JOBLESS GROWTH, INEQUALITY PERSISTENT IN PHL Translating economic gains to poverty reduction remains a challenge

MANILA-The Philippines’s steady economic growth has not been coupled by improvements in the labor market, creating a “jobless growth” where many sectors of the population are unable to benefit from prosperity, and where inequality remains persistent.

The country’s growth averaged nearly 7% in the last two years, higher than all the other countries in the region except China. However, economists both local and international noted that the economic surge has failed to create jobs that will result to gainful employment for majority of Filipinos, especially those in rural areas.

The expansion of the services sector, mainly the outsourcing industry, has been remarkable but experts were careful to note that this sector demands only highly skilled positions and accounts for just 1% of employment, leaving the rest of the labor force untapped.

Within this economic scenario, the Angara Centre for Law and Economics today presented the second roundtable discussion of the Andrew Tan Lecture Series on the topic “Towards Inclusive Regional Development in the Philippines: Lessons, Challenges and Policy Suggestions” at the Malcolm Hall, College of Law, University of the Philippines in Diliman, Quezon City.

This lecture is part of a joint study undertaken by the Angara Centre with the World Bank to identify the areas of persistent underperformance and inequality in the Philippines.

Studies showed that economic growth has been largely supported by private consumption and consumer spending, owing to employment in services, construction and remittances from overseas Filipinos. The services sector, contributing 57% of the economy, grew even further as retail, finance, real estate, and business process outsourcing (BPO) posted strong growth.

Growth has failed to permeate the other sectors of the economy, most especially to the countryside that makes up 70% of the population. Agriculture growth was at a measly 1%.

The Philippines’ overall ratio of rural-urban wage gap at 67 percent has remained constant over the last decade.

Teams of economists and leading researchers from the Philippines and abroad presented their studies and recommended actionable policy initiatives. Leading this lecture are Dr. James Robinson of Harvard University, Dr. Pablo Querubin of New York University and Dr. John C. Nye, Frederic Bastiat Chair in Political Economy at the Mercatus Center, George Mason University and Research Director at the Higher School of Economics in Moscow.

They called for public investments to support agriculture, tourism and manufacturing so that infrastructure growth can crawl out of metropolitan centers and into rural areas. Raising millions out of poverty also requires investments in transportation and communication, and improving resilience against disasters that debilitate poverty reduction efforts and threaten to reduce the middle class.

Further, creating quality jobs and enhancing competitiveness through strategic partnerships with the private sector must also be prioritized in order to move more people from the fringes of income distribution.

Clark opens first container depot

CLARK FREEPORT ZONE-Clark Development Corporation (CDC) President and chief executive officer Arthur Tugade said Monday that the three-hectare container depot inside the Freeport Zone is open to serve empty container vans congesting the Port of Manila and other ports in Northern and Central Luzon.

 

The operation of the container yard came into effect upon the signing of the lease agreement between Tugade and CargoHaus Inc. chairman Alberto Lina and President Rudy Fulo over the weekend.

 

“This is the first container yard ever in an eco-zone, and this is the first time in the history of CDC that we will be addressing issues on clogged ports and traffic congestion apart from settling the concerns of our locators,’’ said Tugade.

 

“I thanked CargoHaus for allowing me to perform for CDC and for Clark. I cannot be proud enough of this,’’ he added.

 

The lease deal mandates the use of the Freeport property near the airport as storage house of empty containers shipped from Subic to Metro Manila, Southern, Central and Northern Luzon or vice versa.

 

The agreement also states specific routes to trailers transporting the empty vans to avoid traffic along national McArthur hi-way or other national hi-ways. 

 

Lina said the removal of 20 to 40 footer containers off the road by bringing them directly to Clark will also ease traffic in Metro Manila by 10 per cent. It will also double the savings of importers from Clark to Manila, Bulacan and other Luzon areas as they do not have pay much for gas, parking and cargo fees.

 

Moreover, BCDA President Arnel Paciano Casanova hailed the strengthened partnership between CDC and CargoHaus through the lease agreement, as he called on others to follow suit.

 

“We at BCDA take pride that our family in Clark is doing well in uplifting our economy. You have seen how Clark has grown so fast and achieve a historical target that is not known before.  Hopefully others will follow suit,’’ Casanova said.

 

CDC is a member of the BCDA group, a prime mover of national development. (CDC)

‘Dramatic increase’ in 2014 Clark tourist arrivals

CLARK FREEPORT ZONE-The Tourism Promotions Office (TPO) of the Clark Development Corporation (CDC) said Tuesday there has been a dramatic rise in tourist arrivals this year, attributing most of it to some high impact and well attended events such as the MICE Conference and various sports activities.

In her report to CDC president/CEO Arthur Tugade, TPO manager Noemi Garcia said that Clark tourist visitors both domestic and international increased to 947, 227 from January to June this year, higher by 19.65 percent from the 791, 599 arrivals recorded in the same period of 2013.

Garcia’s report also indicated that 568, 904 of the total arrivals had been accommodated in various hotels inside the Freeport.

“The occupancy rate was impressive as it increased by almost 60 percent from last year’s 283, 632 for the same period,’’ she explained.

The TPO report said the remarkable increase this year also attributed to massive promotions via liaising, high travel fairs participation, networking and distributions of promotional materials and improved data collection on tourism statistics.

A total of 137, 760 day visitors, 78, 636 events and 59, 124 educational tours has been recorded in the first half. Airport arrivals, on the other hand, were pegged at 240, 563.

The MICE Conference held last June was among the many well attended events at the Freeport, which gathered some 600 delegates and guests from countries like Australia, China, Korea, Taiwan, Singapore, United Kingdom, Germany, Poland and Russia.

Tugade was earlier commended by the TPO for the efficient handling of the conference.

Others that equally contributed to the surge in Freeport arrivals include sports activities such as the Clark Animo Run 2014, Milo Marathon, Run Tourism Clark and 2014 Regional Little League Asia-Pacific, which had 52 teams from 16 participating countries. (CDC)

Legarda Warns of Climate Risks Vs. Agri Growth, Poverty Reduction

MANILA-Senator Loren Legarda raised concerns over the risks posed by climate change, which has been causing extreme weather events, in the growth of the agriculture sector and in addressing poverty in the country.

Legarda, Chair of the Senate Committee on Climate Change, said that the Intergovernmental Panel on Climate Change (IPCC) already warned that climate change impacts will likely make poverty reduction more difficult, further erode food security, and prolong existing and create new poverty traps.

During the briefing by the Development Budget Coordination Committee (DBCC) on the 2015 National Expenditure Program (NEP), Socioeconomic Planning Secretary Arsenio Balisacan said that the dismal 0.9% growth in agriculture for the first quarter of 2014 was partly due to disasters, particularly supertyphoon Yolanda.

In line with this, Legarda expressed support in improving public investments in agriculture, such as irrigation, and pouring more funds in research and development.

“The country’s agricultural adaptation program must ensure more investments in agricultural research and infrastructure, improved water governance and land use policies, better forecasting tools and early warning systems, a strengthened extension system that will assist farmers to achieve economic diversification, and access to credit and crop insurance to make significant improvements in the country’s food security goals,” she stressed.

Legarda has already warned of the ill effects of disasters and climate change to the country’s rice and crop production because both strong typhoons and droughts affect the agriculture sector.

The Senator said that past experiences have proven this fact. Typhoons, floods and droughts from 1970 to 1990 resulted in an 82.4% loss in total Philippine rice production; while the El Niño-related drought experienced in the country from 1990 to 2003 was estimated to have caused US$ 370 million in damages to agriculture.

Meanwhile, Legarda said she is hopeful that the government will be more proactive with its disaster resilience and climate change adaptation programs, as it has recognized that the war against poverty will be much harder if disaster vulnerability remains unaddressed.

“Disasters are greatly felt by the poor because the effects are magnified in their life. For many Filipinos, every single day of work is synonymous to survival. When impassable roads due to heavy downpour prevent a daily wage earner from going to work, it would mean no earnings for the day, no food on the table,” she said.

In this regard, she said that the government can look into how its social protection programs can be scaled up to not only address structural poverty, but also build resilience against the recurring impact of natural hazards.

“We cannot let disasters keep the poor forever poor. We cannot let recurrent disasters take away from our people the little that they have in life. Building resilience must be at the heart of the country’s social protection program,” Legarda concluded.

Drilon alarmed by sluggish agricultural growth

MANILA-The maxim “two heads are better than one” may not be applicable for the country’s agriculture sector, said Senate President Franklin M. Drilon who reiterated today his disappointment over the continued decline in the performance of the agriculture sector over the past months.

“I am very alarmed by the dismal figures presented to us by the economic managers insofar as the growth of agriculture sector is concerned,” said Drilon.

“The agriculture sector only grew 0.9 percent in the first quarter of the year, as compared to the 3.2 percent growth registered in the same quarter last 2013, which was still below target,” said Drilon.

“Is the apparent inability of the Department of Agriculture to increase agricultural productivity due to lack of funding or a case of bureaucratic impasse?” asked Drilon.

The Senate leader said, however, that funds for agriculture sector have continuously increased throughout the Aquino administration in an effort to ramp up agricultural productivity.

For 2015, Drilon said the DA will receive P88.8 billion, 11.1 percent higher than its current level of P80.0 billion, which shows an increase of 93 percent from its 2010 level of P47.6 billion.

The bulk of the budget, according to Drilon, will be used to build up the country’s agriculture infrastructure.

“For 2015, the government has allotted P25 billion for various irrigation activities, P14.5 billion for the construction of several farm-to-market roads, and P2.2 billion for the promotion of high value crops, P7.0 billion and P2.3 billion for the development of rice and cord industries, respectively,” pointed out Drilon.

“It appears to me that the consistent prioritization given by the administration to the agriculture sector failed to yield good results for our agriculture sector,” said Drilon.

Drilon said the dismal performance of the agriculture sector is a valid concern, considering that 11 percent of the economy is contributed by agriculture sector and nearly one-third of the nation’s labor force belongs to the agricultural sector,” he stressed.

“There is a clear downward trend in the agricultural sector, and it further went down to only one percent this year due to the effects of the past calamities,” said Drilon.

The Senate chief also lamented the poor living condition of farmers and fisher folks who remain the poorest sector of the society: “Two-thirds of the poorest sector in the society belongs to agriculture sector which should not be the case now given the huge support continuously given by government to the agriculture,”

He thus said there is a need to strengthen and address the various issues confronting the agriculture sector.

Earlier, Drilon suggested that the current structure of agriculture department be reviewed.

“I think we really need to have a clear point man and streamline the DA’s bureaucratic system. They have split the agencies into agricultural departments. I strongly suggest that this should be reviewed,” Drilon said.

Drilon warns against gov’t underspending

MANILA-Senate President Franklin M. Drilon aired concerns about the drop in government spending in 2014 which, if not addressed, could further be aggravated by the “chilling effect” of the Supreme Court’s decision on the Disbursement Acceleration Program (DAP) on the government spending plan.

The Senate leader pointed to signs of looming underspending of the government during the Senate’s hearing on the proposed P2.606 trillion 2015 national budget.

“For the first quarter of 2014, the growth domestic product is only 5.7%, which is lower than the 7.7% growth rate we achieved in the same period in 2013,” said Drilon.

“The underspending is also visible in the decline in the government consumption for the first quarter this year which only reached 2%, way below the 10% level during the same period last year,” he added.  

Drilon thus issued a challenge to the country’s economic managers: “the challenge now is how to accelerate spending in the remaining months of the year while still complying with the Supreme Court decision on the DAP.”

“The members of the bureaucracy now have apprehension against taking initiatives, because they might face charges stemming from the DAP decision. Whether you like it or not, the SC decision on the DAP had a chilling effect on the government expenditure program," said Drilon.

He said the Office of the President and the Department of Budget and Management should closely monitor the line agencies to ensure they would implement their programs in a timely manner.

Drilon also committed that the Senate will continue to exercise its oversight functions to make sure proper and prompt government spending is given priority.

P-Noy Inaugurates Ninoy Aquino Bridge in Cagayan

Camp Aquino, Tarlac City – His Excellency, President Benigno C. Aquino III, inaugurated the “Ninoy Aquino Bridge” located at San Luis, Tuao, Cagayan, early this morning. The said bridge is 360 meters long and it connects Region II, Region I and Cordillera Autonomous Region (CAR).

The “Ninoy Aquino Bridge” worth ₱599.40 million was said to be funded by the controversial Disbursement Acceleration Program (DAP).

President Aquino’s airplane arrived at Tuguegarao Airport before he rode a helicopter heading to Tuao. He was with DPWH Secretary Rogelio Singson, Budget Secretary Florencio Abad, DILG Secretary Mar Roxas, MMDA Chairman Francis Tolentino, Senator Teofisto Guingona and Secretary Manuel Mamba, who was also a native of Tuao.

The area was secured by military troops under Northern Luzon Command headed by NOLCOM Commander Lt. Gen. Felicito Virgilio M. Trinidad Jr. along with 5^th Infantry Division Commander, Maj. Gen. Benito Antonio T. de Leon.

The inauguration was also attended by the governors of the provinces of Isabela, Kalinga and Apayao and other local officials of Region II.

President Aquino, as well as his delegates was warmly welcomed by the people of Tuao upon his arrival. After the inauguration of the bridge, the President with his team rode an open car going to Barangay Naruangan to attend a short program prepared for him.

Legarda Renews Call for Disaster-Resilient and Climate-Proof National Budget

MANILA-Senator Loren Legarda today renewed her call for a national budget that ensures the integration of disaster risk reduction and management (DRRM) and climate change adaptation in government policies and programs.

Legarda, Chair of the Senate Committee on Climate Change, made the statement as the Senate is set to start marathon budget hearings following the briefing by the Development Budget Coordination Committee (DBCC) on the 2015 National Expenditure Program (NEP).

“Government agencies, especially those integral to disaster resilience, should already have included in their programs proactive measures to reduce disaster risks as well as to mitigate and adapt to climate change. We need to stress the importance of a climate-proof and disaster-resilient budget because one disaster can greatly affect our people and our economy,” she said.

The Senator noted that during the DBCC briefing, Budget Secretary Florencio Abad said that the government recognizes the need to focus on disaster prevention and preparedness.

Under the 2015 NEP, the National Disaster Risk Reduction and Management (NDRRM) Fund increased to P14-Billion. The NDRRM Fund for 2014 was P13-Billion.

Other priority programs for DRRM and CCA include the strengthened management of the country’s natural ecosystems, improved flood control and drainage projects, and carbon sequestration through the National Greening Program.

“As we proceed with the budget hearings, I would like to check if DRR programs under the 2014 budget have been implemented efficiently and effectively, particularly the NDRRM Fund, which was formerly the calamity fund and was converted as such to fund pre-disaster activities, and the People’s Survival Fund, which should finance climate change adaptation activities of local governments and organizations. Before we even approve a new budget, we have to see how the previous funds were used and look into the challenges in the implementation so that we can already provide remedy,” said Legarda.

She also said that since ecosystems decline is among the underlying drivers of disaster risks and poverty, in the context of climate change, “we must improve our green policies, which should be integrated in our development strategies, and ensure adequate funding on the same, especially on the protection of our ecosystems.”

R & D funding boosts rice yields by 25% -- book

SCIENCE CITY OF MUÑOZ, Nueva Ecija - Research and development (R & D) initiatives in rice have boosted harvests of the staple by a whopping 25%.

          This was revealed by a recently released book on rice security and poverty reduction.

          The book, entitled “Securing Rice, Reducing Poverty,” was authored by then Southeast Asian Regional Center for Agriculture (SEARCA) Director and now National Economic and Development Authority Chief Arsenio Balisacan among others.

          In the book, Balisacan and his co-authors underscored the need to  increased R & D budget in rice to close the yield gaps often attributed to weeds, pests, and diseases, which can very well be addressed by stepping up research initiatives.

          Dr. Eufemio Rasco Jr., executive director of the Philippine Rice Research Institute (PhilRice), concurred with the findings of the book's authors and stressed that increasing the budget for rice R & D not only boosts production but also improves the overall income of farmers.

          Historically, research expenditure as a proportion of (Gross Domestic Product (GDP) allocation in the Philippines on R&D has  been inferior to its neighbors.

          Citing data from the 2009 World Competitiveness Yearbook, Prof. Teodoro Mendoza of the University of the Philippines Los Baños, said the Philippines allocated only 0.12% of its GDP to R&D, much lower compared with Malaysia and Thailand which allocated 0.64% and 0.20%, respectively.

          A separate report by the International Food Policy Research Institute based in Washington, D.C. and the Bangkok-based Asia-Pacific Association of Agricultural Research Institutions both noted the "rather slow-paced improvement in public spending on R&D in the Philippines relative to other countries."

          In their July 2013 report, Vietnam is reported to have increased its public spending on R&D by over 270%, from $23million in 1996 to $86 million in 2008.

          On the other hand, the Philippines spent a a much higher $133 million on R & D in 2008, up from $129 million in 1996. However, percentage-wise, this represents a scant 3% increase in spending.

          The increase in state spending on R&D having a major impact on rice productivity is most evident in the case of Vietnam where rice yield dramatically increased from 3.77 tons per hectare in 1996 to 4.89 tons/ha in 2008, making it the second highest rice producer in the region next only to China.

          PhilRice economists Sergio Francisco and Flordeliza Bordey, wirting in a paper entitled “Investments in Research, Development, and Extension: Implications on TFP,” said underfunding in public agricultural Research Development and Extension (RD & E) has become “pervasive and persistent.”

          They said such under investment slows down productivity.

          In 2007, an external review conducted to assess the impact of PhilRice, which has been conducting R & D researches to increase farmers' harvests, showed  that the farmers have benefited from the cost-reducing and yield-enhancing technologies developed by the institute. (Manny Galvez)