the Filipino in teaching, learning
and assessment, to enhance the efficiency,
effectiveness and relevance of the learning
process, both formal and ALS.
Amendments to the Roxas Law
This seeks to restructure the allocation of
DepEds budget for capital outlay, amending
RA 7880 (Fair and Equitable Access to
Education Act), and emphasizing the role of
up-to-date school mapping in the rational
allocation of educational infrastructures in
all planning cycles.
Social Development
271
An Act Strengthening and Expanding the

Education Service Contracting Scheme for
Basic Education
allows easier transitions and progression

between TVET and higher education.
Higher Education
This seeks to support current basic education

reforms by comprehensively amending the
existing GASTPE Law and promoting
fiscal savings-oriented PPP. Alongside
other purchaseable services, the legislation
will provide for the expanded outsourcing
of instructional services for early childhood
education, elementary education and ALS,
on top of the existing secondary education.
An Act Providing for an Integrated System
of Licensure, Assessment, Qualification and
Professional Development of Teachers, and
Revising RA 7836 (as amended by RA 9293)
This seeks to provide a three-stage
licensure and qualification system, and
authentic, performance- and NCBTSbased examination; reform the criteria for
appointment or membership in the Licensure
Examination for Teachers (LET); and limit
the number of times LET can be taken.
Amendments to ECCD Law (RA 8980)
This seeks to recognize the early years from 0-6
as the first cycle of educational development,
and strengthening the ECCD Council.
Middle-level Skills Development
Enterprise-Based Education and Training Bill
This seeks to subsume the apprenticeship
chapter of the Labor Code of the Philippines;
and integrate all enterprise-based training
programs, including on-the-job training,
apprenticeship, dual training system, and
similar training modalities, under one set of
coherent policies, and structure to implement
and expand opportunities and venues for
work-relevant education and training.
Institutionalizing the LEP
This seeks to develop and implement a
unified national qualifications framework
that establishes equivalency pathways and
access ramps for a ladderized system that
272
Amendment to CHED Charter ( RA

7722) towards Comprehensive Higher
Education Reform Law
This seeks to pursue the recommended
measures of the Philippine Education
Sector Study (PESS), to eliminate the
conflict of interest between the system
of internal and external governance
due to CHEDs chairmanship of
the governing boards. Other needed
provisions include: for LGU-created/
funded HEIs to be part and parcel of the
overall governance of higher education,
for them to conform to national
standards and best practices; clear-cut
definition of the functions of regional
offices; strengthen the management of
the Higher Education Development
Fund; strengthen, safeguard and
institutionalize normative financing;
and update private higher education
provisions of the Education Act of 1978.
Public Higher Education Institutions
Restructuring Bill
This seeks to address the urgent
need to innovate and rationalize the
system of governance, financing and
quality assurance of publicly funded
institutions of higher learning, to
make state higher education more
accountable and responsive to both the
needs of the students and the economy.
Regional University System in Region
11 Bill
This seeks to create the Southeastern
Philippines Regional State University
System in Region 11 that integrates the
existing state university and three state
colleges in Davao City, Davao del Norte,
and Davao Oriental. This shall serve as
the pioneering model for the envisioned
national restructuring of state higher
education subsystem that will promote
better resource management and

utilization while pursuing enhanced
quality management, effectiveness and
regional relevance.
delivery of housing services, local shelter

planning and disposition of underutilized
assets of shelter agencies and national
government.
Comprehensive Scholarship and Student

Financial Assistance Reform Act
National Land Use Act (NALUA)
This seeks to rationalizes provisions

and rules governing all publicly funded
scholarship based on merit and talent,
student loans, grants and vouchers.
This will modify the existing law on
Government Assistance to Students
and Teachers in Private Education, and
integrate under one set of policies the
optimal resource use, systematizing of
clientele targeting and selection and
awarding of grantees. The legislation
is patterned after Thailands IncomeContingent Allowance and Loans
Program and the Australian Higher
Education Contributions Scheme.

Creation of the Department of Housing
and Urban Development (DHUD)
This seeks to establishe a national land

use framework that will define the
indicative priorities for land utilization and
allocation. NALUA shall integrate efforts,
monitor developments related to land
use, and evolve policies, regulations and
directions of land use planning processes.
The NALUA mandates the formulation of
national planning and zoning guidelines
and standards, to guide LGUs in the
formulation of their CLUPs and enactment
of zoning ordinances.
Comprehensive and Integrated Shelter
Finance Act (CISFA) II
This seeks to enact the continuation of
CISFA or RA 7835, to increase budget
appropriation for the socialized housing
program of the government, and significantly
increase the provision of housing and tenure
security to poor informal settlers, and in
order to attain the MDGs.
This seeks to ensure an adequate and

coherent institutional framework for
a holistic management of the housing
and urban development sector.
Social Protection
Balanced Housing Requirement for

Condominium Projects
An Act Establishing a Comprehensive System

for Registration and Licensing of SWD
Agencies and Accreditation of SWD Programs
and Service
This seeks to require developers of

proposed condominium projects to
develop socialized housing projects
(costing at least 20 percent of the
projects) as compliance with the 20
percent balanced housing requirement
for subdivisions, per Section 18 of the
Urban Development and Housing Act
or RA 7279.
Establishment of Local Housing Boards
This seeks to create Local Housing
Boards in every city and municipality
that shall serve as the focal unit in the
This seeks to encourage the participation of

all persons, organizations or corporations,
natural or judicial, that engage mainly or in
part, or represents themselves to engage in
charitable or SWD activities in uplifting the
quality of life of the poor, vulnerable and the
disadvantaged sectors through a DSWD
registration, licensing and accreditation;
provide benefits and incentives to registered,
licensed and accredited SWD agencies; and
reinforce the regulatory functions of the
DSWD over public and private individuals,
agencies and/or organizations engaged in
SWD activities.
Social Development
273
Philippine Adoption Act
Magna Carta for Youth
This seeks to integrate all the existing laws

on adoption and establish a central adoption
office under the DSWD.
This seeks to ensure the rights, freedoms

and protection of the youth in all aspects
of their lives, and put into reality the
tenet of youth empowerment.
Magna Carta for Workers in the Informal

Economy
This seeks to address the development,
rights and protection of poor, marginalized,
unprotected and underrepresented workers
in the IS; recognize the real economic
value of their labor; and provide standard
registration and accreditation.
An Act to Strengthen and Propagate Foster
Care for Abandoned and Neglected Children
and For Other Children with Special Needs,
Providing Funds Therefore and for Other
Purposes
This seeks to develop a comprehensive legal
framework that will consolidate the interest
of children in need of foster care and for those
who can provide such care.
Anti-Prostitution Bill
This seeks to address the system of
prostitution through the apprehension and
prosecution of agents, recruiters, traffickers,
pimps, procurers, establishment owners,
customers and others who derive sexual
gratification, financial gain or any other
benefit from the prostitution of another
person. It shall also complement the current
laws on antitrafficking and violence against
women, in protecting and promoting the
rights of the vulnerable groups, especially
women and children.
Magna Carta for Domestic Workers
It seek to protect and promote the welfare
of domestic workers by providing realistic
minimum wage and other benefits, such as
SSS and PhilHealth, implementing the use
of a formal contract to govern employeeemployer relationship, and preventing
physical, sexual, mental and economic abuse
of workers among others.
274
Asset Reform
Land Administration Reform Act
(LARA)
This seeks to establish the Land
Administration Authority integrating
the Land Management Bureau, the Land
Registration Authority, the National
Mapping and Resource Information
Authority, and Registry of Deeds.
Annex 8.1. Pace of Progress of the Philippines in Terms of Attaining the MDG Targets
MDG Goals, Targets and Indicators
Pace of Progress
Probability of Attaining
the Target
Goal 1: Eradicate extreme poverty and hunger
Target 1.A: Halve, between 1990 and 2015, the proportion of people whose income is less
than the poverty threshold
Proportion of population below the poverty threshold
Proportion of population below the food threshold

Target 1.C: Halve, between 1990 and 2015, the proportion of people who suffer from hunger
Prevalence of underweight children 0-5 years old
Proportion of households with per capita intake below 100 percent dietary
energy requirement
0.88
1.28
MEDIUM
HIGH
0.67
0.79
MEDIUM
MEDIUM
0.00
0.36
0.35
LOW
LOW
LOW
Goal 2. Achieve universal primary education
Target 2.A: Ensure that, by 2015, children everywhere, boys and girls alike, will be able to
complete a full course of primary schooling
Elementary education net enrolment rate
Elementary education cohort survival rate
Elementary education completion rate
Goal 3. Promote gender equality and empower women
Target 3.A: Eliminate gender disparity in primary and secondary education, preferably by
2005, and in all levels of education no later than 2015
Ratios of girls to boys in elementary education participation rate
Ratios of girls to boys in secondary education participation rate
Ratios of girls to boys in elementary education cohort survival rate
Ratios of girls to boys in secondary education cohort survival rate
Ratios of girls to boys in elementary education completion rate
Ratios of girls to boys in secondary education completion rate
HIGH
HIGH
HIGH
HIGH
HIGH
HIGH
Goal 4. Reduce child mortality
Target 4.A: Reduce by two-thirds, between 1990 and 2015, the under-five mortality rate
Infant mortality rate
Under-five mortality rate
1.17
1.20
HIGH
HIGH
0.47
LOW
0.27
LOW
0.02
0.03
LOW
LOW
0.72
MEDIUM
2.01
2.37
3.82
2.53
HIGH
HIGH
HIGH
HIGH
0.82
1.68
MEDIUM
HIGH
Goal 5. Improve maternal health
Target 5.A: Reduce by three quarters, between 1990 and 2015, the maternal mortality ratio
Maternal mortality ratio

Target 5.B: Achieve, by 2015, universal access to reproductive health
Contraceptive prevalence rate
Goal 6. Combat HIV/AIDS, malaria and other diseases
Target 6.A: Have halted by 2015 and begun to reverse the spread of HIV/AIDS
HIV prevalence among 15 years old and over
Proportion of population aged 15-24 years with comprehensive correct

knowledge of HIV/AIDS
Target 6.B: Achieve, by 2010, universal access to treatment for HIV/AIDS for all those
who need it
Proportion of population with advanced HIV infection with access to

antiretroviral drugs
Target 6.C: Have halted by 2015 and begun to reverse the incidence of malaria and other
major diseases
Malaria morbidity rate
Malaria mortality rate
Tuberculosis case detection rate
Tuberculosis cure rate
Goal 7. Ensure environmental sustainability
Target 7.C: Halve, by 2015, the proportion of people without sustainable access to safe
drinking water and basic sanitation
Proportion of population with access to safe water
Proportion of population with access to sanitary toilet facilities
Social Development
275
Annex 8.2. Regional Poverty and Subsistence Incidence and Magnitude: 2009
Region
Subsistence
Magnitude of
Poverty Incidence Magnitude of Poor
Incidence
Among
Subsistence
Poor
Among the
Population
Population (%)
Population
Population (%)
Philippines
NCR
Region I
Region II
Region III
Region IV-A
Region IV-B
Region V
Region VI
Region VII
Region VIII
Region IX
Region X
Region XI
Region XII
CAR
ARMM
CARAGA
26.5
4.0
23.3
18.8
15.3
13.9
35.0
45.1
31.2
35.5
41.4
43.1
39.6
31.3
35.7
22.9
45.9
47.8
23,142,481
447,891
1,085,078
545,053
1,457,004
1,566,359
980,542
2,422,267
2,113,255
2,368,361
1,731,617
1,361,287
1,586,668
1,278,985
1,332,061
346,193
1,388,856
1,131,004
10.8
0.6
7.9
5.8
5.0
3.7
14.8
17.8
11.2
17.1
19.0
23.5
20.7
14.8
15.6
10.8
11.5
25.3
9,440,397
69,747
367,955
167,479
480,695
414,399
413,876
956,531
761,200
1,143,065
794,766
744,286
829,041
604,612
582,716
162,371
349,459
598,201
Source: NSCB
Annex 8. 3. Provinces in the Bottom Cluster:

2009
Province
Zamboanga del Norte
Agusan del Sur
Surgao Del Norte
Eastern Samar
Maguindanao
Zamboanga Sibugay
Romblon
Masbate
Davao Oriental
Northern Samar
Bohol
Saranggani
Sulu
Lanao del Norte
Camarines Sur
Poverty Incidence
46
43.5
43.1
37.6
37.7
35.4
36.3
36.6
36.4
32.4
33.6
34
33
31.9
33.8
Source: NSCB
276
Annex 8.4. Gini Concentration Ratios, by Region:

2006 and 2009
Region
Philippines
NCR
CAR
I (Ilocos Region)
II (Cagayan Valley)
III (Central Luzon)
IV-A (CALABARZON)
IV-B (MIMAROPA)
V (Bicol)
VI (Western Visayas)
VII (Central Visayas)
VIII (Eastern Visayas)
IX (Zamboanga Peninsula)
X (Northern Mindanao)
XI (Davao)
XII (SOCCSKSARGEN)
XIII (CARAGA)
ARMM
Sources: FIES, NSO
2006
2009
0.4580
0.3988
0.4481
0.3953
0.4216
0.3994
0.4082
0.4106
0.4428
0.4326
0.4639
0.4828
0.5054
0.4806
0.4225
0.4006
0.4452
0.3113
0.4484
0.3953
0.4212
0.4086
0.4425
0.3727
0.4063
0.4004
0.4164
0.4197
0.4601
0.4841
0.4738
0.4737
0.4275
0.4425
0.4595
0.2948
Annex 8.5. Income Poverty Measures by Region: 2006 and 2009
Region
PHILIPPINES
NCR
CAR
I (Ilocos Region)
II (Cagayan Valley)
III (Central Luzon)
IV-A (CALABARZON)
IV-B (MIMAROPA)
V (Bicol)
VI (Western Visayas)
VII (Central Visayas)
VIII (Eastern Visayas)
IX (Zamboanga Peninsula)
X (Northern Mindanao)
XI (Davao)
XII (SOCCSKSARGEN)
XIII (CARAGA)
ARMM
Income Gap
2006
2009
27.2
19.2
27.5
23.5
21.2
22.3
22.2
28.8
28.7
24.2
31.7
27.6
32.9
31.1
28.4
26.4
30.1
23.3
Poverty Gap
2006
2009
25.7
16.9
28.0
22.4
21.0
22.9
20.2
25.6
25.1
23.8
28.8
27.4
30.8
29.9
27.5
27.0
30.5
20.2
5.7
0.7
5.1
4.8
3.3
2.7
2.1
9.9
10.3
5.4
10.6
8.6
11.3
10.1
7.4
7.2
11.1
8.5
Severity of Poverty
2006
2009
2.7
0.4
4.8
4.0
3.0
2.8
2.1
7.1
9.0
5.7
8.7
9.1
11.3
9.8
7.0
7.6
12.1
7.7
2.2
0.2
1.9
1.7
1.0
0.9
0.7
3.9
4.0
1.8
4.6
3.3
5.1
4.3
2.9
2.6
4.6
2.8
2.0
0.1
1.8
1.4
1.0
0.9
0.6
2.6
3.3
2.0
3.6
3.5
4.8
4.1
2.8
2.9
5.0
2.3
Source: NSCB
Annex 8.6. National and Regional BDR Estimates for the Regular Benefit Package: 2008
Region
Coverage (%)
Philippines
I - Ilocos Region
II - Cagayan Valley
III - Central Luzon
IVA - CALABARZON
IVB - MIMAROPA
V - Bicol Region
VI - Western Visayas
VII - Central Visayas
VIII - Eastern Visayas
IX - Zamboanga Peninsula
X - Northern Mindanao
XI - Davao Peninsula
XII - SOCCSKSARGEN
NCR
CAR
ARMM
CARAGA
53
65
48
54
62
36
46
44
54
38
36
74
43
35
77
57
14
51
Adjusted
Availment Rate (%) Support Value (%)
42
19
10
24
35
23
38
40
61
62
76
49
64
92
33
37
87
28
34
29
38
29
26
32
40
38
27
32
40
42
41
37
21
36
37
42
BDR (%)
7.7
3.6
1.9
3.7
5.7
2.7
7.0
6.6
8.7
7.3
11.0
15.1
11.5
11.9
5.4
7.4
4.4
6.1
Source: Joint DOH-PhilHealth Benefit Delivery Review, August 2010

Social Development
277
Annex 8.7. Various Forms of Malnutrition, by Region: 2008
Children 0-5 years old, in

percent
Stunting
Wasting
Region
Philippines
I
II
III
IV-A
IV-B
V
VI
VII
VIII
IX
X
XI
XII
CARAGA
NCR
CAR
ARMM
32.3
27.5
31.1
22.3
24.8
37.2
38.2
39.1
35.1
41.1
40.3
37.7
37.0
39.6
37.2
24.7
36.3
39.7
Anemia, in percent
6mos 5years
Pregnant
23.7
29.4
39.3
21.4
22.9
25.4
24.9
29.1
20.4
16.1
20.5
16.0
15.4
34.8
29.0
23.7
12.4
22.7
42.5
33.3
60.0
40.7
37.8
49.6
51.1
61.5
40.4
39.5
34.1
35.7
22.6
49.8
34.3
48.0
22.6
47.3
6.9
6.5
8.0
7.1
6.5
7.0
8.0
8.5
4.6
6.7
8.0
6.6
5.7
6.9
7.8
6.2
5.8
10.3
Median urinary iodine

excretion, in mcg/L
Pregnant
Lactating
105
82
157
143
111
75
125
111
82
83
68
38
62
105
94
135
107
85
81
112
161
94
97
67
97
74
63
58
48
55
50
72
49
128
99
88
Source: 2008 National Nutrition Survey by the Food and Nutrition Research Institute of DOST
Annex 8.8. Poverty Estimates of the Basic Sectors: 2000, 2003 and 2006

2000
2003
2006
Magnitude in Millions
2000
2003
2006
Women
32.3
29
30.1
12.22
11.60
12.80
Youth
24.5
23.5
25.4
5.47
5.29
5.92
Children
42.5
38.8
40.8
14.09
13.47
14.40
Senior Citizens
28
18.4
20.3
1.27
.96
1.29
Urban Poor
17.3
15.9
16.1
6.78
6.36
6.85
Migrant and Formal

Sector Workers
18.7
18.4
19.5
2.62
2.88
3.22
Farmers
46.6
42.4
44
2.43
2.02
2.09
Fishermen
50.8
43.6
49.9
.45
.44
.48
Basic Sector
Source: NSCB Press Release ( July 2009)
278
Overweight
and obesity
among adults,
in percent
26.6
23.0
22.3
29.8
29.3
20.6
20.5
19.4
28.0
27.1
23.9
29.1
28.9
25.4
29.6
32.2
29.9
17.1
Annex 8.9. Regions with Minimum and Maximum Poverty Incidences for Each Basic Sector: 2006
Basic Sector
Women
Youth
Children
Senior Citizens
Urban Poor
Migrant and Formal
Sector Workers
Farmers
Fishermen
Least Poor
Region
Region
Poorest
NCR
NCR
NCR
NCR
CAR
9.7
7.3
15.2
4.4
7.4
ARMM
ARMM
ARMM
ARMM
ARMM
58.9
53.2
66.3
46.5
52.4
NCR
4.8
CARAGA
36.8
Region II
Region III
16.9
23.9
ARMM
CARAGA
62.3
66.7
Annex 8.10. Regions with the Most Number of Poor for Each Basic Sector: 2006
Basic Sector
Magnitude
Region
Highest
Lowest
Poorest
Children
1,420,163
262,711
Women
1,183,088
245,306
Urban Poor
1,138,424
37,563
Youth
547,595
135,222
Migrant and Formal

Sector Workers
400,251
41,863
Farmers
212,188
47,118
Senior Citizens
144,473
26,936
Fishermen
116,725
2,512
1. Region V
2. Region VI
3. Region IV-A
1. Region V
2. Region VI
3. Region IV-A
1. NCR
2. Region III
3. Region IV-A
1. Region VI
2. Region V
3. Region IV-A
1. Region VI
2. Region III
3. Region IV-A
1. ARMM
2. Region VII
3. Region V
1. Region VII
2. Region VI
3. Region VIII
1. ARMM
2. Region V
3. Region VII
Least Poor
1. CAR
2. Region II
3. Caraga
1. CAR
2. Region II
3. Caraga
1. CAR
2. Region II
3. Region IX
1. CAR
2. Region II
3. Caraga
1. CAR
2. ARMM
3. Caraga
1. Region II
2. Region III
3. CAR
1. Region II
2. CAR
3. NCR
1. Region II
2. NCR
3. Region III
Social Development
279
280
09
Peace &
Security
Peace & Security
281
Peace & Security

Peace and security shall be achieved in support to national development. The
government shall exert all efforts to win peace and ensure national security. The peace
process shall center on the pursuit of negotiated political settlement of all armed
conflicts and the implementation of complementary development tracks to address its
causes. This shall be anchored on conflict prevention and peace-building in conflictaffected areas. On the other hand, national security shall involve the whole-of-nation
approach, focusing on internal stability, upholding the sovereignty and territorial integrity
of the state, capability and preparedness against natural calamities and disasters, and
reform and modernization of the security sector.
Assessment and
Challenges
A stable national security environment is
crucial to achieving development, human
security and general welfare. Stability can
be threatened, however, by internal security
concerns such as recurring armed conflict
and criminality, together with new global
security threats such as terrorism, human
trafficking, illegal arms trade, and drug
trafficking.
The challenge, therefore, is for the country
to achieve national stability through an
appropriate and adequate response to internal
conflicts and external threats, so that it may
become a responsible partner in promoting
peace and good relations among nations.
All these must occur within the irreducible
framework of national sovereignty and
territorial integrity.
Internal Security Challenges

Of all security concerns, the most pressing is
the internal conflict involving armed groups
with a capability to gravely affect lives and
properties in areas in Southern Philippines,
especially those with large Muslim
population. While government instituted
282
efforts to come to a political settlement

with the armed groups and has worked
to address the causes of conflict,
these conflicts have persisted, thereby
affecting the delivery of basic services
and creating a large development gap
between conflict-affected areas and the
rest of the country. Among the causes
of armed conflict are abject poverty,
poor governance, abuse of power,
corruption, failures of the justice system,
human rights violations, disputes over
land ownership and use of natural
resources, marginalization of lumad
and indigenous cultural communities,
and the lack of respect and recognition
of ancestral domain and indigenous
peoples rights.
Government will continue to pursue
negotiated political settlements with
the Moro Islamic Liberation Front
(MILF) and the Communist Party of
the Philippines-New Peoples ArmyNational Democratic Front (CPPNPA-NDF). There is also a need
to complete the implementation of
Final Peace Agreements with the
Cordillera Peoples Liberation Army
(CPLA) (1986), Moro National
Liberation Front (MNLF) (1996),
and the Rebolusyonaryong Partido ng
Manggagawa-Pilipinas / Revolutionary
Proletariat Army / Alex Boncayao

Brigade (RPMP/RPA/ABB) (2000).
While this requires disposition of forces
through appropriate reintegration, it will
also involve provision of socioeconomic
assistance to former rebels and
delivery of basic services to conflictaffected communities. Meanwhile, the
Tripartite Implementation Review of
the 1996 Final Peace Agreement with
MNLF is nearing completion, during
which common grounds and common
proposals were formulated for adoption
and implementation.
While formal negotiations with both
the MILF and the CPP-NPA-NDF
have stalled in recent years, prospects
have since improved for the resumption
of formal negotiations. These include:
(a) reconstitution by government of
the negotiating panels for the MILF
and the CPP-NPA-NDF peace talks;
(b) continued implementation of the
agreements with the MILF on ceasefire
mechanisms, and rehabilitation and
development of conflict-affected areas;
and (c) agreement with the CPP-NPANDF on respect for human rights and
international humanitarian law. Not
the least of the reasons, however, has
been the renewal of the governments
legitimacy through the democratic
election of an administration that
enjoys the peoples support and that is
willing to invest its political capital on
peace.
While peace negotiations are pursued,
the causes of conflict must also be
addressed in order to reap dividends
from peace efforts.
For conflictaffected areas, the peace talks must be
complemented by the delivery of basic
services, institution of good governance,
people empowerment, assistance for
the return or resettlement of IDPs,
policy reforms, and local economic
development.
Other Security Challenges

Other threats to peace and development
in local communities arise from criminal
elements and other armed threats to peace
and order, including politically partisan
armed groups (PAGS) that surface during
the conduct of national and local elections.
Putting an end to these criminal activities
shall be given prime importance.
External Security Challenges

As global trade in goods and services and
international investment become important
drivers of the countrys economic growth,
government shall continue to be vigilant in
responding to crimes that thrive under an
environment of increasingly open borders,
such as terrorism, human trafficking, arms
and drug-trafficking, and smuggling.
The archipelagic nature of the country
makes it both urgent and challenging for the
government to uphold its territorial integrity.
Greater efforts shall be exerted to safeguard
the countrys interests within maritime
areas, notably its Exclusive Economic
Zone (EEZ), through heightened maritime
security capabilities.
In addition to territorial threats, the
overseas diaspora of Filipinos entails a
The administration will have to pick up the pieces and resume the quest
for peace with vigor and clarity of purpose. Our quest must not only focus
on ensuring stability of the State and the security of our nation. Our
ultimate goal must be the safety and wellbeing of our people.
We must revive the peace process on the basis of a comprehensive
understanding of the root causes of the conflict, under clear policies that
pave and clear the way ahead, and driven by a genuine desire to attain
a just and lasting peace. We shall endeavor to restore confidence in the
peace process that is transparent and participatory, and renew our faith
in our shared vision of a peaceful, secure and prosperous future under
one sovereign flag.
-President Benigno S. Aquino, April 22, 2010
Mandarin Hotel, Makati
Peace & Security
283
wider redefinition and understanding of

threats to Filipino interests. In particular,
the predicament of overseas Filipinos who
come into conflict with the laws of other
countries poses complex new challenges to
the countrys conduct of foreign relations,
with potential repercussions on issues of
sovereignty and territorial integrity.
A comprehensive response to these concerns
involves initiatives to improve relations and
forge cooperation with other nations to
preserve and protect national security and
interest, including the welfare of Filipinos
living and working abroad.
Because peace and security are
indivisible, efforts toward their
attainment must be anchored
through a whole-of-nation
approach, which seeks to bring
about a concerted effort towards
national peace and security.
Nontraditional Security
Challenges
Nonmilitary and transnational threats,
otherwise called nontraditional security
concerns, also challenge the countrys peace
and security. Armed personnel of government
shall continue to assist other government
agencies during emergency situations, such
as during disasters caused by natural hazards
and health pandemics, as well as in securing
vital development projects under threat of
destabilization.
Strategic Framework
As the challenges to national security
become more complex, effective strategies
that would ensure the attainment of peace,
public order and safety through the cessation
of armed conflict and prevention of crimes
shall be continuously identified and pursued
while communities are empowered and
transformed into areas of growth and
productivity.
Because peace and security are indivisible,
efforts toward their attainment must be
anchored through a
whole-of-nation
approach, which seeks to bring about a
concerted effort towards national peace and
security. This approach is not about burdensharing but rather about creating a consensus
and understanding of security, that is shared
not just among core security forces and
oversight government institutions, but also
284
by civil society and all the nations

communities. This shared responsibility
can only emanate from a shared concept
of security. People-centered security
within the framework of human
security puts peoples welfare at the
center of its operations. It gives primacy
to human rights while recognizing and
promoting local security and safety
based on the needs and realities of
communities.
This framework shall be pursued under
the following guiding principles: (a)
full respect, promotion and protection
of human rights and human security;
(b) primacy of the peace process at
all times; and (c) acceptance of social
diversity and promotion of a culture of
peace. These principles shall be adopted
in all key aspects of the implementation
of strategies.
Overall, specific strategies shall support
governments National Security Policy
and National Security Strategy. These
two documents lay down the blueprint
for the countrys national security
vision and serve as the basis for the
preparation of the plans and programs
of government agencies involving
national security.
Section 1. Winning the

Peace
Promotion of the peace process shall be
the centerpiece of the internal security
program, as a testament to governments
commitment to a policy of peace,
reconciliation and reunification. Peace
is not just the absence of war or conflict,
rather it is the sum total of conditions
that ensure human and social wellbeing
in all its dimensions. This entails
winning the hearts and minds of the
aggrieved and afflicted while retaining
the allegiance of the rest.
A.
Goal
While the governments ultimate

aim is to win the peace, the goal for
the medium term shall be to bring all
armed conflict to a permanent and
peaceful closure.
B.
Objectives
Toward this end, the following objectives

shall be met by the end of the Plan
period:
1. A negotiated political settlement
of armed conflicts; and
2. The causes of armed conflict and
other issues that affect the peace
process being effectively addressed.
C.
Specific Strategies
In pursuit of the abovementioned goal

and objectives, two tracks shall be
followed, each with its corresponding
strategies and programs, as follows:
1. A negotiated political settlement of
all armed conflicts
d. Final disposition of arms of the

abovementioned armed groups and
mainstreaming of former rebels as
productive members of society, in
accordance with peace agreements;
e. Establishment of mechanisms for
a participatory and accountable peace
process.
Negotiations with armed groups shall
be guided by the principles laid down in
EO 3 (series of 2001), with reference to a
comprehensive peace process which: (a) is
community-based, reflecting the sentiments,
values and principles important to all
Filipinos; (b) aims to forge a new social
compact for a just, equitable, humane and
pluralistic society; and (c) seeks a principled
and peaceful resolution to the internal
armed conflicts, with neither blame nor
surrender, but with dignity for all concerned.
The following parameters for peace talks are
further specified:
Peace is not just the absence

of war or conflict, rather it is
the sum total of conditions
that ensure human and social
wellbeing in all its dimensions.
a. the Constitution, inclusive of the

flexibilities provided within its provisions;
b. the experience and lessons learned from
past negotiations and with the creation
and operation of the ARMM;
This track shall involve the following:

a. Resumption and completion of
negotiations with the MILF and
CPP-NPA-NDF, respectively;
b. Completion and implementation
of signed final closure agreements
with the CPLA (1986) and the
Rebolusyonaryong
Partidong
Manggagawa-Pilipinas
/
Revolutionary Proletariat Army /
Alex Boncayao Brigade (RPM-P/
RPA/ABB) (2000), respectively;
c. Adoption and implementation of
actions agreed upon in the Tripartite
Implementation Review of the 1996
Final Peace Agreement with the
MNLF;
c. Governments ability to deliver politically, economically and socially commitments made and agreed on; and
d. Inclusiveness
and
transparency,
sensitivity to general public sentiment as
far as practicable, with the aim of restoring
full confidence and trust in the peace
process.
In order to put in place a gender-responsive
mechanism for transparent and accountable
peace process, civil society organizations
shall be involved, with government support
if necessary, in the establishment of a
Consultative Body defining its own structures
and mechanisms to fully participate in
various peace processes. Alongside this
body led by civil society organizations, the
government shall establish an Advisory
Body with representatives from Congress,
Peace & Security
285
members of the 1987 Constitutional

Commission, retired Justices of the Supreme
Court, local government executives, and
former government chief negotiators.
This shall serve as venue for dialogues to
address issues of discontent, inhibition, and
agitation, facilitate conflict resolution and,
prevent armed confrontations in conflictaffected areas.
national government agencies, LGUs

and development partners. PAMANA
rests on three main pillars:
2. Complementary Track
Dialogues and policy formulation

to improve governance and
address threats to identity and
marginalization;
A complementary track will be followed

to address the causes of conflict and issues
affecting the peace process. These include:
To put in place a transparent
and accountable peace process,
civil society organizations shall
be involved in various peace
processes.
a. Focused development in conflictaffected areas through the PAMANA

Payapa at Masaganang Pamayanan
Program;
PAMANA (Peaceful and Resilient
Communities) is the national governments
peace and development framework to
respond and strengthen peace building,
reconstruction and development in conflictaffected areas (CAAs). Under the guiding
principles of PAMANA, government will
implement a converged peace building
program focused on the development of
conflict-affected areas to address the causes
of armed conflict. The main strategy is to
bring back government in these communities
by ensuring that they benefit from improved
basic services delivery and are served by
responsive and accountable government.
This will ensure that these communities feel
the presence of government in their lives.
The design of specific interventions shall
recognize cultural practices and traditions.
PAMANA aims to: (a) reduce poverty
and vulnerability in conflict-affected areas;
(b) improve governance; and (c) empower
communities and strengthen their capacity to
address issues of conflict and peace through
activities that promote social cohesion.
Over a period of four years, PAMANA shall
cover 218 municipalities in 43 provinces.
Some 3,500 conflict-affected barangays
and an estimated 400,000 households will
benefit from this intervention. This will be
implemented through collaboration between
286
Pillar 1 refers to interventions at

the macrolevel that help establish
the foundations of peace and the
building of communities capable
of addressing peace issues. Among
the policy issues the framework
seeks to address are:
Ancestral domain, agrarian

reform and natural resource conflict
resolution; and
Security
guarantees
and
transitional support especially to
internally displaced persons (IDPs).
Pillar 2 refers to microlevel

interventions focused on households
and communities. These include
delivery of basic services at
the community level through
conditional cash transfer approaches,
community driven reconstruction
and development and community
livelihood.
Pillar 3 refers to mesolevel

interventions that address local
development challenges, including
constraints to local economic
development, economic integration
of poor areas with more prosperous
areas and physical and economic
connectivity
improvements.
These include high-impact local
development projects, such as
ancestral domain management
plans, support services for farmers
and farm-workers, including roads
and post-harvest facilities, or
culturally sensitive industries, such
as development of communitybased tourism and the halal

industry.
b. Support efforts to end impunity
and extra-judicial killings through
decisive action of the government
in dealing with grave human rights
violations as well as political or
election-related violence;
c. Support
the
indigenous
peoples agenda which includes:
professionalizing
the
service
bureaucracy;
the
review
of
Certificate of Ancestral Domain
Titles (CADTs) issuances; delivery
of basic services and review/ redress
IPs in conflict areas and realization of
the Indigenous Peoples Masterplan
(IPMAP) 2011-2016 with particular
stress on Human Rights Protection
of IPs;
implementation and
compliance with the International
Convention on the Elimination of
All Forms of Racial Discrimination
(ICERD) and the Convention of the
Rights of the Child; and advocacy of
the ratification of ILO Convention
No. 169, or the Convention on
Indigenous and Tribal Peoples;
d. Support an affirmative action
agenda for Muslims including the
development of a halal industry,
institutionalization of the Hajj
management system, establishment
of
economic
and
financial
mechanisms, such as Islamic banking
and microfinance, speedy resolution
of cases involving children and
women languishing in jails, putting
an end to discriminatory practices in
work places, and the establishment
of Shariah Courts;
e. Support the enhancement of
ARMM governance, including
greater accountability to citizens
living in remote and poorest areas.
This shall be accompanied by efforts
to end patronage politics, dismantle
all private armies, ensure free, responsible

and clean elections, strengthen democratic
processes and the rule of law in the
electoral system, and fully integrating
ARMM in all Mindanao-wide and
national development plans;
f. Support the implementation of UN
Security Council Resolution 1325, which
entails close collaboration with the CSOs
to fully comply with the governments
commitment to increase participation of
women in peace processes and address
sexual violence against women in armed
conflict situations. More specifically,
efforts shall be exerted to: (i) ensure the
protection of womens rights and prevent
the violation of these rights in armed
conflict and postconflict situations; (ii)
empower women and ensure their active
and meaningful participation in areas of
peace building, peace keeping, conflict
prevention, conflict resolution and
postconflict reconstruction; (iii) promote
and mainstream the gender perspective in
all aspects of conflict prevention, conflict
resolution and peace building; and (iv)
institute a system to monitor, evaluate and
report the implementation of the national
action plan to enhance accountability
for successful implementation and the
achievement of its goals;
Government will implement

a converged peace-building
program focused on the
development of conflict-affected
areas to address the causes of
armed conflict.
g. Address the needs of children in

situations of armed conflict by setting
up an effective mechanism to monitor,
report and immediately respond to
the identified seven grave child rights
violations in conflict situations, namely:
recruitment and use of minors by armed
groups, killing and maiming, abduction,
denial of humanitarian assistance, rape
and sexual abuse, and attacks on schools
and hospitals. Protecting children in
situations of armed conflict will likewise
entail monitoring of implementation
and compliance to the International
Convention of the Rights of the Child;
h. Support the reform of the security
sector, which entails mainstreaming a
people-centered approach to human
security and developing policies to
Peace & Security
287
institutionalize Democratic Control of

the Armed Forces (DCAF);
i. Support the settlement of land
disputes aimed at rationalizing national
land policies and strengthening conflict
resolution mechanisms on the ground,
recognizing the fact that internal armed
conflicts are largely rooted in longstanding disputes over land and resources.
B.
In particular, the following objectives

shall be pursued:
1. Promotion of sustained internal
stability;
2. Full capability to uphold the
sovereignty and territorial integrity
of the state assured;
Legislative Agenda
Secure internal and external

peace that will contribute to
development efforts and ensure
that Filipinos will be able to take
part in the process of economic
growth and development.
2. Protection of women and children in

situations of armed conflict; and
3. Human rights and human security of
persons in conflict-affected areas fulfilled
and protected.
Section 2. Ensuring National

Security
Apart from the peace process, the
government shall create and sustain
an enabling environment conducive to
development. This will be done by involving
the whole government, other institutions,
and the entire citizenry in addressing
national integrity, public order and safety,
and governance reforms. These mutuallyreinforcing strategies are envisioned to
secure internal and external peace that will
contribute to the development efforts of the
government and ensure that Filipinos will be
able to take part in the process of economic
growth and development.
A.
Goal
Throughout the Plan period, the government

shall create and sustain a safer and more
secured environment conducive to national
development.
288
3. Highest standard of capability

and preparedness against natural
calamities and disasters achieved;
and
During the Plan period, the administration

shall work toward the passage of legislation
to achieve the following outcomes, among
others:
1. An Organic Act for the ARMM as
amended to ensure full implementation of
the GRP-MNLF Final Peace Agreement;
Objectives
4. Security sector reformed and

modernized.
C.
Specific Strategies
1. To promote and sustain internal
stability, the following strategies
shall be pursued:
a. Capabilities of armed groups
must be reduced at a level where
they can no longer threaten the
stability of the state. These shall be
done through the following:
End
activities
of
Abu
Sayyaf Group (ASG), Jemiah
Islamiyah( JI) and their allied
armed groups and other criminal
elements; and
Contribute to the establishment
of conditions for civil authorities
to take responsibility for the
safety and wellbeing of their
constituents.
b. Continuous and intensified police
and other law enforcement agencies
operations must be implemented
to address criminality including
organized crime groups. To ensure
the safety of the citizenry from
becoming victims of unlawful acts,
the following shall be carried out:
Enforce the law effectively and

credibly and anticrime strategies
in partnership and collaboration
with stakeholders and other
pillars of the Criminal Justice
System;
Improve
performance
solving crimes; and
Dismantle
groups.
private
in
armed
2. To assure full capability to uphold

the sovereignty and territorial
integrity of the state, the following
strategies shall be undertaken:
a. International
relations
and
external security must be sustained
and cultivated through the following:
Strengthen
cooperative
security
arrangements
with
neighbors and other countries
by adopting mechanisms in
the regional and global setting
in building confidence and
promoting consultations and
interactions.
Pursue friendly and peaceful
bilateral
and
multilateral
relations with other nations and
international agencies to promote
cooperative projects in the
political, economic and military
fields, as well as assuring the
security and welfare of Filipinos
working and living abroad; and
Expand
participation
Operations.
immigration laws and upgrading of

surveillance and detection capacity to
thwart the entry of foreign terrorists
and other lawless elements as well as
human trafficking and smuggling of
anti-social goods and weapons of mass
destruction; and
and
improve
in UN Peace
b. Capability on border management,

surveillance and detection against
lawless elements must be improved
through the following:
Enhancement
of
border
security through the strict
enforcement of the Philippine
Ensuring that maritime assets,

maritime practices, territorial integrity
and coastal areas are protected in
accordance with the Baselines Law
(RA 9522) and by upgrading air and
maritime capability.
3. To achieve the highest standard of
capability and preparedness against
natural and man-made calamities and
disasters, the following will be undertaken:
Strengthen the role of the security
sector in emergency relief and
rescue operations to maintain public
order and safety during calamities.
Mechanisms to improve alert warning
and monitoring before and during
disasters will be enhanced to preempt loss to lives and properties.
The sector will be transformed to
become more dynamic, proactive, and
responsive to prevent and prepare for
disasters through improvement on
technical and institutional capacity,
and by promoting synergy among
stakeholders and building resiliency of
communities to disasters; and
Support national development
programs by securing and protecting
critical infrastructures and facilities,
and other high value projects of the
public and private sector.
4. To carry out Security Sector Reform
and Modernization initiatives that shall
adhere to the principle of transparency
and accountability, the following
strategies shall be implemented:
a. Pursue reforms in the security sector by
adopting policies, programs and activities
that contribute to:
Peace & Security
289
Strengthening the civilian control and

oversight of the security sector;
Capability to perform air, land

and sea operations, as mandated;
Orienting the security forces, to

include, among others, programs
designed to train soldiers, police and
other security sector personnel on their
respective responsibilities, respect on
human rights and international law, and
ethnic sensitivity;
Capacity building of the

security sector particularly on
non-traditional skills on conflict
resolution and peace-building,
democratic accountability, gender
and development issues, ethnic
sensitivity, and indigenous peoples
rights; and
Strengthening the internal security

system. Pursue and support the reform
efforts in both the AFP and PNP
through programs such as the Philippine
Defense Transformation Program of the
AFP and the Integrated Transformation
Program-Performance
Governance
System of the PNP. The security sector
must rebuild themselves as institutions by
reorganizing, retooling, and reorienting
the approaches to keep up with the
constantly changing policy and security
strategy environment; and
Strengthening of the rule of law
throughout the country by ensuring a
strong, independent judicial system and a
better functioning of correctional systems
so that justice is applied to all. The
Philippine government recognizes the
need to strengthen the rule of law to assure
the people of the basic protective services
with an effective and reliable response
mechanism from the law enforcement
agencies as well as a functioning and
dependable justice system.
b. Pursue the upgrading and modernization
of the defense and security establishments
to perform the full spectrum of roles
and mandates in accordance to the more
comprehensive and updated definition of
National Security. This entails the following:
Capability to perform all types
and levels of internal and external
operations as well as non-traditional and
development roles;
Education,
training,
and
preparation of all officers (including
non-commissioned officers) and
civilian employees, in accordance
with the highest standards of
personal integrity and professional
competence required in all the
leadership, officer, technical and
rank and file positions in the armed
and other uniformed services.
Legislative Agenda
During the Plan period, the
administration shall work toward the
passage of legislation or amendments to
existing laws such as:
1. Amendment
of
the
AFP
Modernization/Development
Program (RA 7898) to extend its
implementation;
2. Enactment of the National Defense
and Security Act to make it relevant to
the contemporary global and regional
environment;
3. Enactment of a law declaring the
countrys maritime zones (Territorial
Sea, Contiguous Zone and Exclusive
Economic Zone) to ensure Philippine
Maritime interests;
4. Enactment of PNP Reorganization
Law; and
5. Enactment of Comprehensive
Law on Firearms, light Weapons and
Ammunition.
290
10
Conservation,
Protection &
Rehabilitation of
the Environment
& Natural
Resources
Conservation, Protection & Rehabilitation of the Environment & Natural Resources
291
Conservation, Protection
& Rehabilitation of the Environment
& Natural Resources
The country is widely acknowledged as having an outstanding endowment of natural
resources, which could provide essential ecosystem services to the population.
Demands arising from development and utilization activities, population expansion,
poor environmental protection, and external factors such as climate change, however,
have placed the countrys environment and natural resources under grave threat. For
the medium-term, an environment that is healthy, ecologically balanced, sustainably
productive, climate change resilient, and one that provides for present and future
generations of Filipinos is envisioned. This vision will be pursued through an integrated
and community-based ecosystems approach to environment and natural resources
management, precautionary approach to environment and natural resources, sound
environmental impact assessment (EIA) and cost-benefit analysis (CBA). These, then,
are all anchored on the principles of shared responsibility, good governance, participation,
social and environmental justice, intergenerational space and gender equity, with people
at the core of conservation, protection and rehabilitation, and developmental initiatives.
Assessment
State of the environment and
natural resources
The degraded state of the countrys
environment and natural resources is felt
most intensely by the poor, especially the
rural communities given that they depend
on these resources for their primary source
of living. On the other hand, poverty
frequently aggravates environmental stress
as the marginalized population presses
upon limited resources, such as unregulated
activities and upland cultivation.
Major urban centers are polluted

With regard to water pollution, the
Biochemical Oxygen Demand (BOD)
levels of 10 rivers (Bocaue, Anayan,
Malaguit, Paniqui, Calapan, Iloilo, Luyang,
Sapangdaku, Cagayan de Oro and Balili)
1
292
are already within standard and

BOD levels of rivers have improved.
However, waterways in major urban
centers, especially esteros, are unfit for
human activity, despite recent clean-up
efforts. The cost of medical treatment
and loss of income from water-borne
diseases total PhP6.7 billion per year,
according to a WB report (2007). At
least six rivers in the NCR, Region 3
and Region 4-A fail in terms of both
dissolved oxygen (DO) and Biological
Oxygen Demand, namely: the
Paraaque, San Juan, Marikina, Pasig,
Meycauayan, and Ylang-Ylang rivers.
The Supreme Court in December 2008
issued a continuing mandamus for the
government to clean up the waterways,
especially those emptying into Manila
Bay, in order to improve the water
quality in the bay to SB level. 1
SB-areas regularly used by the public for bathing, swimming, skin diving, etc.
In Metro Manila, up to 58 percent

of groundwater has been found to be
contaminated with coliform.2
The problems posed by hazardous
wastes are also beginning to be a priority
concern due to the increasing number
of large companies that generate wastes
considered hazardous to health and the
environment. Like most developing
countries, the Philippines still has
inadequate
equipment
and technical expertise to deal with
these wastes despite steps to define
the regulatory and enforcement
responsibilities of various government
agencies. Currently, the Philippines has
no large-scale treatment and disposal
facilities for hazardous wastes.
solid waste remains a major

source of pollutants
Uncontrolled dumping of raw sewage
in coastal areas, particularly those that
are thickly populated or used heavily
by tourists, contributes to dangerous
water contamination levels. The lack
of point-source and nonpoint-source
pollution controls are the main factors
that contribute to the degradation of
water quality in the Philippines.
The problem of solid waste
disposal is most serious in urban
centers, particularly Metro Manila,
because of high population density,
high consumption rates, and the
concentration of packaged goods, and
packaging materials, some of which
are toxic and nonbiodegradable.3 The
Philippines generates 30,000 tons of
garbage per day. Metro Manila alone
produces 8,000 tons per day, of which
only 70 percent is collected. For the
whole country, only half of the garbage
generated is collected. Uncollected
garbage ends up mostly in rivers, esteros,
and other water bodies, clogging the
drainage system and leading to floods and

the pollution of major water bodies.
Water is becoming scarcer

The country is endowed with abundant
water resources. It experiences an average
annual rainfall of 2,400 mm. and has 421
river basins, of which 20 are major river
basins ranging from 990 to 25,000 km2.
The countrys watersheds and aquifers, if
fully functional, could supply 146 billion
cubic meters (BCM) of water annually for
domestic, industrial and agricultural uses.
Total water availability is estimated at 126
BCM per year from surface water such as
rivers or streams, and an estimated 20 BCM
per year groundwater potential (NWRB
1998).
Although water is still abundant in certain
areas, the country faces the threat of
emerging water scarcity. Lack of urban
planning, indiscriminate urban development,
lack of investment in water, problems
of water resource management, and the
impact of climate change threaten water
security and sustainability. Deforestation
and lack of effective management of forest
and freshwater ecosystems have led to the
further deterioration of watersheds, limiting
aquifer recharge and increases water runoff
and soil erosion. Around 267 watersheds
with a total area of 10.6 million hectares
have been identified as needing immediate
rehabilitation. These priority watersheds
support national irrigation systems and
are the major source of domestic water
supply. Storage and distribution of water to
deficient areas and proper water-resources
management are also areas of concern.
The Philippines generates

30,000 tons of garbage per day.
Metro Manila alone produces
8,000 tons per day, of which only
70 percent is collected.
Increasing water demand has resulted in

a number of regions and at least nine key
urban centers experiencing water stress
(NWRB 1998). These include Metro Manila,
Metro Cebu, Davao, Baguio, Cagayan
de Oro, Bacolod, Angeles, Iloilo, and
Zamboanga. These highly urbanized cities
European Commission (EC), Country Environmental Profile, 2005.
DENR, National State of Brown Environment, 2009.
293
Figure 10.1. Philippine Forest Cover, 1934-2003
The quality of land resources

has deteriorated steadily
because of erosion, pollution
and land conversion. Twentyone percent of the countrys
agricultural lands and 36
percent of nonagricultural lands
are moderately or severely
eroded.
Source: World Bank (2009) and Forest Management Bureau (2010)
rely mostly on groundwater for water supply,

resulting in uncontrolled withdrawal from
groundwater aquifers in recent years. Rapid
and uncontrolled urban development has
reduced aquifer recharge and has eventually
resulted in the decline of groundwater levels
as well as saltwater intrusion.
The 2010 Philippines MDG Progress
Report shows the proportion of the
Philippine population with access to safe
water has risen at a moderate rate, increasing
from 73.8 percent in 1991 to 81.4 percent in
2008. If the trend continues, the 2015 target
(86.9%) may be attainable. These favorable
results, however, hide the fact that almost
one in five (or 15.73 million) persons is still
unable to access safe water despite abundant
water resources.
quality of farm land is deteriorating

and forested lands are shrinking
The quality of land resources has deteriorated
steadily because of erosion, pollution and
land conversion. Twenty-one percent of the
countrys agricultural lands and 36 percent
of nonagricultural lands are moderately or
severely eroded.4 Soil erosion has affected
294
ADB, Country Environmental Analysis: Philippines, 2009
DENR-FMB estimate based on 2003 satellite images
the productivity of land, limited

the rehabilitation or restoration of
degraded lands, lowered the quality of
surface water, and modified hydrologic
conditions by changing land resources
and land management. Moreover,
the changing weather patterns have
brought about prolonged droughts and
excessive rains. Farmers have to endure
lower yields and lower income from
farming.
Of the countrys total land area of 30
million hectares, 47 percent (14 million
hectares) has been classified as alienable
and disposable (A&D) lands while 15.9
million hectares (52%) are classified as
forestlands. Some 2.7 million hectares
of total classified forestlands have
been either established or considered
as protected areas, making up a total
of 238 protected areas. Of the 15.9
million hectares of forestland, only 6.43
million hectares or 41 percent were still
forested in 2003, a significant decline
from the 17 million hectares recorded
in the 1930s.5 Figure 10.1 shows the
decline in forest cover from 1934 to
2003.
An analysis of satellite-based maps

elaborated by the EUs Joint Research
Centre ( JRC) in 2007 revealed that
possibly, only 19 percent of the countrys
land area remains forested.
The main threats to Philippine forests
come from the collection of fuel wood,
settlements in forestlands, conversion
to agricultural uses, kaingin and forest
fires, and illegal logging. There are
approximately 20 million people living
in upland watershed areas, half of whom
are dependent on shifting cultivation
for their livelihood6. Inequitable land
distribution, insecure tenure and rural
poverty are often cited as causes of
deforestation and forest degradation
in the Philippines, linked to increases
in rural populations both as a result
of high fertility and in-migration7.
Deforestation has made many poor
communities more vulnerable to
natural calamities such as of typhoons,
flash floods and landslides8.
The countrys unique

biodiversity is under severe
pressure
The Philippines is rich in biological and
genetic resources or biodiversity and is
one of the 18 megadiverse countries in
the world. The majority of plant and
animal species in the country are unique
and cannot be found anywhere else. The
countrys species are among the worlds
top 10 in terms of endemism. Given
the land density and the density of both
flora and fauna, the Philippines may
even be considered to be the worlds
most megadiverse country.
The countrys forests and coastal
and marine ecosystems, inland water
bodies, wetlands and caves are also
home to a wide variety of flora and
fauna. The wetlands are home to one
6
Cruz and Zosa-Feranil, 1998.
Kummer, 1992; Liche, 1997.
EC CEP, 2009
of the largest assemblies of microorganisms,

reptiles, amphibians, fish, birds, and
mammals that live within or near waters.
Over 1,500 caves have been recorded in
the country since 1994 with a significant
number yet to be discovered and mapped.
These caves are considered unique, natural
and nonrenewable resources with important
scientific, economic, educational, cultural,
historical and aesthetic values.
Biodiversity in the Philippines, however,
is also among the most endangered in the
world. As of 2008, 221 species of fauna and
526 species of flora have been included in
the list of threatened species. The continually
increasing demands for food, energy, and
other goods, coupled with the pressures
exerted by rapid development and economic
growth, have put much stress on the
countrys natural environment resulting in
the destabilization of ecosystems, destruction
of natural habitats and an alarming rate
of biodiversity loss. The introduction of
invasive alien species (IAS) has threatened
biodiversity and destabilized ecosystems.
coastal and marine resources are

under threat
Located within the Coral

Triangle, at the center of high
marine diversity, the countrys
vast, rich and diverse coastal
and marine resources are
composed of coral reefs,
sea grass beds, mangrove
and beach forests, fisheries,
invertebrates, seaweeds, marine
mammals and many others.
The Philippines has one of the worlds

longest coastlines, a total of 36,289
kilometers. The countrys marine jurisdiction
extends up to 200 nautical miles from the
baseline (Exclusive Economic Zone)
and up to the limits of the continental
margin where it extends beyond 200 miles
(Extended Continental Shelf ). Located
within the Coral Triangle, at the center of
high marine diversity, the countrys vast, rich
and diverse coastal and marine resources
are composed of coral reefs, sea grass beds,
mangrove and beach forests, fisheries,
invertebrates, seaweeds, marine mammals
and many others. About 60 percent of the
total Philippine population live in the coastal
zones and depend on these coastal resources
for livelihoods.
295
Some unsustainable human activities,

however, cause great stress to coastal and
marine resources. Coastal development and
climate change impacts such as sea-level
rise and increasing sea-surface temperature
add to the stress on these resources.
Sedimentation in coastal areas due to
unsustainable land use in upland areas
continues to threaten coastal ecosystems.
The productivity of the countrys coral reefs,
mangrove forests, sea grass, and algal beds
and fisheries is declining at an alarming rate.
Of the 27,000 sq km. of coral reef, over 70
percent are of poor or fair quality and only
five percent are in excellent condition.9 The
Philippine reefs may already be in a steady
state of decline from 5 percent to 3 percent
to less than 1 percent (Nanola et. al., 2004).
The countrys coral reefs are considered to be
one of the highly threatened reef areas in the
world.10
Major distributions of seagrass beds in
the Philippines are found in Bolinao Bay
in Luzon, Palawan, Cuyo Islands, the
Cebu-Bohol-Siquijor area, Zamboanga,
and Davao. About half of the countrys
seagrass beds have been lost due to coastline
development and blast fishing. The mapping
of seagrass bed distribution remains limited,
and the management of seagrass resources
has not received priority.
Mangroves protect the coast from waves,
tidal currents, and typhoons and provide
habitats, shelter, breeding sites, and food
sources to various groups of fish and other
coastal wildlife. The ecological functions
of mangroves as land builder and coastline
stabilizer are also widely known. Mangrove
cover, however, has declined from 450,000
hectares in 1918 to only about 140,000
hectares in 2008.11 The development
of mangrove swamps into aquaculture
ponds, salt beds, reclamation areas and
other agricultural activities has extensively
degraded this resource. A total of 62,834
9
Gomez et. al., 1994.
10
Burke et al., 2002
11
WB, 2009
12
296
DENR-MGB, Mining Industry Statistics, 2011
hectares of mangrove forest area were

issued Fishpond Lease Agreements
(FLAs) between 1973 and 2002.
Logging concessionaires generally
have not left behind mother trees to
replenish the area, and several cases of
illegal logging cutting occur even in
protected reserves.
mineral resource development

is delivering mixed results
The mining industry in the Philippines
has rebounded due to the promotion
and revitalization of responsible
mining and recognition of the
industrys possible contribution in
inducing economic growth, attracting
investments and reducing poverty in
the countryside. Challenges remain on
the emerging framework of responsible
mining specifically on corporate
accountability, voluntary compliance
among companies and giving of due
recognition to local autonomy and
indigenous peoples rights.
Of the countrys 30 million hectares
of land area, 9 million hectares (30%)
is considered as having high mineral
potential. Only 2.7 percent of this
high-potential area is covered by
mining permits or contracts and only
0.32 percent is in the development or
operating stage. The mining industrys
potential as a driver of economic
growth has led to the revitalization
of the sector in the last six years.12
As a result, investments in priority
mineral exploration, development
and processing projects from 20062009 have reached US$2.2 billion,
and the production of gold, copper,
and nickel has also increased. Nickel
production increased by 651 percent,
buoyed by favorable prices, while
copper production rose by 141 percent
Figure 10.2. Distribution of Active Faults

and Trenches
Figure 10.3. Frequency of Tropical Cyclones in the

Philippines, 1948-2006
Source: PHIVOLCS
Source: PAGASA
in the same period. The value of

mineral production increased by 46.34
percent from PhP72.5 billion in 2006
to PhP106.1 billion in 2009. Mining
contributed 1.3 percent to GDP,
or a gross value added of PhP97.1
billion in 2009 (at current prices).
With the expected operation of five
metallic mines and one cement plant,
output value is projected to increase
by 30 percent to PhP138.5 billion in
2010. For the period 2006 to 2009,
employment in mining and quarrying
increased from 141,000 to 166,000
(0.50 %), while taxes, fees and royalties
from the minerals industry rose by 93.7
percent, from PhP6.39 billion in 2006
to PhP12.38 billion in 2009.
Data show that the share of mining in
GDP and employment is increasing
13
and there are considerable potentials.

However, target investments and excise tax
from mining in 2004-2010 have not been
fully achieved due to the financial crisis,
among others. In addition, an assessment
report of a mining project has indicated
that the fair share of the government from
mining has not been achieved due to the
existing incentive mechanism.13 Issues have
been also raised on sharing of the mining
industry with regard to foreign companies
as well as the undesirable environmental
conditions which the Filipino communities
will have to deal with.
In separate researches, it was found that
mining permits or contracts were within half
the number of titled and claimed ancestral
domains.
A number of mining projects, however, have
been alleged to have caused environmental
DENR, Assessment of the Rapu-Rapu Polymetallic Project, 2006.
297
Table 10.1. Top 20 Provinces Susceptible to Floods
Provinces
Table 10.2. Top 20 Provinces Susceptible to Landslides
Rank Area
Susceptible to
Flooding (%)
Provinces
Rank
Area
Susceptible to
Landslides(%)
Pampanga
79.5
Misamis Occidental
90.3
Nueva Ecija
51.2
Quirino
87.1
Pangasinan
48.1
Bulacan
86.7
Tarlac
47.1
Basilan
84.7
Maguindanao
42.5
Bukidnon
84.7
Bulacan
39.9
Surigao Del Norte
82.6
Metro Manila
33.2
Quezon
82.1
Cotabato (North Cotabato)
30.1
Camarines Sur
78.6
Oriental Mindoro
28.7
Lanao Del Norte
77.6
Ilocos Norte
10
27.9
Camarines Norte
10
77.4
Iloilo
11
26.7
Zamboanga Del Norte
11
77.3
La Union
12
26.3
Northern Samar
12
74.5
Cagayan
13
25.5
Pampanga
13
74.4
Sultan Kudarat
14
24.4
Metro Manila
14
72.9
Ilocos Sur
15
23.4
Pangasinan
15
71.5
Bataan
16
23.1
Davao Oriental
16
70.9
Leyte
17
20.8
Southern Leyte
17
70.1
Davao Del Norte/Compostela Valley
18
20.2
Aurora
18
68.9
Compostela Valley/Davao Del Norte
19
20.2
Cotabato (North Cotabato)
19
67.9
Camarines Sur
20
19.2
Sulu
20
67.4
Source: DENR-MGB, 2010.

Source: DENR-Mines and Geosciences Bureau
(MGB), 2010.
degradations,
physical
displacement to stringent, globally-defined standards
of indigenous peoples, and cultural for responsible mining.
dislocations. In 2005, a European Union
(EU) -commissioned study reported that Ensuring the equitable and just
legal and illegal mining operations posed distribution of benefits from extracted
serious threat to the forest and to local rivers mineral resources remains to be a
because of forest clearing and the release challenge.
of toxins.14 Metallic mine waste generated
from 1990 to 1999 amounted to 131 million Currently, there is no standard resource
metric tons (MT), while mine tailings were and environment valuation. There is
about 136 million MT.15 Many of these a need to have a cost-benefit analysis
concerns stem from the failure of many small and standard parameters that will
and large-scale mining companies to adhere consider all relevant values (including
nonmarket values).
298
14
EU, Commission Country Environment Profile, 2005
15
EU, Commission Country Environment Profile, 2005
Table 10.3.Hazard Susceptibility of Selected Provinces by Poverty Incidence
Province/Region
2006 Pov. Inc
Susceptibility to hazards
(% of area)
Flood
RIL*
Typhoon
frequency
Rank
Tawi-Tawi
78.9
0.8
5.7
1 in 50 yrs
Zamboanga Del Norte
63.0
3.2
50.1
1 in 50 yrs
Maguindanao
62.0
42.5
23
1 in 50 yrs
Apayao
57.5
7.2
84.7
4 in 3 yrs
Surigao Del Norte
53.2
9.8
35
1 in 1 yr
Lanao Del Sur
52.5
7.6
41.4
1 in 30 yrs
Northern Samar
52.2
14.9
49.6
4 in 3 yrs
Masbate
51.0
5.7
28.8
1 in 1 yr
Abra
50.1
7.6
82.1
4 in 3 yrs
Misamis Occidental
48.8
10
3.5
50
1 in 30 yrs
Agusan Del Sur
48.7
11
15.3
51.4
1 in 10 yrs
Oriental Mindoro
47.1
12
28.7
54.6
1 in 1 yr
Sulu
46.5
13
no data
10.4
1 in 50 yrs
Occidental Mindoro
46.5
13
18.3
63.5
1 in 1 yr
Kalinga
45.8
15
7.2
84.7
2 in 1 yr
Surigao Del Sur
45.4
16
11.1
48.3
1 in 3 yrs
Mountain Province
45.0
17
0.8
87.1
2 in 1 yr
Sarangani
44.8
18
5.3
67
1 in 50 yrs
Lanao Del Norte
44.1
19
11.7
54.9
1 in 30 yrs
Negros Oriental
43.7
20
5.6
51
1 in 3 yrs
Sorsogon
43.5
21
13.7
47
4 in 3 yrs
Antique
43.0
22
13.6
74.5
1 in 2 yrs
Eastern Samar
42.7
23
8.5
62.1
4 in 3 yrs
Aklan
42.6
24
18.3
66.5
1 in 2 yrs
Romblon
41.9
25
10.7
58
1 in 1 yr
Camarines Sur
41.2
26
19.2
38
1 in 1 yr
Davao Oriental
40.8
27
7.9
70.1
1 in 30 yrs
Palawan
40.8
27
10.3
43.7
1 in 3 yrs
Marinduque
40.8
27
10.6
78.6
1 in 1 yr
Sultan Kudarat
40.7
30
24.4
52.1
1 in 50 yrs
Leyte
40.5
31
20.8
49.5
1 in 1 yr
Samar
40.2
32
6.2
68.9
1 in 1 yr
Sources: NSO, NSCB, MGB, PAGASA, UNDP
299
Extreme vulnerability to
environmental hazards and climaterelated risks
The countrys vulnerability

to natural hazards cost the
government an average of
PhP15 billion annually in direct
damages, or more than 0.5
percent of GDP . The indirect
and secondary impact of
disasters further increases this
cost.
Owing to its location and natural attributes,

the country is prone or vulnerable to
natural hazards such as tropical cyclones,
floods, earthquakes and volcanic eruptions.
Active faults and trenches line the country
(Figure 10.2). The longest of these, the
Philippine Fault, is one of the major active
faults in the world. On the average, the
Philippine Institute of Volcanology and
Seismology (PHIVOLCS) records 20
earthquake occurrences every day, but
damage is normally caused by shallow-focus
earthquakes with Magnitude 6 or more and
when the associated ground shaking is at
Intensity 6 or higher. The country has 300
volcanoes, of which 22 are active.
The country also lies along the typhoon
belt of the Western North Pacific where 66
percent of tropical cyclones originate. About
20 tropical cyclones enter the Philippine
Area of Responsibility (PAR) every year, of
which seven to nine make a landfall. Tropical
cyclone season is from May to December;
peak months are July to September with an
average of three or more occurrences. Their
movements follow a northwesterly direction,
frequently hitting northern Luzon and
provinces in the eastern seaboard (Figure
10.3). Mindanao is usually spared from being
directly hit by majority of the typhoons that
cross the country.
Data from the DENR-Mines and
Geosciences Bureau (MGB) show that
in eight provinces, at least 30 percent of
provincial land area are susceptible to
floods (Table 10.1). The same report shows
68 provinces are more susceptible to raininduced landslides, affecting at least one
third of the total land area of each province
(Table 10.1).
Aside from the direct impact of

natural disasters on human lives, their
properties, and communities, disasters
have also derailed social and economic
development. A WB 2005 study
reported that the countrys vulnerability
to natural hazards cost the government
an average of PhP15 billion annually
in direct damages, or more than 0.5
percent of GDP.16 The indirect and
secondary impact of disasters has
further increased this cost. This was
surpassed in 2009 when typhoons
Ondoy and Pepeng inflicted damage
equivalent to 2.7 percent of GDP.17
The degradation of the environment
aggravates the impacts of disasters
and climate change. Deforestation
increases the chances of landslides. The
risk of drought and poor availability
of water are aggravated by the loss
of forest cover.18 Depleted mangrove
reserves deprive coastal communities of
natural protection from storm surges.
Uncontrolled urban growth coupled
with poor land use planning results in
encroachment on protected forests or
danger zones like riverbanks. Together
with shortfalls in basic services such
as proper waste disposal and decent
housing, these result in clogged
waterways and increased flood risk.
Of the 32 provinces with poverty
incidence of at least 40 percent, 16 are
hit by typhoons at least once a year
(Table 10.3). Provinces in extreme
Northern Luzon (Apayao, Abra,
Kalinga, and Mt. Province) and on the
eastern seaboard (Surigao del Norte,
Northern Samar, Masbate, Agusan
del Sur, and Surigao del Sur), where
typhoons are more frequent, are among
the 20 poorest provinces.
16
WB, Natural Disaster Risk Management in the Philippines: Enhancing Poverty Alleviation through Disaster
Reduction, 2005.
17
WB, Typhoons Ondoy and Pepeng Post-Disaster Needs Assessment, 2009.
18
OCD-NDCC, Strengthening Disaster Risk Reduction of the Philippines: Strategic National Action Plan (20092019)
300
Climate change has exacerbated these

hazards. In the last six decades, the
annual mean temperature has increased
by about 0.57oC. Extreme events and
severe climatic anomalies have been
recorded, such as heat waves, intense
rains and floods, droughts, and an
increasing frequency of typhoons and
tropical storms. The Department of
Science and Technology-Philippine
Atmospheric, Geophysical
and
Astronomical Services Administration
(DOST-PAGASA) scenarios for 2020
to 2050 project widespread warming
in most parts of the country, with
longer hot days and shorter cold days.
The number of days with maximum
temperature in excess of 35oC is
expected to increase in all parts of
the country within the said period.19
Projected seasonal mean temperatures
in the Philippines are expected to
rise by about 0.5oC to 0.9oC for 2020
and 1.2oC to 2.0oC by 2050. Extreme
rainfall is also projected to increase in
Luzon and Visayas, while a decreasing
trend is projected in Mindanao.
Challenges
Policy responses
In line with RA 9003 or the Ecological
Solid Waste Management Act of 2000,
technical assistance was provided
to 1,325 LGUs for the closure and
rehabilitation of open or controlled
dumps, while technical assistance for
the establishment of sanitary landfills
was extended to 236 LGUs. Despite
closure orders and technical assistance,
there were still 838 open dumpsites and
396 controlled disposable facilities that
need to be closed or rehabilitated. Only
338 of 1,610 cities and municipalities
(20.9%) have completed their solid
waste management plans. In Metro
Manila, only eight out of 17 cities and
municipalities have complete plans.
19
Hazardous wastes have been an increasing

concern because of the increasing number
of transnational companies that generate
hazardous wastes. A core inventory of
38,000 legally allowable substances under
the Philippine Inventory of Chemicals
and Chemical Substances (PICCS) has
been prepared. The Toxic Substances and
Hazardous and Nuclear Waste Control
Act of 1990 (RA 6969) already bans the
consumption, storage or transport of toxic
or nuclear waste into or within the country.
However, the country lacks adequate
equipment and technical expertise to
deal with these wastes, although steps are
being taken to define the regulatory and
enforcement responsibilities of various
government agencies.
With respect to mining, several environmental
safeguards and social development programs
have been installed in mining projects,
including the 97 Environmental Protection
and Enhancement Program (EPEP),
23 Final Mine Rehabilitation and/or
Decommissioning Program (FMR/DP), 387
Social Development Management Program
(SDMP) and IEC Campaigns. Mining
companies have committed to inculcate the
following in their environmental and social
programs:
a. the implementation of some 400
approved five-year SDMPs for the host
and neighboring communities amounting
to PhP1.89 billion benefitting over 700
barangays nationwide;
b. the implementation of environmental
management and protection activities
through the EPEP amounting to PhP25
billion and for mine closure through the
FMR/DP worth PhP600 million;
The degradation of the

environment aggravates the
impacts of disasters and
climate change. Deforestation
increases the chances of
landslides. The risk of drought
and poor availability of water
are aggravated by the loss
of forest cover. Depleted
mangrove reserves deprives
coastal communities of
natural protection from storm
surges. Uncontrolled urban
growth coupled with poor land
use planning results in the
encroachment on protected
forests or danger zones like
riverbanks. Together with
shortfalls in basic services such
as proper waste disposal and
decent housing, these result
in clogged waterways and
increased flood risk.
c. a mining forest program with 79

participating companies reforesting
or afforesting 10,319 hectares of mine
affected and nonmining disturbed areas
with 9.3 million seedlings; and
MDGF-1656, PAGASA GCM Scenarios, 2010
301
Table 10.4. Forest Tenurial Instruments Implemented

/a
No.
LTI Type
Number
Timber License Agreement
Integrated Forest Management Agreement
Socialized Industrial Forest Management Agreement
Area (has)
252,510
145
1,017,654
1,822
36,941
Agroforestry Farm Lease Agreements
17
4,776
Tree Farm Lease Agreement
88
9,742
Forestland Grazing Management Agreement
364
97,019
Special Land Use Permit
198
2,063
Special Land Use Lease Agreement
18
98
Forest Land Use Agreements for Tourism Purposes
31
967
10
Special Forest Land Use Agreement
11
2,580
11
Community-Based Forest Management Program

CBFM Agreement
Other CBFM Tenure
1,790
3,314
1,633,892
3,200,024
12
Approved CADT and CALT
414
4,276,639
13
PACBRMA
58
22,240
14
Areas under Management Arrangements

Philippine National Oil Corporation
National Power Corporation
National Irrigation Administration
Co-Management Agreement with LGUs
153
266,326
337,721
22,243
485,536
8,427
11,668,974
TOTAL
(Footnotes)
/a Accumulated from the start of the implementation of each tenurial instrument.
Source: DENR- Forest Management Bureau (2010)
d. payment of royalties to indigenous

peoples of at least PhP330 million
between 2007-2009.
The assessment and rehabilitation of
abandoned or inactive mines have also
been started. The rehabilitation of Bagacay
Mines in Western Samar included the
implementation of interim structural
measures,
phytoremediation
and
revegetation of disturbed areas. Rapid risk
20
assessment of other abandoned and

inactive mines has also been conducted
by the following companies: Basay
Mining Corp (Negros Oriental);
Thanksgiving
Mine-Benguet
Exploration, Inc. (Benguet); Black
Mountain (Benguet); Consolidated
Mines, Inc. (Marinduque); Palawan
Quicksilver Mines (Palawan); Western
Mine Corp (Benguet); and Dizon
Mines (Zambales).
While some case studies20 present
examples of economic valuation of the
environment and natural resources,
other sectors contest the validity of the
parameters used. Issues of transparency
have also cropped up, with some
sectors and support groups pointing to
difficulties in accessing information on
mining contracts.
As for forest lands, approximately
78,000 hectares were reforested during
the period 2004-2010 although this
only 60 percent of the total target of
130,000 hectares. More than 14 million
hectares of untenured forestlands have
been protected. As of end of 2009, 41
of the 78 target provinces for forest
boundary delineation21 have completed
boundary surveys. Seventeen of these
are ready for legislation. A total of
336 municipalities were also covered
by public land survey (partial cadastre
only) while 770,835 hectares were
covered by patents issued from 2004
to 2010. As of 2010, both government
and nongovernment sectors reforested
a total of 1,958,928 hectares22. The
government, through projects of
the DENR, contributed a total of
1,368,645 hectares or 70 percent,
while the nongovernment sector
accomplished 590,283 hectares or 30
percent. As of 2010, approximately 11.6
Galang, Angelina P., The Philippine Environment in the Ecozoic Age, 2009.
21
The delineation of forestland boundary is the first and an important step in the management of the countrys forest
areas. Section 4, Article 12 of the Constitution provides that the congress, shall, as soon as possible, determine by law
the specific limits of forest lands and national parks marking clearly their boundaries on the ground.
22
302
DENR-Forest and Management Bureau
million hectares of forestlands were

covered by some form of community
forest management under various
government programs (Table 10.4).
Despite the rise in the distributed
number of these tenurial instruments,
few protected areas have been declared,
while deforestation continues.23
Biodiversity conservation and protection
measures have been taken in the form
of cave and wetland management,
proclamation of protected areas and
critical habitats, and establishment
of protected areas and zones. An
Updated National Wetlands Action
Plan for the Philippines (NWAPP) to
be implemented from 2011-2016 has
been prepared. RA 9072, otherwise
known as the National Caves and Cave
Resources Management and Protection
Act of 2001, provides the backbone for
managing and protecting caves in the
country. The DENR Memorandum
Circular 2007-04 or the Procedure in
Cave Classification has been issued to
assess the status and values associated
with a particular cave and assign its
most beneficial use. A Cave Strategic
Action Plan has been developed with
cave stakeholders for implementation
within the period 2011-2016 to
guide the priority actions on cave
management and conservation.
Biodiversity protection has been
expanded and intensified. A total of
111 protected areas (terrestrial and
marine) have been proclaimed since
the passage of the National Integrated
Protected Areas System (NIPAS) Act
in 1992, covering 3.53 million hectares.
Terrestrial areas cover 2.16 million
hectares or 7.2 percent of the land area,
and marine areas cover 1.371 million
hectares or 0.69 percent of the total
sea area of the country. Of these, 13
protected areas covering 894,262.16
hectares have been established through

specific laws, namely: (a)Batanes Protected
Seascape, (b) Northern Sierra Madre in
Isabela, (c) Bangan Hill National Park in
Isabela, (d) Mts. Banahaw-San Cristobal in
Quezon and Laguna, (e) Tubbataha Reefs
in Palawan, (f ) Mt. Kanlaon and Sagay
in Central Visayas, (h) Mt. Malindang,
Misamis; (i) Mt. Mimbilisan, Misamis, (j)
Mt. Apo, Davao, (k) Mt. Hamiguitan Range,
Davao, (l) Mt. Kitanglad, Bukidnon. There
are also protected areas outside the NIPAS
such as those proclaimed by LGUs and
Peoples Organizations (PO). Unfortunately,
most of these protected areas do not have
sufficient budgets, staff or capacity for
effective self-management.
The operating policies and strategies for
these laws are provided in various issuances.
EO 578 established the national policy
for protecting, conserving and sustainably
utilizing biological diversity. It also
revitalized the management of rich fishing
grounds like the Sulu-Celebes Seas and
Verde Island Passage, which are considered
the center of marine shore fish diversity in
the world. The Philippines has signed an
agreement with Indonesia, Malaysia, Papua
New Guinea, Solomon Islands and Timor
Leste on the protection and sustainable
management of the Coral Triangle. Through
EO 533, the government adopted integrated
coastal management as a national strategy
to ensure the sustainable development of
the countrys coastal and marine resources.
The protection of the whale shark has
been intensified with the issuance of AO
282 (March 16, 2010), providing for the
following added protection for whale sharks:
mapping of their migratory pathways,
mandatory rescue, intensified investigation
and prosecution, and provision of rewards.
EO 797, on the other hand, adopts the
Coral Triangle National Plan of Action,
which contributes to the attainment of the
goals and targets agreed by the six Coral
Triangle countries under the Regional Plan
A cost-benefit analysis is
required that considers all
relevant (including nonmarket)
values pertinent to the project.
While some case studies
present examples of economic
valuation of the environment
and natural resources, other
sectors contest the validity of
the parameters used.
23
Caucus of Development NGO Networks (CODE-NGO), The Freedom from Debt Coalition (FDC) and United
Nations Development Program (UNDP). Citizens Roadmap for Poverty REduction and Achieving the MDGs,
Recommendations for the 2010-2016 MTPDP, and Kalikasan Peoples Network for the Environment. Philippine
Environmental Situation 2001-2009.
303
Box 10.1. Women and the Environment and Natural Resources
The Philippines passed the

Climate Change Act of 2009
(RA 9729) to incorporate
climate change in government
policy formulation and establish
the framework strategy for
climate change. The National
Framework Strategy on Climate
Change was formulated in
2010 to ensure and strengthen
the adaptation of the countrys
natural ecosystems and human
communities to climate change,
charting a cleaner development
path for the country in the
process. This is reinforced by
the enactment of RA 10121,
the Philippine Disaster Risk
Reduction and Management Act
of 2010.
Women, especially the poor, are most vulnerable to changing

environmental conditions and economic shifts. The roles of women in the
management of the environment and natural resources management have
not been duly recognized. Womens initiatives that include establishment
of women-managed areas illustrate womens enhanced role in effective
implementation of coastal resources management. Yet, women are
still less recognized particularly in existing policies. One of the critical
challenges is the implementation of the Magna Carta of Women (RA
9710), of which an increase in the number of women participating in
Fisheries and Aquatic Resources Management Councils and other bodies
are mandated. In terms of access to productive resources, women enjoy
less benefits than their male counterparts. There is differential access
among men and women to forest resources. DENR data in 2002/2003
show that women beneficiaries make up only 30 percent of the total holder
of community-based forest management agreements (CBFMAs).
Source: Philippine Council for Women and Women Network of Aksyon Klima, 2010
of Action. During the Ministerial Meeting

held in the Solomon Islands in December
2009, the six countries officially recognized
the Sulu-Sulawesi Marine Ecoregion as
the First Priority Seascape under the Coral
Triangle Initiative-Regional Plan of Action.
These initiatives have contributed to the
protection and conservation of threatened
species and their habitats. Among others,
the tamaraw population in the wild has
increased from 187 in 2001 to 314 heads
in 2010. In 1999, only about 20 cockatoos
were observed in the wild; at present about
239 cockatoos have been recorded in Raza
Island, Palawan alone. To date, 48 new
species of plants and animals have been
discovered in the Philippines, including
new species of bats, birds rodents, frogs, and
rafflesia (worlds largest flower). The new
species were discovered in the mountains of
Cagayan, Camiguin, Cordilleras, Quezon,
Palawan, Mindoro, among other places.
Various actions have been taken to address
threats to coastal resources. Several initiatives
led to the establishment of marine protected
24
areas (MPAs) covering around 22,540

square kilometers. Of more than 1300
existing and proposed MPAs, however,
only 10-15 percent are effective.
Many MPAs are either unmanaged
or nonfunctioning. Sixty percent are
located in the Visayas Seas region, in
the most heavily-fished waters in the
country. It is estimated that 4.9 percent
of coastal municipal waters are protected
as MPAs, but only 0.5 percent are
within no-take areas. One study shows
that marine corridors are also not well
represented by the current MPAs.24
Four of the nine identified corridors
(namely, Babuyan Corridor, MindoroCalavite Tablas Triangle, Balabac
Strait Corridor, Sibutu Passage-Sulu
Archipelago Corridor, Ticao PassSan Bernardino Strait-Samar Sea
Corridor, Panay Gulf Guimaras Strait
Corridor, Philippine Sea Corridor and
Tapiantana Corridor) have designated
no MPAs. This implies that the
development of MPAs has largely
been dominated by local initiatives
rather than through a national strategy.
Weeks, R; Russ, GT; Alcala, AC; White, AT. Effectiveness of Marine Protected Areas in the Philippines for
Biodiversity Conservation. Conservation Biology, Volume 24 Issue 2 p. 531-540. April 2010
304
Small MPAs are unlikely to provide

protection for larger, more mobile
species25 and contribute little to regional
conservation objectives. Smaller MPAs
must therefore be scaled up to become
MPA networks and made resilient
to climate change by developing or
redesigning them into climate-smart
MPAs.
Effective and sustained enforcement
of fishery and relevant environmental
laws have also been a major challenge.
There are notable achievements in
community-based law enforcement
by local Bantay-Dagat groups and
networks in Verde Island Passage and
in the Visayas, working as composite
teams in cooperation with enforcement
agencies and LGUs. Still there is an
urgent need to strengthen, expand,
replicate, and sustain these successful
interventions.
As long as coastal resources continue
to be threatened by both humaninduced and natural disasters, the poor,
particularly women, who are dependent
on these ecosystems for their subsistence
will likewise be further disadvantaged
(Box 10.1).
To deal with disasters and extreme
events, the country has adopted
legislation and policy dealing with
DRRM and CCA. Since the signing
of the United Nations Framework
Convention on Climate Change
(UNFCCC) in 1992, the country
has passed several laws and localized
various international environmental
commitments. Its policy responses have
evolved from approaches focusing on
greenhouse gas emissions to one that
integrates mitigation and adaptation
in practically all sectors. Its policy and
institutional reforms are implemented
through broad-based platforms on
sustainable development such as
multisector national plans and strategies, and

special environmental management agenda.
The Philippines passed the Climate Change
Act of 2009 (RA 9729) to incorporate
climate change in government policy
formulation and establish the framework
strategy for climate change. The National
Framework Strategy on Climate Change
was formulated in 2010 to ensure and
strengthen the adaptation of the countrys
natural ecosystems and human communities
to climate change, charting a cleaner
development path for the country in the
process. This is reinforced by the enactment
of RA 10121, the Philippine Disaster Risk
Reduction and Management Act of 2010.
The National Disaster Risk Reduction and
Management Council (formerly NDCC)
has been given the mandate to protect
the wellbeing of people and safeguard the
national economy and environment through
more concrete financial investment in DRR.
This paradigm shift is also in consonance
with the countrys international commitment
to the Hyogo Framework for Action (HFA)
of 2005, which seeks to build the resilience
of nations and communities in the face of
disasters. The National DRRM Framework
and Plan utilizes the multihazard approach
in managing the impact of natural and
human-induced disasters. It calls for building
the disaster resilience of communities
and institutionalizing arrangements and
measures for reducing disaster risks, and
enhancing
disaster-preparedness
and
response capabilities at all levels. Since DRR
is closely linked to poverty alleviation and
development, it is necessary to link it firmly
to development planning at all levels.
Before the passage of RA 10121,
the government already initiated the
development of a long-term master plan for
disaster mitigation known as the Strategic
National Action Plan on DRR or SNAP.
This document proactively serves as a road
map for the next 10 years and was formulated
through as inclusive participatory process of
25
Sale, PF, et al, 2005. Critical science gaps impede use of no-take fishery reserves. Trends in Ecology & Evolution
20:74-80.
305
Box 10.2. Environmental Education

In 2008, the Philippines enacted RA 9512 or the National Environmental
Awareness and Education Act of 2008. This legislation concretized
the countrys support to the United Nations Decade of Education for
Sustainable Development (2005-2014) and the ASEAN Environmental
Education Action Plan for Sustainable Development (2008-2012). This law
has reiterated the policy of the State to protect and advance the right of
the people to a balanced and healthful ecology in accord with the rhythm
and harmony of nature. The law has further recognized the vital role of the
youth in nation building, and the role of education to foster patriotism and
nationalism, accelerate social progress and provide total human liberation
and development.
In the DENR, the Environmental Education and Information Division (EEID)
and the 16 Regional Environmental Education and Information Sections
of the EMB has been the agencys lead arm in creating environmental
awareness. It has spearheaded year-round environmental events from
World Water Day (March 22) and Philippine Water Week (third week of
March), International Earth Day (April 22), Philippine Earth Month (April),
World Environment Day (June 5), Philippine Environment Month (June),
National Clean Up Month, and National Ozone Protection (September),
International Ozone Day (September 16), International Coastal Clean Up
Weekend (third weekend of September), National Clean Air Month, and
National Environmental Awareness Month (November), Global Warming
and Climate Change Consciousness Week (November 19-24).
EEIDs activities which include distribution of IEC materials, recyclables
collection, tree planting and environmental exhibits have contributed to
the increasing awareness of Filipinos in caring for the environment and
natural resources of the country.
Source: DENR-EMB, 2009
all stakeholders. SNAP was approved on

June 17, 2010 through EO 888 (Adopting
the SNAP on DRR). EO 888 explicitly
adopts the 18 priority programs/projects on
DRR and identified agencies with primary
responsibility. The consistency of SNAP
with RA 10121 however still has to be
reviewed and reevaluated.
The GAA allocates specific amounts annually
(PhP5 billion in 2011) for the calamity
fund, for use in aid, relief and rehabilitation
services to communities or areas affected
26
306
SNC
by man-made and natural calamities,

repair and reconstruction of permanent
structures, including other capital
expenditures for disaster operation,
and rehabilitation activities, although it
has a special provision allowing its use
for predisaster activities. On the other
hand, Section 22 of the Philippine
DRRM Act of 2010 (RA 10121)
also enumerates permissible uses of
the annual calamity fund, generally
allowing support for a wider range of
activities. There is a need to reconcile
differences and arrive at a common
interpretation of what DRR measures
can be charged against the calamity
fund. Moreover, a big financing gap
exists between the annual budget
reserve of government for calamities
(average of PhP2 billion a year) and the
damage typically incurred in times of
disasters.
Risk transfer mechanisms such as
microinsurance/finance,
although
available, need to be made more
accessible. Health insurance is also
being made more widely accessible, but
the uptake by poor rural communities,
which are the most affected in terms of
disaster, remains low.26
The government has initiated various
programs and projects to provide
more up-to-date scientific and
technical information and data scales
to be used in decision making. The
DENR- Ecosystems Research and
Development Bureau (ERDB) has
completed vulnerability assessments of
43 priority watersheds nationwide with
the aim of highlighting areas vulnerable
to soil erosion, landslide, biodiversity
loss, and forest fire. Such information
is critical for LGUs in the development
of their disaster risk management
programs, their local climate change
action plans and in the formulation

of their land use plans. Vulnerability
assessments, adaptation tools and
downscaling climate change scenarios
and projections are being developed
to equip decision makers and planners
on how to adapt to climate change and
disasters. IEC campaign materials and
knowledge management products are
also being created to increase public
awareness of climate change, its impacts
and attendant risks, and DRR.
Institutional issues
Despite government efforts at
sustainably managing the countrys
environmental degradation continues.
The plethora of laws and policies, as well
as the established agencies to manage,
protect, and preserve the countrys
environment and natural resources
have not sufficed or worked effectively
enough to address the threats to
ecological integrity. Institutional issues
need to be addressed to ensure the
sustainability of the countrys fragile
environment and natural resources.
Policies, programs and existing
institutional arrangements must be
revisited in order to move forward
and deliver the promise of sustainable
development.
Implementation is confused
by overlapping and conflicting
policies
There is a need to review and harmonize
a number of conflicting and overlapping
policies. A case of policy conflict is
that between forest protection laws,
on the one hand, and the Agriculture
and Fisheries Modernization Act
(AFMA), on the other. AFMA
encourages agriculture expansion into
the uplands including forestlands
through the creation of Strategic
Agriculture and Fisheries Development
Zone (SAFDZs) that promote the
production of high value crops such
as coconut, pineapple and sugarcane.
While there is a need to improve the income

of upland farmers, the identification of
suitable upland areas for commercial highvalue crop production should be given
priority and closely undertaken together
with DENR to avoid onsite and offsite
negative externalities. The NIPAS Act is
also in conflict with the Fishery Code on the
municipal water income of municipalities
within protected areas, as well as the LGC
on the matter of the jurisdiction of LGUs
within protected areas. Conflicts also exist
in the implementation of various laws such
as the Mining Act, NIPAS Act, IPRA and
the LGC, among others. These conflicts,
overlaps, or divergent interpretations have
led to the delay or suspension of some
projects.
Box 10.3. Devolution of ENR Functions

The Local Government Code of 1991 placed LGUs at the forefront of
environment and natural resources management. According to the League
of Municipalities of the Philippines (LMP), the following ENR functions
were devolved to LGUs in 2005:
a. Regulation of environmental impacts of SMEs under Kalakalan 20
Law;
b. Regulation of fishing in municipal waters;
c. Regulation of minor mineral extraction like small-scale mining and
certain scales of quarrying and sand and gravel gathering;
d. Regulation of nuisance and pollution under the Clean Air Act;
e. Solid waste management under the Ecological Solid Waste
Management Act; and
f. Antismoke belching program.
Likewise, the Code assigns municipalities the task of establishing a
solid waste disposal system or environmental management system and
services or facilities related to general hygiene and sanitation. Meanwhile,
provinces are tasked to enforce forestry laws limited to community-based
forestry projects, pollution control law, small-scale mining law, and other
laws on the protection of the environment; and minihydro electric projects
for local purposes.
Source: WB Country Environmental Analysis, 2009
307
Government capacity for resource

management is wanting
For CCA, putting in place

adaptation measures also
requires financial resources.
The Philippines continues to
uphold the UNFCCC principle
of common and differentiated
responsibilities to hold on to
the agreement that Annex I
countries will extend financial
assistance over and above the
level of development assistance.
Developed countries are
required under the Convention
to provide new and additional
resources, either through
bilateral, multilateral or regional
funding mechanisms, to meet
the agreed costs of developing
countries in complying with their
obligations as well. The country,
however, cannot be dependent
on these funds.
Overlapping jurisdictions. Due to the large

number of players in the environment and
natural resources sector, governance issues
are inevitable. In some instances, conflicts
arise between national and local governments
in terms of the protection and utilization
of natural resources. This is apparent when
LGUs initiate the reversion of abandoned
fishponds, while it is the DENR who should
lead the process, following the Philippine
Fisheries Code of 1998 and several joint
administrative orders. Another concern
is the national-local conflicts in mining
projects, specifically when LGUs pass local
legislation rejecting or opposing the entry
or expansion of large-scale mining projects.
This contravenes the DOJ opinion that local
ordinances cannot undo a law and should
not run counter to national policy; DENR
memoranda also order its regional offices to
continue implementing their mandate.27
To ensure compliance in incorporating
CCA and DRRM management in the
development process, the roles of agencies
and their respective mandates as provided
by law must converge and synchronize. The
Climate Change Act and the Philippine
DRRM Act of 2010 are significant strides
to include climate change and DRR
management in the planning process.
Sectoral plans, including the Environment
and Natural Resources Framework Plan,
must be updated to include these concerns.
Technical expertise. Environment and natural
resources management requires a skilled
and competent workforce to implement
professional standards of operation in
environment, but technical experts and
trained personnel at the national and local
levels are in short supply. Some implementing
agencies have the capacity to implement
provisions of environment and natural
resources laws requiring the application of
new and sophisticated technologies (e.g.,
highly technical LAMTM technologies
27
308
DOJ Opinion No. 8, Series of 2005
geographic information system

(GIS), global positioning system
(GPS), valuation, databases and online
connectivity of information systems).
Still others, however, particularly LGUs,
still have to develop the competence to
implement their mandated tasks and
to properly assume environment and
natural resources functions.
Information
systems.
Integrated,
updated and quality information for
ENR and climate change is necessary
for planning, management and decision
making. The lack of a participatory and
science-based baseline data creates
discrepancies that can cause uncertainty
and lead to serious errors in carrying
out the policy and planning functions
of ENR stakeholders.
A better system for gathering,
processing, storing, and sharing
information needs to be put in place.
The DENR is currently implementing
the Information Systems Strategic
Plan (ISSP) which aims to provide a
coherent, integrated and decentralized
set of data to every office, making
information to stakeholders available
anytime. ISSP also aims to develop
information systems that will address
the integration, collaboration and
consolidation of data/information to
deliver quality and timely statistics
in spatial and digital form. (Box 10.2
summarizes current government efforts
on environmental education.)
Enforcement of environmental
laws and policies is inadequate
Full and effective implementation
of environmental laws, policies and
programs continues to be a challenge.
Governance
issues,
including
corruption, are among the reasons for
low compliance in these laws. The
incomplete devolution of mandates
to LGUs has also hampered their
full implementation (see Box 10.3

for devolved functions). A DILGcommissioned study in 200528 called
the state of environment and natural
resource devolution partial and at
worst, minuscule and insignificant.
Devolved functions were mainly
peripheral, unattractive to private
investors, and were costly to perform.
Among these functions were watershed
regulation, greenbelt and treepark
development, farmer-level integrated
social forestry, and small-scale mining,
all of which do not attract significant
investments from the private sector
or are limited to certain LGUs. The
control of smoke-belching vehicles,
the management of solid wastes, and
coastal zone regulation and protection
are devolved functions requiring
substantial investments from LGUs. In
2007, ADB also commissioned a study
on the devolution of DENR functions,
to help identify responsibilities in
the Integrated Coastal Resources
Management Project (ICRMP). The
study pointed out the institutional
weaknesses in most of the 206
Protected Area Management Boards
(PAMBs) revealed by a 2003 UNDP
study. Of these PAMBs, only five were
fully constituted boards backed by
specific laws; the rest became interim
boards.29
Contributing to poor enforcement and
compliance is the lack of knowledge
of environmental laws, policies, and
programs among LGUs, specifically
in communities or barangays. There
are still rural communities which
depend on resource extraction for their
livelihood. Relevant environmental
laws, specifically those regulating
the utilization of natural resources,
e.g., NIPAS, Wildlife Act, etc. are
poorly implemented. There is a need
to intensify information and advocacy
campaigns on existing environmental laws

and policies among communities.
Absence of a financing strategy for

programs and CCA
Government programs are hobbled by
financial constraints. Funding support for
watershed management has been insufficient
to cover all important watersheds. It will
take 280 years to reforest given the average
budget allocation of about PhP300 million
for reforestation in the past 10 years.30 Thus,
more funds should be allocated, to prioritize
watersheds that support irrigated lands.
The implementation of National Sewerage
and Septage Management Program by the
DPWH has also been slow due to lack of
funds to meet the large investment needed
for infrastructure development.
As for CCA, putting in place adaptation
measures also requires financial resources.
The Philippines continues to uphold the
UNFCCC principle of common and
differentiated responsibilities to hold on to
the agreement that Annex I countries will
extend financial assistance over and above the
level of development assistance. Developed
countries are required under the Convention
to provide new and additional resources,
either through bilateral, multilateral or
regional funding mechanisms, to meet the
agreed costs of developing countries in
complying with their obligations as well.
The country, however, cannot be dependent
on these funds.
The National Environmental Economic
and Development Study (NEEDS) 2010
on the inventory of financial flows showed
that grants to the environment, agriculture,
biodiversity, energy, CCA, health, and
water supply and sanitation address only
a given problem or requirement, like solid
waste management, resource conservation,
production constraints, biodiversity loss,
28
DILG/ADB, 2005. Local Government Financing and Budget Reform.
29
ADB, Country Environmental Analysis, 2008.
30
DENR-FMB
309
In order to improve the

conservation, protection,
and rehabilitation of the
countrys natural resources,
the sector shall pursue their
sustainable use and integrated
management. Natural resources
management activities shall be
directed at enhancing the state
of the different ecosystems and
the natural resources within
them to provide resourcedependent communities with
sustainable livelihoods.
Greenhouse Gas (GHG) emissions,

institutional capacity, outbreak of infectious
diseases, and water shortages. The grants
received have moreover been limited in scope
and geographic coverage. The restricted
project scale, for instance, could be seen in
an integrated area project covering at most
only one or few cities or municipalities, a
watershed or ecosystem, or of a nationwide
scale but focused only on a few provinces or
interregional areas. Limited geographical
coverage result in project benefits being
confined to particular area niches, a project
piloting mode of introducing change, an
inability to scale up, and turfing among
country donors and multilateral agencies
(EMB-DENR, 2010).
The NEEDS study concluded the
budgetary resources set aside by the
Philippine Government for CCA have been
inadequate. The larger budgetary share of
disaster management from 2003 to 2008 did
not represent proactive efforts to mitigate
the expected damages and risks from natural
disasters but merely reflected the postdisaster
relief and rehabilitation expenditures.
The budget for DRR, particularly those
appropriated as Calamity Fund in the GAA,
still reflects the response-oriented perspective of
traditional disaster management. The DRRM
Act (RA 10121) already explicitly provides for
the change in the nature of the calamity fund
making it more appropriate for DRR use as the
NDRRMF. Government budget allocations
for DRR should be clearly delineated so that
aid from international financial institutions can
be directed to where it is really needed. It is also
critical to determine the extent and manner
of obtaining funding from other stakeholders
and partners in order to finance DRR activities,
especially costly structural measures.
While good results from DRR projects and
activities have provided opportunities for sound
practices to take root, existing organizational
and societal structures do not necessarily allow
positive values to thrive. Sustaining mechanisms
such as making DRR a regular budget item,
strengthening PPP, creating incentives for
disaster risk-reducing behaviour, recognizing
and replicating best practice, instilling risk
310
awareness at all levels of government, in

households, firms and workplaces should
be part of a general strategic plan.
The inadequacy of financing for the
enforcement of laws and policies is
an important continuing concern.
Several studies and initiatives have been
undertaken to measure the costs of users
activities on natural resources, assessing
the feasibility of generating funds for their
management. ENR agencies however
continue to rely largely on administrative
services for regulation rather than on
market-based instruments.
Strategic Framework
Consistent with Philippine Agenda
21 and its enhanced version and the
countrys commitments to multilateral
environmental
agreements,
the
Environment and Natural Resource
Sector shall pursue the following goals
and strategies:
Goal 1. Improved
conservation, protection
and rehabilitation of natural
resources
In order to improve the conservation,
protection, and rehabilitation of the
countrys natural resources, the sector
shall pursue their sustainable use
and integrated management. Natural
resources management activities shall
be directed at enhancing the state of
the different ecosystems and the natural
resources within them to provide
resource-dependent communities with
sustainable livelihoods. Priority shall be
given to the implementation of national
action plans on forest, biodiversity,
coastal and marine resources and
wetlands. Mechanisms and policies will
be pursued to rationalize the use of the
countrys land and mineral resources.
In line with the National Framework
Strategy on Climate Change, integrated
ecosystem-based management will
continue to be adopted as a major
strategy for sustainable natural resource

management as well as a means to
adapt to climate change scenarios. As
a safeguard for all undertakings with a
potential impact on the environment
and natural resources, a mechanism for
third party cost-benefit analysis31 and
monitoring shall be enforced that takes
environmental and social costs and
benefits into account.
Sustainably manage forests and

watersheds
Targeting to have 15 million hectares
of forested land, 50 percent of which
may be production forest, the following
will be implemented to increase forest
cover by 600,000 hectares by 2016;
a. Continue and enhance the
protection of forest and reforested
areas
(especially
in
critical
watersheds) and sustain the
productivity of agroforestry areas:
Manage, protect, and develop
natural
forest,
established
plantation, and economically
important nontimber forest
products and species;
Encourage communities to
enhance protection and sustain
productivity of reforestation areas
and upland areas for livelihood
and poverty alleviation;
Transform open, denuded and
degraded areas into protection
forests and/or economicallyproductive assets; and
Encourage communities to
develop multipurpose forests in
open, denuded and degraded
areas;
b. Complete the delineation of
forestland boundaries and develop
plans for forest land use and watershed

management:
Delineate and assess forestland
boundaries and push for the enactment
of relevant bills, placing all untenured
/open access areas under management
regimes;
Carry
out
collaborative
watershed management planning
cum vulnerability assessment and
implementation
among
DENR,
LGUs
and
other
watershed
stakeholders towards responsible forest
management; and
Develop a portfolio approach for
forest investment in collaboration
with the LGUs and the National
Commission on Indigenous Peoples
(NCIP), which shall jointly prepare a
forest land use plan identifying areas
for protection and areas for investment
and provide the necessary permits and
clearances prior to development;
c. Improve baseline information, and
conduct valuation and accounting of
forest resources:
The PNRPS aims to empower

forestland managers and
support groups that sustainably
and equitably managing
forestlands and ancestral
domains with enhanced carbon
stock and reduced greenhouse
gasses emission. Besides
reducing forest degradation
and deforestation, the strategy
alleviates poverty, conserves
biodiversity, and improves
governance.
Conduct monitoring and evaluation

using common criteria and indicators,
third- party monitoring, and forest
certification, among others; and
Strengthen the decision-support
system through an inventory of forest
resources, baseline data generation and
GIS mapping, and forest valuation and
natural resource accounting;
d. Implement the Philippine National
REDD32 + Strategy (PNRPS). The PNRPS
aims to empower forestland managers
and support groups that sustainably and
equitably manage forestlands and ancestral
domains with enhanced carbon stock
and reduced greenhouse gasses emission.
31
WB, 2009
32
REDD is an acronym for Reducing Emissions from Degradation and Deforestation.
311
Besides reducing forest degradation and

deforestation, the strategy alleviates poverty,
conserves biodiversity, and improves
governance.
Improve protection and conservation

of biodiversity
a. Conserve, preserve, and manage
protected areas, wildlife, and their
habitats:
Assess
the
effectiveness
of
management and implement adaptive
management in all protected areas
proclaimed under the NIPAS;
PES is a mechanism in
environment and natural
resources management that
corrects the flaw in current
economic system whereby the
users of ecosystem/environment
services are made to pay the
managers.
Establish and manage critical

habitats to reduce habitat loss and
enhance ecosystem services that play
important roles in addressing climate
change impacts;
Establish and effectively manage
additional protected areas focused on
identified KBAs through Presidential
Proclamation to sustain ecological
goods and services of the area;
Strengthen
management
of
protected areas in partnership with
local communities through issuance
of security of tenure and provision of
alternative livelihood;
Manage significant caves for their
socioeconomic and ecological values;
Rehabilitation of important habitats
such as wetlands; and
Facilitation of significant increases
in the population threatened and
endangered species;
b. Prepare protected area management
plan incorporating vulnerability and
adaptability of the sector to disaster risk
and climate change
33
312
Memorandum of Understanding on PES, 2010
Complete
the
boundary
delineation and demarcation of
protected areas;
Preparation/updating
of
management plan for protected
areas and ecologically important
habitats to include CCA; and
Manage priority wetlands
for food production, water
conservation
and
disaster
mitigation;
c. In protected areas, institute
and operationalize the concept of
Payment for Environmental Services
(PES). PES is a mechanism in
management that corrects the flaw
in current economic system whereby
the users of ecosystem/environment
services are made to pay the ENR
managers;33
d. Continue
implementing
international commitments on
biodiversity conservation, protection
and rehabilitation:
Implement
EO
514
(Establishing
the
National
Biosafety
Framework,
Prescribing Guidelines for its
Implementation, Strengthening
the National Committee of the
Biosafety of the Philippines, and
for Other Purposes) particularly
the provisions on environmental
and health risk assessment in
the field-testing and regulated
propagation
of
geneticallymodified organisms (GMO)
following the precautionary
principle;
Implement
the
Nagoya
Protocol on Access to Genetic
Resources and Fair and Equitable
Sharing of Benefits Arising from
their Utilization (e.g., capacity
of
f. Update nautical charts for safety at sea

and protection of the marine environment;
Implement
the
Updated
National Wetland Action Plan
for the Philippines (NWAPP) as
part of the countrys commitment
to the Convention on Wetlands
or Ramsar Convention.
g. Pursue claims for an extended

continental shelf and delineate various
maritime jurisdictions such as internal
waters, archipelagic waters, territorial sea
and exclusive economic zone;
building and formulation

relevant policies); and
Enhance coastal and marine

resources management
a. Develop
and
implement
the national integrated coastal
management
(ICM)
program
to include principles, strategies
and action plans in accord with
EO 533 (Adopting Integrated
Coastal Management as a National
Strategy to Ensure the Sustainable
Development of the Countrys
Coastal and Marine Environment
and Resources and Establishing
Supporting Mechanisms for Its
Implementation);
b. Prioritize the protection and
management of mangroves, sea
grasses, coral reefs and beaches
as a management unit to derive
maximum benefits resulting in
synergistic interactions of these four
ecosystems that enhance marine
productivity;
c. Apply the ecosystem approach
to the management of fisheries and
other marine resources, addressing
transboundary policy and regulatory
concerns;
d. Evaluate management effectiveness
of all MPAs proclaimed under NIPAS;
e. Implement the Coral Triangle
Initiative National Plan of Action
and the
Sulu-Sulawesi Marine
Ecoregion (SSME) Conservation
Plan which includes designating
priority seascapes across the Coral
Triangle as geographic focus of
sustainable management;
h. Conduct inventory and status

of foreshore lands to identify and
clarify impacts of privatization and
commercialization to the environment
and the fishing communities;
i. Revert abandoned, underutilized and
unproductive fishponds to mangroves;
j. Revise policies on the management
of mangrove areas in order to increase
mangrove cover;
k. Integrate coastal and marine water use
plans into the comprehensive land use
plans of LGUs;
l. Complete the delineation of municipal
waters; and
m. Improve the status of coastal and
marine biodiversity by safeguarding
coastal ecosystems, species, and genetic
diversity.
Improve land administration and

management
a. Fast track the cadastral survey to
delineate boundaries of all municipalities/
cities, provide economic data for landbased development studies and projects
and facilitate land disposition and titling;
b. Accelerate the titling of agricultural
and residential lands and ancestral
lands in partnership with DAR, NCIP,
LRA and LGUs to improve the socioeconomic condition of beneficiaries and
provide security of land tenure;
c. Rationalize land policies and laws
towards a harmonized and effective Land
Administration laws;
313
d. Incorporate environmental safeguards

in the issuance of foreshore leases taking
into account the likely effect of climate
change;
e. Intensify a more vigorous nationwide
campaign against the proliferation of fake
or fraudulently-issued certificates of land
title;
The development of
environment-friendly enterprise
and livelihood opportunities for
local communities is envisioned
to address the prevailing
poverty of resource-dependent
communities. This will also
motivate communities to protect
natural habitat and wildlife.
f. Strengthen the management of land

resources information and cadastral
information through computerization
and in partnership with other landrelated agencies, local governments, and
the private sector for improved land
administration services and revenue
collection;
Strictly enforce compliance

of mining companies within
environmental
and
social
development commitment;
Implement
noncapital
intensive
and
short-term
remediation measures; and
Develop mine viability and
environmental
assessment
guidelines for the remediation/
rehabilitation or redevelopment
of viable projects.
g. Enhance the capacity and competence

of professionals, practitioners and workers
in the land sector, supporting them with
modern technology and land-resources
information made available at national
and local levels and in the private sector;
and
c. Rationalize the extraction and use

of minerals for national development
h. Develop a national country program

to combat land degradation and poverty
in marginal areas and rural communities
and mainstream issues of sustainable land
management (SLM) and desertification,
land degradation and drought in
agriculture and environment planning
and policy formulation.
Promote the development

of downstream industries to
maximize the benefits or valueadded from mining;
Manage a more equitable utilization

of mineral resources
a. Review and harmonize mining policies
and other related policies (e.g., IPRA,
NIPAS, LGC, etc.);
b. Ensure
the
mining
industrys
compliance with laws and policies
on
conservation, protection
and
rehabilitation:
Institute comprehensive resource
valuation of mining operations
(including environmental and social
costs);
314
Safeguard the ecological and

environmental integrity of areas
affected by mining operations;
Determine the actual minerals

and metal needs of the country
that will contribute to the
realization of industrialization;
Rationalize
resource
assessment for both metallic and
mineral commodities; complete
an accurate and realistic inventory
of actual mineral reserves,
indicating specific locations, types
and values of the minerals to be
potentially extracted;
Strictly implement the useit-or-lose-it policy to cleanse
inactive mining applications and
nonperforming mining contracts;
Determine untapped offshore
mineral resources by actively
pursuing characterization and
assessment surveys; and
Pursue new mining technology

and research and development
of mining techniques in mining
planning,
scheduling,
and
design to raise the level of mine
productivity and make the
local mining industry globally
competitive. This should be
supported by capability building
programs and the establishment
of laboratory facilities with
state-of-the art equipment.
d. Guarantee
the
equitable
distribution of benefits from
minerals through good governance
in the mining sector:
Rationalize the incentives granted by

the government to mining companies.
Develop and implement

environment-friendly enterprise and
livelihood opportunities.
The development of environment-friendly
enterprise and livelihood opportunities for
local communities is envisioned to address
the prevailing poverty of resource-dependent
communities.
This will also motivate communities to
protect natural habitat and wildlife. This
includes among others:
a. Well-regulated ecotourism areas;
Protect public investments

through government oversight
over mining companies to ensure
transparency and accountability,
stimulating more investment as a
result;
Review, monitor and evaluate
existing
large-scale
mining
contracts with respect to their
compliance with existing rules
and regulations;
Reaffirm
ordinances
and
resolutions issued by LGUs to
protect their environment to the
extent these are consistent with
national laws and policies;
Sign on to the Extractive
Industry Transparency Initiative
(EITI) in order to practice and
implement transparency and
accountability among mining
companies operating in the
country;
Ensure the timely and accurate
release of the legitimate share
of local governments in the
extraction of national wealth;
Improve the government share
in taxes; and
b. Livelihood activities (income and

food-based) designed for women; and
In order to provide communities

with a healthier environment, the
quality of the air, land and water
must improve.
c. Development and intensification of

markets for products out of waste such as
organic composts and reusable items.
The
DA-DAR-DENR
National
Convergence Initiative (NCI) intends to
help provide more jobs and livelihood in
identified convergence sites for productive
management and sustainable utilization
of forestlands. The programs of the three
agencies will be integrated to promote
increased investment in rural areas,
increased and sustainable food production,
good governance and efficiency in proper
implementation.
Goal 2. Improved
environmental quality for
a cleaner and healthier
environment
In order to provide communities with a
healthier environment, the quality of the
air, land and water must improve. Vital to
the improvement of environmental quality
is the full implementation of laws and other
regulatory measures. Measures to reduce
pollution and waste generation will also
be pursued. The promotion of green jobs
and the greening of industry are win-win
solutions that should be pursued.
315
Reduce air pollution in Metro Manila

and other major urban centers
Achieve a 30-percent reduction of 2009
levels of pollution by 2011 and a 5-percent
annual reduction thereafter by 2016 in
Metro Manila and other major urban centers
through the following:
a. Intensify enforcement on stationary
and mobile sources of pollution, instilling
discipline and improving compliance
with emission-testing and mandatory
vehicle inspection and maintenance, and
promoting conversion to fuel-efficient
engine;
b. Monitor industry compliance with
environmental standards;
c. Establish the full number of monitoring
stations as provided under the Clean Air
Act (CAA) in Metro Manila and other
major urban centers;
d. Promote the use of clean fuel and use
indigenous resources to the fullest as
sources of clean energy;
e. Establish a financial mechanism to
jump-start a massive electric vehicle
(EV)-based public transportation system
by supporting either new EV production
or the conversion of existing fossil-fuel
vehicles; and
f. Revise emission standards and update
emission limits for motor vehicles.
Reduce water pollution to improve

water quality in priority rivers and
other economically and ecologically
important water bodies
a. Establish, and operationalize the
Water Quality Management Fund and
water quality management areas and their
governing boards;
b. Establish in Metro Manila the required
number of monitoring stations provided
under the Clean Water Act;
316
c. Undertake a massive clean-up

and rehabilitation of esteros in
partnership with DILG, LGUs, and
other government agencies through
partnership agreements such as the
Adopt-an-estero program;
d. Undertake the massive cleaning
and rehabilitation of Manila Bay
using funds collected from identified
polluters to bring water quality to
SB classification through an effective
Operational Plan for the Manila Bay
Coastal Strategy Goal 2020;
e. Implement river rehabilitation
and protection using bio-ecoengineering technology
f. Include other priority rivers for
clean-up, including Laguna de Bay,
Boracay, and Pasig Rivers, with funds
collected from identified polluters.
Reduce wastes generated and

improve waste disposal
a. Ensure compliance with RA
9003 or Ecological Solid Waste
Management Act of 2000, the
overall principle of which is that all
waste should be brought to where
they can be converted into resources;
b. Reduce land-based pollution by
cutting back on waste generation;
c. Implement
environmentally
sound management and disposal of
toxic and hazardous waste, including
electronic waste (e-waste);
d. Immediately close or rehabilitate
dumpsites and waste disposal
facilities in environmentally critical
areas;
e. Publish
the
list
of
nonenvironmentally
acceptable
packaging and products;
f. Regulate or ban consumer

products containing chemicals of
concerns;
g. Promote clean production and
extended producer responsibility as
part of corporate social responsibility;
h. Institute
healthcare
waste
management systems in health
facilities by investing in training
and communications; encourage
schools to include healthcare waste
management processes in their
technical curricula;
i. Engage LGUs in PPP options
and financial schemes for the
establishment of large-scale waste
treatment
technologies;
BOT
projects for cooperative waste
treatment facilities and sanitary
landfills are viable options;
j. Promote private sector research,
development and manufacture of
nonmercury-based devices and
technologies used in health facilities
and for health care; and
k. Encourage the development
and manufacture of local wastetreatment technology and ensure
their availability in the market.
Specific strategies, programs and
projects as well as activities on the hard
components of waste management
are discussed in detail in Chapter 4,
Accelerating Infrastructure Development.
Establish a healthier and livable

urban environment
a. Establish urban parks with dense
greenery to minimize heat island
effects in town and cities
b. Adopt green architecture with
rooftop gardens in central business
districts; promote climate changeresilient building designs in new
urban centers for a cool and refreshing

environment;
c. Intensify ecological solid waste and
wastewater management;
d. Promote waste recycling technologies
to reduce green house gas emissions
(CO2 and methane) and groundwater
pollution in sanitary landfills;
e. Encourage industries to use cleaner
technologies and practice extended
producer
responsibilities
through
provision of tax incentives;
f. Establish a pollution release and
transfer registry and the pay-as-youpollute scheme; and
g. Promote Green Industry and greening
the supply chain.
Goal 3. Enhanced resilience

of natural systems and
improved adaptive capacities
of human communities to cope
with environmental hazards
including climate-related risks
Strengthen institutional capacities of
national and local governments for
CCA and DRRM
a. Mainstream and integrate DRR
and CCA in national, sectoral, regional
and local development plans, including
integration of hazard and climate change
vulnerability maps in the updating of
CLUPs by LGUs and enforcement of
zoning regulations; and encourage more
provinces to mainstream DRR in their
plans, and build capacities of national and
local agencies assigned to lead the effort;
b. Support
the
initiatives
for
mainstreaming DRR and CCA in by
granting it priority in budget allocation;
c. Adopt a responsive national and local
legal and policy framework through
multistakeholder dialogues that will
create an enabling environment for all
317
Filipino citizens and the government to

guide them towards an integrated DRR
and CCA approach;
that are climate change-resilient

under the EIA and risk assessment
system of the EMB; and
d. Enhance the self-reliance of local

DRRM councils and their ability
to implement the program through
responsible DRMM offices;
c. Establish a network of protected

areas in coordination with other
LGUs based on ecological, social
and
economic
considerations
(ecosystem resiliency and biological
connectivity) to address the impacts
of human-induced factors and
climate change.
e. Devise cost-effective means to offset

socioeconomic losses from disasters;
prepare for disaster recovery by establishing
an enabling environment for both public
and private sectors to increase their
contribution to risk reduction activities;
develop a common understanding of
resource needs and include DRR and
CCA in the regular business, policies, and
actions of organizations;
f. Enhance national and local capacities
for monitoring, forecasting, hazard
identification, early warning, and risk
evaluation and management;
g. Complete the geological mapping of
hazards using a larger scale (1:10,000);
h. Improve the postdisaster rehabilitation
and development process;
i. Make the newly established national
DRRM fund more accessible to resourcepoor LGUs; explore new mechanisms to
expedite fund releases during emergencies;
provide information on possible funding
sources; and
j. Harmonize the implementation of the
DRRM Act and the Climate Change
Act.
Enhance the resilience of natural

systems
a. Conduct vulnerability assessment and
mapping on the different ecosystems;
b. Issue guidelines for the review and
approval of design proposals and projects
318
Improve adaptive capacities of

communities
a. Conduct geohazard mapping,
vulnerability and risk assessments
especially for highly susceptible
communities and areas for the
formulation and implementation
of disaster risk reduction and
management plans;
b. Integrate CCA and DRRM in all
education levels and in specialized
technical training and research
programs;
c. Raise public awareness of
DRR and mitigating the impacts
of natural disasters through the
formulation and implementation of
a communication plan for DRR and
CCA;
d. Conduct gendered vulnerability
assessment, recognizing the differing
vulnerabilities and capacities of poor
women and men across economic
sectors and geographic locations;
e. Use science-based tools and
technologies to support decisions
in identifying, preventing and
mitigating
potential
disaster
impacts; collect and disseminate data
according to risk knowledge needs
and develop information systems to
support decision makers and apprise
stakeholders;
f. Enhance disaster-preparedness
through
multistakeholder
coordination; and
important partners for the sustainable

development and management of
natural resources;
g. Conduct an extensive IEC

campaign for an increased public
awareness of DRR.
Tenurial security both in upland

and coastal areas and recognition of
indigenous peoples rights to their
ancestral domain;
Cross-cutting Strategies
In order to achieve the three goals
and to realize an environment that
is
healthy,
ecologically-balanced,
sustainably productive, climate-change
resilient, the following crosscutting
strategies will be pursued:
Effective environmental
governance
Stewardship agreements and/or

contracts between government and
community; and
Improved
multistakeholders
effectiveness
in
enforcing
environmental law.
b. Reduce graft and corruption:
a. Encourage
multistakeholder
partnership
through
enabling
mechanisms that encourage greater
stakeholders participation and
commitments, including:
Community-based
natural
resources management efforts in
forestry, biodiversity conservation,
protected area management,
coastal resource management and
integrating resilience especially
among vulnerable groups (women,
children, elderly, etc);
Partnership
with
the
business sector in cleaning the
environment, natural resource
management, DRR and CCA;
Devolution of relevant ENR
mandate to LGUs accompanied
by capacity development;
Mandatory
creation
of
Environment
and
Natural
Resources Offices for LGUs;
Provision
of
effective
mechanisms that will empower
marginalized
groups
as
Curbing graft and corruption in the

natural resources sector is crucial to
improving environmental governance.
Transparency in decision-making and
in the disposition of revenues raised
from extraction, processing, and sale
of natural products must be ensured.
Philippine participation in the EITI
is also important. The greening of the
judiciary should also be pursued. The
desired end is a vigorous and consistent
enforcement of environmental laws
and policies.
c. Harmonize and streamline efforts in
protection and conservation:
Environmental governance should
be emphasized in the local level. There
should be clear delineation of duties
and responsibilities of stakeholders.
ENR management strategies should
also be harmonized horizontally and
vertically. Furthermore, harmonization
and strengthening of DENRs policies,
plans and programs related to the
different ecosystems and natural
resources will be pursued. Relatedly,
requirements
for
environmental
permits (e.g., ECC) will be streamlined
and simplified.
319
d. Implement Convergence Initiative:

Facilitate complementation of
different agencies to ensure that
resources are maximized by achieving
synergy and institutional efficiency;
Build partnerships between and
among the local communities, LGUs,
and government agencies to ensure
that all development interventions
are based on the actual needs and
aspirations of the community; and
Achieve
spatial
integration
within the different ecosystems to
ensure environmental integrity and
sustainability.
Continued institutional
strengthening and capability building
a. Strengthen
institutions
for
management at various levels (i.e.,
insufficient manpower for ENR);
b. Improve
and
institutionalize
various multistakeholder coordination
mechanisms as mandated by the different
ENR laws for greater transparency
and accountability is important in
environmental governance;
c. Provide assistance to LGUs to develop
and implement local environment and
natural resources management plans and
programs (i.e., ICM plans, forest and
watershed management plans, etc.) in
accordance with the national programs,
thereby facilitating the achievement
of
economic
and
environmental
sustainability priorities and targets
through relevant on-the-ground strategies
and action plans; and
d. Support womens enhanced roles
in ENR through policy development,
capacity-building and strengthening of
gender mainstreaming mechanisms.
Research, Development,
Extension and Knowledge
Management
a. Pursue research, development and
extension to:
Demonstrate, develop and
replicate low-cost technologies to
optimize the recycling, reuse, and
recovery of solid waste, including
the conversion of residual organic
materials into clean renewable
energy;
Establish valuation of resources
and develop a system of natural
resources accounting;
Determine the values and
potential benefits of the natural
resources.
Conduct
gender-aware
resource-use studies to recognize
roles, impacts and opportunities
among women in ENR ecological
profiling;
Develop DRR
technologies;
and
CCA
Develop clean and energy

efficient technologies;
Rehabilitate mines to ensure
that abandoned/inactive, current
and future mines are effectively
rehabilitated;
Obtain the most benefits
and value-added from mineral
resources;
Geologically assess and explore
of undiscovered mineral resources;
Determine
forest-based
industrial requirements;
Develop
resource-based
management technologies;
320
Provide
clear
guidelines
to
minimize
environmental
impacts of existing technologies
(e.g., incinerators) and new
technologies (GMOs, e-waste,
nano technology, etc.);
Develop and propagate lowcost noncombustion technologies
for infectious and hazardous
wastes;
Develop risk and vulnerability
assessments using gendered
tools and generating genderdisaggregated data; and
Assess metallic and nonmetallic
minerals, both onshore and
offshore;
b. Make available timely, accurate
and
updated
science-based
information on the environment
though an effective knowledge
management system:
Establish the National Spatial
Data Infrastructure (NSDI);
Establishment of baseline
information on the environment
and natural resources through
ecosystem profiling;
Establish strategic organization
structure for information systems
sharing;
Update
the
national
topographic and nautical chart
databases, including electronic
charts;
Develop a National Coastal
and Marine Resource Information
Management System to support
research, policy formulation and
implementation and public education

and communication on coastal
resources and the environment;
Rationalize mapping activities; and
Establish a monitoring and
evaluation mechanism to measure and
push performance to a high-level.
c. Establish National Wildlife Research
Center pursuant to the Wildlife Act (RA
9147).
Environment and Natural Resource

Financing
In order to sustainably finance environment
and natural resources activities, government
will pursue the use of appropriate valuation
methods in the computation of applicable
fees and taxes for the use the countrys
natural resources and enhance its collection.
Likewise, PES shall be institutionalized at
the national and local levels and shared with
communities to encourage natural resource
protection and management as well as
increase household income.
In order to sustainably
finance environment and
natural resources activities,
government will pursue the use
of appropriate valuation methods
in the computation of applicable
fees and taxes for the use the
countrys natural resources and
enhance its collection.
a. Ensure rightful share of ENR activities

and priorities in national and local
government budgets;
b. Enhance collection of taxes/revenues
including pollution and exploitation fees
from industries (i.e., mining companies
including small-scale mining);
c. Retain the LGU share of taxes and
revenues, specially those pertaining to
environment activities;
d. Utilize
disposable
public
and
government land assets and resources,
balancing economic, environmental, and
social development objectives;
e. Strengthen LGU revenues through
local real property tax to achieve better
local tax efficiency, a wider tax base, and
greater equity;
321
f. Promote and roll out the adoption of

the Philippine Valuation Standards and
compatible valuation methodologies in
the public and private sector;
g. Develop local capacities to generate
revenues to finance activities in the
control of polluting vehicles;
h. Increase the value of natural resources
by adopting resource valuation techniques
in determining rates of users fees for use
of forest land such as telecom, power,
water utilities and others;
i. Increase Government share from
the use of the countrys mineral wealth
through thru the establishment of mineral
reservations and greater value adding;
j. Formulation of policies on accessing
carbon credits;
k. Exploring further innovative sources of
finance, both for environment and natural
resources activities and climate change
adaptation; and
l. Increase value-added from natural
resources (e.g., users fee and payment
for environmental services) to generate
revenues for protection and conservation
5. Implement a national communications
strategy particularly for pollution concerns
(air, water and solid waste). This is due to
the fact that people themselves contribute
to the pollution and they need to be made
responsive on how pollution affects their
well-being.
Legislative Agenda
In order to push forward sustainable
management
of
the
countrys
the passage of the following pieces of
priority legislation should be pursued:
1. National Land Use Bill to
provide a rationalized land use
planning in the country and put in
order the national laws on land uses
(such as agrarian reform, protected
areas, ancestral domain, fisheries,
forestry, agriculture agricultural
modernization, mining and housing)
that are sector specific and do not
address the cross cutting land use
issues;
2. A Sustainable Forestry Bill to
provide the clear policy for the
sustainable management of the
countrys forest resources;
3. Land Administration Reform
Bill to address the pervading
multi titling problems through
the rationalization of the various
agencies responsible in land titling
and related activities and address
this concern through the adoption
of the one stop concept;
4. Land Administration Code
- update and harmonize land
administration laws enacted at
different dispensations to support
the future roles of key agencies
towards
addressing
cadastral
information
requirements
and
land administration services for
sustainable development;
5. Marine Pollution Bill to respond
to the pressing need of reducing risks
and preventing disasters caused by
trade and other economic activities
in the marine environment and its
resources;
322
6. Permanent Forest line Bills

to provide the specific boundaries
limits of forestlands per province
delineating areas in which no other
land use may prevail;
13. Extended Producers Responsibility

Bill to compel industries, manufacturers,
importers and sellers to take-back the
waste and end-of-life of their products or
goods;
7. Bills on Enactment of Priority

Protected Areas to cover areas
that are among the Key Biodiversity
Areas in the country which are
globally significant and considered as
actually manageable for biodiversity
conservation;
14. Formulation of the Electronic

Waste (e-waste) policy framework to
provide a mechanism on how to dispose,
reuse and/or recycle waste coming from
electronic equipment;
8. Integrated Coastal Management

Bill to institutionalize the
Integrated Coastal Management
in the Philippines as a national
strategy to ensure the sustainable
development of the countrys
coastal and marine environment
and resources and establishing
supporting mechanisms for its
implementation;
9. Improvement and enhancement
of Small-Scale Mining Law to make
it more responsive to present and
emerging needs on environmental,
safe-time health and social concerns;
10. Enact legislation recognizing
access to clean water and sanitation
as a human right;
11. Peoples Survival Fund (PSF)
Bill to amend the Climate Change
Act of 2009 and put up a fund that
will finance adaptation programs and
projects that are directly supportive
of the objectives enumerated in
the local climate change action
plans (LCCAP) of LGUs and
communities;
12. Archipelagic Principle Bill
to amend Section 4 of RA 8550 or
the Philippine Fisheries Code of
1998 that provides guidelines on
the delineation of municipal waters
using the archipelagic principle;
15. Environmental Code for LGUs to

provide LGU budget appropriations for
localized environmental activities;
16. Marine Protected Area Bill to
mandate local government units to
establish marine protected areas in their
respective municipal waters;
17. PAG-ASA Modernization Law to
allocate funds for the needed reforms of
the agency; and
18. Bill on Hazardous and Radio
Active Waste Management to provide
penalties for violation thereof and for
other purposes.
The following pieces of proposed legislation
need further discussion and deliberation:
19. Minerals
Management
Bill.
This bill pushes for the conservation
of nonrenewable mineral resources for
the benefit of both present and future
generations of Filipinos by adopting
a sustainable, rational, needs-based
minerals management, geared towards
effective utilization of mineral resources
for national industrialization and
modernization of agriculture; and
20. Ratification of the Basel Ban
Amendments. The Basel Convention is
an international treaty seeking to reduce
movements of hazardous wastes between
nations, and specifically preventing
the transfer of hazardous waste from
developed to less developed countries
(LDC). The country has yet to ratify its
position on the said Convention.
323
List of Acronyms
3Rs
Reduce, Reuse, and Recycle
BemONC
3G
Third Generation
4Ps Program
Pantawid Pamilyang Pilipino Program
A&D
AAGR
AARNR
ACE
ACPC
Alienable and Disposable

Annual Average Growth Rate
Agriculture, Agrarian Reform and
Natural Resources
ASEAN Center for Energy
Agricultural Credit and Policy Council
BARC
BAS
Basel II
AD
Ancestral Domains
ADB
ADBI
ADM
ADR
ADSDPP
Asian Development Bank

Asian Development Bank Institute
Alternative Delivery Modes
Alternative Dispute Resolution
Ancestral Domain Sustainable
Development and Protection Plan
Agriculture, Fisheries and Forestry
Agroforestry Farm Lease Agreement
Agriculture and Fisheries Modernization
Act
Armed Forces of the Philippines
Aquino Health Agenda
Alternative Learning System
AIDS Medium Term Plan
Annual Poverty Indicators Survey
Agro-Industry Modernization Credit
Financing Program
Anti-Money Laundering Act
Administrative Order
Asia-Pacific Economic Cooperation
Action Program for Judicial Reform
Annual Procurement Plan
Agrarian Reform Beneficiaries
Agrarian Reform Communities
Anti-Red Tape Act
Air Service Agreement
Association of Southeast Asian Nations
Automated Teller Machine
Air Transportation Office
Automatic Weather Stations
AFF
AFFLA
AFMA
AFP
AHA
ALS
AMTP
APIS
AMCFP
AMLA
AO
APEC
APJR
APP
ARB
ARC
ARTA
ASA
ASEAN
ATM
ATO
AWS
324
BCF
BCM
BDR
BESRA
BFAR
BHS
BHFS
BI
BIR
BIS
BMT
BOC
BOD
BOI
BOP
BOT
BPLS
BPO
BSP
BSWM
BTr
BTU/lb
CA
CAA
CAA
CAAP
CAB
CADT
CALABARZON
CALT
CAMIS
Basic and Comprehensive Emergency

Obstetric and Neonatal Care
Barangay Agrarian Reform Committee
Bureau of Agricultural Statistics
New Risk-based Capital Adequacy
Framework
Billion Cubic Feet
Billion Cubic Meter
Benefit Delivery Ratio
Basic Education Sector Reform Agenda
Bureau of Fisheries and Aquatic
Resources
Barangay Health Stations
Bureau of Health Facilities and Services
Bureau of Immigration
Bureau of Internal Revenue
Bank for International Settlements
Billion Metric Ton
Bureau of Customs
Biological Oxygen Demand
Board of Investments
Balance of Payment
Build-Operate-Transfer
Business Permits and Licensing System
Business Process Outsourcing
Bangko Sentral ng Pilipinas
Bureau of Soils and Water Management
Bureau of the Treasury
British Thermal Unit / Pound
Court of Appeals
Clean Air Act
Conflict-affected Area
Civil Aviation Authority of the
Philippines
Civil Aeronautics Board
Certificate of Ancestral Domain Titles
Region IV-A (Batangas, Cavite, Laguna,
Quezon and Rizal)
Certificate of Ancestral Land Title
Court Administration Management
Information System
CAR
CARP
CARPER
CATV
CBA
CBFMA
CBFMP
CBMS
CBOs
CCA
CCA
CCC
CCIC
CCT
CDA
CDD
CDI
CDIS
CEA
CeC
CES
CFL
CFO
CFP
CFSA
CHED
CISFA
CHRP
CIA
CIAC
CICT
CIDF
CIMS
CIPB
CIS
CISFA
CISL
CISs
CITP
Capital Adequacy Ratio

Program
Program Extension with Reforms
Cable Television
Cost - Benefit Analysis
Community-Based Forest Management
Agreement
Community-Based Forest Management
Program
Community-Based Monitoring System
Community-based Organizations
Center for Culture and the Arts
Climate Change Adaptation
Climate Change Commission
Central Credit Information Corporation
Conditional Cash Transfer
Cooperative Development Authority
Community Driven Development
Child Development Index
Citizens Database Information System
Country Environmental Analysis
Community e-Center
Career Executive System
Compact Fluorescent Lamp
Commission on Filipinos Overseas
Community Forestry Program
Community Forest Stewardship
Agreement
Commission on Higher Education
Finance Act
Commission on Human Rights of the
Philippines
CARP Implementing Agencies
Children in Armed Conflict
Commission on Information and
Communications Technology
Communal Irrigation Development Fund
Collateral Information and Management
System
Compliance and Integrity Programs for
Business
Communal Irrigation System
Finance Act
Collective Investment Schemes Law
Communal Irrigation Systems
Convention on Indigenous and Tribal
Peoples or ILO Convention No. 169
Ckt
CL
CLM
CLOA
CLUP
CME
CMIS
CMP
CMTS
CNFIDP
CNG
CNS-ATM
CO2
COA
COMELEC
CPI
CPI
CPP
CPR
CQI
CRC
CSC
CSF
CSO
CTI-R/N POA
DA
DAR
DBCC
DBM
DBP
DCAF
DENR
DepEd
DFA
DHUD
DICT
DILG
DMIA
DO
DOE
DOF
Circuit Kilometer
Contingent Liabilities
Contingent Liability Management
Certificate of Land Ownership Award
Comprehensive Land Use Plan
Coco-Methyl Ester
Case Management Information System
Community Mortgage Plan
Cellular Mobile Telephone Service
Comprehensive National Fishery
Industry Development Plan
Compressed Natural Gas
Communications Navigation
Surveillance-Air Traffic Management
Carbon Dioxide
Commission on Audit
Commission on Elections
Consumer Price Index
Corruption Perception Index
Communist Party of the Philippines
Contraceptive Prevalence Rate
Continuous Quality Improvement
Convention of the Rights of the Child
Certificate of Stewardship Contract
Credit Surety Fund
Civic Society Organization
Coral Triangle Initiative Regional/
National Plan of Action
Department of Agriculture
Department of Agrarian Reform
Development Budget Coordination
Committee
Department of Budget and Management
Democratic Control of Armed Forces
Department of Environment and Natural
Resources
Department of Education
Department of Foreign Affairs
Department of Housing and Urban
Development
Department of Information and
Communications Technology
Department of the Interior and Local
Government
Diosdado Macapagal International
Airport
Dissolved Oxygen
Department of Energy
Department of Finance
List of Acronyms
325
DOH
DOJ
DOLE
DOPPI
DOST
DOT
DOTC
DPWH
DRR
DRRM
DSWD
DTI
DTT
DTU
DU
EC
ECC
ECCD
ECE
ECEP
eCFM
EE & C
EEID
EEZ
EFA
EIA
EITI
EIU
e-JOW
EMB
ENR
EO
EPEP
EPIRA
ERA
ERC
ERDB
ERDT
ERP
ESCO
326
Department of Health
Department of Justice
Department of Labor and Employment
Deep Ocean Power Philippines, Inc.
Department of Science and Technology
Department of Transportation and
Communications
Department of Public Works and
Highways
Disaster Risk Reduction
Disaster Risk Reduction and
Management
Department of Social Welfare and
Development
Digital Terrestrial Television
Direct-to-User Satellite Provider
Distribution Utility
Electric Cooperative
Environmental Compliance Certificate
Early Childhood Care and Development
Early Childhood Education
Emergency Community Employment
Program
Enhanced Case Flow Management
Energy Efficiency and Conservation
Environmental Education and
Information Division
Exclusive Economic Zone
Education For All
Environmental Impact Assessment
Extractive Industry Transparency
Initiative
Economist Intelligence Unit
Enhanced Justice on Wheels
Environmental Management Bureau
Executive Order
Environmental Protection and
Enhancement Program
Electric Power Industry Reform Act
Energy Reform Agenda
Energy Regulatory Commission
Ecosystems Research and Development
Bureau
Engineering Research and Development
for Technology
Economic Resiliency Plan
Energy Service Company
ESWMA
ETEEAP
EU
E-waste
EV
FAA
FDCP
FDI
ETEEAP
F1
FDA
FL
FLEMMS
FE
FIA
FICAP
FIES
FiT
FLA
FLAg
FLAgT
FLGMA
FLMA
FMB
FMR
FMR/DP
FOB
FOI
FPIC
FRB
FRIA
FSAP
FSF
FSSR
FTA
FY
GAA
GAD
GCM
GCR
Ecological Solid Waste Management Act

of 2000
Expanded Tertiary Education,
Equivalency and Accreditation Program
European Union
Electronic waste
Electric Vehicle
Federal Aviation Authority
Film Development Council of the
Philippines
Foreign Direct Investment
Expanded Tertiary Education,
Equivalency and Accreditation Program
FOURmula One
Food and Drug Administration
Functionally Literate
Functional Literacy, Education and Mass
Media Survey
Forward Estimates
Freedom of Information Act
Federation of International Cable TV
Association of the Philippines
Family Income and Expenditures Survey
Feed-in Tariff
Fishpond Lease Agreement
(Special) Forest Land Use Agreement
Forest Land Use Agreement for Tourism
Purposes
Forestland Grazing Management
Agreement
Forest Land Management Agreement
Forest Management Bureau
Farm-to-Market Road
Final Mine Rehabilitation and/or
Decommissioning Program
Freight on Board
Freedom of Information
Free, Prior and Informed Consent
Fiscal Responsibility Bill
Financial Rehabilitation and Insolvency
Act
Financial Sector Assessment Program
Financial Sector Forum
Food Staples Self-Sufficiency Roadmap
Free Trade Agreement
Fiscal Year
General Appropriations Act
Gender and Development
Global Climate Model
Global Competitiveness Report
GDI
GDP
GEF
GEM
GFI
GHG
GIFMIS
GIR
GIS
GMO
GNP
GOCC
GPI
GPS
GQMP
GQMSS
GRP
GS
GSIS
GSM
GVA
GWh
HCW
HDI
HEI
HFA
HGC
HIV-AIDS
HLURB
HRD
HRH
HSRA
HUCs
HUDCC
HWG
IAM
IAS
IAs
IAS
IATCTP
IC
Gender Development Index

Gross Domestic Product
Global Environment Facility
Gender Empowerment Measure
Government Financial Institution
Greenhouse Gas
Government Integrated Financial
Management Information System
Gross International Reserve
Geographic Information System
Genetically-Modified Organism
Gross National Product
Government Owned and Controlled
Corporations
Gender Parity Index
Global Positioning System
Government Quality Management
Program
Systems Standards
Government of the Republic of the
Philippines
Government Securities
Government Service Insurance System
Global System for Mobile
Communications
Gross Value Added
Gigawatt-Hour
Health Care Waste
Human Development Index
Higher Education Institution
Hyogo Framework for Action
Home Guaranty Corporation
Human immunodeficiency virus
acquired immune deficiency syndrome
Housing and Land Use Regulatory Board
Human Resource Development
Human Resources for Health
Health Sector Reform Agenda
Highly Urbanized Cities
Coordinating Council
Hazardous Waste Generator
Internal Audit Manual
International Accounting Standards
Irrigators Associations
Invasive Alien Species
Inter-Agency Technical Committee on
Transport Planning
Insurance Commission
ICAO
ICC
ICC
ICC-DBCC
ICERD
ICM
ICS
ICT
ICRMP
IDP
IEC
IES
IFC
IFMA
IFRS
IGF
IKSP
ILO
IMD
IMF
IMR
IMT
INFRACOM
IP
IPCC
IPMAP
IPP
IPPA
IPR
IPRA
IRA
IRR
ISDB-T
ISFs
ISM
International Civil Aviation

Organization
Investment Coordination Committee
Indigenous Cultural Communities
Investment Coordination CommitteeDevelopment Budget Coordination
Committee
International Convention on the
Elimination of All Forms of Racial
Discrimination
Integrated Coastal Management
Internal Control System
Information and Communications
Technology
Integrated Coastal Resources
Management Project
Integrated Development Plan
Information, Education and
Communication
Impact Evaluation Study
International Finance Corporation
Integrated Forest Management
Agreement
International Financial Reporting
Standards
International Gateway Facility
Indigenous Knowledge Systems and
Practices
International Labour Organization
International Institute for Management
Development
International Monetary Fund
Infant Mortality Rate
Irrigation Management Transfer
NEDA Board Committee on
Infrastructure
Indigenous People
Inter-governmental Panel for Climate
Change
Indigenous Peoples Masterplan
Independent Power Producer
Administrator
Intellectual Property Rights
Indigenous Peoples Rights Act
Internal Revenue Allotment
Implementing Rules and Regulations
Integrated Services Digital BroadcastTerrestrial
Irrigation Service Fees
International Safety Management
List of Acronyms
327
ISO
ISPS
ISSP
IWRM
JCMS
JICA
JMC
JMP
JRC
JV
KALAHI-CIDSS
KPO
kV
LAA
LAD
LARA
LBP
LCCAP
LDC
LEP
LET
LHB
LFS
LGC
LGU
LMB
LMP
LNB
LPG
LRA
LRTA
LTI
LUB
LWUA
M1
M2
MARINA
Mbps
MC
MCC
MCP
MDFO
328
International Organization for

Standardization
International Ship and Port Facility
Information Systems Strategic Plan
Integrated Water Resources
Management
Judiciary Case Management System
Japan International Cooperation
Agency
Joint Memorandum Circular
Joint Monitoring Program
Joint Research Centre
Joint Venture
Kapit-bisig Laban sa KahirapanComprehensive and Integrated Delivery
of Social Services
knowledge process outsourcing
Kilovolt
Land Administration Authority
Land Administration Reform Act
Land Bank of the Philippines
Local Climate Change Action Plan
Least Developed Countries
Ladderized Education Program
Licensure Examination for Teachers
Local Housing Boards
Labor Force Survey
Local Government Code
Local Government Unit
Land Management Bureau
League of Municipalities of the
Philippines
Liga ng mga Barangay
Liquefied Petroleum Gas
Land Registration Authority
Light Rail Transit Authority
Land Tenure Improvement
Luzon Urban Beltway
Local Water Utilities Administration
Currency in circulation, peso demand
deposits
M1 and peso savings, time deposits
Maritime Industry Authority
Memorandum Circular
Millennium Challenge Corporation
Mandated Credit Program
Municipal Development Fund Office
MDG
MDGF
MEDP
MERALCO
MfDR
MFI
MGB
MIGA
MILF
MIMAROPA
MB
MBFOE
MMDA
MME
MMLOE
MMMT
MMR
MMS
MMSCF
MNCHN
MNLF
MOA
MOOE
MPA
MPDI
MRF
MRF
MRR
MRS
MSACC
MSME
MT
MTDPFS
MTEF
MTOE
MTPDP
MVA
MVUC
MW
MWSS
Millennium Development Goals

Millennium Development Goal Fund
Missionary Electrification Development
Plan
Manila Electric Company
Managing for Development Results
Microfinance Institution
Mines and Geosciences Bureau
Multilateral Investment Guarantee
Agency
Moro Islamic Liberation Front
Mindoro, Marinduque, Romblon and
Palawan
Million Barrels
Million Barrels of Fuel Oil Equivalent
Metro Manila Development Authority
Monitoring, Management, and
Evaluation
Million Liters of Oil Equivalent
Million Metric Tons
Maternal Mortality Ratio
Multimedia Messaging Service
Million Standard Cubic Feet
Maternal, Neonatal and Child Health,
and Nutrition
Moro National Liberation Front
Memorandum of Agreement
Maintenance and Other Operating
Expenses
Marine Protected Area
Mandatory Pre-departure Inspections
Materials Recovery Facility
Microinsurance Regulatory Framework
Mandatory Rate Reduction
Materials Recovery System
Multi-Sectoral Anti-Corruption
Council
Micro, Small and Medium Enterprises
Metric Tons
Medium-Term Development Plan for
the Financial Sector
Medium-Term Expenditure Framework
Million Tons of Oil Equivalent
Medium Term Philippine Development
Plan
Megavolt-Ampere
Motor Vehicle User's Charge
Megawatt
Metropolitan Waterworks and Sewerage
System
MWSS-RO
NACPA
NAFC-CFA
NAIA
NALUA
NAMRIA
NAPC
NATCCO
NAT MPS
NBB
NCBTS
NCCA
NCCAP
NCI
NCIP
NCR
NDCC
NDF
NDHS
NDRRMC
NDRRMF
NDSA
NEA
NEC
NEDA
NEECP
NEEDS
NEFCA
NER
NFA
NG
NGA
NGCP
NGICS

SystemRegulatory Office
National Anti-Corruption Plan of
Action
National Agriculture and Fishery
Council-Committee on Fisheries and
Aquaculture
Ninoy Aquino International Airport
National Land Use Act
National Mapping and Resource
Information Authority
National Anti-Poverty Commission
National Confederation of Cooperatives
National Achievement Test Mean
Percentage Score
National Biofuels Board
National Competency-Based Teacher
Standards
National Commission for Culture and
the Arts
National Climate Change Action Plan
National Convergence Initiative
National Commission on Indigenous
Peoples
National Capital Region
National Disaster Coordinating Council
National Democratic Front
National Demographic and Health
Survey
National Disaster Risk Reduction and
Management Council
National Disaster Risk Reduction and
Management Framework
National Defense and Security Act
National Electrification Administration
National Ecology Center
National Economic and Development
Authority
National Energy Efficiency and
Conservation Programs
National Environmental Economic and
Development Study
National Endowment Fund for Culture
and the Arts
Net Enrolment Rate
National Food Authority
National Government
National Government Agency
National Grid Corporation of the
Philippines
National Guidelines on Internal Control
System
NGO
NGVPPT
NHA
NHIP
NHTS-PR
NIA
NIMF
NIPAS
NIS
NJIS
NLEX
NPA
NPA
NPC
NPL
NPP
NREB
NREP
NSCB
NSDI
NSM
NSO
NSWMC
NTC
NTP
NUDHF
NWAPP
NWAR
NWRA
NWRB
NWRP
NWAPP
O&M
ODA
OECD
OEOs
OFW
OMB
OPIF
OSH
Non-Governmental Organization
Natural Gas Vehicle Program for Public
Transport
National Housing Authority
National Health Insurance Program
National Household Targeting System
for Poverty Reduction
National Irrigation Management Fund
National Integrated Protected Areas
System
National Irrigation Systems
National Justice Information System
North Luzon Expressway
New Peoples Army
Non-performing Assets
Non-performing Loans
New Power Provider
National Renewable Energy Board
National Renewable Energy Program
National Statistical Coordination Board
National Spatial Data Infrastructure
National Safety Management
National Statistics Office
National Solid Waste Management
Commission
National Telecommunications
Commission
National Transport Policy
National Urban Development and
Housing Framework
National Wetlands Action Plan for the
Philippines
National Warrant of Arrest Registry
Net Worth-to-Risk Assets
National Water Resources Board
National Water Resources Policy
Philippines
Operations and Maintenance
Official Development Assistance
Organisation for Economic
Cooperation and Development
Other Executive Offices
Overseas Filipino Worker
Office of the Ombudsman
Organizational Performance Indicator
Framework
Occupational Safety and Health
List of Acronyms
329
OTEC
OWWA
PACBRMA
PAGASA
PAGCOR
PAL
PAMANA
PAMB
PAO
PAR
PAS
PAYGO
PBD
PBS
PC
PCFC
PCG
PCL
PCSHC
PCSO
PCTA
PCW
PDEx
PDIC
PDR
PDU
PECR
PEEP
PEGR
PELMATP
PER
PERA
PES
PESFA
PESO
PESS
PEZA
330
Ocean Thermal Energy Conversion

Overseas Workers Welfare
Administration
Protected Area Community Based
Resource Management Agreement
Philippine Atmospheric, Geophysical
and Astronomical Services
Administration
Philippine Amusement and Gaming
Corporation
Private Agricultural Land
Program
Protected Area Management Board
Public Attorneys Office
Philippine Area of Responsibility
Philippine Accounting Standards
Pay-As-You-Go
Program Beneficiaries Development
Paper on Budget Strategy
Personal Computer
Peoples Credit and Finance
Corporation
Philippine Coast Guard
Priority Chemical List
Philippine Center for Specialized
Health Care
Philippine Charity Sweepstakes Office
Philippine Cable Television Association,
Inc.
Philippine Commission on Women
Philippine Dealing Exchange
Philippine Depository Insurance
Corporation
Philippine Defense Reform
Private Distribution Utility
Philippine Energy Contracting Round
Philippine Energy Efficiency Program
Partnership for Economic Governance
Reforms
Philippine Energy Efficiency Lighting
Market Transformation Project
Public Expenditure Review
Personal Equity and Retirement Act
Payment for Environmental Services
Private Education Student Financial
Assistance Program
Public Employment Service Office
Philippine Education Sector Study
Philippine Economic Zone Authority
PFM
PFRS
PGIAM
PGS
PHF
PhilGEPS
Philhealth
PHILPOST
PHIVOLCS
PIA
PICCS
PIDS
PIOU
PISs
PMS
PMS-OPES
PMTP
PNHA
PNHRS
PNOC
PNOC-AFC
PNQF
PNP
PNP-MG
PNRPS
PO
POs
PPP
PPP
PQA
PROC
PS
PSA
PSALM
PSEi
PSF
PSSR
Public Financial Management

Philippine Financial Reporting
Standards
Philippine Government Internal Audit
Manual
President Gloria Scholarship Program
Post-Harvest Facilities
Philippine Government Electronic
Procurement System
Philippine Health Insurance Corporation
Philippine Postal Corporation
Philippine Institute of Volcanology and
Seismology
Philippine Information Agency
Philippine Inventory of Chemicals and
Chemical Substances
Philippine Institute for Development
Studies
Private Investor-owned Utility
Private Irrigation Systems
Performance Management System
Performance Management SystemOffice Performance Evaluation System
Philippine Medical Tourism Program
Philippine National Health Accounts
Philippine National Health Research
System
Philippine National Oil Corporation
Philippine National Oil Company Alternative Fuels Corporation
Philippine National Qualification
Framework
Philippine National Police
Philippine National Police- Maritime
Group
Philippine National REDD+ Strategy
Peoples Organization
Private Operators (Water Service
Provider)
Public-Private Partnership
Purchasing power parity
Philippine Quality Award
Peoples Republic of China
Personal Services
Payment System Act
Power Sector Assets and Liabilities
Management Corporation
Philippine Stock Exchange Index
Peoples Survival Fund
Philippine Sustainable Sanitation
Roadmap
Patubigayan Trust Fund

Persons with Disability
Philippine Water Supply Sector
Roadmap
Quality Management System
QMS
Qualified Third Party
QTP
Research and Development
R&D
Republic Act
RA
Run After Tax Evaders
RATE
RATS
Run After the Smugglers
Risk-based Capital Adequacy
RBCA
Framework
Revealed Comparative Advantage
RCA
Research, Development and Extension
RD&E
Regional Development Councils
RDC
Renewable Energy
RE
Regional Ecology Center
REC
Reducing Emissions from Deforestation
REDD
and Forest Degradation
Reducing Emissions from Deforestation
REDD+
and Forest Degradation (with enhanced
carbon stock)
Real Effective Exchange Rate
REER
Real Estate Investment Trust
REIT
Rural Health Units
RHU
Revenue Integrity Protection Service
RIPS
Regional Check Centers
RLX
Registry of Deeds
ROD
Roll-On/Roll-Off
RORO
Right-of-Way
ROW
Rationalization Plan
RP
Responsible Parenting and Family
RP-FP
Planning
RPMP/ RPA-ABB Rebolusyonaryong Partido ng
Manggagawa-Pilipinas /Revolutionary
Proletariat Army-Alex Boncayao
Brigade
PTF
PWD
PWSSR
RPS
RRTS
RSEC-WR
S&T
S/S
SAFDZ
SBC
SBIA
SC
SC
SCMB
Renewable Portfolio Standard

Road-RORO Terminal System
Rules for Setting EC Wheeling Rates
Science and Technology
Substation
Strategic Agriculture and Fisheries
Development Zone
Small Business Corporation
Subic Bay International Airport
Service Contract
Supreme Court
Subic-Clark-Manila-Batangas
SCTEx
SCWR
SD
SDAH
SDMP
SEA-K
SEC
SIFMA
SIJ
SLB
SLM
SLP
SME
SNAP
SNC
SOLAS
SPED
SPLULA
SPPD
SPUG
SRNH
SSIPs
SSL
SSME
SSS
STAR
STuFAPs
SUF
SWM
SWS
TB
T/L
TDP
TelOf
TESDA
TESDP
TEU
TEZ
TFEC
TFLA
TFP
Subic-Clark-Tarlac Expressway
Sub-Committee on Water Resources
Sustainable Development
Sector-wide Development Approach for
Health
Social Development and Management
Program
Self-Employment Assistance - Kaunlaran
Securities and Exchange Commission
Socialized Industrial Forest Management
Agreement
Strengthening the Integrity of the
Judiciary
Securities Borrowing and Lending
Special Land Use Permit
Small and Medium Enterprises
Strategic National Action Plan
Second National Communication
Safety of Life at Sea
Special Education
Special Land Use Lease Agreement
Support for Policy and Programme
Development
Small Power Utilities Group
Strong Republic Nautical Highway
Small-scale Independent Providers
Salary Standardization Law
Sulu-Sulawesi Marine Eco-region
Social Security System
Southern Tagalog Arterial Road
Student Financial Assistance Programs
Spectrum User Fee
Solid Waste Management
Social Weather Stations
Tuberculosis
Transmission Line
Transmission Development Plan
Telecommunications Office
Technical Education and Skills
Development Authority
Technical Education and Skills
Development Program
Twenty-foot Equivalent Unit
Tourism enterprise zones
Total Final Energy Consumption
Tree Farm Lease Agreement
Total Factor Productivity
List of Acronyms
331
TIEZA
TLA
TNE
TPES
TPLEx
TransCo
TRM
TSD
TSNs
TSP
TV
TVET
UASF
UCME
UDHA
UHC
ULAP
UNCAC
UNDP
UNESCAP
UNFCCC
UNICEF
VAS
VAT
VAW
VE/VA
VTMS
WB
WDR
WDs
WEDC
WEF
WEO
WESM
WGI
WHO
WHS
WiFi
WSP
WTO
WWF
332
Tourism Infrastructure and Enterprise

Zone Authority
Timber Licence Agreement
Transnational Education
Total Primary Energy Supply
Tarlac-Pangasinan-La Union Expressway
National Transmission Corporation
Trade Related Matters
Transport, Storage, Disposal
Transcript of Stenographic Notes
Total Suspended Particles
Television
Technical And Vocational Education And
Training
Universal Access and Service Fund
Universal Charge for Missionary
Electrification
Urban Development and Housing Act
Universal Health Care
Union of Local Authorities of the
Philippines
United Nations Convention Against
Corruption
United Nations Development
Programme
United Nations Economic and Social
Commission for Asia and the Pacific
United Nations Framework Convention
on Climate Change
The United Nations Children's Fund
Value-Added Service
Value Added Tax
Violence Against Women
Value Engineering/Value Analysis
Vessel Traffic Management System
World Bank
World Development Report
Water Districts
Women in Extremely Difficult
Circumstances
World Economic Forum
World Economic Outlook
Wholesale Electricity Spot Market
Worldwide Governance Indicators
World Health Organization
Wooden Hull Ships
Wireless Fidelity
Water Service Provider
World Trade Organization
World Wildlife Fund
YTD
ZBB
Year-to-Date
Zero-Based Budgeting
Glossary
The percentage of the number of graduates who get a job after completion of education and/or
training to the number of graduates who were not employed prior to completion of education
and/or training.
Access to Finance
Sustained availability of reasonably priced, socially responsible and environment friendly
financial products, services and support programs that are designed for MSMEs, and that
MSMEs can conveniently and readily access.
Accordingly, a fully inclusive financial system is characterized by (a) the provision of a wide
range of financial services (credit, savings, payments, insurance, innovative products) to serve
the demands of different market segments, (b) the development of financial products that
are appropriately designed and priced, tailor-fitted to market needs and capacities, (c) the
participation of a wide variety of strong, sound and duly authorized financial institutions
utilizing innovative delivery channels to provide financial services to more Filipinos, and (d) the
effective interface of bank and non-bank products/delivery channels, technology and innovation
to reach the financially excluded.
Action Program for Judicial Reform A comprehensive set of programs and projects aimed at enhancing conditions and performance
(APJR)
for an improved delivery of judicial services. The APJR embodies the vision and mission of
then Chief Justice Hilario G. Davide, Jr. for a judiciary that is independent, effective, efficient
and worthy of public trust and confidence.
Adaptation
adjustment in natural or human systems in response to actual or expected climatic stimuli or
their effects, which moderates harm or exploits beneficial opportunities.
AFP Coast Watch South System
A program designed to secure the countrys coasts especially in Mindanao regions.
AFP Modernization/Development A comprehensive modernization of the AFP primarily for defense capability with support
Program or RA 7898
mechanisms for national development
Agrarian Reform Community
A community composed and managed by agrarian reform beneficiaries (ARBs) who are
willing to be organized and to undertake the integrated development of an area and/or their
organizations or cooperatives (RA 9700).
Agrarian Reform
The redistribution of lands, regardless of crops or fruits produced, to farmers and regular
farm workers who are landless, irrespective of tenurial arrangement, to include the totality of
factors and support services designed to lift the economic status of the beneficiaries and all
other arrangements alternative to the physical redistribution of lands, such as production or
profit-sharing, labor administration, and the distribution of shares of stock, which will allow
beneficiaries to receive a just share of the fruits of the lands they work (RA 6657).
Agribusiness
The sum of all operations involved in the manufacture and distribution of farm supplies;
production activities on the farm; and the storage, processing and distribution of farm
commodities and items made from them (DAR AO No. 5, Series 2009).
Agricultural Lands
Lands devoted to or suitable for the cultivation of the soil, planting of crops, growing of trees,
raising of livestock, poultry, fish or aquaculture production, including the harvesting of such
farm products, and other farm activities and practices performed in conjunction with such
farming operations by persons whether natural or juridical and not classified by the law as
mineral land, forest land, residential land, commercial land, or industrial land (RA 8435).
Agriculture and Fisheries
An act modernizing the agriculture and fishing industries of the Philippines. It mandated the
Modernization Act (AFMA) of 1997 prescription of urgent related measures to modernize the agriculture and fisheries sectors to
or RA 8435
enhance their profitability, and prepare said sectors for the challenges of globalization through
an adequate, focused and rational delivery of necessary support services.
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.
Absorption rate
Glossary
333
Alienable or Disposable Land

Allocation to Local Government
Units
Alternative Dispute Resolution
(ADR)
Alternative fuels
Alternative Learning System

Ancestral Domains
Ancestral Lands
Armed Forces of the Philippines
Autoclave/Autoclaving
Backbone Network
Bank Density Ratio
Barangay
Basel II & III
Basic education
334
Land of the public domain, which has been classified and declared as such and available for
disposition.
The share of LGUs from the internal revenue collections of the national government based on a
sharing scheme computed for each LGU provided for under the Local Government Code and
other special laws.
A procedure used to resolve a dispute or controversy, other than by adjudication 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).
Non-conventional 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.
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.
All areas generally belonging to ICCs/IPs comprising lands, inland waters, coastal areas, and
natural resources therein, held under a claim of ownership, occupied or possessed by ICCs/
IPs, themselves or through their ancestors, communally or individually, continuously to the
present except when interrupted by war, force majeure or displacement by force, deceit, stealth
or as a consequence of government projects or any other voluntary dealings entered into by
government and private individuals, corporations, and which are necessary to ensure their
economic, social and cultural welfare.
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-ininterest, 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.
Established by virtue of Commonwealth Act No.1 otherwise known as the National Defense
Act of December 21, 1935, as the official military organization of the state. It is composed
of three branches of service: Philippine Navy (PN), Philippine Air Force (PAF) and the
Philippine Army (PA).
A more efficient wet thermal disinfection. This method is typically used in hospitals for the
sterilization of reusable medical equipment. Allows for the treatment of only limited quantities
of waste and is therefore commonly used only for highly infectious waste, such as microbial
cultures or sharps.
A major transmission path/facility that can carry high volume of traffic, and is designed to
interconnect, often lower-speed distribution networks, channels, or clusters of dispersed
terminals or devices.
The ratio of the total number of domestic banking offices to the total number of cities/
municipalities in the Philippines.
The smallest administrative division in the Philippines and is the native Filipino term for a
village, district or ward. Municipalities and cities are composed of barangays.
It refers to the global minimum capital standards set by the Basel Committee on Banking
Supervision. The Basel II (International Convergence of Capital Measurement and Capital
Standards: A Revised Framework) framework is composed of three pillars: minimum capital
requirements, supervisory review process and market discipline. It was released in June 2006
to provide global standards on risk-sensitive capital requirements for banks. As a revision
to the 1988 Basel Accord, Basel II is designed to establish minimum levels of capital for
internationally active banks. Basel III embodies the changes to existing capital rules under Basel
II in response to the global financial crisis of 2008.
The education intended to meet basic learning needs which lays the foundation for subsequent
learning. It encompasses early childhood, elementary and high school education as well as
alternative learning system for out-of-school youth and adult learners and includes education
for those with special needs (RA 9155).
A package of policy reforms pursued by the Department of Education (DepEd) to improve the
quality of education in the Philippines and attain the Education For All (EFA) goals in 2015.
The ability to read and write with understanding a simple message in any language or dialect.
The cumulative likelihood that any Filipino is (a) eligible to claim; (b) aware of entitlements
and is able to access and avail of health services from accredited providers; and (c) is fully
reimbursed by PHIC as far as total health care expenditures are concerned.
Bio-chemical Oxygen Demand
The measurement of the approximate quantity of dissolved oxygen that will be required by
(BOD)
bacteria to stabilize organic water in wastewater or surface water.
Biodiesel
Ethanol produced from feedstock and other biomass.
Biodiversity
Variability among organisms from all sources, including terrestrial, marine and other aquatic
ecosystems and the ecological complexes of which they are a part; this includes diversity within
species, between species and of ecosystems. (Source: RA 9125)
Bioethanol
Fatty Acid Methyl Ester (FAME) or mono-alkyl esters derived from vegetable oils or animal
fats and other biomass-derived oils that shall be technically proven and approved by the
Department of Energy for use in diesel engines, with quality specifications in accordance with
the Philippine National Standards.
Biofuel
Bioethanol and biodiesel and other fuels made from biomass and primarily used for motive,
thermal and power generation, with quality specifications in accordance with the Philippine
National Standards.
Biomass energy systems
Energy systems which use biomass resources to produce heat, steam, mechanical power or
electricity through either thermochemical, biochemical or physico-chemical processes, or
through such other technologies which shall comply with prescribed environmental standards
pursuant to Republic Act No. 9136.
Biomass resources
Non-fossilized, biodegradable organic material originating from naturally occurring or
cultured plants, animals and micro-organisms, including agricultural products, by-products
and residues such as, but not limited to, biofuels except corn, soya beans and rice but including
sugarcane and coconut, rice hulls, rice straws, coconut husks and shells, corn cobs, corn stovers,
bagasse, biodegradable organic fractions of industrial and municipal wastes that can be used
in bioconversion process and other processes, as well as gases and liquids recovered from the
decomposition and/or extraction of nonfossilized and biodegradable organic materials.
Broadband
A high data rate connection to the Internet and a transmission capacity with sufficient
bandwidth to permit combined provision of voice, data and video. Each country may have
varying definitions of "basic broadband" for data transmission speeds, ranging up from 256
kbps up to 4.0 Mbps.
Broadcast-Terrestrial (ISDB-T)
The digital terrestrial television broadcasting standard originally developed by Japan, and is also
one of international digital broadcasting standards recommended by ITU. DTT broadcasting
services using ISDB-T started in Japan in December 2003. Currently, the ISDB-T standard is
mostly adopted/deployed in South American countries (e.g., Brazil, Peru, Argentina, etc.) and
is also the standard adopted in the Philippines.
Business Development Services
The wide array of non-financial services critical to the entry, survival, productivity,
(BDS)
competitiveness and growth of enterprises. BDS are provided to assist individuals and
entrepreneurs to enhance their business skills and market access to improve their income
generation and asset-building capacity. These services include training, consultancy and
advisory services, marketing assistance, market information, technology development and
transfer, and business linkage promotion.
Business Process Outsourcing (BPO) A form of outsourcing that involves the contracting of the operations and responsibilities of a
specific business function (or process) to a third-party service provider. It is typically categorized
into back office outsourcing which includes internal business functions such as human resources
or finance and accounting, and front office outsourcing which includes customer-related
services such as contact center services.
Cable Television (CATV)
A transmission system which distributes broadcast television signals and other services by
means of coaxial cable. CATV is also one of the popular pay-TV platforms in the Philippines.
Cabotage principle
A state wherein a country grants rights to another country to trade and navigate within its own
coastal territories, and to operate and regulate the traffic inside its territorial waters.
Capital Accounts
Refers to the sum of paid-in capital, assigned capital and allowable qualified components, other
equity instruments, retained earnings and undivided profits, other comprehensive income and
appraisal increment reserves.
Basic Education Sector Reform
Agenda (BESRA)
Basic or Simple Literacy
Benefit Delivery Ratio (BDR)
Glossary
335
Private and official inward flows of money to the country in the form of investments, grants
and loans
Capital Market
An alternative market from bank-originated loan market wherein individuals and institutions
raise funds mostly via trading or other over-the-counter (OTC) financial instruments. It is
also considered as a long-term (maturities of longer than one year) funding source. The most
common sub-components of capital market are stock and bond markets.
Capital Outlay
Appropriations for the purchase of goods and services, the benefits of which extend beyond the
fiscal year and which add to the assets of the Government, including investments in the capital
stock of GOCCs and their subsidiaries.
Carbon Dioxide (CO2)
A chemical compound composed of two oxygen atoms covalently bonded to a single carbon
atom. It is a colorless, odorless, non-poisonous gas that is a normal part of earth's atmosphere.
It is considered as a greenhouse gas because it traps heat radiated by the earth into the
atmosphere and thereby contributes to global warming.
Case Management Information
An automated modernization program to improve overall efficiency of the Judiciary in
System (CMIS)
theadministrationof justice in the Supreme Court andthe Appellate courts(e.g. Court of
Appeals, Court of Tax Appeals and Sandiganbayan.)
Center of Excellence
A higher education institution, whether public or private, that demonstrates the highest degree
or level of standards in a given field of instruction, research and extension as identified by
CHED.
Certificate of Ancestral Domain Title A title formally recognizing the rights of possession and ownership of ICCs/IPs over their
ancestral domains identified and delineated in accordance with this law; Land titles given to
tribal communities in asserting their right on the protection and sustainable utilization of their
ancestral domain areas.
Certification rate
The percentage of examinees who passed the national competency assessment for or within a
given period.
Chattel
Movable items of property which are neither land nor permanently attached to land or
building. A chattel mortgage is a conditional sale of personal property as security for the
payment of debt or the performance of some other obligation, the condition being that the
sale shall be void upon the seller's payment to the purchaser of a specific sum of money or his
accomplishment of some named act. If the condition is performed according to its terms, the
mortgage and the sale immediately become void and the mortgagee is hereby divested of his
title.
Chemical Disinfection
A method to treat wastes by adding chemicals, mostly aldehydes, chlorine compounds,
ammonium salts, and phenolic compounds, to kill or inactivate the pathogens the waste
contains.
Chemical mixture
Any combination of two or more chemical substances if the combination does not occur in
nature and is not, in whole or in part, the result of a chemical reaction, if none of the chemical
substances comprising the combination is a new chemical substance and if the combination
could have been manufactured for commercial purposes without a chemical reaction at the
time the chemical substances comprising the combination were combined. This shall include
nonbiodegradable mixtures.
Citizens Database and Information An information system maintained by the National Bureau of Investigation (NBI) whose main
System (CDIS)
sources include the Clearance Processing and Issuance, e-Clearance and the Crime Information
and Monitoring System. It is an information system that will provide effective and efficient
frontline service to NBI clients, partners and counterparts. This system is useful for clearance,
authentication, investigation, and for effective decision-making.
Civil Society Organization
Civil Society Organizations (CSOs) refer to a wide array of organizations: community
groups, non governmental organizations (NGOs), labor unions, indigenous groups, charitable
organizations, faith-based organizations, professional associations, and foundations.
Classroom shortage
The condition wherein the classroom-pupil ratio is higher than 1:45.
Climate Change Act of 2009 or RA
An act mainstreaming climate change into government policy formulations, establishing the
9729
framework strategy and program for climate change. It adopts a principle of protecting the
climate system for the benefit of humankind, on the basis of climate justice or common but
differentiated responsibilities and the Precautionary Principle to guide decision-making in
climate risk management.
Capital Inflows
336
Refers to a change in climate that can be identified by changes in the mean and/or variability
of its properties and persists for an extended period typically decades or longer, whether due to
natural variability or as a result of human activity. (RA 9729)
Co-Generation Facility
A facility which produces electrical and/or mechanical energy and forms of useful thermal
energy such as heat or steam which are used for industrial commercial heating or cooling
purposes through the sequential use of energy.
Cohort survival rate
The percentage of enrolees at the beginning grade or year in a given school year who reached
the final grade or year of the elementary/secondary level.
Communal Irrigation System
An irrigation system managed by a bona fide Irrigators Association (RA 8435).
Communist Party of the Philippines Founded by Jose Maria Sison in December 26, 1968, the CPP is the major communist party in
the Philippines.
Community e-Center (CeC)
A Community e-Center is a self sustaining shared facility owned and operated by the
government as a one-stop shop for ICT needs of the citizens, providing affordable access
to ICT-enabled services and relevant content. It serves as a conduit for efficient delivery
of government and other services and a potent tool for empowerment and participation of
unserved and underserved communities in development.
Competency Assessment
The process of gathering and judging evidence to decide whether a person has achieved a
standard of competency or competence objective.
Competitive Advantage
Competitive edge in terms of product quality and/or price. It likewise refers to the ability to
produce a product with the greatest relative efficiency in the use of resources (RA 8435).
Comprehensive Land Use Plan
A document accompanied by maps and similar illustrations, which represent the communitydeserved pattern of population distribution and proposal for the future allocation of land for
the various land use activities, in accordance with the social and economic objectives of the
people. It identifies the location, character and extent of the area's land resources to be used for
different purposes and includes the process and the criteria employed in the determination of
the lands use (DAR AO No. 1, Series of 2002.)
Concession Contract
The award by the government to a qualified private entity of the responsibility for financing,
operating, expanding, maintaining and managing specific Government-owned assets.
Conflict-affected Area
Areas where the local and peripheral population is heavily impacted by the infighting of armed
groups.
Consolidated Public Sector Deficit or The combined deficit of the National Government, the Central Bank restructuring accounts,
Surplus
the major non financial government corporations, the government financial institutions, the
local government units, the social security institutions, and the Bangko Sentral.
Consumer Price Index
A measure of change in the average retail prices of goods and services commonly purchased by
a particular group of people in a particular area.
Continuous Quality Improvement
A strategic approach to providing the best health care possible. It is a preventive strategy
(CQI)
that uses consultant innovation to improve work processes and systems by reducing timeconsuming, low-value activities.
Contraceptive prevalence rate (CPR) The percentage of currently married women 15 to 49 years of age reporting current use of any
method of contraception.
Controlled dumpsites
A disposal site at which solid waste is deposited in accordance with the minimum prescribed
standards of dumpsite operation.
Convention on the Rights of the
The first instrument to incorporate the complete range of international human rights
Child
including civil, cultural, economic, political and social rights as well as aspects of humanitarian
law.
Convention on Indigenous and
Convention No.169 is a legally binding international instrument open to ratification, which
Tribal Peoples or ILO Convention
deals specifically with the rights of indigenous and tribal peoples. Today, it has been ratified by
No. 169
20 countries. Once it ratifies the Convention, a country has one year to align legislation, policies
and programmes to the Convention before it becomes legally binding. Countries that have
ratified the Convention are subject to supervision with regards to its implementation.
Convergence
This refers to two different trends: (a) convergence between the broadcasting and
telecommunications sectors. Advances in technology make it possible to use different media
(cable networks, terrestrial and satellite radio relay systems, computer terminals and television
sets) to carry and process all kinds of information and services, including sound, images and
data; and
Climate Change
Glossary
337
(b) fixed/mobile convergence. Increasingly similar technologies are used and services provided
by fixed telephone and mobile telephone systems. This type of convergence opens up prospects
for operators to propose the same services to all users, regardless of the technology or networks
they use.
Core Housing
Any formally built house that is incomplete at the time of initial occupation. It is normally
designed so that it can be completed by the inhabitant.
Corporate Malfeasance
Deceptive and fraudulent activities carried out by corporate officers, investment banks or
brokerage firms that may cost investors millions. This takes place when trusted financial
professionals abandon ethical principles to pursue excessive material gain.
Court Administration Management A software designed for logging, monitoring and monitoring caseload and caseflow statistical
Information System (CAMIS)
data. The software was developed with the assistance of the Canadian International
Development Agency (CIDA).
Coverage
The geographical reach, or the area on earth capable of effectively receiving transmission of a
certain network (e.g., coverage for cellular or satellite network).
Creditworthiness
A creditors measure of an individual's or companys ability to meet debt obligations.
Current Operating Expenses
Amount budgeted for the purchase of goods and services for the conduct of normal
government operations within a budget year. Includes goods and services that will be used or
consumed during the budget year.
Democratic Control of Armed Forces The norms and standards governing the relationship between the armed forces and society. The
armed forces are subordinated to democratically-elected authorities and subject to the oversight
of the judiciary as well as the media and civil society organisations.
Dependable capacity
The load-carrying ability of a power plant during a specific time interval and period. The
dependable capacity of a generating facility or transmission system is a fluctuating value that
depends upon the available energy, the demand for that energy, the capability of the system to
deliver that energy at a given moment, and the facilities available to handle increased capacity
should the need arise.
Digital Divide
The gap between individuals, households, businesses and geographic areas at different
socioeconomic levels with regard to both their opportunities to access information and
communication technologies (ICTs) and to their use of the Internet for a wide variety of
activities. The digital divide reflects various differences among and within countries.
Digital Terrestrial Television (DTT) The sending and receiving of moving images and sound by means of discrete (digital) signals
Broadcasting
providing a greater number of channels and different interactive services and/or better quality
of picture and sound in the same amount of frequency spectrum (bandwidth) as that used by
analogue transmissions through a conventional (aerial) antenna instead of a satellite dish or
cable connection.
Disaster Risk Reduction (DRR)
Concept and practice of reducing disaster risks through systematic efforts to analyze and
manage the causal factors of disasters, including through reduced exposure to hazards, lessened
vulnerability of people and property, wise management of land and the environment, and
improved preparedness for adverse events.
Disbursements
Settlement of government obligations and/or accounts payable by cash; movement of cash from
the BTr or from an authorized disbursing officer to the final recipient.
Disposal site
A site where solid waste is finally discharged and deposited.
Disposal
The discharge, deposit, dumping, spilling, leaking or placing of any solid waste into or in any
land.
Dissolved Oxygen (DO)
Amount of gaseous oxygen (O2) actually present in water expressed in terms either of its
presence in the volume of water (milligrams of O2 per liter) or of its share in saturated water
(percentage).
Distribution Utility
Any electric cooperative, private corporation, government-owned utility or existing local
government unit which has an exclusive franchise to operate a distribution system in
accordance with Republic Act No. 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.
338
Means having more value with less impact on the environment; it emphasizes monitoring of
material and energy flows of stocks and life cycle assessment.
Ecological Solid Waste Management An act providing for an ecological solid waste management program, creating the necessary
Act of 2000 or RA 9003
institutional mechanisms and incentives, declaring certain acts prohibited and providing
penalties. It reinforces the country's drive towards a healthier environment by providing a
comprehensive solution to the country's solid waste problem.
Ecological Solid Waste Management The systematic administration of activities which provide for segregation at source, segregated
transportation, storage, transfer, processing, treatment, and disposal of solid waste and all other
waste management activities which do not harm the environment.
e-Commerce
Commercial transactions occurring over open networks, such as the Internet. Both business-tobusiness and business-to-consumer transactions are included.
Economic zones
Selected areas with highly developed or which have the potential to be developed into agroindustrial, industrial tourist/recreational, commercial, banking, investment and financial centers.
Eco-tourism
A form of tourism that can sustainably use natural and cultural resources while providing
employment opportunities for local communities.
e-Governance
A wider concept that defines and assesses the impacts that technologies are having on the
practice and administration of governments, and the relationships between public servants
and the wider society, such as dealings with the elected bodies or outside groups such as nongovernment organizations, or private sector corporate entities. It is understood to extend the
scope by including citizen engagement and participation in governance, and can be defined as
the use of ICTs to achieve better governance.
e-Government
The development of online services for the public, providing services such as: e-tax; business
registration; birth, wedding, and death certificates; voting or public opinion polling; passport or
identification renewal; social benefits; licences and approvals, planning or business applications;
or e-health. Also included are networked ICT systems supporting various levels of government
in the administration and delivery of mandated services.
El Nio/La Nia
El Nio is a warming of the surface water of the Pacific Ocean that causes extreme dry weather
or drought while the La Nia causes heavy rains in the country that may also bring strong
winds and storms. La Nia brings mostly the opposite effect of El Nio.
Electric Cooperatives
Cooperatives supplying or empowered to supply electric service.
Electricity
The fundamental form of energy created by the movement of electrons or an electric current
supplied as a public utility for lighting, heating, etc.
Employment generation
Derived from the Labor Force Survey conducted by the NSO, and pertains to the number of
individuals that were granted with work.
Employment rate
The ratio of the total number of employed persons to the total number of persons in the labor
force.
End-user financing
Financing for stakeholders in a particular sector usually incorporated in a modality or program.
Enhanced Case Flow Management An offshoot project of the Case Flow Management (CFM) System that aims to establish
System (ECFMS)
a judiciary-wide ICT systems development for increasing efficiency in the management of
dockets of all first and second level courts. It involves the design, development, testing, pilot
testing, and process and system documentation of the eCFM system that is integrated with the
existing CAMIS of the OCA, e-Payment and other application systems that may be developed
later.
Enhanced Justice on Wheels
A program created by the High Court to reach out to poor Filipinos and expedite litigation of
(E-JOW)
cases they are involved in. The project aims to literally bring the courts to the people via an airconditioned bus that houses a small courtroom representing first and second level court. The
bus is staffed by a judge, court personnel and a mediator. It is divided into two main sections:
the front section serves as the courtroom, while the rear section serves as a mediation room.
Enterprise-based training
A program of learning which takes place in the enterprises or in the workplace.
Entrepreneurship
The act of being an entrepreneur, which can be defined as one who takes over the world
innovations, finance and business acumen in an effort to transform innovations into economic
goods.
Eco-efficiency
Glossary
339
Environmental Compliance
Certificate (ECC)
Environmental Impact Assessment

(EIA) EO 570, series of 2006
Ethanol
Excise Tax
Exclusive Economic Zone
Executive Order 514
Executive Order 533
Executive Order No. 3 (series of

2001)
Executive Order No. 797
Executive Order No. 888
Expanded Tertiary Education

Equivalency and Accreditation
Program (ETEEAP)
340
A document issued by the DENR Secretary or the Regional Executive 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.
The process of predicting the likely environmental consequences of implementing projects or
undertakings and designing appropriate preventive, mitigating and enhancement measures.
Also known as Institutionalizing Peace Education in Basic Education and Teacher Education.
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.
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.
A zone beyond and adjacent to the territorial sea in which a coastal state has: sovereign rights
for the purpose of exploring and exploiting, conserving and managing the natural resources,
whether living or non-living, of the waters superjacent to the seabed and of the seabed and its
subsoil, and with regard to other activities for the economic exploitation and exploration of the
zone. This includes the production of energy from the water, currents, and winds; jurisdiction
with regard to the establishment and use of artificial islands, installations, and structures; marine
scientific research; the protection and preservation of the marine environment. The outer limit
of the exclusive economic zone shall not exceed 200 nautical miles from the baselines from
which the breadth of the territorial sea is measured.
An order establishing the National Biosafety Framework which aims to strengthen the existing
science-based determination of biosafety to ensure the safe and responsible use of modern
biotechnology, enhance the decision-making, and guide implementation of international
obligations on biosafety. The NBF puts together into the framework the existing biosafety
regulations, delineates the responsibilities of each biosafety agencies, strengthens the National
Committee on Biosafety of the Philippines and provides a venue for discussion of overlapping
policy issues.
An order adopting an Integrated Coastal Management as a National Strategy to ensure the
sustainable development of the country's coastal and marine environment and resources and
establishing supporting mechanisms for its implementation. It seeks to address environmental
as well as socioeconomic issues in a comprehensive and integrated manner in order to promote
optimum resource utilization and sustainable coastal and marine development.
Also known as the EO Defining the Policy and Administrative Structure: For Government
Comprehensive Peace Efforts
An order that seeks to reorganize the ministry of labor and employment, creating the
Philippine overseas employment administration, and for other purposes. It is basically geared
towards the development of employment opportunities, the protection of workers, and the
promotion of industrial peace.
An order adopting the Strategic National Action Plan (SNAP) on Disaster Risk Reduction,
2009-2019 and institutionalizing DRR. It seeks to reduce economic losses from the adverse
impacts of climate variability including extreme events as the country undergoes economic
growth, population increase and rapid urbanization.
A certification mechanism for non-school based learning that is integrated into the countrys
educational system through the Executive Order 330. This program is a comprehensive
educational assessment scheme at the tertiary level which recognizes, accredits and gives
equivalency to the knowledge, skills, attitudes and values gained by individuals from relevant
work experiences, high-level non-formal training and informal experiences parallel to those
obtained from the formal system leading to an award of a degree. In essence, it is an alternative
learning system in tertiary education.
The provision of training, information, and support services by the government and non
government organizations to the agriculture and fisheries sectors to improve the technical,
business, and social capabilities of farmers and fisherfolk (RA 8435).
Farm-to-Market Roads
Roads linking the agriculture and fisheries production sites, coastal landing points and postharvest facilities to the market and arterial roads and highways (RA 8435).
Feed-in Tariff
A policy mechanism that involves the obligation on the part of electric power industry
participants to source electricity from renewable energy generation at a guaranteed fixed rate
per kilowatthour for renewable energy generation for a given period of time.
Feedstock
Organic sources such as molasses, sugarcane, cassava, coconut, jatropha, sweet sorghum or other
biomass used in the production of biofuels.
Financial Sector Forum (FSF)
It principally provides for an institutionalized framework for coordinating the supervision and
regulation of the financial system, for strengthening the exchange of information among the
different regulators and for the promotion of better consumer protection.
Fiscal Deficit
Shortfall/deficiency of revenues over expenditures of the government.
Fiscal Policy
The part of government policy which is concerned with the raising of resources through
taxation and borrowing and deciding on the level and pattern of expenditures.
Fiscal Responsibility Bill (FRB)
A proposed bill which aims to strengthen fiscal discipline in the public sector by prescribing
principles of responsible fiscal management, establishing control mechanisms on spending, and
adopting preventive measures against the erosion of the tax base of the government.
Fixed Telephone Line
Voice telephony via land line telephone service. It is a physical line connecting the subscriber to
the telephone exchange. Typically, fixed-line network is used to refer to the traditional phone
system or the Public Switched Telephone Network (PSTN), to distinguish it from mobile
networks.
Food security
It exists when all people, at all times, have physical and economic access to sufficient, safe and
nutritious food that meets their dietary needs and food preferences for an active and healthy life
(FAO, 2002).
Foreign direct investment
The category of international investment made by a resident entity in one economy (direct
investor) with the objective of establishing/obtaining a lasting interest in an enterprise resident
in an economy other than that of the investor (direct investment enterprise).
Foreign Direct Investments
Investments made to acquire a lasting interest by a resident entity in one economy in an
enterprise resident in another economy. The purpose of the investor is to have a significant
influence and effective voice in the management of the enterprise.
Forward and backward linkages
Channels through which information, material and money flow from suppliers to the firms
(backward) and from suppliers to customers (forward).
Forward Estimates (FEs)
Projections or estimation of future costs of existing policies. It also serves as the validation
instruments for the reasonableness of agency proposals on existing programs, projects, and
activities.
Fossil fuels
Fuels formed by natural resources such as anaerobic decomposition of buried dead organisms.
The age of the organisms and their resulting fossil fuels is typically millions of years, and
sometimes exceeds 650 million years. The fossil fuels, which contain high percentages of carbon,
include coal, petroleum, and natural gas.
Franchise area
A geographical area exclusively assigned or granted to a distribution utility for distribution of
electricity.
Functional Literacy (new definition) A range of skills and competencies cognitive, affective and behavioral which enables
individuals to: (a) live and work as human beings; (b) develop their potentials; (c) make
critical and informed decisions; (d) function effectively in society within the context of their
environment and that of the wider community (local, regional, national, global) in order to
improve the quality of their life and that of society.
Functional Literacy (old definition) A significantly higher level of literacy which includes not only reading and writing skills
but also numerical skills. The skills must be sufficiently advanced to enable the individual to
participate fully and efficiently in activities commonly occurring in her/his life situation that
require a reasonable capability of communicating by written language.
General Fertility Rate
The number of live births per 1,000 women aged 15-49 in a given year.
Geothermal Energy Systems
Machines or other equipment that converts geothermal energy into useful power.
Extension Services
Glossary
341
Geothermal Resources
Gini concentration ratios

Gini ratio (Gini coefficient)
Global Warming
Government of the Republic of the
Philippines
Greenhouse gases (GHG)
Green ICT
Grid
Gross Domestic Product (GDP)
Gross Enrolment Rate (GER)

Gross International Reserve (GIR)
Gross National Product (GNP)
Gross Value Added
Hazardous Substances
Hazardous Wastes
342
Mineral resources, classified as renewable energy resource, in the form of: (a) all products
of geothermal processes, embracing indigenous steam, hot water, and hot brines; (b) steam
and other gases, hot water, and hot brines resulting from water, gas, or other fluids artificially
introduced into geothermal formations; (c) heat or associated energy found in geothermal
formations; and (d) any by-product derived from them.
Measures the inequality in income distribution where zero means perfect equality and a value
of 1 implies perfect inequality.
A concentration ratio which is used to measure income inequality. It takes values from zero (0),
representing complete equality of income, to one (1), representing complete inequality. Thus,
the higher the value of the coefficient, the more unequal is the distribution of income among
families within a given area under study.
Increase in the average temperature of the earths near-surface air and oceans that is associated
with the increased concentration of greenhouse gases in the atmosphere.
The official title of the government
Constituents of the atmosphere that contribute to the greenhouse effect including, but not
limited to, carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and
sulfur hexafluoride.
Green ICT is a new approach to ensuring environmental sustainability of ICTs in businesses
and organizations. This involves reducing carbon emissions and improving energy efficiency of
ICT systems, as well as promoting use of less harmful materials and encouraging recycling and
appropriate disposal of ICT equipment and peripherals.
The high voltage backbone system of interconnected transmission lines, substations and related
facilities.
Refers to the value of all goods and services produced domestically. It is the sum of gross value
added of all resident institutional units engaged in production (plus any taxes, and minus any
subsidies, on products not included in the values of their outputs); The total output produced
within the geographical boundaries of the country regardless of the nationality of the entities
producing the output.
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.
Foreign assets that are readily available to and controlled by the BSP for direct financing of
payment imbalances and for managing the magnitude of such imbalances, GIR consists of
holdings of gold, special drawing rights, foreign investments, and foreign exchange, including
Reserve Position in the Fund.
A measure of the countrys output of final goods and services. It is equivalent to the Gross
Domestic Product adjusted with the net factor income from the rest of the world. It refers to
the aggregate earnings of the factors of production (nationals) plus indirect taxes (net) and
capital consumption allowance.
Total payment to factors of production namely: wages, interest, profit and rent. It also includes
capital consumption allowance and indirect taxes. It is estimated by deducting from the gross
value of output of non-factor such as raw materials, fuel, advertising and other non-industrial
overhead cost.
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.
Substances that are without any safe commercial, industrial, agricultural or economic uses and
are shipped, transported or brought from the country of origin for dumping or disposal into or
in transit through any part of the territory of the Philippines.
Health Care Waste
High Speed Packet Access (HSPA)

Higher Education (HE)
Household
Housing loan ceiling
Housing Unit
Human Development Index (HDI)
Hydropower Resources
Hydropower Systems
Inclusive Finance
Inclusive Growth
Income gap
Indigenous People
Indigenous Peoples Masterplan

Indigenous Peoples Rights Act of
1997 or RA 8371
Inelastic supply
Infectious waste from hospitals such as equipment, instruments, utensils, and fomites of a
disposable nature from patients who are suspected to have or have been diagnosed as having
communicable diseases and must therefore be isolated as required by public health agencies,
laboratory wastes such as pathological specimens (i.e., all tissues, specimens of blood elements,
excreta, and secretions obtained from patients or laboratory animals), and disposable fomites
that may harbor or transmit pathogenic organisms, and surgical operating room pathologic
specimens and disposable fomites attendant thereto, and similar disposable materials from
outpatient areas and emergency rooms.
A family of high-speed 3G digital data services provided by cellular carriers worldwide that use
the GSM technology.
The stage of formal education requiring secondary education covering the programs on all
courses of study leading to bachelors degree and all degree courses of study beyond bachelors
degree level.
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.
The limit one can acquire as loan for the construction of a housing structure.
A building or structure that is a dwelling or place for habitation by human beings.
Measures quality of life or well-being in terms of health, education and income.
Water resources found technically feasible for development of hydropower projects.
Water-based energy systems which produce electricity by utilizing the kinetic energy of falling
or running water to turn a turbine generator.
Greater access to in financial services and further deepening of the financial system towards
sustainable growth and stability.
Growth that is rapid enough to matter, given the countrys large population, geographical
differences, and social complexity. It is sustained growth that creates jobs, draws the vast
majority into the economic and social mainstream, and continuously reduces mass poverty.
It is an essential ingredient of any successful growth strategy where the idea of equality of
opportunity is emphasized in terms of access to markets, resources, and unbiased regulatory
environment for businesses and individuals.
The average income shortfall expressed as a proportion to the poverty line of families with
income below the poverty threshold.
An existing power generating entity which is not owned by NPC.
People, communities, and nations who are native to a particular area; Refer to a group of
people or homogenous societies identified by self-ascription and ascription by other, who have
continuously lived as organized community on communally bounded and defined territory,
and who have, under claims of ownership since time immemorial, occupied, possessed customs,
tradition, and other distinctive cultural traits, or who have, through resistance to political, social
and cultural inroads of colonization, non-indigenous religions and culture, become historically
differentiated from the majority of Filipinos. IPs shall likewise include peoples who are
regarded as indigenous on account of their descent from the populations which inhabited the
country, at the time of conquest or colonization, or at the time of inroads of non-indigenous
religions and cultures, or the establishment of present state boundaries, who retain some or
all of their own social, economic, cultural and political institutions, but who may have been
displaced from their traditional domains or who may have resettled outside their ancestral
domains.
Under the Indigenous Peoples Rights Act (IPRA) of 1997, the National Commission on
Indigenous Peoples (NCIP) is mandated to formulate regularly the Five Year Master Plan
An act which recognizes, protects and promotes the rights of indigenous cultural communities/
indigenous people, creating a national commission of indigenous people, establishing
implementing mechanism, appropriating funds therefore, and for other purposes.The law
restores the rights of indigenous peoples over their ancestral lands and ancestral domains.
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.
Glossary
343
The number of deaths among children below one year old per 1,000 livebirths at a specified
period of time. IMR is used as a general indicator of the nutritional and health status of the
population.
Inflation rate
The annual rate of change or year-on-year change in Consumer Price Index.
Inflation Rates
The annual rate or percentage change or the year-on-year change in the Consumer Price Index
(CPI). It indicates how fast or slow the CPI increases or decreases.
Informal settlers
Occupants of public or private lands without any legal entitlement or authority to said lands.
Informal waste sector
Individuals or groups involved in extraction of recyclable and reusable materials from mixed
waste, i.e., scavengers and waste pickers.
INFRACOM Sub-Committee on
An inter-agency committee for the Water Resources Sector established through NEDA Board
Water Resources (SCWR)
Committee on Infrastructure (INFRACOM) Resolution No. 2, Series of 2008 composed of
representatives from key national government agencies, leagues of cities and municipalities,
academe and civil society. Its functions include, among others: (a) ensuring that sector plans
are carried out; (b) coordinating the conduct of sector monitoring and periodic assessments; (c)
coordinating the undertaking of studies, researches and analyses in order to propose subsequent
policy recommendations for the sector; (d) formulating areas of cooperation within the sector;
(e) clearing sector data/information; and (f ) serving as a platform for discussion and resolution
of issues in the sector.
Installed/rated capacity
The maximum capacity of an equipment/facility such as a power plant for which it is designed
by the manufacturer and is usually expressed in megawatts (MW).
Integrated Water Resources
A framework which promotes the coordinated development and management of water, land
Management (IWRM)
and related resources in order to maximize the resultant economic and social welfare in an
equitable manner without compromising the sustainability of vital ecosystems.
Interconnection
The physical connection of telephone networks owned by two different operators. Network
operators typically charge a per minute fee for use of their network by other network operators.
International Convention on the
United Nations convention adopted and opened for signature and ratification by the United
Elimination of All Forms of Racial
Nations General Assembly on December 21, 1965, and which entered into force on January
Discrimination
4, 1969. It defines and condemns racial discrimination and commits States to change national
laws and policies which create or perpetuate racial discrimination.
Investment climate
Overall environment for investments. It refers to the factors such as economic, monetary, and
other conditions that affect the performance of investments.
Irrigation Service Fees (ISF)
A means to generate revenues to cover operations and maintenance (O&M) costs of irrigation
facilities.
Job generation
The number of tasks, duties, or activities that were created.
Judiciary Case Management System A management system of the Supreme Court and one of the Judiciary's reform projects aimed
( JCMS)
at declogging congested dockets and helping solve delays in case management and resolution
through the use of information technology.
Justice Sector Coordinating Council An inter-agency body composed of senior representatives from the Judiciary, the Department
( JSCC)
of Justice, the Department of the Interior and Local Government, and their relevant
attached agencies, which serves as a joint forum for dialogue on issues of common interest
and mechanism for effective coordination and sharing of information for planning and
implementation of joint initiatives.
K+12 system
Kindergarten and the twelve years of elementary and secondary education. Kindergarten refers
to the 5-year old cohort that takes a standardized kinder curriculum. Elementary education
refers to primary schooling that involves six or seven years of education; meanwhile secondary
education refers to high school. Under the K+12, the intention is not just to add two years of
schooling but more importantly to enhance the basic education curriculum.
Kapit-bisig Laban sa KahirapanA program for implementing small-scale projects by barangays following their own plans,
Comprehensive and Integrated
priorities, and processes, with funding support and in-kind support from the national and local
Delivery of Social Services
governments.
(KALAHI-CIDSS)
Kilowatt-hour (kWh)
A unit of energy equivalent to one kilowatt (kW) of power expended for one hour of time.
Infant mortality ratio (IMR)
344
The population 15 years old and over, whether employed or unemployed, who contribute to
the production of goods and services in the country. Persons considered not in the labor force
are those who are not working and are not available for work during the reference week, and
persons who are not available and are not looking for work because of reasons other than those
previously mentioned, (e.g., housewives, students, disabled or retired persons and seasonal
workers.)
Labor Market Programs
Measures aimed at enhancing employment opportunities and protection of the rights
and welfare of workers. Employment enhancing measures include trade policies and skills
development and training. Labor protection includes compliance with labor standards such as
minimum wages or health and safety in the workplace.
Ladderized Education
A new system of education in the Philippines that allows learners to progress between TVET
and college, and vice-versa. (http://www.e-tesda.gov.ph/faqs.asp).
Lateral Attrition
The transfer in post and/or separation from government service, in accordance with civil service
rules and regulations of internal revenue or customs officials/officers and collection officers of
other revenue-generating units, who do not meet their respective revenue or collection goals for
the year with all due considerations being taken.
Level I Water Supply System (point A protected well or developed spring system without a distribution system, generally adaptable
source)
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 faucets. Usually,
(communal faucet system or
one faucet serves 4 to 6 households. Generally suitable for rural and urban fringe areas where
standpost)
houses are clustered densely to justify a simple piped-system. (NEDA Board Resolution No.
12 Series of 1995).
Level III Water Supply System
A system composed of a source, reservoir, piped distribution system and household taps. It is
(waterworks system or individual
generally suited for densely populated urban areas. (NEDA Board Resolution No. 12 Series of
household connections)
1995).
Lifeline rate
The subsidized rate given to low-income captive market end-users who cannot afford to pay at
full cost.
Liquefied petroleum gas (LPG)
A flammable mixture of hydrocarbon gases used as a fuel in heating appliances and vehicles. It
is increasingly used as an aerosol propellant and a refrigerant, replacing chlorofluorocarbons in
an effort to reduce damage to the ozone layer.
Local Exchange Carrier
The regulatory term in telecommunications for the local telephone company.
Local Government Code of 1991 or An act providing for a local government code which seeks to promote genuine and meaningful
RA 7160
local autonomy for territorial and political subdivisions of the State to enable them to attain
their fullest development as self-reliant communities and make them more effective partners
in the attainment of national goals. It provides a responsive and accountable local government
structure instituted through a system of decentralization whereby local government units shall
be given more powers, authority, responsibilities, and resources.
Low cost housing
Under Philippine laws, these are housing units that are priced from P 400,000 to P 3,000,000.
Magna Carta for Countryside and
An act establishing the Magna Carta for countryside and barangay business enterprises,
Barangay Business Enterprises
granting exemptions from any and all government rules and regulations and other incentives
(Kalakalan 20)
and benefits thereof, and for other purposes. It aims to achieve growth in the countryside
business enterprises through absence of bureaucratic restrictions and granting of incentives and
other benefits.
Magna Carta of Women or RA 9710 A comprehensive women's human rights law that seeks to eliminate discrimination against
women by recognizing, protecting, fulfilling and promoting the rights of Filipino women,
especially those in the marginalized sectors. It promotes empowerment of women and
pursues equal opportunities for women and men and ensures equal access to resources and to
development results and outcome.
Magnitude of Poor Families
The number of families whose income cannot provide for the basic food and non-food
requirements called the poverty threshold.
Magnitude of Poor Population
The number of individuals whose income cannot provide for the basic food and non-food
requirements called the poverty threshold.
Maintenance and Other Operating Expenditures to support the operations of government agencies such as expenses for supplies
Expenses (MOOE)
and materials; transportation and travel; utilities (water, power, etc) and the repairs, etc.
Labor Force
Glossary
345
Market Turnover
Materials Recovery Facility
Maternal mortality ratio (MMR)
Medical tourism
Medium-Term Expenditure
Framework (MTEF)
Metrology
Micro, Small and Medium
Enterprises (MSMEs)
A management strategy that focuses on development performance and on sustainable

improvements in country outcomes. It provides a framework for development effectiveness in
which performance information is used to improve decision making. It also includes practical
tools for strategic planning, risk management, progress monitoring, and outcome evaluation.
(OECD Policy Brief, March 2009).
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.
Includes solid waste transfer station or sorting station, drop-off center, a composting facility,
and a recycling facility.
The number of women who die from any cause related to or aggravated by pregnancy or its
management (excluding accidental or incidental causes) during pregnancy and childbirth
or within 42 days of termination of pregnancy, irrespective of the duration and site of the
pregnancy, per 100,000 livebirths.
The concept of traveling to a particular destination for health care services. These services are
offered by countries with qualified and experienced health care professionals working in some
of the highly technologically advanced facilities in the world. International medical travel helps
medically underserved residents located in the US, Europe, Australia, Canada, and Asia. The
costs are usually a fraction of what the same procedure would be in their countries. Moreover,
these medical travels may include holiday amenities like hotel or resort accommodation,
chauffered city travel, and a bilingual personal assistant to guide and make a client feel secure
and to arrange any other requirements he or she may need aside from medical needs.
A planning budgeting framework of the government which provides a medium term three-year
perspective to decision making process during budget preparation.
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
Any business activity/enterprise engaged in industry, agri-business/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:
Large
Medium
Small
Micro
Missionary Electrification
Mitigation
Monetary Policy
Moro Islamic Liberation Front
Moro National Liberation Front
346
Asset Size
(in million PhP)
> 100
15.1 100
3.1 1.5
<3
Employment
> 200
100 199
10 99
19
The provision of basic electricity service in unviable areas with the aim of bringing the
operations in these areas to viability levels.
Human intervention to address anthropogenic emissions by sources and removals by sinks of
all GHG, including ozone-depleting substances and their substitutes.
A management strategy that focuses on development performance and on sustainable
improvements in country outcomes. It provides a framework for development effectiveness
in which performance information is used to improve decision making. It also includes
practical tools for strategic planning, risk management, progress monitoring, and outcome
evaluation. (OECD Policy Brief, March 2009)
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.
The MILF is an Islamic secessionist movement in the Bangsamoro homeland in Mindanao
and the neighbouring islands. The MILF was formed in 1977 when Hashim Salamat split
from the Moro National Liberation Front, in 1977.
The Moro National Liberation Front (MNLF) is a political organization whose former aim
was to secede away from the Philippines. The MNLF, led by its Chairman, Nur Misuari,
signed a Final Peace Agreement with the Governmentin 1996 which resulted to the
enactment of Republic Act 9054 otherwise known as the Autonomous Region in Muslim
Mindanao.
A service that allows the sending of multiple media in a single message, and the ability to
send a message to multiple recipients.
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 Initiative
A multi-sectoral and integrated planning approach adopted by the DA, DAR, and the
DENR towards more efficient use of resources.
National Defense and Security Act
The law that governs the mechanisms of the national defense of the Philippines
National Democratic Front
The political component of the Communist Party of the Philippines. The NDF sits across the
GPH on the peace negotiating table.
National Environmental Awareness An act to promote national awareness on the role of natural resources in economic growth
and Education Act of 2008 or
and the importance of environmental conservation and ecological balance towards sustained
Republic Act No. 9512
national development. This legislation concretized the countrys support to the United
Nations Decade of Education for Sustainable Development (2005-2014), and the ASEAN
Environmental Education Action Plan for Sustainable Development (2008-2012).
National Framework Strategy on
A framework strategy of the Philippines serving as basis for a program for climate 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 our natural
ecosystems to climate change, and optimize the country's mitigation opportunities towards
sustainable development. It highlights the critical aspect of Climate Change adaptation,
which will be applied to all levels of governancefrom city to municipal down to the
barangay level. "
National Integrated Protected Areas An act providing for the establishment and management of national integrated protected
system Act of 1992 or RA 7586
areas system, defining its scope and coverage, and for other purposes. It encompasses
outstanding remarkable areas and biologically important public lands that are habitats of rare
and endangered species of plants and animals, biogeographic zones and related ecosystems,
whether terrestrial, wetland or marine, all of which shall be designated as protected areas.
National Integrated Protected Areas Classification and administration of all designated protected areas to maintain essential
Systems (NIPAS)
ecological processes and life-support systems, to preserve genetic diversity, to ensure
sustainable use of resources found therein, and to maintain their natural conditions to the
greatest extent possible.
National Irrigation System (NIS)
A major irrigation system managed by the National Irrigation Administration (RA 8435).
National Justice Information System A program that is intended to address and remedy the current information gaps in the
(NJIS)
Philippine criminal justice system by enabling effective sharing of data between the
participating agencies, including the police, judiciary, probation services, custodial authorities,
and criminal information registries, at key decision points in our criminal justice system
process.
National Transport Policy (NTP)
A long-term comprehensive policy which shall guide all elements of the transportation
system and all sub-sectors of transportation, including passengers, shippers, service providers,
agencies and instrumentalities of government and those involved in the movement of people
and goods and in the provision of transportation infrastructure, facilities and services. The
NTP shall cover the areas of: (a) Resource Generation and Allocation; (b) Criteria for the
Preparation of Agency Plans, Programs and Projects; (c) Cost Recovery and Subsidies; (d)
Regulation of Passenger Transport Services; (e) Urban Transport; (f ) Transport Logistics;
and (g) Governance, in all their decision-making, undertakings, and transactions.
Natural gas
A gas consisting primarily of methane, typically with 0 to 20 percent higher hydrocarbons
(primarily ethane). It is found associated with other hydrocarbon fuel, in coal beds, as
methane clathrates, and is an important fuel source and a major feedstock for fertilizers.
Net Enrolment Rate (NER) or
The ratio of the enrolment for the age group corresponding to the official school age in the
Participation Rate
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.
Multimedia Messaging Service
(MMS)
Mutual Funds
Glossary
347
Net Intake Rate (NIR)

Net Lending
Network
New Peoples Army
Non-Tax Revenues
Nuclear wastes
Ocean Energy Systems

Off-Grid Areas
On-Grid System
Open access
Organic Agriculture
Organizational Performance
Indicator Framework (OPIF)
Over-urbanization
Pantawid Pamilyang Pilipino
Program (4Ps program)
Paper on Budget Strategy
Program
PAYGO
348
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).
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.
Combination of telecommunications resources, for example, exchanges, wire links (copper
cable, optical fiber) and terrestrial or satellite radio transmission links.
Military arm of the Communist Party of the Philippines.
Revenue collected from sources other than compulsory tax levies. Include those collected in
exchange for direct services rendered by government agencies to the public, or those arising
from the governments regulatory and investment activities.
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.
Energy systems which convert ocean or tidal current, ocean thermal gradient or wave energy
into electrical or mechanical energy.
Areas not connected to the wires and related facilities of the OnGrid System of the
Philippines.
Electrical systems composed of interconnected transmission lines, distribution lines,
substations, and related facilities for the purpose of conveyance of bulk power to the grid.
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).
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).
An approach to expenditure management that directs resources towards results or major final
outputs and measures agency performance by key quality and quantity indicators.
A term used in relation to cities in the developing world which have been deemed to be too
large in relation to their countrys industrial base.
The countrys conditional cash transfer (CCT) program, which provides 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.
This will link budget allocation with the national agenda of the government to identify the
priority areas for spending and to incorporate the sectoral and regional implications in the
dimension and distribution of the budget.
The national governments peace and development framework to respond and strengthen
peace building, reconstruction and development in conflict-affected areas.
A part of the budget process which requires that any additional budgetary allocation and/or
mandatory spending increase must be compensated by a corresponding increase in tax and/or
revenue or a cut in spending in other items in the budget over a specified time period.
Payment for Environmental Services A compensation involving cash that is linked directly to the provision of environmental
(PES)
services. This is a mechanism to improve the provision of indirect environmental services,
which the provider gets paid for doing so (provider-gets) and the beneficiaries pay for
getting the services (user-pays). Payment for environmental goods and services may include:
watershed protection from upland forest, biodiversity of forest and coastal resources, carbon
sequestration of forest and landscape/scenic beauty of the countrys natural resources.
Other forms of PES include: purchase of land critical to habitat preservation, biodiversity
conservation, important ecological function; and tax relief to owners who will maintain the
desired land uses.
Penetration
A measurement of access to telecommunications. It is usually calculated by dividing the
number of subscribers by the population, and multiplying by 100. Also referred to as density.
Per capita income
Obtained by dividing the total family income by the total number of family members.
Petroleum
A naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of
various molecular weights and other liquid organic compounds, that are found in geologic
formations beneath the earth's surface. Petroleum is recovered mostly through oil drilling.
It is refined and separated, most easily by boiling point, into a large number of consumer
products, from gasoline and kerosene to asphalt and chemical reagents used to make plastics
and pharmaceuticals.
Philippine Clean Air Act of 1999 or An act providing for a comprehensive air pollution control policy and for other purposes. It
RA 8749
aims to protect and advance the right of the people to abalanced and healthful ecology in
accord with the rhythm and harmony of nature. It seeks to promote and protect the global
environment to attain sustainable development whilerecognizing the primary responsibility
of local government units to deal with environmental problems.
Philippine Clean Water Act of 2004 An act providing for a comprehensive water quality management, and for other purposes. It
or RA 9275
aims to protect, preserve and revive the quality of the countrys fresh, brackish and marine
waters.
Philippine Defense Reform
The PDR provides the framework for introducing a comprehensive, institutional,
structural and systemic reform package at the strategic level for the defense and military
establishment.
Philippine Disaster Risk Reduction An act that seeks to strengthen the Philippine disaster risk reduction and management
and Management Act of 2010 or RA system through the adoption of the National Disaster Risk Reduction and Management
10121
Framework (NDRRMF), and the National Disaster Risk Reduction and Management
Plan (NDRRMP). It further aims to recognize and strengthen the capacity of the national
government and the local government units (LGUs), together with partner stakeholders,
to build the disaster resilience of communities, and to institutionalize arrangements and
measures for reducing disaster risks, including projected climate risks, and enhancing disaster
preparedness and response capabilities at all levels.
Philippine National Police
The Republics national and local police force that provides all law enforcement services
throughout the Philippines.
Post -Harvest Facilities
Includes, but is not limited to, threshers, moisture meters, dryers, weighing scales, milling
equipment, fish ports, fish landings, ice plants and cold storage facilities, processing plants,
warehouses, buying stations, market infrastructure and transportation (RA 8435).
Poverty gap
The total income shortfall of families with income below the poverty threshold, divided by
the number of families.
Poverty Incidence
The proportion of families/individuals with per capita income/expenditure less than the per
capita poverty threshold to the total number of families/individuals
Poverty Incidence of Families
The proportion of families whose income cannot provide for the basic food and non-food
requirements called the poverty threshold to the total number of families.
Poverty Incidence of Population
The proportion of individuals whose income cannot provide for the basic food and non-food
requirements called the poverty threshold to the total number of individuals.
Poverty incidence
capita poverty threshold to the total number of families/individuals.
Glossary
349
Is equal to the food threshold plus the non-food requirements. In the new methodology as
approved by the NSCB Executive Board on December 8, 1992, the non-food requirements
provide only the expenditures on basic non-food items. This includes clothing and footwear
and other wears, fuel, light, and water, housing maintenance and other minor repairs, rental
of occupied dwelling units, medical care, education, transportation and communication,
non-durable and furnishings, household operations and personal care and effects but excludes
alcoholic beverages, tobacco, recreation, durable furniture and equipment, miscellaneous
expenditures and other expenditures. The raising factor is estimated from the consumption
pattern of all FIES (Family Income and Expenditure Survey) families of size six by taking
the average ratio of total expenditures to total food expenditures.
Power
The rate at which work is performed or energy is converted. It can be expressed in kilojoules
per second (kJ/sec) or kilowatts (kW).
Privatization
The sale, disposition, change and transfer of ownership and control of assets and Independent
Power Producer (IPP) contracts from the government or a government corporation to a
private person or entity
Productivity and Efficiency
Refers to the production and delivery of competitive, standards-compliant, sociallyresponsible and environment-friendly products and services that generate optimum economic
returns.
Protected area
Identified portions of land and water set aside by reason of their unique physical and
biological significance, managed to enhance biological diversity and protected against
destructive human exploitation.
Public-Private Partnership (PPP)
A contractual arrangement between the government and the private sector to deliver public
infrastructure and/or public services.
Purchasing power of the peso
A measure of the real value of the peso in a given period relative to a chosen reference period.
It is computed by getting the reciprocal of the CPI and multiplying the result by 100.
Rationalization Program
A move to transform the Executive Branch into a more effective and efficient government. It
aims to: (a) focus government efforts on its vital functions and channel government resources
to these core public services; and (b) improve the efficiency of government services, within
affordable levels, and in the most accountable manner.
Real Effective Exchange Rate
The weighted average of a country's currency relative to an index or basket of other major
(REER)
currencies adjusted for the effects of inflation. The weights are determined by comparing the
relative trade balances, in terms of one country's currency, with another country within the
index. Essentially it refers to the NEER adjusted for inflation differentials.
Real Per Capita GDP
An approximation of the value of goods produced per person in the country, equal to the
country's constant GDP divided by the total number of people in the country.
Reasonable Water Supply Access
Availability of at least 20 liters per day from a source within 1 kilometer of the dwelling.
Rebolusyonaryong Partido
The party was formed in 1995 following a split from the Communist Party of the Philippines
ng Manggagawa-Pilipinas /
due to its ideological differences like rejection of Maoism and preferring the act of
Revolutionary Proletariat Army-Alex insurrection over the Maoist Protracted People's War.
Boncayao Brigade
Recyclable material
Any waste material retrieved from the waste stream and free from contamination that can
still be converted into suitable beneficial use or for other purposes, including, but not limited
to, newspaper, ferrous scrap metal, non-ferrous scrap metal, used oil, corrugated cardboard,
aluminum, glass, office paper, tin cans, plastics and other materials as may be determined by
the NSWMC.
Reducing Emissions from
A proposed incentive system for reducing GHG emissions. Industrialized countries would
Deforestation and Forest
provide financial incentive for forested, developing countries to manage and protect forests to
Degradation Plus (REDD-plus)
reduce their GHG emissions and enhance carbon stocks. It is performance-based, such that
payments would only be delivered if emissions were reliably reduced.
Regulatory capture
An economic situation in which state regulators serve the interest of the industry or firms
rather than the interest of the public or society.
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.
Poverty Threshold
350
A policy mechanism which places an obligation to electric power industry 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.
Republic Act 8532
An act strengthening further the Comprehensive Agrarian Reform Program (CARP), by
providing augmentation fund therefor, amending for the purpose Section 63 of Republic Act
No. 6657, otherwise known as The CARP Law of 1988.
Republic Act 9700
An act strengthening the Comprehensive Agrarian Reform Program (CARP), extending
the acquisition and distribution of all agricultural lands, instituting necessary reforms,
amending for the purpose certain provisions of Republic Act No 6657, otherwise known as
the Comprehensive Agrarian Reform Law of 1988, as amended, and appropriating funds
therefor.
Repurchase Agreement
One of the two open market operations (OMO) instruments of the BSP. Under a repurchase
(repo) agreement, the BSP buys government securities from a bank with a commitment to
sell it back at a specified future date at a predetermined rate. A repo transaction expands the
level of money supply as it increases the bank's level of reserves. At present, the BSP enters
into a repo agreement for a minimum of one day (overnight) and for a maximum of 91 days.
Resettlement
The act or instance of settling or being settled in another place; also, movement of informal
settlers from land where they have no legal right, to land provided by the government and
with just title.
Residual Waste
Waste left from household sources containing materials that have not been separated out or
sent for reprocessing.
Retail Rate
The total price paid by end-users consisting of the charges for generation, transmission and
related ancillary services, distribution, supply and other related charges for electric service.
Retail trade
Any act or occupation of selling direct to the general public merchandise, commodities or
good for consumption.
Revealed Comparative Advantage
Refers to the share of product to total Philippine exports as a ratio of share of the product to
total world exports.
Revenue Effort
Computed as the ratio of total government revenues (both tax and non-tax) to gross
domestic product (GDP) at current prices, aims to measure the capability of the government
sector to generate revenues to support the development needs of the economy. Revenue data
are sourced from the Department of Finance (DoF) while GDP data are sourced from the
National Statistical Coordination Board (NSCB).
Revenue Integrity Protection Service The anti-corruption arm of the DOF created by Executive Order 259 (December 17, 2003).
(RIPS)
RIPS investigates allegations of corruption in the Department of Finance and its attached
agencies such as the Bureau of Internal Revenue and the Bureau of Customs, the Bureau
of Local Government Finance, Bureau of Treasury, Central Board of Assessment Appeals,
the Insurance Commission, the National Tax Research Center, the Fiscal Incentives Review
Board, and the Privatization and Management Office.
Risk-Based Capital Adequacy
The internationally accepted risk-sensitive capital adequacy standards for financial
Framework
institutions. It prescribes that financial institutions must, at all times, have capital
commensurate with their risk taking activities.
Run Against Tax Evaders (RATE)
A program initiated by the DOF and BIR to investigate and prosecute individuals and/
or entities engaged in tax evasion and other criminal violations of the National Internal
Revenue Code (NIRC) of 1997. RMO No. 24-2008 issued on June 11, 2008 provides the
policies and guidelines for the development, investigation and prosecution of cases under the
RATE Program of the BIR.
Salary Standardization Law
An act prescribing a revised compensation and position classification system in the
government and for other purposes.
Sanitary Landfill
A waste disposal site designed, constructed, operated and maintained in a manner that
exerts engineering control over significant potential environmental impacts arising from the
development and operation of the facility.
Renewable Portfolio Standards
(RPS)
Glossary
351
A wide range of services and arrangements pertaining to the hygienic and proper
management of human excreta (feces and urine) and community liquid wastes to safeguard
the health of individuals and communities.
Secondary Mortgage Market
A market for the purchase and sale of existing mortgages, designed to provide greater
liquidity, for selling mortgages.
Securities Borrowing and Lending
The temporary loan of securities between borrower and lender. This allows the borrower, who
expects the price of the security (either a government security or a stock) to fall, to hold a
short position for a long duration. Meanwhile, the lender receives a fee that could potentially
enhance portfolio yield with relatively low risk. A repo is also one form of securities
borrowing and lending instrument wherein securities may be borrowed in a repo market to
cover short positions.
Septage
The sludge produced in individual/communal onsite wastewater-disposal systems, principally
septic tanks.
Severity of poverty
The total of the squared income shortfall of families with income below the poverty
threshold, divided by the total number of families and is sensitive to the income distribution
among the poor.
Sewage
Wastewater which is a combinaion of the liquid or water-carried wastes removed from
households, insitutions, and commercial and industrial establishments, together with such
groundwater, surface water, and stormwater as may be present.
Sewerage
Facilities that collect human waste and sullage from residences and establishments usually
piped and conveyed in structures (sewers, pump stations) for eventual central treatment
and safe disposal. Piped sewerage includes a collection system (street lateral), a conveyance
system (trunk sewers and pump stations), and a treatment plant/disposal.
Shariah Courts
Shariah District Courts (SDCs) and Shariah Circuit Courts (SCCs) that were created
in 1977 through Presidential Decree 1083, which is also known as the Code of Muslim
Personal Laws. These courts have been established to resolve cases involving Muslims.
Short Messaging Service (SMS)
A service available on digital networks, typically enabling messages with up to 160 characters
to be sent or received via the message center of a network operator to a subscriber's mobile
phone.
Sitio
A territorial enclave inside a barangay, especially in rural areas.
Slum
A run-down area of a city characterized by substandard housing and squalor and lacking in
tenure security.
Small Power Utilities Group (SPUG) The functional unit of the National Power Corporation created to pursue missionary
electrification function.
Social Insurance
Programs that seek to mitigate income risks by pooling resources and spreading risks across
time and classes. These are designed in such a way that beneficiaries pay a premium over a
given period of time to cover or protect them from loss of income and unemployment as a
result of illness, injury, disability, retrenchment, harvest failure, maternity, old age, etc. This
component includes micro and area-based schemes to address vulnerability at the community
level such as micro-insurance, agricultural insurance and social support funds.
Social Protection
Constitutes policies and programs that seek to reduce poverty and vulnerability to risks
and enhance the social status and rights of the marginalized by promoting and protecting
livelihood and employment, protecting against hazards and sudden loss of income, and
improving peoples capacity to manage risks.
Social Safety Nets
Stop-gap mechanisms or urgent responses that address effects of economic shocks, disasters
and calamities on specific vulnerable groups. These are measures that specifically target
affected groups with the specific objective of providing relief and transition. Measures include
emergency assistance, price subsidies, food programs, employment programs, retraining
programs and emergency loans.
Social Welfare
Preventive and developmental interventions that seek to support the minimum basic
requirements of the poor, particularly the poorest of the poor, and reduce risks associated
with unemployment, resettlement, marginalization, illness, disability, old age and loss of
family care. Social welfare and assistance programs usually comprise direct assistance in the
form of cash or in kind transfers to the poorest and marginalized groups, as well as social
services including family and community support, alternative care and referral services.
Sanitation
352
Provision of affordable housing (usually by the government) through efficient production

of housing units for ownership and sustainable housing financing. Currently, socialized
housing are house and lot packages costing PhP400,000 and below.
Solar Energy Systems
Energy systems which convert solar energy into thermal or electrical energy.
Solar Energy
Energy derived from solar radiation that can be converted into useful thermal or electrical
energy.
Solid Waste Management (SWM)
The discipline associated with the control of generation, storage, collection, transfer and
transport, processing, and disposal of solid wastes in a manner that is in accord with the
best principles of public health, economics, engineering, conservation, aesthetics, and other
environmental considerations, and that is also responsive to public attitudes.
Standardization
The creation and use of guidelines for the production of uniform, interchangeable
components, especially for use in mass production.
Stock Market Capitalization
The sum of the current value of all securities traded on a financial market.
Strategic Agriculture and Fisheries The areas within the Network of Protected Areas for Agricultural and Agro-industrial
Development Zones (SAFDZ)
Development (NAPAAD) identified for production, agro processing and marketing
activities to help develop and modernize, either the support of government, the agriculture
and fisheries sectors in an environmentally and socio-culturally sound manner (RA 8435).
Strengthening the Integrity of the
A program of the Judiciary that aims to: (a) provide the Judiciary with effective tools and
Judiciary (SIJ)
techniques to systematicaly assess the level of integrity of its administrative processes; (b)
guide the Judiciary as it conducts a comprehensive review of its administrative processes
that will provide the basis for the design of reform measures; and (c) assist the Judiciary in
effectively implementing the selected reforms.
Subprime Crisis
The global financial meltdown in the housing mortgage market after a sharp increase in
mortgage delinquencies when adjustable rates were reset at higher rates. Securities backed
with subprime mortgages lost most of their market value. With almost 80 percent of US
mortgages being subprime loans and held by banks, these resulted to the decline in the
capital of banks and other government sponsored enterprises worldwide but mostly in the
US and Europe.
Subsidy
A grant or financial aid, usually by a government body, to persons, institutions, or GOCCs;
it may also refer to amounts used to cover operational expenses not supported by corporate
revenues or to cover corporate deficits and losses.
Subsistence Incidence
capita food threshold to the total number of families/ individuals.
Subsistence Incidence of Families
The proportion of families whose income cannot provide the basic food requirements called
the food or subsistence threshold to the total number of families.
Subsistence Incidence of Population The proportion of individuals whose income cannot provide for the basic food requirements
called the food or subsistence threshold to the total number of individuals.
Subsistence Threshold
The cost of basic food requirements. This is measured by costing low-cost menus constructed
by region, urban-rural, which meet 100 percent adequacy of the Recommended Dietary
Allowance (RDA) for energy (2,000 calories) and 80 percent adequacy of other nutrients
as recommended by the Food and Nutrition Research Institute (FNRI). The menus are
prepared by the FNRI and costed by the TWG using the prices obtained from the NSO and
BAS surveys.
Substation
A part of an electrical generation, transmission, and distribution system, where voltage is
transformed from high to low, or the reverse, or many other important functions.
Sub-transmission Assets
Facilities related to the power delivery service below the transmission voltages and based on
the functional assignment of assets including, but not limited to, step-down transformers
used solely by load customers, associated switchyard/substation, control and protective
equipment, reactive compensation equipment to improve customer power factor, overhead
lines, and the land, where such facilities/ equipment are located. These include National
Power Corporation assets linking the transmission system and the distribution system which
are neither classified as generation nor transmission.
Supplier
Any person or entity authorized by the Energy Regulatory Commission to sell, broker,
market or aggregate electricity to the end-users.
Socialized Housing
Glossary
353
Sustainable Development
Tariffs
Tax Effort
Tax Revenues
Technical vocational education and
training (TVET)
Technology (ICT)
Third Generation (3G)
Total Factor Productivity

Total fertility rate (TFR)
Total Suspended Particulates (TSP)
Tourism enterprises
Tourism receipts
Toxic Substances and Hazardous
Waste Act of 1990 or RA 6969
Transmission (of Electricity)

Transmission Development Plan
Transnational education (TNE)
354
Development that is compatible with the preservation of the ecosystem in areas where
agriculture and fisheries activities are carried out (RA 8435).
The use of the land to meet changing human needs (agriculture, forestry, conservation),
while ensuring long term socioeconomic and ecological functions of the land. (The Updated
Philippine National Action Plan to Combat Desertification, Land Degradation and Drought
2010-2020).
Tax levied on imports and exports.
The ratio between the governments tax revenue collection vis--vis GDP at current prices.
Compulsory charges or levies imposed by government on goods, services, transactions,
individuals, entities, and others, arising from the sovereign power of state.
The education process designed at secondary and lower tertiary levels, officially recognized as
non-degree programs aimed at preparing technicians, para-professionals and other categories
of middle-level workers by providing them with a broad range of education, theoretical,
scientific, artistic and technological studies, social services and related jobs skills training.
An umbrella term that covers all technical means for processing and communicating
information. It defines a broad range of technologies, including methods for communication
(communication protocols, transmission techniques, communications equipment, media
communication), as well as techniques for storing and processing information (computing,
data storage, etc.)
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.
A measure of marginal productivity that takes into account the contribution of technological
change and improvements in production efficiency.
The number of births a woman would have on average at the end of her reproductive life
throughout her reproductive years (15-49).
Small or liquid particles suspended in the air.
Facilities, services and attractions involved in tourism, such as, but not limited to: travel
and tour services; tourist transport services, whether for land, sea or air transportation; tour
guides; adventure sports services involving such sports as mountaineering, spelunking, scuba
diving, and other sports activities of significant tourism potential; convention organizers;
accommodation establishments, including, but not limited to, hotels, resorts, apartelles,
tourist inns, motels, pension houses, and home stay operators; tourism estate management
services, restaurants, shops and department stores, sports and recreational centers, spas,
museums and galleries, theme parks, convention centers and zoos.
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.
An act to control toxic substances and hazardous and nuclear wastes, providing penalties
for violations thereof, and for other purposes. It aims to regulate, restrict or prohibit the
importation, manufacture, processing, sale, distribution, use and disposal of chemical
substances and mixtures that present unreasonable risk and/or injury to health or the
environment; to prohibit the entry, even in transit, of hazardous and nuclear wastes and
their disposal into the Philippine territorial limits for whatever purpose; and to provide
advancement and facilitate research and studies on toxic chemicals.
The conveyance of electricity through the high voltage backbone system.
The program for managing the transmission system through efficient planning for the
expansion, upgrading, rehabilitation, repair and maintenance, to be formulated by the
Department of Energy (DOE) and implemented by the National Transmission Corporation
(TransCo)/National Grid Corporation of the Philippines (NGCP) pursuant to Republic Act
No. 9136.
All types of higher education study programs, or sets of courses of study, or educational
services (including those of distance education) in which the learners are located in a country
different from the one where the awarding institution is based. Such programs may belong to
the education system of a State different from the State in which it operates, or may operate
independently of any national education system
UN Security Council Resolution

1325
Underemployed
Underemployment rate
Unemployed
Unemployment rate
Universal Access
Universal Health Care
Universal Service
Utilization rate
Value Chain
Value Engineering/Value Analysis

(VE/VA)
Value-Added Service (VAS)
Vulnerability
Vulnerable groups
The resolution reaffirms the important role of women in the prevention and 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.
Resolution 1325 urges all actors to increase the participation of women and incorporate
gender perspectives in all United Nations peace and security efforts. It also calls on all
parties to conflict to take special measures to protect women and girls from gender-based
violence, particularly rape and other forms of sexual abuse, in situations of armed conflict.
The resolution provides a number of important operational mandates, with implications for
Member States and the entities of the United Nations system.
All employed persons who expressed the desire to have additional hours of work in their
present job or an additional job, or to have a new job with longer working hours. Visibly
underemployed persons are those who work for less than 40 hours during the reference
period and want additional hours of work.
Percentage of the total number of underemployed persons to the total number of employed
persons.
The unemployed include all persons who are 15 years old and over as of their last birthday
and are reported as: without work, i.e., had no job or business during the basic survey
reference period; and currently available for work, i.e., were available and willing to take up
work in paid employment or self employment during the basic survey reference period, and/
or would be available and willing to take up work in paid employment or self employment
within two weeks after the interview date; and seeking work, i.e., had taken specific steps to
look for a job or establish a business during the basic survey reference period; or not seeking
work due to the following reasons: (a) tired/believe no work available, i.e., the discouraged
workers who looked for work within the last six months prior to the interview date; (b)
awaiting results of previous job application; temporary illness/disability; (d) bad weather; and
(e) waiting for rehire/job recall.
Percentage of the total number of unemployed persons to the total population 15 years old
and over.
Ubiquitous access to ICT services, e.g., at a public place, thus also called public, community
or shared access.
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.
Means every individual or household can have service, using it privately e.g., either at home
or increasingly, carried with the individual through wireless devices such as mobile phones,
PDAs, etc.
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.
In agriculture, identifies the set of actors and activities that bring a basic agricultural product
from production in the field to final consumption, where at each stage value is added to the
product. A value chain can be a vertical linking or a network between various independent
business organizations and can involve processing, packaging, storage, transport and
distribution. The terms value chain and supply chain are often used interchangeably (FAO,
2005).
A professionally applied and systematic team management approach used to 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.
A telecommunications industry term for non-core services including all services beyond
standard voice calls and fax transmissions.
The susceptibility to deterioration in well-being 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.
Groups of people who are susceptible to poverty as a result of risks and external shocks.
Glossary
355
Warrant of Arrest Information

System (WAIS)
Wasting
Water Quality
Water Resources (SCWR)
Waterless Barangay/Municipality
Watershed
Wet Thermal Disinfection
Whole-of-Government approach
Wholesale Electricity Spot Market

WiMAX
Wind Energy Systems
Wind Energy
Wireless Fidelity (WiFi)
Wireless
Yield Curve
Zero-Based Budgeting (ZBB)
356
Refers to the database of Warrant of Arrests issued by the different courts nationwide
accessible by all Philippine National Police (PNP) units and other law enforcement agencies
nationwide.
Current or recent or active malnutrition characterized by very low weight-for-height as a
result of deficits in both muscle tissue and fat mass.
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.
An inter-agency committee with core members as well as sub-sector 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).
A barangay/municipality wherein 50 percent or less of the population has access to safe
water.
Land area drained by a stream or fixed body of water and its tributaries having a common
outlet for surface run-off.
Steam disinfection which is based on exposure of shredded infectious waste to hightemperature, high-pressure steam. It inactivates most types of microorganisms if temperature
and contact time are sufficient; for sporulated bacteria, a minimum temperature of 121C is
needed. This method is similar to the autoclave sterilization process.
An approach wherein a government actively uses formal and/or informal networks across the
different agencies to coordinate the design and implementation of the range of interventions
that the agencies will be making in order to increase the effectiveness of those interventions
in achieving the desired objectives.
The market where competitive, efficient, transparent and reliable market/trading of electricity
will be made.
Fixed wireless standard IEEE 802.16 that allows for long-range wireless communication at
70 Mbit/s over 50 kilometres. It can be used as a backbone Internet connection to rural areas.
Machines or other related equipment that convert wind energy into useful electrical or
mechanical energy.
Energy that can be derived from wind that is converted into useful electrical or mechanical
energy.
A mark of interoperability among devices adhering to the 802.11b specification for Wireless
Local Area Networks (LANs) from the Institute of Electrical and Electronics Engineers
(IEEE). However, the term Wi-Fi is sometimes mistakenly used as a generic term for
wireless LAN.
Generic term for mobile communication services which do not use fixed-line networks for
direct access to the subscriber.
It is a line that plots the interest rates, at a set point in time, of bonds and other financial
instruments having equal credit quality but differing maturity dates. It is used as a benchmark
for other debt in the market such as mortgage rates or bank lending rates. The curve is also
a graphical representation of the range of interest rates available to investors and fused to
predict changes in economic output and growth.
A budgeting approach which involves a review/evaluation of major on-going programs
and projects implemented by different department/agencies, in order to: (a) establish the
continued relevance of program objectives given the current development/directions; (b)
assess whether the program objectives/outcome are being achieved, and; (c) guide decision
makers on whether the resources for the program/project should continue at its present level,
or be increased, reduced or discontinued.
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368
Planning Committees
Plan Steering Committee
Name
Position
Agency
Sec. Cayetano W. Paderanga, Jr.
Chair
NEDA
Sec. Cesar V. Purisima
Member
Sec. Corazon "Dinky" Juliano-Soliman
Member
Department of Social Welfare

& Development
Sec. Jesse M. Robredo
Member
Department of the Interior &

Local Governments
Planning Committee 1
Planning Committee Chair:
Sub-committee on Macroeconomy
Sub-committee Chair: Philippine Institute of Development Studies
Members:
Bangko Sentral ng Pilipinas
Department of Budget & Management
Office of the President Presidential Management Staff
Development Academy of the Philippines
Congressional Policy and Budget Research Department
Senate Economic Planning Office
University of Asia and the Pacific
Sub-committee on Industry and Services
Sub-committee Chair: Board of Investments-Department of Trade and Industry
Sub-committee Co-Chair: National Competitiveness Council
Members:
Bureau of Micro, Small and Medium Enterprise Development
Caucus of Development NGO Networks
Clark International Airport Corp.
Commission on Human Rights
Commission on Information and Communications Technology
Planning Committees and Schedule of Consultations
369
Congressional Policy and Budget Research Department

Department of Environment and Natural Resources - Mines and Geosciences Bureau
Department of the Interior and Local Government
Department of Transportation and Communications
Export Development Council
Federation of Philippine Industries
Joint Foreign Chambers
Office of the President-Presidential Management Staff
Philippine Chamber of Commerce and Industry
Philippine Economic Zone Authority
Philippine Exporters Confederation Inc.
Sub-committee on Modern & Competitive Agriculture and Fisheries

Sub-committee Chair: Department of Agriculture
Sub-committee Co-Chair: Department of Agrarian Reform
Members:
Government Agencies:
Phil. Council for Agricultural, Forestry and Natural Resources, Research and Development
Phil. Council for Aquatic and Marine Research and Development
Department of Environment and Natural Resources
Bureau of Agricultural Statistics
Department of Budget and Finance
Bureau of Fisheries and Acquatic Resources
Land Bank of the Philippines
Department of Science and Technology -Philippine Atmospheric Geophysical and
Astronomical Services Administration
Philippine Institute for Development Studies
Legislative:
HOR - Committee on Agriculture and Food
HOR - Committee on Agrarian Reform
HOR - Committee on Rural Development
HOR - Committee on Food Security
HOR - Committee on Natural Resources
HOR - Committee on Aquaculture and Fisheries Resources
370
HOR - Congressional Oversight Committee on Agriculture and Fisheries Modernization

HOR - Congressional Policy and Budget Research Department
Senate - Senate Economic Planning Office
Senate - Committee on Agriculture and Food
Senate - Committee on Agrarian Reform
NGOs/POs
Asian NGO Coalition for Agrarian Reform and Rural Development
Alyansa Agrikultura
Private Sector:
Management Association of the Phils.-Agribusiness and Countyrside Development
Foundation
Northern Mindanao Vegetable Producers Association, Inc.
Federation of Philippine Industries, Inc.
Philippine Exporters Confederation, Inc.
Rural Bankers Association of the Philippines
Resource Persons:
UPLB-School of Environmental Science and Management
National Academy of Science and Technology
Planning Committee Chair: National Economic and Development Authority
Sub-committee on Transport
Sub-committee Chair: Department of Transportation and Communication
Members:
Metro Manila Development Authority
Manila International Airport Authority
Department of Public Works and Highways
Philippine Ports Authority
Maritime Industry Authority
Clean Air Initiative for Asian Cities
Bases Conversion and Development Authority
National Computer Center
Light Rail Transit Authority
Civil Aeronautics Board
Toll Regulatory Board
Land Transportation Franchising and Regulatory Board
Cagayan Economic Zone Authority
Philippine National Railways
371
Sub-committee on Water
Sub-committee Chair: Department of Public Works and Highways
Sub-committee Co-Chair: National Water Resources Board
Members:
Manila Water and Sewerage System
League of Provinces
Department of Interior and Local Government
Local Water Utilities Administration
Pasig River Rehabilitation Commission
Board of Investments - Department of Trade and Industry
Philippine Water Partnership
Maynilad
Manila Water
Office of the President
Office of Civil Defense
Cooperative Development Authority
Metropolitan Waterworks and Sewerage System
Sub-committee on Energy
Sub-committee Chair: Department of Energy
Members:
Power Sector Assets and Liabilities Management
National Power Corporation-Small Power Utilities Group
National Electrification Administration
National Transmission Corporation
Philippine National Oil Company
Energy Regulatory Commission
Sub-committee on Communications
Sub-committee Chair: Commission on Information and Communication Technology
Members:
National Telecommunications Division
Telecommunications Office
National Computer Center
Philippine Association of TElephone Companies
Bureau of Internal Revenue
372
Sub-committee on Social Infrastructure

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

Sub-committee Chair: Bangko Sentral ng Pilipinas (BSP)
Members:
Bankers Association of the Philippines
Board of Investments
Bureau of Customs
Export Development Council
Financial Executives Institute of the Philippines
Landbank of the Philippines
National Competitiveness Council
Philippine Institute for Development Studies
Philippine Stock Exchange
National Reintegration Center for Overseas Filipino Workers - Department of Labor
and Employment
373

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

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

Sub-committee Chair: Department of Health
Members:
Commission on Population
National Nutrition Council
374

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

Sub-committee Chair: Department of Education
Members:
Technical Education and Skills Development Authority
Commission on Higher Education
National Commission on Culture and the Arts
Department of Science and Technology - Science Education Institute
Philippine Sports Commission
Philippine Information Agency
National Commission on Indigenous Peoples
Legislative:
HOR Committee on Basic Education and Culture
HOR Committee on Higher and Technical Education
Senate Committee on Education, Arts and Culture
Senate Committee on Labor, Employment and Resource Development
NGOs/Private Sector:
Philippine Education Network
375
Philippine Business for Education
Sub-committee on Housing and Urban Development

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

Sub-committee Chair: Department of Social Welfare and Development
Members:
Commission for the Welfare of Children
Peoples Credit and Finance Corporation
National Council on Disability Affairs
National Commission on Indigenous Peoples
Legislative:
HOR Committee on Labor and Employment
Senate Committee on Youth, Women and Family Relations
376
Social Watch Philippines
Pambansang Kalipunan ng mga Manggagawang Impormal sa Pilipinas
Sub-committee on Peace and Security

Sub-committee Chair: Office of the Presidential Adviser on Peace Process
Members:
Department of National Defense
National Commission on Indigenous People
National Security Council
Regional Planning and Development Office
Mindanao Development Authority
National Commission on Muslim Filipinos
Legislative:
HOR Committee on Public Order and Safety
HOR Committee on National Defense and Security
HOR Committee on Mindanao Affairs
HOR Special Committee on Peace, Reconciliation and Unity
Senate Committee on National Defense and Security
Senate Committee on Justice and Human Rights
Senate Committee on Peace, Unification and Reconciliation
CBCP National Secretariat for Social Action, Justice and Peace
Philippine Human Rights Information Center
Free Legal Assistance Group
Planning Committee Chair: Department of Environment and Natural Resources
Committee Co-Chair: Department of the Interior and Local Government
Members:
DENR-Planning Service
Environmental Management Bureau
Mines and Geosciences Bureau
Protected Areas and Wildlife Bureau
Forest Management Bureau
377
Ecosystems Research and Development Bureau

River Basin Control Office
National Water Resources Board
Land Management Bureau
National Mapping and Resources Information Authority
National Solid Waste and Management Commission
Pasig River Rehabilitation Commission
Laguna Lake Development Authority
Manila Bay Coordinating Office
Climate Change Commission
DOST-Philippine Atmospheric, Geophysical and Astronomical Services Administration
Philippine Institute of Volcanology and Seismology
Office of the Civil Defense - National Disaster Risk Reduction and Management Council
Department of Agriculture - Planning Service
Bureau of Fisheries and Aquatic Resources
Bureau of Soils and Water Management
DAR Planning Service
Department of Trade and Industries-Policy and Planning Dept.-BOI
Department of Budget and Management-Fiscal Planning
Department of Budget and Management- Operations
Department of Budget and Management- Bureau E
Department of Budget and Management-Fiscal Planning Bureau
Department of Public Works and Highways
Department of Public Works and Highways-Planning Service and PPP
Department of Transportation and Communications-Planning Service
National Stastistics Office
Philippines Institute for Development Studies
Legislative:
HOR Committee on Ecology
HOR Committee on Environment and Natural Resources
HOR Congressional Policy and Budget Research Department
Senate Committee on Climate Change
Private Sector:
Management Association of the Philippines
Philippine Business for the Environment
Chamber of Mines of the Philippines
NGOs/POs:
Civil Society Counterpart Council for Sustainable Development
World Wide Fund
Conservation International
Aksiyon Klima
Greenconvergence
Aidwatch Philippines
378
Schedule of Consultations
1st Meeting of the Plan Steering Committee
October 18, 2010
Visioning Group Meeting
November 26, 2010
Planning Committee & Sub-committee Meetings
November-December 2010
Inter-Planning Committee Meeting
December 21, 2010
Regional Consultations
National Capital Region
January 14, 2011
Region 1-Ilocos Region
January 4, 2011
Region 2- Cagayan
January 6, 2011
Region 3 - Central Luzon
January 4, 2011
Region 4A - CALABARZON
January 6, 2011
Region 4B - MIMAROPA
January 5, 2011
Region 5 - Bicol Region
January 5, 2011
Region 6 - Eastern Visayas
January 6, 2011
Region 7 - Central Visayas
January 6, 2011
Region 8 - Western Visayas
January 6, 2011
Region 9 - Western Mindanao
January 5, 2011
Region 10 - Northern Mindanao
January 6, 2011
Region 11 - Southern Mindanao
January 5, 2011
Region 12 - Central Mindanao
January 5, 2011
Region 13 - Caraga
January 14, 2011
CAR
January 4, 2011
ARMM provinces joined the consultations in Region 9 and Region 12

Expanded Plan Steering Committee Meeting
January 24, 2011
Representatives of Civil Society Organizations
January 25, 2011
Representatives of Labor Groups
January 31, 2011
NEDA Board Meeting
March 28, 2011
379
380
A Social Contract with the

Filipino People
BENIGNO S. AQUINO III
PLATFORM of GOVERNMENT
A National Leadership in
Need of Transformational
Change
A People Crying out for

Change
Its legitimacy is under question;
Corruption robs our children of their protection,

nutrition and education.
It persecutes those who expose the truth

about its illegitimacy and corruption;
Corruption destroys
communities.
It stays in power by corrupting

individuals and institutions;
Corruption steals from our farmers and workers.
It confuses the people with half-truths

and outright lies;
It rewards, rather than punishes,
wrongdoing;
our
families
and
Corruption deters businessmen from investing

in our economy.
This has eroded our spirit as individuals, as
communities, as a people.
It offers no lasting solutions for the

many problems of the country;
We have lost trust in the democratic institutions

we so courageously re-established after the
dictatorship.
It weakens the democratic institutions

that hold our leaders accountable.
Our proven capacity for collective outrage and

righteous resistance has been weakened.
It hinders our local governments from

delivering basic services;
We have ceased to depend on the patriotism

and civic engagement that used to animate
many of our efforts.
It has no vision of governance beyond

political survival and self-enrichment.
We have become divided and alienated, focusing

only on ourselves and on our individual pursuits.
Our moral faculties as a people have been
paralyzed.
We have retreated into a dark world of selfabsorption and cynicism. Our collective despair
has reached its lowest point.
381
Then finally, the gift of Light
Our Mission:
Cory Aquino passed on to the next life. From

our sadness, we awakened to a shaft of light
cutting through the darkness. She left the
Filipinos a legacy of selfless love for country
and people. Filipinos connection with each
other was rekindled. In death, she enabled
us to hope again for decent government. The
millions who connected with Cory at her
funeral represented something more than
euphoria, sentiment or transient emotions.
They represented the reverent memory of a
good leader in the past and the firm hope of
having a similarly good leader in the future.
We will start to make these changes

first in ourselvesby doing the right
things, by giving value to excellence
and integrity and rejecting mediocrity
and dishonesty, and by giving priority
to others over ourselves.
A Peoples Campaign of
Renewed Hope
Anchored on Ninoys and Corys legacy of
change through the ways of democracy
Embraces the qualities of integrity, humility
and trust-worthiness in public leadership
Recognizes the absence of these qualities in
government as a major cause of widespread
poverty, misery and despair.
The Vision for the Philippines:

A country with
1. A re-awakened sense of right and wrong,
through the living examples of our highest
leaders;
2. An organized and widely-shared rapid
expansion of our economy through a
government dedicated to honing and
mobilizing our peoples skills and energies
as well as the responsible harnessing of our
natural resources;
3. A collective belief that doing the right
thing does not only make sense morally, but
translates into economic value as well;
4. Public institutions rebuilt on the strong
solidarity of our society and its communities.
382
We will make these changes across

many aspects of our national life.
A Commitment to
Transformational Leadership:
1. From a President who tolerates
corruption to a President who is the
nations first and most determined
fighter of corruption.
2. From a government that merely
conjures economic growth statistics
that our people know to be unreal to
a government that prioritizes jobs
that empower the people and provide
them with opportunities to rise above
poverty.
3. From relegating education to just one
of many concerns to making education
the central strategy for investing in our
people, reducing poverty and building
national competitiveness.
4. From treating health as just another
area for political patronage to recognizing
the advancement and protection of
public health, which includes responsible
parenthood, as key measures of good
governance.
5. From justice that money and
connections can buy to a truly impartial
system of institutions that deliver equal
justice to rich or poor.
Economy
Government Service
6. From government policies influenced

by well-connected private interests
to a leadership that executes all the
laws of the land with impartiality and
decisiveness.
11. From Presidential appointees chosen

mainly out of political accommodation
to discerning selection based on integrity,
competence and performance in serving the
public good.
7. From treating the rural economy

as just a source of problems to
recognizing farms and rural enterprises
as vital to achieving food security and
more equitable economic growth,
worthy of re-investment for sustained
productivity.
12. From demoralized but dedicated civil

servants, military and police personnel destined
for failure and frustration due to inadequate
operational support to professional, motivated
and energized bureaucracies with adequate
means to perform their public service missions.
8. From government anti-poverty

programs that instill a dole-out
mentality to well-considered programs
that build capacity and create
opportunity among the poor and the
marginalized in the country.
9. From a government that dampens
private initiative and enterprise to a
government that creates conditions
conducive to the growth and
competitiveness of private businesses,
big, medium and small.
10. From a government that treats its
people as an export commodity and
a means to earn foreign exchange,
disregarding the social cost to Filipino
families to a government that creates
jobs at home, so that working abroad
will be a choice rather than a necessity;
and when its citizens do choose to
become OFWs, their welfare and
protection will still be the governments
priority.
Gender Equality
13. From a lack of concern for gender
disparities and shortfalls, to the promotion
of equal gender opportunity in all spheres of
public policies and programs.
Peace & Order

14. From a disjointed, short-sighted Mindanao
policy that merely reacts to events and incidents
to one that seeks a broadlysupported just peace
and will redress decades of neglect of the Moro
and other peoples of Mindanao.
Environment
15. From allowing environmental blight
to spoil our cities, where both the rich and
the poor bear with congestion and urban
decay to planning alternative, inclusive urban
developments where people of varying income
levels are integrated in productive, healthy and
safe communities.
16. From a government obsessed with
exploiting the country for immediate gains
to the detriment of its environment to a
government that will encourage sustainable
use of resources to benefit the present and
future generations.
This platform is a commitment to change that
Filipinos can depend on.
With trust in their leaders, everyone can work
and build a greater future together.
383
Index
1991 Local Government Code,
201
A
absorptive capacity, 42
A&D, 294
adaptation tools, 307
adaptive management, 312
Adopt-an-estero program, 316
agri-business and forest-based industries, 57
agriculture, 3154, 3454
Agriculture and Fisheries Modernization
Act, 307
air pollution, 316
alienable and disposable lands, 294
alternative delivery modes, 170
Alternative Dispute Resolution, 204
ancestral domain, 319, 322
ancestral domains, 297, 311
anticorruption drive, 23
Anti-Graft and Corrupt Practices Act, 212
Anti-Money Laundering Act, 213
Anti-Red Tape Act, 200
APEC Code of Conduct for Business, 202
aquifer recharge, 293, 294
Arangkada Philippines 2010, 58
armed conflict, 26, 282, 284, 285, 286, 287,
288
ARMM, 136, 156, 162, 168, 285, 287, 288
ASEAN, 40
asset, 45, 46
Asset price, 45
B
balance of payments, 44
Bantay-Dagat, 305
Barangay Health Stations, 167
Basic Education Sector Reform Agenda, 24
basic sanitation, 127, 129, 133
Biochemical Oxygen Demand, 292
Biodiversity, 295, 303, 323
bio-eco-engineering technology, 316
BIR, 42, 46, 47
Board of Investments, 65
BOC, 42, 46, 47
384
BOD, 292
border security, 289
BOT, 50, 51
BPO, 31, 57, 61, 62, 63, 71, 75, 79, 82
Brand Philippines, 77
broadband Internet, 153
BSP, 40, 41, 43, 44, 51, 52
BTr, 39, 50
budget deficits, 21
Bureau of Customs, 42
Bureau of Internal Revenue, 42
business environment, 56, 58, 64, 69, 73,
74, 76, 78, 83
business process outsourcing, 57
Business Registration/Permits and
Licensing System, 74
C
Calamity Fund, 310
campaign finance, 215
capital and financial account, 44
Capital formation, 30
carbon stock, 311
Career Executive System (CES) bill, 208
case-monitoring, 217
causes of conflict, 282, 283, 286
caves, 295, 303, 312
Cave Strategic Action Plan, 303
CBA, 292
CCA, 119, 124, 128, 129, 138, 140, 141,
167, 169, 305, 308, 309, 310, 312,
317, 318, 319, 320
China, 31, 48
Citizen-centered government, 211
Citizens Charter, 200
Citizens participation, 204
Civil Service Academy, 208
civil society organizations, 51
Clean Air Act, 307, 316
Clean Water Act, 134
client-satisfaction surveys, 23
climate change, 26, 119, 131, 132, 133,
135, 139, 140, 152, 157
Climate change, 301
Climate Change Act, 304, 305, 308, 318,

323
Climate Change Act of 2009, 304, 305,
323
Climate Change Adaptation, 76
climate change resilient, 292
climate change scenarios, 307, 311
coastal and marine resources, 295, 296,
303, 310, 313
coastal resources, 295, 304, 305, 321
Code of Conduct and Ethical Standards
for Public Officials and
Employees, 213
Codes of Conduct for law enforcers, 218
coliform, 293
Commission on Audit, 50
Committee on Infrastructure, 128
Communal Irrigation Development
Fund, 138
communal irrigation systems, 136
community-driven development, 24, 25
Competency Needs Assessment, 208
competition policy, 23
competitiveness, 56, 57, 58, 59, 64, 69,
73, 74, 77, 78, 79, 81, 84, 87, 89,
91
Competitiveness indicators, 58
Compliance and Integrity Programs for
Business, 213
comprehensive anticorruption
program, 207
Comprehensive Land Use Plans, 167
conditional cash transfers, 24
consolidated public sector deficit, 41, 46
Construction and Related Materials, 87
Consumer Policy, 72
Consumer Price Index, 44
consumer welfare, 56, 72, 92
Contingent Liability Management, 50
Continuous Quality Improvement, 169
coral reefs, 295, 296, 313
Coral Triangle, 295, 303, 304, 313
Corruption Perception Index, 203
cost-benefit analysis, 292, 298, 303, 311
cost of doing business, 56, 58, 69
criminal elements, 283, 288
culture of competitiveness, 56, 57, 77,
78
current account balance, 44
D
DBM, 39, 49, 50, 51
debt, 41, 43, 45, 47, 51, 53
Debt management, 51
deficit, 40, 41, 43, 46, 47, 48, 49
DENR, 134, 165, 293, 294, 296, 297, 298,
300, 302, 303, 304, 306, 307, 308, 309,
310, 311, 315, 319
DENR- Ecosystems Research and Development
Bureau, 306
DENR-Mines and Geosciences Bureau, 298,
300
Department of Science and TechnologyPhilippine Atmospheric, Geophysical
and Astronomical Services
Administration, 301
Developing Human Resources, 78
Digital Terrestrial Television
broadcasting, 155
DILG, 141
disaster-preparedness, 305, 319
Disaster Risk reduction, 76
Disaster Risk Reduction and Management
Act, 306, 308, 310, 318
disasters and extreme events, 305
dissolved oxygen, 292
DOF, 49, 51
DOH, 123, 132, 133, 134, 164, 165, 168, 169,
170
Doing Business Report, 58, 74
DOST-PAGASA, 301
DPWH, 123, 134, 139, 141, 170
DRR, 305, 306, 307, 308, 310, 317, 318, 319,
320
DRRM, 119, 128, 138, 140, 141, 167, 169,
305, 306, 308, 310, 317, 318
duty-bearers, 207
E
Ease of Doing Business, 201
East Asian, 48
eco-efficiency, 132, 140
ecoefficient water infrastructure, 128
ecological integrity, 26
Ecological Solid Waste Management Act, 301,
307, 316
Ecological Solid Waste Management Act of
2000, 301, 316
Economic Regulation, 131
Economic Zones, 66, 67, 77
ecosystem profiling, 321
ecotourism, 315
Index
385
education, 37, 43, 46, 48, 53

Education For All, 169
e-governance services, 209
e-Government system, 157
e-Government Systems, 155
EIA, 292, 318
Electric Power Industry Reform Act, 44
electronic Prosecution Case Management, 217
electronics, 57, 61, 64, 67, 79, 83
electronic waste, 316
El Nio, 34
EMB, 165
employment, 30, 36, 37, 38, 42, 52, 56, 61,
63, 67, 68, 69, 70, 71, 73, 77, 79, 81
employment generation, 25
Enhanced Case Flow Management (eCFM)
System, 217
entrepreneurial culture, 57
environmental governance, 319, 320
environmental impact assessment, 292
environmentally critical areas, 316
environmental safeguards, 301, 314
environment and natural resources, 21, 26
Environment and Natural Resources Framework
Plan, 308
ESWMA, 162, 163, 164
e-waste, 316, 321, 323
excise tax, 39, 47
Exclusive Economic Zone, 283, 290
Executive and Legislative Advisory &
Consultative Council (JELACC), 220
Executive Development and Strategic
Management, 208
Expansion of Court-Annexed Mediation, 217
Expansion of e-JOW, 217
export, 3654
exports, 56, 58, 60, 61, 63, 64, 74, 77, 79, 83,
84, 85, 86, 87, 90
export sector, 47
exports of services, 45
external, 31, 39, 41, 45, 46, 53
external debt, 41, 45, 53
external debt-to-GDP ratio, 45
external security, 289
Extractive Industry Transparency
Initiative, 315
F
fees and charges, 41, 43
financial markets, 39, 44, 45, 52
Financial Sector Forum, 52, 53
financial stability, 45, 46, 52, 53
fiscal, 30, 31, 33, 39, 40, 42, 43, 44, 45, 46,
386
47, 48, 49, 50, 51, 52

fiscal consolidation, 42, 46, 47
fiscal deficits, 39, 43
fiscal incentives, 47, 49
fiscal policy, 30, 46
fiscal responsibility, 47
Fiscal Responsibility Bill, 49
fiscal stimulus, 33
Fiscal Year, 42
Fisheries and Aquatic Resources
Management Councils, 304
Fishery Code, 307
Flood and Drainage Management, 139
flood management, 127, 128, 140, 141
flood management infrastructure, 140
food security, 137
forest cover, 294, 300, 301, 311
forestland, 294, 295, 302, 303, 307, 311,
315, 323
forest lands, 302
Forward Estimates, 48
Freedom of Information Act, 205
Functional Competency
Development, 208
G
GAA, 50, 51
Garments, 87
GDP, 30, 31, 33, 34, 40, 41, 42, 43, 44,
45, 46, 47, 48, 56, 32, 41, 51
Gender Development Index, 206
gendered interests, 206
gender mainstreaming, 320
General Appropriations Act, 50
General Procurement Reform Act, 118
genetically-modified organisms, 312
geographic positioning system, 308
geohazard mapping, 318
Gini ratio, 17
Global And Regional Integration, 91
global commodity, 46
Global Competitiveness Report, 58
global crisis, 33
global financial crisis, 33, 40, 44, 45, 52
global information system, 308, 311
Global Integrity Report, 203
global recession, 33
GNP, 31, 33, 34
GOCC, 50, 51
Good governance, 198
governance, 18, 22, 56, 74
Governance and Public Leadership, 208
Government Compensation and Position
Classification System, 201

Government Corporate Council, 51
Government Integrated Financial
Management Information
System, 50, 211
Government Procurement Policy
Board, 213
Committee, 211
Program, 211
Government Rationalization
Program, 49
green architecture, 317
Greenhouse Gas, 310
green house gas emissions, 317
greenhouse gasses emission, 311, 312
Green ICT, 157, 161
Green Industry, 317
greening of industry, 315
green jobs, 315
gross international reserves, 45
groundwater, 293, 294, 317
Guidelines and Procedures for entering
into Joint Venture (JV) Agreements
between Government and Private
Entities, 118
H
habitats, 295, 296, 303, 304, 312
hazard identification, 318
hazard maps, 140
hazardous waste generators, 165
hazardous wastes, 293, 301, 321, 323
Hazardous wastes, 301
hazards, 299, 300, 301, 317, 318
HCW, 164, 165
Health Care Wastes, 164
Health Facility Enhancement
Program, 168, 170
higher education, 26
Homestyle Products, 86
housing, 57, 84
human capital, 56, 57, 78, 86, 89
Human development, 20
HWG, 165
Hyogo Framework for Action, 305
I
ICC-DBCC, 50
IMT, 138
inclusive growth, 21, 46, 73, 88
Inclusive growth, 14
Induction Program, 208
industrial peace, 57
industries with high growth potential, 57
industry, 56, 57, 61, 62, 63, 64, 65, 67, 68, 69,
71, 72, 73, 75, 76, 77, 79, 82, 83, 84, 85,
86, 87, 88, 89, 90, 91
industry-cluster approach, 57
inflation, 31, 33, 39, 44, 45, 46, 51, 52, 53
Inflation, 40, 44, 51
Information, education, and
communication, 135
Information Systems Strategic Plan, 308
infrastructure, 21, 39, 42, 43, 46, 48, 49, 53,
57, 58, 60, 64, 74, 76, 77, 79, 81, 82, 85,
86, 90, 91, 93
Inmate Information System, 217
institutional and regulatory environment, 118
institutions, 18
integrated coastal management, 303, 313
Integrated Coastal Resources Management
Project, 309
integrated ecosystem-based management, 310
Integrated Water Resources Management, 128
Integrity Development Review, 216, 218
Integrity of the Judiciary, 218
Internal Control System, 49, 212
Internal Revenue Allotment, 42, 201
internal security program, 284
internal security system, 290
internal stability, 282, 288
International Labor Organization, 35
International Organization For Standardization
(ISO) Quality Management System
(QMS), 211
invasive alien species, 295
investment, 43, 44, 45, 48, 52, 53
investment promotion areas, 56, 77
investment ratio, 17
investments, 34, 56, 58, 59, 62, 63, 64, 65, 66,
67, 68, 74, 75, 76, 77, 78, 79, 83, 84, 85,
86, 89, 91, 92
irrigable lands, 138
irrigated agriculture, 136, 137
irrigation, 127, 128, 136, 137, 138, 140
Irrigation, 136, 137, 138
irrigation service fees, 137
irrigators associations, 137
ISF, 137, 138
islands of good governance, 198
IWRM, 128, 132
Index
387
J
Joint Foreign Chambers of the
Philippines, 213
Judiciary, 220
Judiciary Case Management System,
Justice Sector Coordinating Council
(JSCC), 220
justice system infrastructure, 217
217
K
Katarungang Pambarangay Law,
219
L
labor mismatch, 36
ladderized HRD program, 208
land-use mapping, 138
Lateral Attrition Law, 39, 47
learning-by-doing, 25
Level II (communal faucet system or
standpost), 131
Level III (waterworks system or individual
household connections), 131
Level I (point source), 131
LFS, 32, 34, 35, 36
LGU, 140, 152, 158, 161, 163, 164, 169, 171
Light Rail Transit Authority, 43
loan portfolio, 46
loan-to-value ratio, 46
Local Government Code, 307, 314
Local Government Code of 1991, 307
logistics, 57, 60, 68, 85, 91, 93
LWUA, 130, 131
M
macroeconomic stabilization, 39, 46
Macroprudential regulations, 46
Magna Carta of Women, 304
mangrove, 295, 296, 300, 301, 313
mangroves, 296, 313
Manila Bay Coastal Strategy Goal 2020, 316
marine protected areas, 304, 323
Market Access, 91
Materials Recovery Facilities, 162
materials recovery systems, 163
MDG, 127, 129, 131, 132, 133, 134
MDG 7, 127, 132
Medium-Term Expenditure Framework, 48
merchandise exports, 33, 44
Merchandise exports, 30
Merchandise imports, 45
388

SystemRegulatory Office, 130
microfinance, 25
micro, small, and medium
enterprises, 57
Millenium Challenge Corporation, 199
Millennium Development Goals, 15
minimum wage, 44
mining, 57, 64, 75, 76, 79, 83, 84, 90,
296, 297, 298, 301, 302, 307, 308,
309, 314, 315, 321, 322
Missionary areas, 149
monetary, 30, 39, 44, 45, 46, 52, 53
Monetary authorities, 44, 46, 52
monetary policy, 30, 39, 44, 45, 52
Motor Vehicle Parts and Components, 86
Multi-Sectoral Anticorruption
Council, 202
Municipal Development Fund
Office, 131
MWSS, 130, 131, 134
N
Nagoya Protocol, 312
National Anticorruption Plan of
Action, 202
National Biosafety Framework, 312
National Brand and Identity
Awareness, 56
National Citizen Satisfaction Index, 211
National Commission on Indigenous
Peoples, 311
National Consumer Affairs Council, 72
National Environmental Awareness and
Education Act of 2008, 306
National Framework Strategy on Climate
Change, 304, 305, 310
National Health Insurance Program, 24
National Integrated Protected Areas
System, 303
National Irrigation Authority, 136
National Irrigation Management
Fund, 138
national irrigation systems, 136
National Justice Information
System, 215
National Power Corporation, 44
National Quality Infrastructure, 89
National Renewable Energy
Program, 144, 150
National Sanitation Code, 135
national security, 282, 284
national sovereignty, 282
National Telecommunications
Commission, 153, 155, 160
National Transport Policy, 124
National Urban Development and Housing
Framework, 166
National Water Resources Board, 128
National Water Resources Policy, 132
Philippines, 303
National Wildlife Research Center, 321
natural hazards, 300
NCR, 156, 162, 164, 165, 166, 168
NEC, 163, 164
Next Wave Cities, 62, 83
NFA, 43
NG, 40, 41, 43, 46, 48, 50, 53
NGA, 117, 129, 135, 155, 157, 161, 162
NG deficit, 41, 46
NIA, 136, 137, 138
NIS, 138
NTP, 124
NWRB, 128, 129, 130, 132
O
Official development assistance, 134
one-stop shops, 207
open defecation, 133, 134, 135
Open defecation, 134
open for business, 76, 77
Organizational Performance Indicator
Framework, 48
Organizational Performance Indicators
Framework, 208
Overseas Filipino remittances, 45
P
PAMANA, 286
Paper on Budget Strategy, 48
part-time workers, 36
Patubigayan Trust Fund, 138
pay-as-you-pollute, 317
Payment for Environmental
Services, 312
peace process, 282, 283, 284, 285, 286,
288
Peoples Survival Fund, 323
per capita income, 27
Performance Management System, 208
PES, 312, 321
peso, 44, 45
Philippine Agenda 21, 310
Philippine Amusement and Gaming
Corporation, 169, 170

Philippine Charity Sweepstakes Office, 169,
170
Philippine Disaster Risk Reduction and
Management Act of 2010, 304, 305
Philippine Ecological Solid Waste Management
Act of 2000, 162
Philippine Economic Zone Authority, 65, 66,
67
Philippine Fisheries Code of 1998, 308, 323
Philippine Government Electronic Procurement
System, 49, 213
Philippine Inventory of Chemicals and
Chemical Substances, 165
Philippine Strategy on Climate Change
Adaptation 2010, 139
Philippine Water Supply Sector
Roadmap, 128, 131
policy interest rates, 44
policy rates, 33
pollution control, 127, 128
potable water, 127, 131, 132, 167
poverty, 15
poverty incidence, 16, 38
poverty threshold, 38
Power Sector Assets and Liabilities
Management Corporation, 44
PPP, 23, 51, 53, 117, 118, 120, 121, 124, 126,
135, 165, 167, 171
precautionary approach, 292
price shocks, 46
Priority Chemical List, 165
private irrigation systems, 136
privatization, 42, 43
Procurement law, 213
Procurement Reforms, 49
productivity and efficiency, 56, 57, 73, 77, 87,
88
project preparation, development, and
implementation, 116
property-rights, 19
Property-rights, 21
prosecutors and judges, 218
Protected Area Management Boards, 309
protected areas, 294, 303, 304, 307, 312, 318,
322, 323
PSSR, 134, 135
Public Financial Management, 50
public financial management (PFM)
system, 211
public order and safety, 284, 288, 289
public-private partnership, 22
Public-Private Partnership, 76
Index
389
public procurement, 22
PWSSR, 131, 132, 134
R
RA 7718, 118
RA 9003, 301, 316
RA 9710, 304
RA 9729, 304, 305
rafflesia, 304
Ramsar Convention, 313
RA No. 9003, 162
rationalization, 23, 47
Rationalization Plan, 137, 202
real effective exchange rate, 45
Regional Development Councils, 51
reglementary period, 217
regulatory, 45, 52, 53
Remittance, 34
remittances, 31, 33, 37, 44, 45, 53
Remote area electrification, 150
Renewable Energy Act of 2008, 144
research and development, 69, 75
Resource regulation, 132
resource valuation, 314, 322
Revenue effort, 40
Risk Analysis and Management, 116
risk evaluation, 318
Risk transfer mechanisms, 306
rule of law, 198, 287, 290
Rules for Setting EC Wheeling Rates, 148
Rural Health Units, 167
S
saltwater intrusion, 294
sanitation, 127, 129, 132, 133, 134, 135, 170,
172
Sanitation Code, 132, 134, 135
Sanitation Code of 1975, 134
science and technology, 26, 69, 91
Science, Technology and Innovation, 89
sea grasses, 313
sea-level rise, 296
Security Sector Reform and
Modernization, 289
self-employment, 25
Self-sufficiency level, 141
septage, 127, 133, 134, 135, 136
services, 56, 57, 58, 59, 60, 61, 62, 63, 64, 67,
68, 69, 71, 72, 73, 74, 76, 77, 78, 79, 80,
81, 82, 85, 86, 87, 88, 89, 91, 92, 93
services sector, 3353, 34
sewerage, 127, 133, 134, 135
390
shipbuilding, 57, 67, 86

short-term external debt, 41, 45
single, independent economic
regulator, 131, 135
single website/portal, 209
single-window service channels, 207
sin products, 40
social and economic services, 50
social protection measures, 24
social services, 38, 41, 43, 46, 48
solid waste, 293, 301, 307, 309, 317,
320, 322
Sparkplugs for Governance and Economic
Development, 200
Strategic and Integrated HRD, 208
Strategic National Action Plan on Disaster
Risk Reduction, 305
streamlining bureaucratic procedures, 56
Subcommittee on Water Resources, 128
Subic Bay Regulatory Board, 130
Sulu-Celebes Seas, 303
Sulu-Sulawesi Marine Ecoregion, 304,
313
Supervisory Development, 208
Supply Chains, 93
sustainable development, 303, 305, 307,
319, 322, 323
sustainable environment, 127, 134
T
Tariff and Customs Code, 75
tax administration, 47
tax effort, 39, 46, 47
Tax effort, 40
tax reforms, 31, 40, 47
tax system, 47
technical barriers, 60
Ten-point Agenda, 73
territorial integrity, 282, 283, 284, 288,
289
Thailand, 48
total factor productivity, 27
tourism, 57, 61, 62, 63, 64, 68, 75, 76,
77, 79, 80, 81, 82, 88, 90, 91, 92
Toxic Substances and Hazardous and
Nuclear Waste Control Act of
1990, 301
trade, 33, 34, 53
transcript of stenographic notes, 217
transparency, 56, 74, 76
Transparency Internationals Corruption
Perception Index, 58
Transport, Storage, Disposal, 164
tropical cyclones, 300

typhoon Ondoy, 42
U
underemployment, 36, 37
Underemployment, 15
unemployment, 32, 35, 36, 37
UNFCCC, 305, 308, 309
United Nations Convention against
Corruption, 213
United Nations Framework Convention on
Climate Change, 305
universal access, 153, 158, 159, 161
unpaid family workers, 36
Updated National Wetland Action Plan for
the Philippines, 313
urban parks, 317
Workplace Basics, 208

World Bank, 127, 129
world-class forensic laboratories, 217
World Justice Project Rule of Law Index
2010, 203
Worldwide Governance Indicators, 198
Z
ZBB, 42, 50
Zero Backlog Project, 217
zero-based budgeting, 22, 210
Zero-Based Budgeting, 50
V
value-added tax, 39
Value Engineering/Value Analysis, 116
Verde Island Passage, 303, 305
Vietnam, 48
Volumetric (volume-based) pricing, 138
Vulnerabilities, 45
vulnerability assessment, 311, 318
Vulnerability assessments, 307
W
Warrant of Arrest Information
System, 217
waterless areas, 127, 130, 132
water pollution, 292, 316
Water Quality Management Fund, 316
water resource management, 293
water resources, 127, 128, 129, 138,
293, 294
water-service providers, 129
watershed management, 127, 128, 140
watersheds, 140, 293, 306, 309, 311
water supply, 117, 127, 128, 129, 130,
131, 132, 133, 134, 135, 140, 166
WATSAN, 172
Wearables, 86
wetlands, 295, 310, 312
Whistleblower Protection Law, 215
WHO/UNICEF JMP on the MDGs, 133
WHO/UNICEF Joint Monitoring Program
on the MDGs, 129
wildlife, 296, 312, 314, 315
Wildlife Act, 309, 321
Women in Nation Building Act, 206
Index
391

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Philippine Development Plan, 2011-2016

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Philippine Development Plan

Philippine Development Plan 2011-2016

2011 by National Economic and Development Authority

Philippine Development Plan 2011-2016

Printed in the Philippines

Philippine Development Plan 2011-2016

Chapter 1. In Pursuit of Inclusive Growth

What is Inclusive Growth

What Makes Inclusive Growth Elusive

How Shall We Achieve Inclusive Growth

How Shall We Monitor Progress Towards Inclusive Growth

Chapter 2. Macroeconomic Policy

Assessment and Challenges

Output and Employment

Economic Performance 2004-2010

Employment and Poverty

Fiscal and Monetary Sectors

Monetary and External Sectors

Monetary Policy and External Sector Reforms

Philippine Development Plan 2011-2016

Chapter 3. Competitive Industry & Services Sectors

Exports of Goods and Services

Micro, Small and Medium Enterprises (MSMEs)

Goal 1: Create a better business environment

Goal 2: Action agenda to improve productivity and efficiency

Goal 3: Action agenda to enhance consumer welfare

Chapter 4. Competitive and Sustainable Agriculture and Fisheries Sector

Goals and Strategies

Goal 1: Food Security Improved and Incomes Increased

Goal 2. Sector Resilience to Climate Change Risks Increased

Goal 3. Policy Environment and Governance Enhanced

Philippine Development Plan 2011-2016

Chapter 5. Accelerating Infrastructure Development

Assessment, Issues, and Challenges

Strategic Plan and Focus

Crosscutting Issues and Strategies in the Water Sector

Assessment, Issues, and challenges

Strategic Plan and Focus

Assessment, Issues, and Challenges

Strategic Plan and Focus

Information And Communications Technology (ICT) Infrastructure

Assessment, Issues, and Challenges

Strategic Plan and Focus

Chapter 6. Towards a Resilient and Inclusive Financial Sector

Current Structure of the Financial System

Condition and Performance

Philippine Development Plan 2011-2016

Vision for the Financial Sector

Key Reform Objectives and Targets

Specific Reform Strategies

Chapter 7. Good Governance and the Rule of Law

Assessment and Challenges

Public Service Delivery

Political Processes and Systems

Gender Roles in Governance Structures

Curb Corruption Decisively

Intensify Corruption Prevention

Adopt a comprehensive anticorruption program

Enhance the Legal and Policy Framework for Corruption Prevention

Strengthen Integrity Mechanisms and Control Structures

Enhance Partnership Structures and Mechanisms and International Linkages

Conduct anticorruption advocacy campaigns

Strengthen the Rule of Law

Philippine Development Plan 2011-2016