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St. Barangay Pinyahan Quezon City. 1100. Telephone (02) 9211985. Telefax (02) 9246399. [email protected]. 2
Table of Contents
New Economics for a New Administration .................................................................................................... 3
Executive Summary .................................................................................................................................... 11
Chapt er 1: ............................................................................................................................................... 22
Towards Modernity and Prosperity. Next Stop: Philippines 2020. ............................................................ 23
1. Activist Developmental State ......................................................................................................... 24
2. Equitable and Strategic Land Ownership and Use for Sustainable Development and Livability of
Communities.......................................................................................................................................... 26
3. Domestic Capital-driven Development ........................................................................................... 29
4. Integrated, Modernized, and Ecologically-sound Industry focused on developing Sustainable Local
Economies and Domestic Markets ......................................................................................................... 32
5. Empowered Labor Sector ............................................................................................................... 35
6. Ecologically Sustainable and Climate-adaptive Economy ............................................................... 37
7. Strong Social Support and Safety Net System for Households and the Reproductive Economy ..... 40
8. Food Sovereignty............................................................................................................................ 42
9. Active State Participation towards an Integrated, Sustainable and Humane Management and
Development of the Water Sector ......................................................................................................... 45
10. Strong State Participation towards a Rational and Participatory Power System ........................ 48
Chapt er 2: ............................................................................................................................................... 51
Why are we poor? Going Beyond the Corruption Discourse ..................................................................... 521. Weak, Elite-Captured State ............................................................................................................ 58
2. Inequitable Land Ownership and Lack of Social and Strategic Outlook on Land Use and
Management.......................................................................................................................................... 62
3. Foreign Capital-dominated Open Economy .................................................................................... 65
4. Fragmented Industry designed for Low Value Added Exports ........................................................ 68
5. Repressive Labor Environment ....................................................................................................... 71
6. Ecologically destructive Economy vulnerable to Climate Disasters................................................. 75
7. Unrecognized and Neglected Reproductive and Care Economy ..................................................... 78
8. Crops and Fishes for the Global Supermarket................................................................................. 81
9. Grossly Neglected, Fragmented, and Ill-Governed Water Sector .................................................... 84
10. Abandoned Power Sector and Industry ...................................................................................... 87
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New Economics for a New Administration1
By Rep. Walden Bello , President of the Freedom from Debt Coalition (2008-2010)*2
3The dominant feature of the Arroyo administration was pervasive corruption, but its most4
destructive legacy in the long term will probably be its policy failures. The ascent to power of a new5
president, backed by a new Congress, provides the opportunity for a fundamental shift in policy in order6
to end poverty and re-launch the Philippines on the road to development.7
8
The policy paradigm of the administration was one it inherited from previous administrations. This9
was a pro-market, neoliberal approach the key prongs of which were accelerated trade and financial10
liberalization, deregulation, and privatization. In addition, Arroyo continued her predecessors policy of 11
fully servicing the foreign debt, dealt with the ever-widening budget deficit by imposing a 12 per cent value-12added tax that hit mainly the middle class and the poor, and left it to the market to address poverty and13
income inequality.14
15
With its pro-market orientation, the Arroyo presidency followed the lead of previous administrations16
in refusing to pursue an industrial policy, reducing budget support for agriculture to a minimum, and17
radically bringing down tariffs on both agricultural and manufacturing imports. Abandoned to global18
market forces as the administration embraced the ideology of globalization, the economy was channeled to19
the massive export of labor, export-oriented low-value-added manufacturing, particularly of electronic20
components, and providing personnel for the outsourced operations of transnational corporations like call21centers.22
23
Failure of a Paradigm24
25
Not surprisingly, the countrys GDP growth rate was consistently significantly below those of its Asian26
neighbors, the radical reduction of tariffs decimated manufacturing, the country was turned from a net27
food exporter to a net food importer, the poverty rate stubbornly refused to go below 30 per cent of the28
population, and income distribution worsened. In addition, the ecological crisis intensified, owing to29
desultory environmental management and failure to promote a reproductive health policy for fear of 30offending the Catholic Church hierarchy.31
32
The countrys plight under the lash of wrong policies over the last four administrations becomes33
clearer in a comparative perspective. According to the United Nations Development Programs Human34
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Development Report, the Philippines registered the second lowest average yearly growth rate, 1.6 per cent,1
in Southeast Asia in the period 1990-2005lower than Vietnam (5.9 per cent), Cambodia (5.5 per cent),2
and Burma (6.6 per cent). The only country registering average growth below that of the Philippines was3
Brunei, which, being an oil-rich, high-income country, could not afford not to grow.4
5
Except perhaps for allowing the passage of the law extending the period for the redistribution of 6land under land reform and providing funding for much needed support services, it is difficult to find bright7
spots in Arroyos economic record. The only mitigating factor in this dismal performance is that it cannot8
be separated from that of the previous three administrations.9
10
In the last two years, the seemingly unending crisis of the domestic economy has been exacerbated11
by the worst global economic crisis since the Great Depression, a development that is a product of the12
same principles of deregulation and trade and financial liberalization. This dual crisis coincides with the13
arrival of a new president and provides an unparalleled opportunity to break with the paradigm that has14
condemned this country to stagnation for nearly three decades.15
16
A Pro-active State17
18
First and foremost among the necessary changes is the transformation of the Philippine state from a19
passive actor into an proactive agent of development. The role of the state is not simply to regulate or20
discipline the market and the private sector, though this is an important function. More important, this21
state must lead in developing and implementing a strategic program for Philippine development, one that22
harnesses the energies of the public sector, civil society, and the market to achieve development targets.23
Planning, which has become a dirty word in recent years, must again take pride of place among the24instruments of economic development, with the National Economic Development Authority (NEDA) ceasing25
to be simply a statistical collection agency and becoming the planning agency it was originally meant to be.26
27
The revival of an economy with a solid industrial and agricultural base must be among the key aims28
of the activist state since industry and agriculture are the main sources of solid growth in the economy.29
This means engaging in industrial policy, or the strategic deployment use of tariffs and other mechanisms30
not only to protect domestic manufacturing from unfair competition but, more important, to give it depth,31
diversity, coherence and complementarity. It also means making agriculture again a centerpiece of the32
economy through the strategic management of tariffs, quotas, subsidies for farmers, and sustainable agro-33
technology. The long-awaited completion of agrarian reform is, of course, a central element in the34
agricultural policy package, and the presidents electoral campaign promise to distribute Hacienda Luisita to35
its tenants would give the green light for this. 36
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Income and Asset Redistribution1
2
Market-driven export-oriented industrialization and export-oriented agriculture were the main3
prongs of the old, discredited paradigm. It is time to make the domestic market again the driver of growth.4
This can only be done, however, by increasing the purchasing power of Filipinos in the lower income5
groups. This will inevitably involve income and asset redistribution, including a deepening of the land6reform program. Higher wages for workers, income subsidies for the poor, and strengthened support7
services for peasant farmers are also mechanisms to achieve this goal of activating a vibrant domestic8
market that will be the locomotive of growth. In the current global economic crisis, the Philippines and9
other countries, via stimulus programs. have fallen back on the domestic market to make up for the10
shortfall in foreign markets. This reorientation must be made permanent, a prescription that is underlined11
by the poor prospects of recovery by export markets in the next few years.12
13
Asserting the role of an activist developmental state does not mean a return to the old14
developmental paradigm of the 1960s and 1970s. The old paradigm focused on achieving high growth15rates, prioritized industrial development, made equity a secondary consideration, and paid little attention16
to environmental damage.17
18
The New Economic Policy, in contrast, stresses the quality of development, with a strong emphasis19
on equity and ecological stability. A lower rate of growth that would meet the needs of development and20
poverty reduction without destabilizing the environment is not a utopian dream, but it can only be brought21
about on the basis of a more equitable sharing of the fruits of growth. Thus, equity in the distribution of 22
income, assets, and resources fulfills simultaneously the needs of demand-driven growth, environmental23
sustainability, and social justice.2425
Democracy and Development 26
27
The New Economic Policy is not out to create an authoritarian state. Indeed it sees democratic28
governance as central to creating consent and thus giving legitimacy to the states economic initiatives.29
This means fundamental economic decisions, such as which industries should be promoted owing to their30
disproportionately positive impact on development and employment, must be arrived at democratically. It31
means the establishment of mechanisms of accountability of government agencies to civil society bodies32
such as peasant and workers production councils and consumer associations. Democracy strengthens33government, not weaken it.34
35
The New Economic Policy must acknowledge the value of womans work. For too long, womans36
central role in the reproduction of the economy has not been acknowledged, leading to the devaluation of 37
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womans work and generating systemic inequality in income distribution between the sexes. That the1
majority of the poor are women is not an accident. Addressing the inequality created by gender will involve2
coming up with a set of complementary mechanisms including income support, affirmative action in3
employment, and promotion of women-friendly methods of family planning.4
5
Production, consumption, equity, and ownership of the means of production are closely linked. In6contrast to a system where one form of property subjugates others, an equity-oriented system of 7
production combines various forms of ownership including state ownership, private property, cooperatives,8
and ancestral domain or communal property.9
10
Full recognition and protection of ancestral domain or communal forms of ownership as enshrined11
in the Indigenous Peoples Rights Act of 1997 is the best guarantee for enhancing the economic welfare of 12
indigenous peoples. Their well being can also be promoted through the establishment of and effective13
maintenance of protected areas where environmental management will be in the hands of indigenous14
communities. Such sanctuaries must be created not only in forest and mountain areas but also in the seas15
and lakes. Fishing in waters at a designated distance from the shore must be reserved for artisanal fishing16
communities.17
18
SustainableDevelopment and Provision of Public Goods19
20
Mining for natural resources is an important economic activity. Yet government policies have21
supported foreign corporations that have brought little of their profits to the country and left mainly22
environmental disasters like the Marinduque mining disaster in 1992. Constitutional restrictions on the23
nationality of owners of mining firms must be fully respected, mining policy must favor mainly small24operators, tight environmental restrictions must be instituted, and profits from mining operations must25
flow mainly to mining communities. Repeal of the 1995 Mining Act will be necessary to bring about such a26
pro-people mining regime.27
28
In all areas of the economy, there must be a concerted shift to green technology. In agriculture, for29
instance, land reform and a reversal of destructive trade liberalization is not enough. To be sustainable,30
agricultural technology must be made less dependent on the chemical-intensive technology that has31
proven so ruinous to the environment and public health. At the same time, it must avoid the illusion of a32
new Green Revolution based on genetically engineered seeds that are owned by transnational33
corporations. Organic agricultural methods suitable to small-scale farming must be developed and34
promoted with the aid of the state and our local scientific community.35
36
The last three decades have witnessed a disastrous experiment in the privatization of power, water,37
and other public goods. Privatization has resulted in higher profits for the private sector but it has not38
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brought about more efficient management and lower costs of power and water. People have a basic right1
to power and to water, and production and delivery of these goods by public or cooperative enterprises is2
the best guarantee that their price remains within the reach of all citizens. Making public goods affordable3
will sometimes involve some form of subsidization in which richer classes and organizations assist, through4
transfer payments, the poorer sectors of the community.5
6The Fiscal Challenge and the Debt 7
8
Taxation is an indispensable mechanism for government to raise the resources to spend for the9
public welfare. The problem in the Philippines is a system that is regressive, where owing to reliance on the10
value added tax and other forms of indirect tax, the burden of taxation falls principally on the poor and11
middle classes. The key to raising resources is to shift the burden of taxation to the rich through higher12
marginal tax rates for those in the upper income brackets, more efficient collection of income taxes and13
corporate taxes, and increasing taxes on socially unhealthy activities such as gambling, drinking, smoking,14
and carbon emissions. This mix of measures will yield a significant part of the resources to cover the now15gargantuan budget deficit.16
17
Fiscal balance will not, however, be achieved without addressing the debt problem. 22 to 25 per18
cent of the budget now goes yearly to servicing the national debt, a far greater proportion than in most of 19
our Asian neighbors. Debt servicing has become the most important single item contributing to the20
government deficit, especially since the government is now borrowing at higher and higher rates of interest21
mainly to repay debt coming due. Servicing the debt has become the top national priority, and this has had22
not only fiscal consequences but also developmental ones. This practice has contributed to the massive23
reduction in public capital expenditures, which has in turn caused a decline in the rate of investment since24government is the biggest investor in the economy. And this, in turn, has translated into a depressed rate25
of economic growth.26
27
Without a radical change in our debt management policy along the lines of a debt moratorium or a28
negotiated or unilateral reduction of the governments debt burden, successfully implementing a new29
economic policy that will launch the Philippines anew on the road to development will not be possible. A30
fundamental change in debt management similar to Argentinas decision in 2002 to pay only 25 cents to31
every dollar it owed to foreign creditors is the sine qua non of a change in the direction of economic policy.32
The president himself recognizes the need for bold action in this area when he spoke about the need for33
debt repudiation during the electoral campaign.34
35
In sum, a golden opportunity awaits the administration of President Benigno Aquino III. A break36
with past policy, however, is necessary. The contours of a new strategy that will relaunch the country on an37
ecologically and socially benign developmental path are discernible: an activist state, industrial policy,38
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reinvigorating agriculture through a reversal of trade liberalization, domestic market-driven growth made1
possible by more equitable income distribution, environmentally benign production processes in industry2
and agriculture, affirmative action policies for women and indigenous peoples, a mixed property regime,3
state provision of public goods and services, and an aggressive progressive tax regime.4
5
Instituting such an alternative comprehensive program will take a great deal of courage and6determination, especially at the beginning. A Chinese proverb says that every journey of a thousand li7
begins with a first step. That first step is to take the bold measures necessary to tackle the biggest problem8
weighing down the country: the foreign debt.9
10
*Walden Bello is the president of the Freedom from Debt Coalition (FDC), a member of the House of 11
Representatives representing Akbayan, and senior analyst of Focus on the Global South. For most of the12
ideas expressed here, the author is indebted to Milo Tanchuling, secretary general of the FDC, and James13
Matthew Miraflor, who headed up FDCs New Economic Policy Project.14
15
16
The article appeared in: 17
18
19
Perspective, Business Mirror - July 30, 2010 20
21
Viewpoints/Columns, Inquirer.net (under Bello's column Afterthoughts) - July 29, 2010 22
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FDCs SON A 2010 Statement 1
On President Benigno Aquinos First State of the Nation Address (SONA)2
3
4
PRESS STATEMENT5
Freedom from Debt Coalition6
11 Matimpiin St., Pinyahan, Quezon City 1100, Philippines7Phone: +63.2.921.1985 | Telefax: +63.2.924.6399 | Website: www.fdc.ph 8
9
Please refer to:10
Milo Tanchuling, FDC secretary-general, +63.920.901.871111
12
FOR IMMEDIATE RELEASE13
25 July 201014
15
Keeping an eye on Aquinos commitment to change16
17
The new administration of President Benigno S. Aquino III begins with an extremely high trust rating of 8818percent higher than any of the post-dictatorship presidents. This is a measure of peoples belief in the19
commitment of the Aquino administration to reverse the anti-poor policies implemented during the regime20
of Gloria Macapagal-Arroyo.21
22
We in the Freedom from Debt Coalition (FDC) submitted to the President an Agenda outlining demands for23
changes in the debt and public finance policy, the power industry, the water sector, and governments24
stance on climate negotiations and responses to climate crisis. This is in the context of a looming fiscal crisis25
due to the record-breaking deficit and empty public coffers left by the Arroyo administration, electricity26
prices soaring past major Asian cities save Tokyo, a water crisis that is pushing Filipinos to desperate27
extremes, and a looming La Niña that might bring us another devastating Ondoy.28
29 This, for we believe that the Aquino administration should stop Arroyos practice of using band-aid30
solutions to the countrys chronic problems. A business-as-usual approach will only delay the inevitable31
descent of the economy to oblivion, but it will not change its course. Conditional cash transfers to the32
extremely marginalized, or emergency employment, or may sound like valid ambulatory actions, but at33
best, they can only provide breathing space. These measures can never serve as platform in strategically34
resolving the problem of poverty and under-development.35
36
The Aquino administration should not hesitate to be more strategic in its approaches. It is with this belief 37
that FDCs Agenda is part of an alternative National Economic Platform or New Economic Policy (NEP), a38
summary of which we also submitted to Aquino. NEP is a set policy framework statements which outlines a39
vision towards a sustainable and modern Philippine economy to be achieved by 2020. We hope that the40
elements of our NEP would be integrated and used in the drafting of the 2011-2016 Medium-term41Philippine Development Plan (MTPDP). This, for the MTPDP outlines the strategy and governance42
framework of the Aquino administration for its entire term.43
44
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NEP incorporates elements of an alternative paradigm that sharply diverges from the mainstream market1
fundamentalist framework imposed by International Financial Institutions (IFIs) such as the World Bank, the2
International Monetary Fund (IMF), and the Asian Development Bank (ADB):3
4
1. Instead of merely a Strong Republic, NEP centers on the need to establish a Strong5
Developmental State that mobilizes governments regulatory and procurement powers to6
discipline the market and direct resources towards national development and social welfare;7
8
2. Instead of creating Super-Regions which has as its prime purpose spurring economic growth in9
the countryside but ignores equity and environmental issues, NEP pushes for a National Land and10
Water Use Act taking off from the completion of urban and rural land reform and with a sustainable11
development perspective;12
13
3. Instead of capital accounts liberalization championed by IMF, NEP insists on the need for controls14
on capital flow and management of the domestic capital structure;15
16
4. Instead of export-oriented industry focused on exports of raw material and low-value services,17
NEP advocates for an integrated industry focused on developing local economies and servicing the18
needs of a strengthened domestic market;1920
5. Instead of cheap labor policy, NEP champions a high-wage, high-income regime in order to build21
a strong national consumption, savings, and revenue base;22
23
6. Instead of city-centric development that harms the environment through wastage and pollution,24
NEP takes it as primary advocacy the prioritization of adaptation needs and low-carbon25
development;26
27
7. Instead of delegating reproductive tasks to households, NEP champions the provisioning of free28
public universal healthcare and valuation of unpaid labor by women;29
30 8. Instead of an import-dependent food security approach championed by ADB, NEP recommends31
a Food Sovereignty model which seeks food self-sufficiency not just on the national but up to the32
community level.33
34
9. Instead of encouraging private sector participation (PSP) in bulk water supply and local water35
utilities, NEP explores Public-Public Partnerships (PPP) in small-scale water systems that involves36
local government units and cooperatives37
38
10. Instead of a privatized and deregulated industry outlined by the Electric Power Industry Reform39
Act (EPIRA) of 2001, NEP insists on strong government intervention that facilitates the40
strengthening of community-based power systems and rural electric cooperatives.41
42This SONA is merely a start of a challenging six-year rule for the Aquino administration, starting with43
exposing the current national situation after Arroyo. We in FDC hope that the inputs coming from the44
people itself will be heard and sincerely incorporated by the new government. FDC will be watching the45
Aquino administration closely as it wields government power towards its promised reforms. (30) 46
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HA NEP2020
Executive Summary
I. Economic Governance
1. State
Critique Alternative
1. Weak, Elite-Captured State
The current Philippine State, because of its
weakness, is captured by the interests of a
cynical and opportunistic elite class. This results
to the incapacity of the state to act objectively
for economic development and risk
redistribution. Instead, the state becomes the
primary conduit for translating private interests
of elite class into binding public policies.
1.A. Pro-market Economic Management,
Limited Government Role inDevelopment and Welfare
1.B. Malfunctioning Regulation
1.C. Unmitigated widening of Income and
Asset Distribution Gap
1.D. Political Patronage, Rent-Seeking, in the
Public Sector
1. Activist Developmental State
Mobilize states regulatory and procurement
powers for national development and equitable
redistribution of ensuing risks and create
conditions for further growth via provision of
basic welfare, infrastructure improvements,
and support for local entrepreneurship.
1.A. Strong, Sovereign, and Developmental
Orientation
1.B.
Caring Mandate1.C. Assets Reform towards a Democratized
and Equitable Ownership Structure
1.D. Good Governance
1.E. Technocracy-dominated, Manila-centricEconomic Management
1.E. Participatory and Democratic EconomicManagement
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II. Macroeconomic Fundamentals towards National Development
2. Land
Critique Alternative
2. Inequitable Land Ownership
and Lack of Social Outlook and
Strategic Vision on Land Use
and Management
Because our land is under the private property
regime, land use is oriented towards private
profit, not public gain. This promotes non-
agricultural land use conversion and inhibits
land reform, leading to poorly planned and
vulnerable societies and unstable food
production. For the land converted to urban
areas, there is lack of deliberate design leading
to increased risk for residences and businesses.
2.A. Land under the Private Property-Regime
2.B. Lack of Rational Planning on Regional
Zoning, Land Use and Management
2.C. Lack of Effective Development Planning
on Urban Land Use and Management
2. Equitable and Strategic Land
and Land-based Assets Use and
Management for Sustainable
Development and Livability of
Communities
Restructure the ownership of land and land-
based assets and enterprises according to new
ownership instrumentalities and regulatory
environments that, in rural areas, encourages
agricultural development and that is aligned
with a rational and sustainable land and water
use plan, and urban areas, intelligent urban
design and planning.
2.A. Restructuring of Ownership of Land and
Land-based Assets and Enterprises
2.B. Sustainable Rural Land Use and
Regional Planning geared to
strengthening agriculture
2.C. Strategic and Intelligent Urban
Development Planning
2.D. Development strategy centered on
growth-oriented Super-regions
2.D. Using the Bioregion-approach in
Creating and Maintaining Communities
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3. Capital
Critique Alternative
3. Foreign Capital-dominated
Open Economy Our economy is rendered open to foreign
capital competition, leading to the destruction
of our productivity and inevitably, dependence
and foreign capital domination.
3.A. Current Accounts (Financial)
Liberalization
3.B. Weak Banking and Financial Sector
detached from the Industrial Base
3.C. Foreign-financing Dependence
3. Domestic Capital-driven
Development
Accelerate the shift from a foreign capital-led
industry to a domestic-driven one by instituting
capital management instruments,
strengthening domestic financial base by
socially re-embedding the central bank and
monetary policy, and ending the resource gap
problem of public finance by resolving the debt
problem.
3.A. Strategically-managed Capital Structure
and Flows
3.B. Development-oriented and Socially-
embedded Central Bank, Banking
Sector, and Monetary Policy
3.C. Policies towards Fiscal Freedom
3.D. Lack of capacity and propensity to save
in the grassroots
3.D. Public Grassroots Savings Program
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4. Industry and Trade
Critique Alternative
4. Fragmented Industry designed
forL
ow Value Added ExportsOur industries are integrated individually to
foreign markets, not to each other, relegating
us to low-value added production (i.e. low-end
products/services, extracted raw materials) and
export-dependence. This is due to the lack of a
trade-industrial strategy, neglect of domestic
market and local economies, and lack of state
support for increasing competitiveness.
4.A. Incoherent Trade-Industrial Policy due
to lack of Industrial Strategy
4.B. Neglect of the Domestic Market
4.C. Weak and Uncompetitive Domestic
Firms
4. Integrated,Modernized, and
Ecologically-soundIndustryfocused on developing
Sustainable Local Economies
and DomesticMarkets
Pursue an industrialization strategy that
synergistically links an integrated domestic
industry that scales the entire value chain with
a strengthened domestic market for demand
and sustainable local economies for supply, and
one that facilitates technological leapfrogging
and creates uncontested market spaces.
4.A. Strategic, Coherent and Activist Trade
and Industrial Policy
4.B. Tapping the Domestic Market Supply of
Capital and Demand for Goods and
Services
4.C. Facilitating Leapfrogging towards a
Modernized and Sustainable Industry
that is able to create uncontested
market spaces
4.D. Underdeveloped Community Industries
and Sources of Local Employment
4.D. Empowering Local Enterprises through
institutional support and creation of
community and national trade linkages
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5. Labor
Critique Alternative
5. Repressive Labor Environment
Societys creator and determinant of values,the labor sector, have been relegated to low
competency and low purchasing power due to
the politically and economically repressive
cheap labor policy. The lack of regulation,
political agency in the status quo, and
recognition of the large part of the labor sector
leads to further repression.
5.A. Low-wage, Low-benefits Labor Policy
5.B. Lack state protection for workers amid
repression of democratic space
5.C. Marginalized Informal Employment
Sector
5. Empowered Labor Sector
Empower the workers economically andpolitically to ensure that that the sector that
primarily creates (through production) and
determines (through consumption) value
remain to be dynamic, productive, and capable.
Increase and improve the existing labor force
by continuous search for tasks that contribute
to national development and continuous
training and capacitating new sets of workers.
5.A. Economically-capacitated Workforce
towards a Strong Consumption,Savings, Investments, and Tax Base
5.B. Political Empowerment of the Labor
Sector to prevent Labor Income
Distortion
5.C. Transition Program for the Marginally
Employed
5.D. Widespread Unemployment and
Underemployment in Agrarian
Communities and Urban Areas
5.D. Employment Program according to the
agro-industrial development plan
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6. Ecology
Critique Alternative
6. Ecologically destructive
Economy vulnerable to ClimateDisasters
The environment is seen more not as an
endowment to be conserved, but a resource
that can and must be inexhaustibly exploited.
The absorptive capacity and recuperating
mechanism of the environment vis-à-vis the
externalities of our economic activities are also
overestimated, resulting to destabilization of
ecology and decreased livability of
communities.
6.A. Incoherent, Incomprehensive and
Fragmented Environmental Paradigm
6.B. Environmentally-destructive Economic
Sectors
6.C. Ecologically-destabilizing Provision of
Public Services
6.D. Waste-intensive production-
consumption system6.E. Lack of Adaptation Planning for Climate
Disasters
6. Ecologically Sustainable and
Climate-adaptive EconomyAdoption of an economic program that is
geared towards a sustainable and ecologically-
sound development. Ownership instruments,
and demand-supply circuits should operate on
the framework of conservation, rather than
maximum utilization, of natural resources.
Knowledge on biological and ecological systems
should be protected and enhanced, not
commercialized.
6.A. Pass Comprehensive Environment Code
6.B. Rebuilding Terrestrial Carbon Sinks to
increase GHG Sequestration
6.C. Low-emission and Sustainable
Provision of Essential Services
6.D. Demand management in all aspects of
consumption and production
6.E. Climate Adaptation measures to
ameliorate socio-economic effects of extreme weather events
6.F. Economic development biased against
indigenous communities and
environmental preservation
6.F. Protecting Ecologically Sustainable
Practices of Indigenous Communities
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III. Essential Services towards Full Social and Human Development
7. Reproductive Economy
Critique Alternative
7. Unrecognized and Neglected
Reproductive and Care
Economy
The household is only seen as a consumer of
goods and public services rather than a
producer of valuable inputs and resources.
Thus, with women being the primary dispenser
of domestic work, womens contribution to the
economy is largely in this hidden area of production that includes care work, voluntary
or civil society activity, subsistence production
and work in the informal sector.
7.A. Non-compensation of Non-market or
Domestic Labor
7.B. Externalization of Public Good Costs to
Families through Commodification
7.C. Absence of an institutional reproductive
healthcare program
7. Strong Social Support and
Safety Net System for
Households and the
Reproductive Economy
Establish components of strong social welfare
and social security, take back privatized public
goods and essential services, and transfer
components of unpaid care economy to the
community domain in order to relieve
households and women of undue burden.
7.A. Social Compensation System for all
Citizens, Valuation of Unpaid
Reproductive Labor
7.B. State Reclamation of Public Goods and
Essential Services externalized to
Households
7.C. Effective implementation of an
institutional reproductive healthcare
program.
7.D. Unfair distribution of work among
genders in households 7.D. Integrating components of the
Household and Care Economy into the
Public and Community Domain
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8. Food
Critique Alternative
8. Crops and Fishes for the Global
Supermarket The focus of our crop production is the global
market, not domestic need, thus causing
hunger and environmental destruction.
Agricultural activities are also not in line with
sustainability principles, particularly because it
interferes with the profit motive of corporate
and industrial agriculture.
8.A. Corporate-driven Agriculture and Food
consumption
8.B. Stagnating Agricultural Sector due to
low social priority, lack of government
support
8.C. Ecologically-unsound Agricultural and
Food Production System
8.D. Conflict-ridden and Contested
Agricultural Lands
8. Food Sovereignty
Shift from an export-oriented Food Securitymodel to Food Sovereignty approach.
Production-consumption circuits must be as
close to the community as possible. Agriculture
must be based on principles of inclusive
decision-making, participatory central planning,
sound demand-management, cultural integrity,
and environmental stewardship, in
consideration of a national economic plan for
land use, agriculture, and food.
8.A. Recognition and Realization of FoodProducer and Consumer Rights
8.B. Government-led, Community-
facilitated Food Self-Sufficiency and
Agricultural Modernization Program
8.C. Supporting and Practicing Sustainable
and Ecologically-friendly Agriculture
8.D. Increasing Livability and Democracy in
Communities
8.E. Liberalized and Deregulated, Food
Security-based National Food System
8.E. Reorganizing Food Trade based on
citizens need and not corporate
dictates
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9. Water
Critique Alternative
9. Grossly Neglected, Fragmented,
andIll-Governed
Water Sector
National policies on water were introduced on
piecemeal basis as a response to peculiar
challenges of the times. This resulted in
numerous government authorities being
mandated to deal with various aspects of water
management, regulation and development. The
complex web of water-related institutions,
coupled with an economic policy of
privatization, created a fragmented water
sector that is both unresponsive to the needsof the people and not cognizant of their human
right to water. The resultant effect: water
resource mismanagement, water quality crisis,
and seasonal water quantity crisis.
9.A. Treatment of water as primarily an
economic good
9.B. Non-commitment to actual protection,
management and development water
resources
9.C. Numerous yet ineffective anduncoordinated water authorities
resulting in a weak institutional
framework
9. Active State Participation
Towards anIntegrated,Sustainable, and Humane
Management and Development
of the Water Sector
Water is essential to life. While water is a finite
resource and surely has an economic value, the
human right to water must be made the
cornerstone of a national water policy. The
human right to water calls for prioritization of
the right of the people to a continued supply of
clean, safe, adequate and affordable water.This necessarily involves a comprehensive,
holistic and integrated approach to water
resources protection, management and
development. It also entails the effective
supervision, regulation and control of water
provision service.
9.A. State recognition and full
implementation of the human right to
water
9.B. Effective regulation of water resourcestowards security in water supply and
quality
9.C. Rationalization and integration of
water-related institutions within a
participatory framework
9.D. Increasing privatization of water
provision service focused on bulk water
supply
9.D. Public-Public Partnerships in small-
scale water systems to ensure equity
and responsiveness
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10. Power
Critique Alternative
10. Abandoned Power Sector and
Industry
As mandated by the Electric Power Industry
Reform Act (EPIRA), the energy sector is
thoroughly abandoned to the private sector,
with generation and transmission firms
privatized, the industry liberalized and opened
up to foreign competition, and pricing
deregulated. Demand-management is also
lacking.
10.A. Privatized and Private Sector-driven
Power Industry
10.B. Liberalized Ownership and Investments
in the Energy Sector
10.C. Politically-compromised, Incompetent,
and Socioeconomically-detached
Regulation
10. Strong State Participation
towards a Rational andParticipatory Power System
The backbone of economic development has
always been the energy sector as such, its
development as a sector is indispensable to
economic and social success. Since much of the
power industry can be classified as natural
monopolies, the state should intervene so as to
remove inefficiencies and corruption, mitigate
market failures, ensure accessible and
inexpensive energy to households andbusinesses, manage electricity demand, and
facilitate citizens participation in energy supply
and demand planning.
10.A. Regaining strong state presence in the
power industry
10.B. Regulation and Redesigning an
Appropriate, Efficient, and Sustainable
Power System that incorporates
intelligent technologies
10.C. Competent, Independent, and Multi-
sector Regulatory Bodies Re-embedded
to Socioeconomic and Development
Goals
10.D. Undemocratic and private sector-
centric/ -dependent power sector in the
LGUs
10.D. Facilitation of community modes of
power utilities ownership, Participatory
planning and Demand-side
management
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IV. The Local Economic Alternative Program (LEAP)
CommunityDemocratization towards Local Development and Empowerment
Critique Alternative
1.
Technocracy-dominated, Manila-centricEconomic Management [from 1.E] 1.
Participatory and Democratic EconomicManagement [from 1.E] 2. Development strategy centered on
specialized Super-regions [from 2.D] 2. Using the Bioregion-approach in Creating
and Maintaining Communities [from 2.D] 3. Lack of capacity and propensity to save in
the grassroots [from 3.D] 3. Public Grassroots Savings Program [from
3.D] 4. Underdeveloped Community Industries and
Sources of Local Employment [from 4.D] 4. Empowering Local Enterprises through
institutional support and creation of
community and national trade linkages[from 4.D]
5. Widespread Unemployment and
Underemployment in Agrarian
Communities and Urban Areas [from 5.D] 5. Employment Program according to the
agro-industrial development plan [from
5.D] 6. Economic development biased against
indigenous communities and environmental
preservation [from 6.F] 6. Protecting Ecologically Sustainable Practices
of Indigenous Communities [from 6.F]
7. Unfair distribution of work among gendersin households [from 7.D] 7. Integrating components of the Household
and Care Economy into the Public and
Community Domain [from 7.D] 8. Liberalized and Deregulated, Food Security-
based National Food System [from 8.E] 8. Reorganizing Food Trade based on citizens
need and not corporate dictates [from 8.E] 9. Increasing privatization of water provision
service focused on bulk water supply [from
9.D]
9. Public-Public Partnerships in small-scale
water systems to ensure equity and
responsiveness [from 9.D]
10. Undemocratic and private sector-centric/ -dependent power sector in the LGUs [from
10.D]
10. Facilitation of community modes of powerutilities ownership, Participatory planning
and Demand-side management [from 10.D]
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Chapter 1:
New School Economics
A Comprehensive Alternative Economic Policy
For the Philippines
HA NEP2020 Holistic Alternative
National Economic Platform
A Project of the Freedom from Debt Coalition
11 Matimpiin St. Barangay Pinyahan Quezon City. 1100.
Telephone (02) 9211985. Telefax (02) 9246399.
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TowardsModernity and Prosperity. Next Stop: Philippines 2020.1
The neoliberal paradigm, as we know, relegated the country to the backwaters of the global2
economy, while throwing millions of Filipinos to poverty and misery for several decades. Now, we3
begin to explore the alternatives to neoliberal model pillars of a new, cutting-edge, radical4
economic paradigm that will bring the Philippines to modernity and prosperity.5
The speed with which our neighbors have leapfrogged from poverty to development is proof that6
progress, while it will entail difficulties and sacrifices, is not necessarily a long and protracted7
process. Thus, the alternative economic paradigm offered is one that promises in less than a8
generation to lay the foundation of a different economy an economy that is by 2020 already9
facilitates the transition towards a sustainable, gender-equitable, poverty-free, and modernized10
Filipino society.11
At this point, the Philippines having been exposed to the failure and bankruptcy of the succession12
of the old development models employed by its leaders, a new vision is in order a vision that is13
inspirational and unifying in form and revolutionary in substance, a vision that can capture the14
imagination of the mainstream economic community and propel it towards fulfilling a15
transformative project to achieve a modern and prosperous Philippines. 16
It is on this context that we use HANEP! as the main name for our campaign on a new economic17
platform. In Filipino slang, Hanep! is an expression that shows amazement, equivalent to the18
English expression Wow! . We intend that the alternative economy this paper puts forward19
evoke the same emotion an emotion of hope that the Philippines can zoom forward towards an20
amazing and impressive economic and human development.21
While the alternative may not necessarily follow the development path and model of Northern22
industrialized nations and/or their current features, it provides a vision of a future society that is23
sustainable, gender-responsive, and socially just, and at the same time technologically-developed,24
efficient, and productive.25
Clearly, it is time that our economy graduate from high school the old-school laissez-faire26
economy that threw us to poverty and low-development path to an economy of the future. Its27
time to go one step further and commence our path towards a better way of development. 28
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1. Activist Developmental State1
2
Alternative to: Weak, Elite- Captured State3
4
Mobilize states regulatory and procurement powers for national development and 5
equitable redistribution of ensuing risks and create conditions for further growth via6
provision of basic welfare, infrastructure improvements, and support for local 7
entrepreneurship.8
9
10
1.A. Strong, Sovereign, and Developmental Orientation11
12
The state must have a large role in the management of the markets, and must determine the13
boundaries of market competition. It must facilitate conversion of privatized essential services into14
public modes of ownership, and facilitate the nationalization of strategic raw-material industries.15
For this purpose, the state should endeavor to capacitate and make more efficient the corporate16
government sector so it can engage in these endeavors.17
18
1.A.1. Developmentalist, Strategic, Sovereign, and Sustainable Economic Planning19
1.A.2. State Ownership of Vital Services and Resources and State Management of Strategic20
Industries and Assets and Natural Monopolies 21
1.A.3. Competitive, Productive and Socially Necessary State Operated Enterprises (SOE)22
engaged in Public Goods Provision, Industrial Pace-setting, and Global Competition 23
24
1.B. Caring Mandate25
26
The state must use its regulatory powers to protect its citizens and ensure economic security for27all, necessitating large government role in risk redistribution and welfare.28
29
1.B.1. Large government role in providing welfare, including essential services, healthcare [see30
7.B], and unemployment subsidy [see 5.D.1. ]31
1.B.2. Rights-based Governance that is gender-responsive, culturally-sensitive and respective of 32
right to self-determination33
1.B.3. Regulation of economic activity with huge negative externalities (e.g. pollution)34
1.B.4. Regulation of pricing in prime commodities or services markets which lack competitive35
pricing (e.g. oil, electricity)36
37
1.C. Assets Reform towards a Democratized and Equitable Ownership Structure38
39
The state must democratize the economy by ensuring that the citizens equitably own, manage,40
and benefit from domestic resources, and that citizens are themselves involved in economic41
governance not as mere clientele of the government but also as stakeholders and implementers.42
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Assets reform and redistribution must be completed, and ownership instruments must be revised,1
in order to ensure the most equitable and optimal distribution and management of resources.2
3
1.C.1. Facilitating transition to Public modes of Equitable Ownership and Management of 4
Essential Services and major sources of grassroots employment5
1.C.2. State-implemented Urban and Rural Land Reform, Land-based Assets Reform [see 2.A]6
1.C.3. Reformed Taxation on Idle Assets and Inheritance, Discouraging Unproductive Economic7Activities through Taxation8
1.C.4. Redistributive and Progressive Fiscal and Monetary Policy9
10
1.D. Good Governance11
12
For the government to be effective in carrying out its mandate, it should be professional, governed13
by rules, and composed of civil servants that are competent and decent. The government must14
also possess the means of propagating its values via an education system that is geared towards15
economic patriotism and a subsidized independent media apparatus.16
171.D.1. Strong and Coherent Democratic Institutions under the rule of law18
1.D.2. Competent Civil Service and Independent Bureaucracy19
1.D.3. Public Education System geared towards national development and economic patriotism20
1.D.4. State-subsidized media that is disembodied from the state apparatus and the market21
22
1.E. Participatory and Democratic Economic Management 23
24
There should be a reengineering of governments developmental planning and implementation25
systems towards participatory democracy. The bureaucracy should not be the prime determinant26
of development decisions, but more of an enabler of citizens and conduit of people's consensus.27
28
1.E.1. Recognition of Citizens as part Owners and shareholders of society29
1.E.2. Participatory Governance Structures accessible to local government and territorial30
constituencies and sectors31
1.E.3. Decentralized Economic Governance (vis-à-vis central planning mechanisms) and32
Participatory Budgeting (ala Porto Alegre)33
1.E.4. Consensus-based and Culturally-sensitive Community Development Planning34
1.E.5. Ensuring local and national participatory mechanisms in crafting development strategies35
1.E.6. Including participatory decision-making in enterprises as a part of the agenda towards36
political empowerment of workers [see 5.B]37
1.E.7. Practicing more democratic forms of Collaborative Strategic Goal Oriented38Programming (CoSGOP) in long-term infrastructure projects39
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2. Equitable and Strategic Land Ownership and Use for1
Sustainable Development and Livability of 2
Communities3
4
Alternative to: Inequitable Land Ownership and Lack of Social Outlook and Strategic Vision on Land Use5
and Management 67
Restructure the ownership of land and land-based assets and enterprises according to8
new ownership instrumentalities and regulatory environments that, in rural areas,9
encourages agricultural development and that is aligned with a rational and sustainable10
land and water use plan, and in urban areas, intelligent urban design and planning.11
12
13
14
Tenure instruments, which should go beyond agrarian reform to include coastal areas owned by15
fisher-folks and uplands managed indigenous communities, should serve the dual purpose of 16
equity/social welfare, and agricultural-industrial development. Land reform that encourages land17
stewardship through institutional support must be fully implemented.18
19
2.A.1. Completion of the long-overdue Land and Assets Reform Project20
y Culturally-Sensitive and Gender-responsive Agrarian Reform i.e. the right to self-21
determination and the right of women to own land 22
y Land ownership rights should be on the form of land stewardship with government 23
support.24
y Creation of Land Tenural Instruments for Indigenous People, Fisherfolks and Peri-25urban communities26
y Urban Land Reform in order to resolve settlement problems in the cities27
2.A.2. Public ownership and management modes of Agricultural Enterprises 28
y Similar to Chinas Township and Village Enterprises (TVE) 29
30
31
32
All aspects of rural land ownership, use and conversion, and investment must be aligned with the33goals of a National Land Use Plan. This entails stringent regulation on the land market and land34
converting industries such as extractive industries. The state will actively promote agriculture in35
land use and regional planning.36
37
2.B.1. Enact a National Land and Water Use Plan38
2.A. Restructuring of Ownership of Land and Land-based Assets and Enterprises
2.B. Sustainable Rural Land Use and Regional Planning geared to Strengthening
Agriculture
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y Equitable, just, culturally-sensitive1
y In line an environmentally sustainable national development strategy,2
environmental mapping, and renewable energy sources mapping3
2.B.2. More stringent Land Market Regulation that is based on the Land Use Plan and more4
stringent regulation on all extractive industries (e.g. mining, quarrying)5
y Pricing regulation on land and land-based assets 6
2.B.3. Encouraging agriculture as primary economic activity in rural areas in order to make full7use of the lands potential and siphon unemployment in accordance to a public8
employment program [see 5.D]9
y Institutional support and massive agricultural subsidies, especially those focused on10
calibrated modernization 11
12
13
2.C. Strategic and Intelligent Urban Development Planning14
15
Apply the Principles of Intelligent Urbanism (PIU) as a framework in reengineering key services and16
commercial hubs like Metro Manila, Metro Cebu, Metro Davao, and Subic-Clark. This means17engineering cities with the following considerations: balance with ecology, balance with cultural18
tradition, the use of appropriate technology, ensuring conviviality, social interaction, and human-19
scale design, efficiency, opportunity, ease in regional integration, balanced movement, and20
institutional integrity.21
22
2.C.1. Ensure safe, healthy, and economical human settlements for all city residents which the23
residents will gradually own and maintain, and that which is proximate to workplaces,24
schools, and places for social functions25
2.C.2. Decongest megacities like Metro Manila by facilitating development in the rural areas26
and in other cities and regulating in-migration27
2.C.3. Integrate demand management and efficient technologies in provision of essential28
services like water and power in cities29
2.C.4. Implement a Long-term Strategic Framework for the Transportation Industry30
y Streamlining and regulation of the road-based transportation industry in order to31
manage petroleum consumption32
y Ensuring of a Modernized and Efficient Centralized Intra-urban and Rural-to-Urban33
Mass Transit Systems 34
2.C.5. Implement climate-adaptation and disaster risk reduction (DRR) plans [see 6.D]35
36
37
2.D. Using the Bioregion-approach in Creating and Maintaining Communities3839
Communities must be redesigned so as to re-embed human activity into region-scale ecosystems,40
according to the principles of sustainable development.41
42
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2.D.1. Reorganization of political boundaries in order to match them with ecological1
boundaries, create bio-districts and assure rational stewardship of ecological and2
biological resources3
y Tap watershed districts that highlight the unique ecology of bioregions.4
y Design local economies that encourage consumption of local foods and use of local 5
materials where possible.6
y Encourage the cultivation of native plants of the region.72.D.2. Replicate sustainable system practices, e.g. Maximo T. Kalaws Institute for Sustainable8
Developments Ecosystem-based Community-centered Sustainable Development9
Organization and Management (ECSOM) approach10
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3. Domestic Capital-driven Development 1
2
Alternative to: Foreign Capital-dominated Open Economy 3
4
Accelerate the shift from a foreign capital-led industry to a domestic-driven one by 5
instituting capital management instruments, s domestic financial base by socially re-6embedding the central bank and monetary policy, and ending the resource gap problem7
of public finance by resolving the debt problem.8
9
10
3.A. Strategically-managed Capital Structure and Flows11
12
Private investments and its instrumentalities must be strongly regulated and coordinated for13
desired developmental objectives specifically, the strengthening rather than the weakening, of 14
domestic industry, agriculture, and capital base.15
16
3.A.1. Setting up an effective Capital Flows Management System17
y Graduated, Transparent, and Vulnerability-activated system18
y Discouraging Foreign Loans as source of Finance and Portfolio Investments (PI)19
Regulation20
3.A.2. Tying up Foreign Direct Investments (FDI) Planning with an Agricultural and Industrial21
Development Plan that facilitates long-term advantages22
y Similar to Singapores Local Industries U pgrading Program that encourage MNCs to23
source from domestic firms24
3.A.3. Regulation of importation of consumer goods, with saved foreign currency channeled to25
import capital goods for industry [see 4.B.1. ]26
27
28
3.B. Development-oriented and Socially-embedded Central Bank, Banking Sector, and 29
Monetary Policy 30
31
Central bank and monetary policy must be shifted from mere inflation-targeting to one that links32
the domestic financial sector with the agriculture and industries. Capital investments should be33
seen as instruments for job creation. 34
35
3.B.1. Shift Philippine Central Bank and Monetary Policy to promote Agricultural and Industrial36
Development and to create a Industrially-oriented Financial Sector37y Shift away from Inflation-targeting as Central Bank Objective38
y Capitalization must be biased to labor-intensive and labor-enhancing industries.39
3.B.2. Implementing foreign currency exchange regulation in order to maximize benefits of the40
inflow of foreign exchange from OFWs41
y Similar to Malaysia and Chinas crawling peg to a basket of currencies42
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3.B.3. Creation of a Sovereign Wealth Fund (SWF) to manage the foreign exchange sterilized by1
the central bank and direct foreign exchange to growth areas2
y Singapores Temasek can serve as a good model of an SWF 3
3.B.4. Central bank must facilitate the formation of dedicated linkages between financial4
institutions and agriculture and industrial clusters [the formation of which is according to5
an industrial plan discussed in 4.A.1. ]6
y Similar to Japans post-WWII keiretsu policy of having a bank or a chain of banks7support vertically and horizontally integrated firms8
3.B.5. Create financial instruments that is accessible and profitable for the labor sector9
[empowered by 5.A.1. ] and households [capacitated by 7.A.1. ]10
y Should ensure gender-responsive provision of credit, which means income11
requirements should be relaxed for those who belong in the unpaid reproductive12
economic sphere [see 7.A.2. ]13
14
15
3.C. Policies towards Fiscal Freedom16
17The government must finally free public finance from constraints and fiscal hemorrhage by18
strategically resolving the debt and debt service problem, and by accelerating the shift to a19
treasury policy that is biased on domestic savings rather than the global credit market.20
21
3.C.1. Accelerate Shift to Peso Borrowings, National Treasury Policy that is biased on Domestic22
Financing, Savings23
y The treasury can tap the huge dollar reserves managed in a proposed Migrants24
Bank [see 3.D.4. ]25
3.C.2. Establish a Government Expenditure Program that is biased on tapping Domestic Capital26
3.C.3. Resolution of the Public Sector Debt Problem and the consequent Resource-Gap by27
conducting a comprehensive audit of foreign debts and subsequent repudiation of 28
illegitimate ones29
3.C.4. Adopt for the purposes of evaluating existing and future loans, and register international30
support for, the sovereign, democratic and responsible (SDR) financing framework31
32
33
3.D. Public Grassroots Savings Program34
35
Savings provide the vehicle with which 1) the consumers can access goods and services they36
cannot afford due to lack of purchasing power [see 5.A], and 2) domestic firms can gain capital by37
borrowing from banks [see 4.B.2. ]. Thus, the state should be able to mobilize grassroots capital38towards developmental needs by providing the avenue for savings.39
40
3.D.1. Set up a Progressive Tax Regime that encourages Savings41
3.D.2. Strengthening the Postal Savings Bank (PSB) to encourage savings among the workers42
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y Conditional Cash Transfers (CCT) for wages [ 5.A.1. ] or unemployment subsidy 1
[ 5.D.2. , second bullet] can instead be deposited in a PSB rather than handed out 2
3.D.3. Bring back the Small Investors Program (SIP) initiated by Former National Treasurer and3
FDC President Leonor Briones4
3.D.4. Provide migrant workers a savings venue by creating a Migrants Workers Bank managed5
by their families in a cooperative modality.6
3.D.5. Encourage self-organized savings and loans cooperatives 7
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4. Integrated, Modernized, and Ecologically-sound1
Industry focused on developing Sustainable Local2
Economies and DomesticMarkets3
4
Alternative to: Fragmented Industry designed for Low Value Added Exports 5
6
Pursue an industrialization strategy that synergistically links an integrated domestic 7
industry that scales the entire value chain with a strengthened domestic market for 8
demand and sustainable local economies for supply, and one that facilitates9
technological leapfrogging and creates uncontested market spaces.10
11
12
4.A. Strategic, Coherent and Activist Trade and Industrial Policy 13
14
The government must establish an industrial development blueprint that vertically integrates15
industries engaged in raw material extraction with those engaged in the production of finished16
consumer goods in order to scale the entire value chain, that horizontally integrates firms into17
strong industrial clusters, and that pragmatically maximizes trade opportunities. This is vis-à-vis a18
trade policy that serves as an instrument to promote more markets, strengthen national19
industries, and create more jobs and welfare.20
21
4.A.1. State-implemented Selective Industrial Policy and Strategic Development Vision22
y Overall strategic development vision, in consideration of what the nation has23
(supply/resources), and what the people need (demand/market)24
y Labor restructuring and support plan for phase-out industries (retooling, re-skilling,25
adequate compensation)26y Facilitate industrial evolution from Original Equipment Manufacturing (OEM) to27
Original Design Manufacturing (ODM) to Original Brand Manufacturing (OBM) 28
4.A.2. State-driven Vertical and Horizontal Integration of Industries via SOEs or supported29
Industry Players30
y Scaling the entire value chain31
y Assisted by a Keiretsu policy in capital financing [see 3.B.4. ]32
4.A.3. Trade as Industrialization Instrument . Protection for Industrialization, Selective33
Liberalization towards Modernization34
y Protective trade barriers35
y Selective liberalization of industries controlled by rent-seeking and incompetent 36entrepreneurs (excluding essential services and strategic resources/industries)37
38
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4.B. Tapping the Domestic Market Supply of Capital and Demand for Goods and 1
Services2
3
With a capacitated domestic market in a high-wage labor regime [see 5.A.1], industry must begin4
to tap into 1) the burgeoning capital base due to increased workers savings and increased capacity5
to invest by workers, 2) the growing consumption by workers themselves6
7
4.B.1. Tapping the Domestic Market for commodities by state support on industries which cater8
to local demand9
4.B.2. Facilitate the utilization of domestic assets base (grassroots savings and investments)10
[see 3.D.5. ] as primary investments and capital for local firms11
4.B.3. Instill a sense of industrial values of public- and, ecology-centeredness and rejecting12
profit-centeredness, with firms willing to internalize cost13
14
15
4.C. Facilitating Leapfrogging towards a Modernized and Sustainable Industry that is16
able to create uncontested market spaces1718
As traditional smokestack industrialization strategy may be inadequate in an era of stiff global19
competition, climate crises, and declining hydrocarbon supply, the government must resort to a20
flanking strategy that facilitates technological leapfrogging and creates uncontested market21
spaces, or blue oceans, in the global economy.22
23
4.C.1. State-facilitated Knowledge Management (KM) systems and accelerated technological24
transfers to boost Total Factor Productivity (TFP)25
y State-supported Research and Development (R&D)26
y Knowledge-transfer Conditions for Liberalized Industries [see 3.A.2. ]27
y Strong public technical and scientific education system for knowledge reproduction28
4.C.2. Relaxing recognition of Intellectual Property Rights (IPR) for foreign technology, but29
ensuring maximum protection for domestic innovators30
4.C.3. Increase competitiveness by setting up clear but realistic performance targets for31
supported industries and even SOEs and the accompanying incentives system.32
4.C.4. Establishment and maintenance of cost-effective value engineering procedures and33
processes in SOEs engaged in industry34
4.C.5. Creation of a niche export industries, composed of globally-competitive homegrown35
firms, that will also serve domestic need36
y Blue ocean strategy making competition irrelevant by creating uncontested 37
market spaces38
y Specialize in the Renewable Energy (RE) technology industry and eco-industries as39
comparative advantage.40
y Focus on light-manufacturing and consumer goods manufacturing, industrial rather 41
than agricultural exports42
43
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1
4.D. Empowering Local Enterprises through institutional support and creation of 2
community and national trade linkages3
4
Strengthen capacity of local economies to produce industrial inputs while connecting them to the5
community market and the national industrial champions. Ensure that the educational system is6
geared for the purpose of modernizing local enterprises.7
8
4.D.1. Investing on the development of Micro, Small and Medium Enterprises (MSMEs) by9
providing institutional support10
y Research and development subsidies [see 4.C.1. ] for small agricultural enterprises11
y Support in obtaining resource and capital inputs (e.g. fertilizers, equipments)12
y Connecting grassroots savings bank [see 3.D.5. ] to local enterprises13
4.D.2. Facilitate direct trade between the community market and the local enterprises14
y Dismantling big-time traders through creation of grassroots markets15
y Government-facilitated Fair Trade mechanisms in the rural areas16
4.D.3. Link up local, social cooperative enterprises, and MSMEs which focus on tapping17community resources and labor, to national industrial champions18
y Integrate domestic MSMEs which are more labor-intensive than large firms to19
growth areas (South Korea)20
y Engage domestic MSMEs for support production services (Japan)21
y Establish strong linkage between the agricultural sector and labor-intensive22
industries, for example, in food production (India)23
4.D.4. Strengthening Regional Return-of-Service Programs for Public Higher Education24
Institutions (HEIs) (includes SUCs and LUCs)25
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5. Empowered Labor Sector1
2
Alternative to: Repressive Labor Environment 3
4
Empower the workers economically and politically to ensure that that the sector that 5
primarily creates (through production) and determines (through consumption) value6
remain to be dynamic, productive, and capable. Increase and improve the existing labor 7
force by continuous search for tasks that contribute to national development and 8
continuous training and capacitating new sets of workers.9
10
11
5.A. Economically-capacitated Workforce towards a Strong Consumption, Savings,12
Investments, and Tax Base13
14
The government must facilitate the creation of a strong domestic market and savings base by15
ensuring that workers are paid well, free to spend on non-basic commodities, and save for their16future. Public goods for human development should thus be provided.17
18
5.A.1. High wage Labor Regime to induce demand and increase marginal labor productivity19
y High Wage (beyond the living wage), Benefits and Wage Extenders, and Social 20
Security [see 7.A.1. ]21
y Conditional Cash Transfers (CCT) for MSME workers to fill the gap between actual 22
wage and living wage23
y Ending the contractualization and flexi-work schemes24
25
26
5.B. Political Empowerment of the Labor Sector to prevent Labor Income Distortion27
28
The cheap labor policy of the government is further enforced by high demand for work,29
particularly because of the relatively high unemployment rate in the Philippines. This incentivizes30
corporate impunity on violating a high-wage labor policy regime [see 5.A.1. ]. In order to prevent31
this, side by side with the policy to mandate increase in income must be a program towards the32
political empowerment of the labor sector.33
34
5.B.1. Enact a progressive labor code and standard that provides for:35
y Meaningful Representation and Participation in Government [see 1.E.2. ] and 36
Management [see 1.E.6. ]37y Proactive State protection of Labor Rights and Regulation of Corporate Activity 38
5.B.2. Instituting state-enforced mechanisms for Workplace Democracy39
5.B.3. Strengthening corporate democracy via mandated regular transfer of shares to qualified40
employees, on top of wage and wage extenders41
y Building and democratizing capital base [see 3.B.5. ]42
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1
2
5.C. Transition Program for the Marginally Employed 3
4
Facilitate the transition of the informally employed sector via provision of universal social5
protection, reconstituting them as local cooperative enterprises, and supporting the transition of 6
MSMEs to reach core labor standards.78
5.C.1. Tracking down labor abuse in the informal labor sector, facilitating transition of MSMEs9
to reach international core labor standards through government support10
5.C.2. Formalization of informally-employed workers and granting them universal social11
protection and insurance12
5.C.3. Increasing available institutional, financial, and educational support to create13
cooperative-mode MSMEs amongst informal workers14
15
16
5.D.
Employment Program according to the agro-industrial development plan1718
The countrys huge population has at least one advantage a huge potential supply of labor force.19
The government must intervene in order to tap this labor force, directly create employment or20
facilitate the creation and growth of labor-intensive industries, and reduce the burden of the21
existing labor force. However, employment policy should not just be for job creation, but should22
serve national development ends.23
24
5.D.1. Public Employment Program towards Maximum Local-level Employment25
y Small-scale, Labor-based, equipment supported ( LBES) Public Employment Program26
according to a social-needs analysis and to boost infrastructure projects in the27
communities28
y For rural areas, implement a National Rural Employment Guarantee Program29
(similar to Indias MGNRE G A) with unemployment subsidy 30
5.D.2. Spurring job-creation through facilitating the growth of labor-intensive agricultural31
industries in the rural areas32
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6. Ecologically Sustainable and Climate-adaptive1
Economy2
3
Alternative to: Externalities-intensive and Ecologically Destructive Production and Reproduction.4
5
Adopt an economic program that is geared towards a sustainable and ecologically-sound 6development. Ownership instruments and demand-supply circuits should operate on the7
framework of conservation, rather than maximum utilization, of natural resources.8
Knowledge on biological and ecological systems should be protected and enhanced, not 9
commercialized.10
11
12
6.A. Pass Comprehensive Environment Code13
14
The government needs a coherent and comprehensive environmental legislation so that it can15
substantively responds to the climate crisis and it can effectively link its development model to16environmental considerations. Such legislation should set principles and guidelines for17
implementing sectoral laws together, and for rationally and consistently determination of how18
laws might be jointly applied.19
20
6.A.1. Rationalization of Mixed Resource Uses: (e.g., determination of Best Resource Uses in21
areas of multiple and exclusionary land uses; need for comparative valuation system)22
6.A.2. Principle of universal accountability: (e.g., of multi-sector bodies, investors and the23
government)24
6.A.3. Principle of equity among stakeholders of different and mutually exclusionary resource25
users (e.g. cross-subsidies among competing resource users)26
6.A.4. Rationalization of Conflict Resolution among competing & mutually exclusionary resource27
users especially in complex resource regimes like uplands, foreshores, coastal waters,28
watersheds, lakes29
6.A.5. Standardization of good environmental governance by NGAs, LGUs, regulated industries,30
SMEs31
32
33
6.B. Rebuilding Terrestrial Carbon Sinks to increase GHG Sequestration34
35
While the Philippines reserve for itself development space which it needs to industrialize, climate36
change requires the need for mitigation measures around the world. The government, through37financing and support secured from reparations from developed countries, must embark on38
rebuilding our carbon sinks through reforestation in order to better sequester Greenhouse Gases39
(GHG).40
41
6.B.1. Forest restoration through total log ban42
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6.B.2. Selective and partial moratorium and/or extractive and forest-destructive industries such1
as mining and quarrying2
6.B.3. Delineation of lands (coherent with a land use plan [see 2.B.1. ])3
4
5
6.C. Low-emission and Sustainable Provision of Essential Services6
7The provisioning essential services should be regulated and managed by the state as these are the8
services which should be the most massively produced and provisioned by society for itself, and9
thus potentially the most ecologically destabilizing and unsustainable among the socio-economic10
activities. Low-emission and sustainability standards should be incorporated in the management of 11
these essential services as our contribution to global emissions reduction effort.12
13
6.C.1. Reversal of privatization in essential services, and regulation of further private sector14
initiatives such as those in the form of Build-Operate-Transfers (BOT) and Joint Venture15
Agreements (JVA)16
6.C.2. Democratize power generation sector that can provide us with an affordable, clean,17sustainable and renewable energy.18
y Minimum-emissions, which means the conversion of existing coal and diesel-fired 19
power plants to renewable energy plants such as geothermal and hydropower 20
y Moratorium in indigenous coal-for-power mining 21
6.C.3. Decentralized and scattered small-scale water sources development22
y Micro-dam system incorporating efficient rainwater catchment technology 23
6.C.4. Reducing food transportation costs by closing production-consumption circuits [see 8.E.1. 24
]25
26
27
6.D. Climate Adaptation measures to ameliorate socio-economic effects of extreme28
weather events29
30
Global warming is leading to extreme weather patterns which our current economic design (or31
lack thereof) is unprepared for. The state should thus facilitate the reengineering of the economy32
through integrating elements of climate adaptation in order to prevent loss of lives and properties33
associated with climate disasters.34
35
6.D.1. Disaster Risk Reduction (DRR) should be integrated in local development planning and36
national economic strategy37
6.D.2. Economic strategy should assume the existence of climate disasters and should be able38to minimize dangers and maximize opportunities they bring creating industries along39
the way40
y Agriculture sector should assume extreme weather conditions of longer droughts41
and heavier rains42
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y Services sector must cater to climate disaster demands, especially on emergency 1
healthcare and grassroots telecommunications2
y Manufacturing should be able to produce goods needed by communities for 3
preparation and survival 4
5
6
6.E. Demand management in all aspects of consumption and production7
8
Citizens and firms must now take responsibility for and limit what they consume and produce,9
understanding that current modern life is intrinsically ecologically destabilizing. Thus, demand10
management must be put in all aspects of modern life.11
12
6.E.1. Implementing Multi-sector Participatory Water and Energy Planning and Conservation13
6.E.2. Regulation of importation of Petroleum and other high-emission products14
6.E.3. Regulation of foodstuffs bought by Transnational and Multinational Corporations15
engaged in food services16
6.E.4. Regulation of the importation, production, and use of polymer and other plastic products17in consumer goods packaging18
19
20
6.F. Protecting Ecologically Sustainable Practices of Indigenous Communities21
22
Local governments should empower members of indigenous communities to practice, replicate,23
and propagate use of sustainable technology and lifestyle. The state should protect this24
technology from being commercially utilized for profit by transnational and multinational25
corporations.26
27 6.F.1. Protecting indigenous groups and supporting/replicating their practices and technology28
in preserving the environment29
6.F.2. Facilitating not just technology transfer, but also financial support for further developing30
and replicating eco-friendly indigenous climate adaptive techniques31
y R&D on ethno-ecological refuge and indigenous settlements32
y Learning from sustainable community models of IPs33
6.F.3. Exclusion of indigenous knowledge from TRIPS or copyright laws34
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7. Strong Social Support and Safety Net System for1
Households and the Reproductive Economy2
3
Alternative to: Marginalized and Neglected Non-market Sector 4
5
Establish components of strong social welfare and social security, take back privatized 6 public goods and essential services, and transfer components of unpaid care economy to7
the community domain in order to relieve households and women of undue burden.8
9
10
7.A. Social Compensation System for all Citizens, Valuation of Unpaid Reproductive11
Labor 12
13
The state must recognize the intrinsic contribution of each member of society, even if only for the14
function of consumption, through the provision of a social wage even for the unemployed. This15
has an added benefit of ensuring that women in households, which have no formal market work,16will have purchasing power the absence of which perpetuates imbalanced relations in the17
household level.18
19
7.A.1. Guaranteed minimum income (GMI) system 20
y The government fills up the difference between minimum/actual wage and living21
wage via Conditional Cash Transfer (CCT) mechanisms22
y GMI must be deposited in a strengthened postal savings bank [see 3.D.2. ] under the23
beneficiaries name24
y Primarily sources funds from strengthened corporate income tax, progressive25
consumption, and property taxes26
7.A.2. Conducting a thorough valuation of and accounting for reproductive work in the27
assessment of the general economy28
y Gender-disaggregated data is compiled for all economic activity 29
y Setting out a Social Accounting Matrix 30
y Comprehensive review of institutional frameworks and policies related to care31
services32
33
34
7.B. State Reclamation of Public Goods and Essential Services externalized to35
H ouseholds36
37
Essential services externalized to household translate to further exploitation of women, which, in38
traditional societies, have to discharge these services. The government must take back these39
services in order to eliminate this form of exploitation.40
41
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7.B.1. Complete and Free Provision of Public Goods that will result to Net Savings/Income for1
Households and/or less burden to women2
y Universal Healthcare Insurance Coverage (insures all Filipinos expanded coverage3
under PhilHealth)4
y Completion of Education for All (EFA) Targets (6% of GNP allocation to education)5
7.B.2. Subsidized Provision of Essential Services (e.g. Water and Power) for Households via6
Public Utilities [see 1.A.2. , 1.B.1. ]77.B.3. Socialized housing and settlement programs8
y With climate-adaptive features [see 6.D ], and in line with industrial [see 4.B ],9
employment [see 5.D.1. ], and urban [see 2.C ] and rural [see 2.B ] development plan10
11
12
7.C. Effective implementation of an institutional reproductive healthcare program.13
14
Households shall have access to reproductive healthcare and family planning information and15
services. These services should be subsidized and implemented by the government.16
177.C.1. Setting up of reproductive healthcare systems that would provide services such as:18
y Maternal and infant care19
y Family planning reproductive health information dissemination20
7.C.2. Prevention and treatment of diseases and complications related to reproduction which21
includes breast cancer, sexually transmitted diseases and birth complications22
23
24
7.D. Integrating components of the H ousehold and Care Economy into the Public and 25
Community Domain26
27 Domestic duties like ensuring food and water supply, subsistence farming (rural areas), and other28
household work must be collectively discharged and not relegated to households, where gender-29
exploitation is present. Thus, the state must facilitate the transferring of these components of 30
unpaid reproductive labor from domestic to public-economic sphere.31
32
7.D.1. Setting-up Public and Community Enterprises or LGU-level Services to provide for33
previously family-level domestic work in a more efficient manner and with economies of 34
scale:35
y Public/Community laundry 36
y Community-level Early Childhood Care and Development (ECCD) services,37
y Public restaurants/eateries38
7.D.2. Subsistence agricultural work that is usually relegated to households must be converted39
into collective work by rural communities under a food sovereignty model [see 8]40
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8. Food Sovereignty1
2
Alternative to: Crops and Fishes for Global Market 3
4
Shift from an export-oriented Food Security model to Food Sovereignty approach.5
Production-consumption circuits must be as close to the community as possible.6
Agriculture must be based on principles of inclusive decision-making, participatory 7
central planning, sound demand-management, cultural integrity, and environmental 8
stewardship, in consideration of a national economic plan for land use, agriculture, and 9
food.10
11
12
8.A. Recognition and Realization of Food Producer and Consumer Rights13
14
The assurance that food production an essential human endeavor will not compromise the15
rights of both the producers and the consumers, is the greatest assurance that food will be16
produced at adequate levels.17
18
8.A.1. Recognizing the Right of Individuals, Communities, Peoples, and Nations to Adequate,19
Nutritious, and Culturally-appropriate Food, and creating a national food system which20
provides it21
8.A.2. Realizing the right of farmers to own the land they till via a land reform which has strong22
land stewardship character, adequate government subsidies23
y Intensive financing for agricultural inputs (e.g. fertilizers, etc.)24
8.A.3. Production and consumption of food should be guided by the welfare of farmers and25
consumers, not the needs of transnational agribusiness26
2728
8.B. Government-led, Community-facilitated Food Self-Sufficiency and Agricultural 29
Modernization Program30
31
The government should begin a programme towards food self-sufficiency by raising agricultural32
activity and productivity, attracting labor and capital towards the sector, and facilitating the33
development of agricultural technology. This programme should be facilitated and implemented34
by the rural and urban communities. The long-term objective would be to develop a capital-35
intensive modern but sustainable rural agricultural sector while decreasing urban dependence on36
food trade.3738
8.B.1. Heavily investing in Agricultural Research and Development in order to optimize limited39
agricultural inputs40
y Increase support to Philippine Rice Research Institute (PhilRice)41
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8.B.2. Agricultural modernization through government procurement and distribution (to LGUs)1
of capital-saving and labor-saving equipments2
8.B.3. Facilitating urban-to-rural migration by increasing agricultural income3
y Elimination of price distortions by discouraging food trading and facilitating direct 4
trade between farmers and food consumers5
y Focusing at first on labor-intensive processes to6
y Rural Employment Guarantee [see 5.C , 5.D.1. ] and rural social welfare [see 7 ]78.B.4. Facilitating urban agriculture/horticulture to stem food shortages in urban communities8
y Possible Models: Organopónicos system of urban organic gardens in Havana, Cuba,9
Periurban Agriculture Development in China (Modern Agricultural Science10
Demonstration Park in Xiaotangshan)11
12
13
8.C. Supporting and Practicing Sustainable and Ecologically-friendly Agriculture14
15
The states support to agricultural development [see 2.B.3. , 8.B] must be framed towards the16
facilitation and adoption of agricultural practices that protects the ecological balance, conserves17natural resources, and ensures the production of safe and nutritious food for the health and18
productivity of its citizens.19
20
8.C.1. Gearing Rural development support towards the promotion of organic farming21
8.C.2. Regulating the use of Genetically Modified Organisms and other genetic technology in22
farming23
24
25
8.D. Increasing Livability and Democracy in Communities26
27
With the view that agricultural abundance is impossible if the security and democratic rights28
farmland communities are compromised, the state should ensure peace, order, and participation29
in agricultural areas.30
31
8.D.1. Social peace and resolution of armed conflicts in peasant lands32
8.D.2. Prevention of trade agreements-driven land lease which violates the spirit of land reform33
8.D.3. Provide democratic space for economic decision making in agrarian reform communities34
(ARCs)35
36
37
8.E. Reorganizing Food Trade based on citizens need and not corporate dictates3839
Food trade should serve the purpose of mitigating hunger in society, and not ensuring the profits40
of those which engage in the business of providing food. For this purpose, food trade must be41
reorganized, with sustainability and sovereignty considered.42
43
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8.E.1. Closing Food Production and Consumption Circuits1
y Maximum food self-sufficiency at the local/regional level taking into consideration2
rural and productive diversity in order to reduce carbon footprint [see 6.C.4. ] of 3
food transportation4
8.E.2. Ending unregulated international agricultural trade via trade protection instruments, and5
pulling out of trade agreements such as the WTO AoA (agreement on agriculture)6
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9. Active State Participation towards an Integrated,1
Sustainable and Humane Management and2
Development of the Water Sector3
4
Alternative to: Grossly Neglected, Fragmented and Ill-governed Water Sector 5
6Water is essential to life. While water is a finite resource and surely has an economic 7
value, the human right to water must be made the cornerstone of a national water 8
policy. The human right to water calls for prioritization of the right of the people to a9
continued supply of clean, safe, adequate and affordable water. This necessarily involves10
a comprehensive, holistic and integrated approach to water resources protection,11
management and development. It also entails the effective supervision, regulation and 12
control of water provision service.13
14
15
9.A. State recognition and full implementation of the human right to water 16
17
Considering that water is one of the most basic human necessities for existence and survival, the18
State should ensure that everyone has continued access to clean, safe and affordable water. The19
State should recognize the human right to water to finally clarify the existence of the right in the20
countrys legal system. Legal recognition should be backed up by a strong political will to21
implement the right, which entails public expenditure on water-related infrastructure and22
establishment of a mechanism to enforce the human right to water23
24
9.A.1. Enactment of a new Water Code that will comprehensively deal with the various aspects25
of the water sector (i.e., use, conservation, protection, management, development,26regulation and control of water resources and water supply services) with a right-based27
approach28
9.A.2. Declare as a positive right everyones daily access to at least 20 liters of clean and safe29
water at no cost30
9.A.3. Make the non-provision of at least 20 liters of clean, safe and free water a quasi-delict on31
the part of the LGUs, making the latter responsible for compensation32
9.A.4. Institutionalize the enforceability of the right through the first level courts33
9.A.5. Assist the LGUs in localizing the full implementation of the human right to water34
35
36
9.B. Effective regulation of water resources towards security in water supply and 37
quality 38
39
The State should actively protect and manage the water resources in order to secure not only40
dependable and adequate supply of water but, more importantly, clean and safe water. Protection41
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and management of the resources will dramatically decrease the cost of water treatment and1
hospitalization due to waterborne diseases, thereby freeing public funds which can be used for2
expansion of water provision service. The State should likewise mainstream water resources3
protection and management in its climate-adaptation plan considering that the water sector4
stands to be one of the most gravely affected by climate change5
6
9.B.1. Strict implementation of the Clean Water Act of 2004, seeing to it that water polluters7are prosecuted and convicted8
9.B.2. Establishment of a yearly performance target for each water-related institution, with9
non-performance resulting in automatic removal of the head of office10
9.B.3. Immediate reforestation to rehabilitate the watersheds11
9.B.4. Comprehensive review and evaluation of existing water permits, suspending and12
revoking the permits of those who violate its terms and conditions13
9.B.5. Apprehension of those who appropriate water without the corresponding water permit14
9.B.6. Establish a national agency that will provide sewerage services, given that it is very clear15
that the private sector is not interested in venturing into sewerage business.16
17
18
9.C. Rationalization and integration of water-related institutions within a participatory 19
framework 20
21
Instead of mandating various agencies to deal with the different aspects of the water sector, the22
State should rather strengthen the National Water Resources Board (NWRB) as the lead agency in23
the formation, integration and implementation of all water-related policies. Water-related24
institutions whose mandates duplicate or conflict with another should be abolished. Water-related25
institutions attached to other agencies should be made directly responsible to the NWRB as well.26
Moreover, stakeholders, especially domestic water users, must be represented in all levels of 27
policy and decision-making processes in the water sector28
29
9.C.1. Further strengthen the mandate of the NWRB as the national agency primarily30
responsible for the management, development and regulation of the water sector31
y Establish regional, provincial and municipal NWRB offices32
y Other water-related institutions should either be transferred to the NWRB as an33
attached bureau or, in case of impracticality, at least made directly responsible to34
NWRB as well 35
y Competence and integrity must be the main criteria for the selection of the36
members of the NWRB37
y Professionalize the NWRB through continuing education, training and capacity-38building of NWRB officers and employees39
9.C.2. Establish clear lines of responsibilities and mechanisms of exacting accountability in the40
water sector and its sub-sectors41
9.C.3. Remove the mandate of NAPOCOR and other power generation entities in managing42
water resources within sites of operation43
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9.C.4. Ensure multi-stakeholder representation in the NWRB and other water-related1
institutions2
3
4
9.D. Public-Public Partnerships in small-scale water systems to ensure equity and 5
responsiveness6
7
The State, with the framework of fulfilling the human right to water, should reverse the policy of 8
privatization and instead seek to transfer to local organizations and cooperatives the ownership9
and management of small-scale water services and resources. Where they are not yet capable, the10
State must make itself competent in the efficient operation of water provision with the end view11
of capacitating communities in integrated water resources management.12
13
9.D.1. Terminate the concessions contract with Maynilad and Manila Water on account of grave14
and blatant violations of the performance targets spelled out in the agreement and make15
them judicially liable16
9.D.2. Review all Public-Private partnership ventures in the water supply sector, terminate17partnerships that violate their own terms, and penalize those accountable for non-18
performance19
9.D.3. Strong and active regulation of water districts by Local Water Utilities Administration20
(LWUA), establish water systems in partnership with the LGUs21
9.D.4. Capacitate communities in protecting water resources from which they source their22
domestic water23
9.D.5. Ensure that all stakeholders, especially domestic water users, are represented in the24
governing bodies of water provision service providers25
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10. Strong State Participation towards a Rational and1
Participatory Power System2
3
Alternative to: Abandoned Power Sector and Industry 4
5
The backbone of economic development has always been the power sector as such, its6development as a sector is indispensable to economic and social success. Since much of 7
the energy industry can be classified as natural monopolies, the state should intervene so8
as to remove inefficiencies and corruption, mitigate market failures, ensure accessible9
and inexpensive energy to households and businesses, manage electricity demand, and 10
facilitate citizens participation in energy supply and demand planning.11
12
13
10.A. Regaining strong state presence in the power industry towards reliability of access14
and sustainability 15
16The state should be a strong player in the energy sector in order to set the pace and direction of 17
private sector initiatives [see 1.A.2. , 1.A.3. ]. It should heavily invest in the power sector, especially18
in renewable energy, to ensure reliable and inexpensive access to electricity and sustainability.19
20
10.A.1. Rebuilding the State Energy Complex to ensure reliable and inexpensive access to power21
of households and industry22
y Renationalization of key Generation Companies ( GE NCOs) and power generations23
assets they control towards a mixed ownership energy regime24
y Reversing the privatization of Philippine National Oil Company (PNOC) subsidiaries25
such as PN
OC-Exploration Corporation, PN
OC-Energy Development Corporation,26 Petron, among others; strategic vertical integration, of the domesticU pstream,27
midstream, and downstream fuel industries28
10.A.2. Reversal of the TransCo (Transmission Corporation) privatization to ensure an intelligent29
grid system [see 10.B]30
10.A.3. Allowing for SOE participation and cross-ownership in multiple power subsectors in order31
to ensure reliability in electricity supply to households and industries32
10.A.4. Facilitating a transition plan to move away from emission-intensive power generation33
systems by investing heavily in Renewable Energy (RE), preferably through climate34
reparation negotiations [see 6.D]35
36
37
10.B. Regulation and Redesigning an Appropriate, Efficient, and Sustainable Power 38
System that utilizes intelligent technologies39
40
Liberalization should be reversed and the state should intervene [see 10.A] in order to develop an41
appropriate power system conducive to economic and social development. The new power system42
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should be able to align sustainable and ecologically sound power supply with the needs of the1
industry, households, and agriculture. To better facilitate management, the government must2
utilize existing intelligent technologies.3
4
10.B.1. Redesigning the National Grid and Power Generation System (requires 10.A.1 and 10.A.2)5
to ensure optimal generation mix and optimal levels of interconnectedness6
y Includes enabling the expansion in the amount of offshore wind and marine power 7through construction of new networks of submarine cables8
10.B.2. Stopping the operation of Wholesale Electricity Spot Market (WESM) and re-orienting9
Philippine Electricity Market Corporation (PEMC) WESM which disconnects the10
consumers from the producers of electricity11
10.B.3. Removal of direct transmission access for Distribution Utilities (DU) and transfer all12
existing Power Supply Contracts to a Single Buyer (SB), which will:13
y Optimize the schedule of power plant to achieve the least cost/economic dispatch14
y Prepare a least cost capacity development plan (for future requirements to avoid 15
deficiency)16
y Pursue competitive bidding process for new capacity 1710.B.4. Incorporating a system of feed in tariffs for electricity generation to multiply electricity18
production from micro-generation from small-scale low carbon energy production or19
micro-generation20
10.B.5. Voluntary participation in an interactive, intelligent management of load via the smart21
grid, electricity networks that uses smart meter technology so that electricity demand22
can be tailored automatically to match the supply of electricity23
24
25
10.C. Competent, Independent, and Multi-sector Regulatory Bodies Re-embedded to26
Socioeconomic and Development Goals27
28
The regulatory bodies, while part of the government, should be immune from political and29
economic pressure from the power sector capitalists. To be able to exercise their respective30
mandates, the regulatory body should be technically competent and composed of members from31
different sectors, including the consumers themselves.32
33
10.C.1. Depoliticizing the ERC . Competence and integrity must be the main criteria for the34
selection of ERC commissioners, most especially its Chairperson.35
10.C.2. Democratizing the ERC . ERC as an institution, while retaining its quasi-judicial nature,36
should proactively re-focus itself from merely answering legal questions of rate increases37
towards meeting more substantive public concerns, such as the question of consumers38capacity-to-pay.39
10.C.3. Broadening the ERC . Ensure multi-stakeholder representation in the energy sectors main40
regulatory agency [see 1.E]. In the immediate, the ERC must accord full representation41
for consumers by giving them at least one seat.42
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10.C.4. Re-embedding Regulation to Society. Regulation must be pegged on a social and1
economic plan that ensures socialized forms of pricing that at the same encourages2
demand management.3
4
5
10.D. Facilitation of community modes of power utilities ownership, Participatory 6
planning and Demand-side management 7
8
The state must facilitate the transition of privatized energy subsectors, particularly as those in9
generation and distribution, to public modes of ownership [see 1.C.1. ] such as cooperatives. The10
consumers in communities themselves must be able to guide the energy planning and11
management process, including managing its own demand.12
13
10.D.1. Strong State Support on Rural Electric Cooperatives (REC), facilitation of increasing14
democratic participation and dispersal of ownership of RECs, enable RECs to own power15
plants and engage effectively in the generation sector16
10.D.2. Replicating the processes and methods of Panay Multi-Sectoral Development Planning17(MSPDP) in all major regions with Regional Development Councils (RDC)18
10.D.3. Promotion of community-based power systems which focuses on off-grid (stand-alone),19
renewable energy sources20
10.D.4. Transfer the assets of Small Power Utility Group (SPUG) to the community members21
organized as cooperatives22
10.D.5. Equitable consumer ownership of Manila Electric Company (MERALCO) 23
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Chapter 2:
Why are we Poor?
A Comprehensive Critique of
Economic Policy in the Philippines
HA NEP2020 Holistic Alternative
National Economic Platform
A Project of the Freedom from Debt Coalition
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1
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Why are we poor? G oing Beyond the Corruption Discourse1
Data on poverty remains to be distressing. According to the monitoring of the National Statistical2
Coordination Board (NSCB), poverty incidence among families rose from 24.4% in 2003 to 26.9% in 2006,3
which means that the number of poor families rose by as much as 654,610. This is while subsistence4
incidence among families rose from 10.2% to 11%. Ironically, 2006 is a period in which the average5
economic growth was 5.4%.6
That Filipinos are poor are felt by Filipinos themselves. The SWS March 2010 Pre-Election Survey,7
conducted from March 19-22, 2010, showed that 43% (est. 8.1 million) of the families rate themselves as8
Mahirap or Poor. Ironically, this matches the record-low Self-Rated Poverty set in March 1987, which was9
short-lived. The proportion of families experiencing involuntary hunger at least once in the past three10
months went to 21.2%, or an estimated 4.0 million households.11
The huge discrepancy between those who were reportedly poor12
and those who perceive themselves as poor only demonstrates13
that some sectors are indeed invisible from the government14
eye, which makes the poverty reality much more disturbing. To15 quote Sabino G. Padilla, Jr. President of AnthroWatch, an16
organization working with indigenous peoples and a member of 17
the GCAP-Philippines Coordinating Committee, poverty may be18
far worse than what the government wants us to believe since19
there are Filipinos who are not included in the surveys, such as20
the ambulant and transient poor, as well as the Indigenous21
People.22
Is the Philippines Poor?23
The question we should first ask ourselves is, is our country24
poor? Cant the Philippines provide wealth and prosperity for25Filipinos?26
The answer to this is, no. The Philippines as a habitat is27
actually rich richness that can be transformed to wealth for28
peoples wellbeing. The countrys land is known to be29
fertile, with arable lands, diverse flora and fauna,30
extensive coastlines, and rich mineral deposits. The31
Philippines is known to engage in major crop32
production of rice, corn, sugarcane, coconut,33
abaca and tobacco. Our metal and non-metal34
deposits are estimated at 21.5 and 19.3 billion35
metric tons respectively. We are also known36
to be rich in copper, nickel, iron, cobalt,37
silver, and gold. Covering as much as 1.6738
million square kilometers of territorial39
waters the Philippines is home to 2,400 fish40
species of marine life, 65 of which have41 good41
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commercial value. If these resources are utilized (not necessarily monetized) properly, we simply are far1
ahead of countries which denied of such endowments, in opportunity and in potential.2
But despite this, we are known to lag behind our Southeast Asian neighbors, most of which started way3
worse than we are. Singapore's Gross Domestic Product (GDP) per capita (in PPP, international dollars) is4
$51,142, while Malaysia's is at $14,072 and Thailands is at $8,225. Our GDP per capita, on the other hand,5
is pegged at meager $3,546. The human development index (HDI) of Singapore, Malaysia and Thailand is6
0.918, 0.823, and 0.786 respectively, while ours is at 0.745.7
The paradox of why such naturally endowed country as the Philippines is known to lag behind its neighbors8
in Southeast Asia was a long subject of academic and practical discourses which results had already been9
incorporated into various theories and applied policies. Yet, even after decades of number and variable-10
crunching, and countless sessions and regimes of economic planning, prosperity and development remains11
to be evasive.12
Economic development is indeed important to discuss when we talk about poverty because indeed, a13
countrys prosperity is an indicator of how much resources a country has at its disposal to improve the lives14
and wellbeing of its citizens, with the end goal of mitigating or even eradicating poverty. Thus poorer15
countries have fewer resources to provide for social services aimed for welfare. Economist like Michael16
Alba of the De La Salle University, believes that the living standard of the Philippines relative to that of the17U.S. not risen unlike its Asian neighbors because the country has been stuck in a low-growth trajectory.18
But of course, that a country is developed or prosperous doesnt translate that majority are indeed19
prosperous and their communities are really developed. This brings us to the issue of equality.20
Are all Filipinos poor?21
We presented Philippine poverty in the last section a report from the Forbes magazine may give us a look22
at the other side of the coin. Forbes reported that as of 2010, the Philippines, incidentally, is also home of 23
some of the world's billionaires. The Forbes 2010 survey specifically mentioned Henry The Retail King Sy,24
with networth of $5 billion from $3.8 billion a year earlier as the richest man in the Philippines, ranking25
201st in the 2010 list of 1,011 billionaires of the world, that according to Forbes dropped from 1,125 in26
2008. Lucio Tan, owner of Philippine National Bank, Asia Brewery, Tanduay Holdings, Fortune Tobacco and27
Philippine Airlines Inc. ranked second with a net worth of $4 million. Tan was followed by first-time28
billionaire John Gokongwei Jr. with $1.5billion, Jaime Zobel de Ayala29
with $1.4 billion [Gavin & Faustino, 2010].30
So clearly, while the Philippines is home of the poor, it is also the31
home of the super-rich. The combined wealth of the top 40 Filipinos32
amounts to $22.4 billion or P1.008 trillion, representing 13.13% of the33
Gross Domestic Product (pegged at P7.68 trillion, end-2009).34
The NSCB said the governments latest Family Income and35Expenditure Survey (FIES) showed that income inequality, as36
measured by the Gini coefficient1, was at 0.46. Comparing this with37
1The Gini coefficient is basically a measure of inequality of income distribution starting from zero, the closer to one the
coefficient is, the more unequal distribution. Technically, the ratio of the area between the Lorenz curve (graphical representation
The Philippines as a
habitat is actually
rich richness that
can be transformed
to wealth for
peoples wellbeing.
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other countries, the Gini coefficient in Thailand was at 0.43, while in Indonesia, it is 0.34. For richer1
countries such as Japan, the Gini coefficient is pegged at 0.31, while the United States has a Gini of 0.36.2
This means that the rich are much richer than the poor in the Philippines compared to all the countries3
mentioned NSCB Secretary-General Dr. Virola said [Virola for NSCB, 2005]. 4
According to 2006 Family Income and Expenditure Survey (FIES), the income of richest 10% is 20 times the5
income of the poorest 10%. The net worth of the countrys 10 richest individuals and families in 2006 was6
equivalent to the combined income of the countrys poorest 9.8 million households, or 49 million Filipinos.7
According to an ADB study conducted by Ernesto Pernia and Arsenio Balisacan [2002], despite economic8
growth from 1985 to 1997, the poorest 20% of the population only improved their income 0.5% for every9
1% growth in average income. 10
Poverty and Inequality11
Qualitatively, much of the link between inequality and poverty can be explained by what can be called as12
the property regime of an economy and its13
effect on economic rationality. According to14
the mainstream economic thought, resources15
should go where they will be optimally used 16and, according to the same theory, only17
through an economic regime of private18
property can such optimality be achieved2.19
As the theory goes, redistribution mechanisms20
to reduce inequality but violate private21
property are thus inefficient and un-optimal.22
What the mainstream thus forward is an23
economic and regulatory regime that protects24
private property, even at the expense of 25
equity or justice.26
This is crucial because inevitably, the27
economic decision-making process in our28
current society is a function of property.29
Those who own a particular asset or income30
streams are given the decision-making on how31
to utilize those assets and income and who32
benefits from such use. The private property33
regime assumes that individuals are rational,34
of the cumulative distribution function of the empirical probability distribution of wealth, often used to represent income
distribution, where it shows for the bottom x% of households, what percentage y% of the total income they have) and the diagonal
(the line of perfect equality) to the area below.
2Some economists even posit that high inequality is a necessary conditions for generating rapid growth. Examples include Walter
Galenson and Harvey Leibenstein (Investment criteria, productivity, and economic development, August 1955) and Gustav Ranis
(Development and the distribution of income: Some counter-evidence, September-October 1977). Development economists
Michael Todaro proceeded to debunk the claims of these economists [Todaro, 1997].
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and the aggregated decisions of individuals (not necessarily made collectively) result in economic rationality1
one of the primary factors in development.2
The importance of the property regime for development cannot be more emphasized, because in the3
end, only three prevailing questions remain: Who decides who gets what? By what means and goals are4
such decisions made? Do the decisions induce progress and ensure decent life for all or not? These5
questions bring home the point: Inequality, being inseparable from poverty, is also inseparable from the6
question of property.7
8
KungWalang Korap, Walang Mahirap?9
Philippine poverty and inequality was explained as an effect of many things, including the unabated10
population growth, colonial mentality, and lack of labor total factor productivity, among a plethora of 11
others. These items are more commonly presented in their forms of vicious cycles: population growth for12
example, strains limited resources such as those which can be channeled for reproductive education,13
which is a factor in unmitigated population increase. Productivity is low, translating to low national output14
and thus, low public and private expenditure for human capital formation. And a host of other15explanations.16
But the most common explanation invoked, especially the politicians themselves, is corruption. Corruption,17
as it is popularly defined, is simply the use of official power for the benefit of oneself, regardless of whether18
it is beneficial or detrimental to the rest of the populace. As the corruption discourse goes, it is this capture19
of our government institution by corrupt elements that is the reason why the Philippines is poor compared20
to its neighbors, and why many Filipinos are poor despite a number of Filipinos being super-rich.21
This explanation is very sensible. Public sector corruption indeed takes away resources which would have22
been used for developmental purposes. In November 1998, Philippine Ombudsman Aniano Desierto23
claimed the government lost P1.4 trillion (estimated at US$100 billion, varying exchange rate over 11 years)24
since 1988 when the Office began investigating government25corruption, and continues to lose P100 million daily, or P36.526
billion (roughly US$940 million) annually.27
Private sector corruption further erodes public funds.28
According to the National Tax Research Center (NTRC), tax29
evasion among corporations is estimated at 38% (P142 billion30
collectible as against P88 million collected). It is biggest31
among professionals and individual business at 69% (P3932
billion as against P12 billion).33
But if we are to look at what drains the Philippine resources,34
we might as well look at all its manifestations, illegal or legal.35For example, the billions of pesos wasted in corruption pales36
in comparison to what is lost because of our automatic debt37
service policy. In 2008 alone, out of the P1.227-trillion38
proposed budget program, P295.75-billion is earmarked for39
Interest Payments of National Government (NG) Debts.40
Inequality and poverty, for
example, may be an effect, by
design or by consequence, of
corrupt governance. Then again,
the systematic and systemic
denial of opportunities and
upward mobility for the poor
because of the way our
economy itself is structured is,
in itself, a potent explanation.
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Meanwhile, the government will be incurring P328.34-billion off-budget expense for Principal Amortization1
of these NG debts.2
And that is official government policy, same as the official government liberalization policy which could cost3
us as much as P600 million annually in foregone revenues if tariffs on dairy products are removed under the4
Association of Southeast Asian Nations-Australia-New Zealand Free Trade Agreement (AANZFTA). Billions of 5
foregone revenues are also caused by huge tax exemptions offered to corporations, just so to induce6
investments. This proves that the lack of development can be explained as a result of wrong policies as7much as it can be explained to be a result of intended corruption.8
Inequality and poverty, for example, may be an effect, by design or by consequence, of corrupt governance.9
Then again, the systematic and systemic denial of opportunities and upward mobility for the poor because10
of the way our economy itself is structured is, in itself, a potent explanation. While such denial may still be11
in the realm of the corrupt, or the concept of corruption, we can say that it is a corruption of another type,12
a corruption not of any individual predisposition induced by a national lack of moral cogency (as corruption13
is usually defined in the mainstream), but an economic structure that induces relationships between14
economic and social actors that are fundamentally corrupt, if only for their consequences.15
Let us take a look, for example, at the policy of privatization of public utilities. The mainstream belief was16
that since government is intrinsically inefficient (because of lack of competition) and corrupt (because it is17also the regulator) in handling the public utilities, it should transfer the control of these utilities to the18
private sector. A particular example for this, the privatization of the countrys power system, only facilitated19
a transfer of ownership from a corrupt government to a corrupt oligopoly of a few families, leading to20
private control over prices and skyrocketing power prices, now the second in Asia. Clearly, while the intent21
on privatization may be moral for some, the consequences are criminally corrupt.22
In the end, the inequality induced by economic governance failure is one of the primary hindrances to23
development. Attesting to this is the fact that, while almost three-fourths of our economy is Public24
Consumption, we have maintained a low-wage, cheap labor policy a policy which will surely keep at the25
minimum peoples purchasing power. While our greatest asset is our arable land, we refuse to conduct a26
comprehensive agrarian reform which would have raised income of farmers and encouraged agriculture.27 Such a policy- induced inequality is not only because of elite capture by the government, but the stern28
belief that cheap labor would induce investments and private ownership of land optimizes asset utilization.29
The battle against corruption launched by well-meaning politicians and public crusaders may be the first30
step towards resolving the question of poverty, but we must elevate from there into more substantial and31
fundamental arguments that tackle the government policies. This, if we are resolve the problem of poverty32
and inequality. 33
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Why are many Filipinos poor really: A Different Story1
We in Freedom from Debt Coalition (FDC) believe that the problem of poverty and inequality is intricately2
linked to how the components of the economy, specifically the state and the market, failed to realize their3
social functions. The state failed to provide the public goods necessary for social welfare and to ensure4
social and economic justice, while the market failed to induce development and ensure the optimum5
distribution and utilization of assets and income. Both have been captured by individual interests, and were6
transformed from instruments of collective progress to engines of continuing undue profit by a small group7
of people.8
Thus, corruption, beyond its moral ramifications, must be explained as a system question. What forces in9
the current system that induced the state and the market into failing and predisposed them into being10
what they are right now? What government policies and institutions contributed to determining the11
relationships between societal and economic actors?12
We take a look into ten of such policies, which FDC believes to be the primary causes of our mal-13
development. These ten policies describe the fundamental relationship between the government, the14
public, the global market for capital and goods, the land ownership regime and agriculture, and the15
industrial structure. In the end, the objective would be to understand, with the end goal of redefining, the16
relationships between societal and economic actors in order to induce development and ensure justice.17
18
Sources19
Balisacan, Arsenio M. and Ernesto M. Pernia (2002, February). What Else Besides Growth Matters to Poverty 20Reduction? - Philippines. ERD Policy Brief Series. Number 5. Economics and Research Department, Asian Development21Bank (ADB). Accessed: http://www.adb.org/Documents/EDRC/Policy_Briefs/PB005.pdf .22
Gavin MR, Pia Faustino et al. (2010, July 7). Forbes Magazine names 40 richest Filipinos. GMANews.TV. Accessed:23http://www.gmanews.tv/story/195437/forbes-magazine-names-40-richest-filipinos.24
Jimeno, Jaileen F. (2007, December 10). Uncounted and underserved. The Daily PCIJ. Philippine Center for25Investigative Journalism. Accessed: http://www.pcij.org/blog/?p=2079.26
Social Weather Stations (2010, 19 April). SWS March 2010 Pre-Election Survey: Hunger drops slightly to 21.2% of 27families; Self-rated poverty matches record-low 43%. Accessed: http://www.sws.org.ph/pr20100419.htm.28
Todaro, Michael P. (1997). Economic Development. New York University. Addison-Wesley Reading, Massachusetts.29
United Nations Development Programme. (2009). TableG: Human development and index trends, Table I1: Human30and income poverty . Human Development Report 2009 - Overcoming barriers: Human mobility and development31(Palgrave MacMillan).32
Virola, Romulo A. (2005, December 12). The FIES of the Rich: Truth or Consequence? National Statistical Coordination33Board (NSCB). Accessed: http://www.nscb.gov.ph/headlines/StatsSpeak/121205_rav_fies.asp. 34
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St. Barangay Pinyahan Quezon City. 1100. Telephone (02) 9211985. Telefax (02) 9246399. [email protected]. 58
1. Weak, Elite-Captured State1
2
The current Philippine State, because of its weakness, is captured by the interests of a3
cynical and opportunistic elite class. This results to the incapacity of the state to act 4
objectively for economic development and risk redistribution. Instead, the state becomes5
the primary conduit for translating private interests of elite class into binding public 6
policies.7
8
1.A. Pro-market Economic Management, Limited Government Role in Development and 9
Welfare10
11
The government, which is ideologically captured by a market fundamentalist framework and12
biased to providing opportunities for private-sector profit-making, refuses to take part and13
responsibility in ensuring welfare and national development.14
151.A.1. Privatization of Essential Services and Strategic Industries16
1.A.2. Development via Private Sector means, e.g. Build Operate Transfer (BOT), Other Public-17
Private-Partnerships (PPP)18
1.A.3. Market-oriented Economic Development Planning by the National Economic19
Development Authority (NEDA)20
Consequences 21
The purpose of government is transformed from generating public goods into to producing private22
goods for officials, their families, and their cronies. This leads to:23
y Inaccessible essential services, decline in welfare.24
y From public monopoly to enhanced elite monopoly and/or oligarchy25
y Upholding the interests of entrenched rent-seekers26
y National vulnerability from foreign entities seeking capture of strategic industries and services27
Palliatives 28
y Private sector initiatives. Market (Corporate Social Responsibility) and non-market (CSO-29
initiated, or charity-based) initiatives like Gawad Kalinga, Caritas Manila, initiatives by the30
Corporate Media, and others compensate for compromised state role.31
y Devolution. Services that cannot be privatized due to intense opposition are devolved to local32
governments.33
y Patronage. Services that cannot be provided for are extended via patron-client linkages34
between traditional politicians and their constituencies. 35
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1.B. MalfunctioningRegulation1
2
The government fails to exercise its duty to protect the citizens from, and to correct, market3
failures. In fact, market failures that are profitable for a select few are sometimes encouraged in4
patron-client modalities.5
6
1.B.1. Deregulation71.B.2. Regulatory Failure8
1.B.3. Regulatory Capture9
1.B.4. Abusive and corrupt government agencies10
Consequences 11
Regulation is now for the purpose of resolving intra-elite intramurals and scrambling on meager12
national resources, excluding the rest of the people. Thus, people are no longer protected from:13
14
y Decline in welfare to due citizens absorption of externalized costs [see 7.B]15
y Economic dynamism is dampened and siphoned by the costs of market failures16
Palliatives 17
y Citizens Vigilance. Citizens would have to continuously keep watch on costs externalized to18
them, from added costs to products they buy, to the noise at smoke created from nearby19
factories, to undue profiteering by companies.20
y Corporate Media as Fiscalizers. Citizens have become dependent on the corporate media in21
order to fiscalize the abusive22
23
1.C. Unmitigated widening of Income and Asset Distribution Gap24
25
With state policies focusing on distribution of assets to assure more profitability, the state fails to26
arrest the widening of income and asset distribution gap. With the ownership of assets and27
resources being limited to an elite few, the much poorer majority is excluded from meaningful28
economic decision-making. It is because of this marginalization that the majority is excluded also29
from reaping the benefits of societal development.30
31
1.C.1. Lack of asset reform32
1.C.2. Cheap labor policy [see 5.A], lax government regulation on wages and benefits33
1.C.3. Focus on growth- rather than equity-based economic measurements34
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Consequences 1
The fact that a small segment of the population in control of economic resources combines with2
the fact that this small segment is motivated mostly by greed and desire for more accumulation.3
This leads to:4
y Wide income disparity (High Gini index)5
y Stratification of consumption and skewed investment structure6
y Un-optimal use of resources and labor, as the concentration of resources leads to the creation7
of a leisure class8
y Growth of the services and leisure sector despite the need of labor and resources to more9
productive endeavors10
Palliatives 11
y Ensuring accessibility of cheap microcredit for consumption and small businesses.12
y Sin Taxation and other Consumption Taxation to discourage conspicuous luxury.13
y Encouraging investments to productive sectors through government-induced market signals.14y Shift to consumption taxes as a way to mitigate loss due to tax evasion and tax concessions for15
corporations16
17
1.D. Political Patronage, Rent-Seeking, in the Public Sector 18
19
With the capture of public institutions by corrupt parties, the purpose of government has become20
not to generate public goods, but to produce private goods for officials, their families, and their21
cronies. The elite-capture of government leads to corruption, patronage, and poor government22
service.23
24
1.D.1. Bloated, redundant bureaucracy, leading to demoralization of government workers25
1.D.2. Poor quality and inefficient civil service, leading to distrust of citizens to the26
government27
1.D.3. Elite capture of government departments and offices28
1.D.4. High-level corruption29
Consequences 30
y Wastage in national resources, leakages in public programs31
y Ineffectiveness of economic and welfare programs, distortion of impacts32
y Increasing inequality, especially between government officials (and their private-sector33
networks) and the public34
y Failed regulation, regulatory capture [see 1.B]35
y Distrust and cynicism of people of the government, leading some to engage in patron-client36
relationship with corrupt officials 37
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Palliatives 1
y Existence of Anti-corruption and transparency measures and accountability institutions and2
such as the Ombudsman, Sandiganbayan, and other anti-graft and corruption bodies in order3
to prevent government abuse4
y Checks and balance and oversight among government offices, dispersing power and utilizing5
antagonism among government employees and elected officials as guard against abuse. This6fails, however, if a particular interest is able to penetrate multiple levels and sections of the7
government.8
y Performance Evaluations and Civil Service Exams that ascertain capacity and performance9
y Automated government transactions to minimize possibilities of discretion, and thus,10
corruption11
12
1.E. Technocracy-dominated, Manila-centric Economic Management 13
14
The people who have the most stake in policies are excluded from the decision-making, which is15
mostly centered on Metro Manila-based offices excluding effective participation from the other16
regions. Thus, there is a lack of economic democracy and widespread public apathy.17
18
1.E.1. Centralized economic decision-making and development planning19
1.E.2. Lack of genuine participation and consultation processes leading to constituency-blind20
economic decisions21
Consequences 22
Because decision-making is concentrated, it is natural for the following to occur:23
y Unexpected social ramifications24y Failed appointments, leading to incompetent governance and thus, lack of development and25
failure of regulation [see 1.B]26
y Elite capture of public offices, leading to predatory corruption and abuse [see 1.D]27
Palliatives 28
y Token multi-sector consultations for development projects29
y Formation of City and Provincial Leagues to provide interaction between LGU units in Metro30
Manila and the provinces31
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2. Inequitable Land Ownership and Lack of Social and1
Strategic Outlook on Land Use and Management 2
3
Because our land is under the private property regime, land use is oriented towards4
private profit, not public gain. This promotes non-agricultural land use conversion and 5inhibits land reform, leading to poorly planned and vulnerable societies and unstable6
food production. For the land converted to urban areas, there is lack of deliberate design7
leading to increased risk for residences and businesses.8
9
2.A. Land under the Private Property-Regime10
11
Land is seen not as a social good that can and must be used for collective development, but as a12
private property the individual ownership of which should be protected or attained. This is13
supposedly because the private sector is more efficient user of assets like land than the14 government, which represents society.15
16
2.A.1. Monopolistic Land Ownership17
2.A.2. Unequal Land distribution18
2.A.3. Land Valuation biased on commercial functions, primarily services19
Consequences 20
Since land is under a private property complex, land is fought over by individuals in a market, with21
its use determined not by intrinsic value of the land (for production, agriculture, etc.) but its22
market valuation which is biased to commercial activities.2324
y Lack of Land Reform leading to Inequality (due to lack of democratized control over the income25
of land and land-based assets)26
y Rampant Land Use Conversion biased on commercial use of land [see 2.B.1. ]27
y Development aggression leading to community destruction28
Palliatives 29
y Market-Assisted Land Reform (MALR). Characterized by a willing seller - willing buyer30
framework, it encourages land transfer through manipulating the supply-demand on the rural31
land market, reducing landowner opposition through negotiated land transfer.32
y Corporate Redistribution of Land like the Stock Distribution Option (SDO) and Joint-Venture33
Agreement (JVA) model which seeks to corporatize agrarian reform by vertically integrating34
management of the lands through converting land ownership into shares of stock.35
36
37
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2.B. Lack of Rational Planning on Regional Zoning, Land Use and Management 1
2
The private sector-led land development (which is a consequent of 2.A) resulted to the apparent3
absence of state intervention in land use determination, including use and management. No4
national-level regional zoning plan which would have determined land should go to agricultural5
production, manufacturing industries, and services [given a lack of industrial planning, 4.A].6
72.B.1. Commercial and Urban land use bias (biased to services industry, not to manufacturing8
and agriculture, due to 4.A)9
2.B.2. Local Government Unit-determined economic strategy and land use10
2.B.3. Lack of Land and Water Use Act11
2.B.4. Lack of Financial and Institutional Support for Agriculture12
Consequences 13
Regional planning and zoning would have prevented the growth of urban areas and the retreat of 14
agro-rural areas. This leads to:15
16
y Ineffective land reform program, as distributed land revert back to the original landlords which17
engage in land use conversion18
y Collapsing Agricultural Sector [see 8.B] due to lack of agricultural lands19
y Degradation of Forest Areas and Carbon Sinks [see 6.B.2. ] as they are converted to farmlands20
(through the usual slash-and-burn)21
Palliatives 22
y Increasing importation of food and agricultural products for domestic consumption23
y Corrective actions on forest areas such as tree planting, forest area protection, selective log24ban, and those actions as mandated by NIPAS25
26
2.C. Lack of Effective Development Planning on Urban Land Use and Management 27
28
Because urban areas had largely sprouted from land use conversion at the initiative of the private29
land owners (caused by the lack of regional zoning [see 2.B]), there was no deliberate plan on how30
the urban areas are to be designed and for what purpose.31
32
2.C.1. Ad hoc Horizontal Urbanization33
2.C.2. Land Use Conversion in Peri-urban and Rural areas at the metropolitan fringes34
2.C.3. Lack of Universal Settlement Plans35
2.C.4. Local Government-based Initiatives for Commercial Development36
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Consequences 1
Poor Urban Planning, which goes hand-in-hand with lack of industrial [see 4.A] and employment2
[see 5.B.1. ] planning, leads to:3
4
y Congested roads due to lack of analysis of common areas of destination5
y Gap between settlement and employment areas6y Health risk in residential areas near industrial and commercial areas (factories, airports,7
commercial centers, etc.)8
y Lack of disaster preparedness due to lack of disaster risk reduction (DRR) planning which9
should have been embedded in urban design10
Palliatives 11
y Displacements of either residences or businesses when palliative and corrective solutions are12
sought to chronic urban problems (e.g. displacement order vs. Pandacan Depot, informal13
settlers in Manggahan floodway)14
y Palliatives like flood control, waste management, etc. in a time of climate crises or health15
problems16
17
2.D. Development strategy centered on growth-oriented Super-regions18
19
Former President Arroyo unveiled in her 6th
SONA a new development planning strategy in20
partnership with LGUs to divide the country and pour resources into super-regions to spur21
economic growth and create markets for investments in the countryside, in order to eventually22
lead the Philippines to achieving First World status in the next two decades.23
242.D.1. Creation of a North Luzon Agribusiness Quadrangle25
2.D.2. Creation of a Metro Luzon Urban Beltway26
2.D.3. Central Philippines Tourism Super Region27
2.D.4. Creation of an Agribusiness Mindanao Super Region28
2.D.5. Creation of a Philippine Cyberservices Corridor that transverses the four Super-regions29
Consequences 30
The promotion of a homogeneous economy and consumer culture with its lack of stewardship31
towards the environment led to:32
33y For Central Philippines, land-use conversion of previously agricultural lands for tourism or34
services use made have converted several regions net food importers35
y The Cyberservices Corridor plan may have pushed for the creation of a redundant and36
anomaly-ridden National Broadband Network (NBN) deal with Zhong Xing37
Telecommunications, Inc.38
39
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3. Foreign Capital-dominated Open Economy1
2
Our economy is rendered open to foreign capital competition, leading to the destruction3
of our productivity and inevitably, dependence and foreign capital domination.4
5
3.A. Current Accounts (Financial) Liberalization6
7
Controls on the ingress and egress of capital and currency are consciously weakened towards the8
direction of total dismantling, as the government adopts a policy of openness.9
10
3.A.1. Foreign exchange liberalization11
3.A.2. Sustained Interest Differentials when foreign credit is relatively cheaper to siphon12
foreign currency13
Consequences 14
Massive but volatile inflow of short-term investments compromise the stability of the countrys15
financial system and national security:16
y Portfolio investment-driven stock market, dependence on hot money17
y Financial instability, vulnerability to exogenous currency and other financial shocks18
y Compromised national security consequent on foreign investments on privatized strategic19
industries20
Palliatives 21
y High foreign reserves. This policy, fueled mainly by OFW remittances, is maintained to protect22
the country from sudden reversal of capital flows.23
y This is usually accomplished through the strategy of monetary sterilization in which the central24
bank attempts to counteract the effects of a changing monetary base through via open market25
operations in the forex market.26
27
3.B. Weak Banking and Financial Sector detached from the Industrial Base28
29
The banking and financial sector, already weak due to a small savings base [see 5.A.2. ], is30
detached from the industry and agriculture by a profitable services sector.31
32
3.B.1. Inflation-targeting as primary Central Bank preoccupation33
3.B.2. Interest Rate Liberalization34
3.B.3. Bank Liberalization35
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Consequences 1
Domestic industry and finance both went down in a downward spiral as the vicious cycle of weak2
industry not being attractive to private investments causes the decline of private investments,3
weakening the industry further compromising employment, and thus, domestic savings base.4
5
y Weak industry [see 4.C] due to weak Capital Formation6y National treasury biased to low-interest rate foreign bonds7
y Lack of access to credit of Small and Medium Enterprises (SMEs), especially those engaged in8
agricultural activity9
Palliatives 10
y Low Interest Rates, Credit Creation. In order to compensate to lack of targeted financing,11
central bank resorts to low interest rates in order to provide general support to enterprises12
especially in times of crises (contradicting 3.A.2. ).13
y Micro-financing as a way to mitigate capital scarcity in the rural, peri-urban, and sub-urban14
areas is becoming popular among cooperatives, small and medium enterprises, etc.15
16
3.C. Foreign-financing Dependence17
18
Due to lack of mobilizable domestic savings (due in turn to a policy of low-interest rates, and small19
savings base [see 5.A.2. ]), and poor revenue-generation (due in turn to small industry [see 4] and20
consumption-income base [see 5.A.1. ]), the government is dependent on foreign financing and21
debt.22
23
3.C.1. Credit-rating consciousness243.C.2. Supply-driven and development plan and initiates25
Consequences 26
The need to secure foreign financing for public sector activities compels the government to pay27
the debt unequivocally, eventually resulting to lack of resources from the public sector, and thus,28
the need to secure financing for these services. This results though to:29
30
y Debt-dependence, lender-driven public sector activities and development program leading to31
ineffective, market-biased development strategies [see 1.A.3. ]32
y Lack of social spending and institutional support leading to compromised households [see33gender-differentiated effects of this in 7.B]34
y Lack of spending on economic services leading to weak industries [see 4.C.1. ] and collapsing35
agricultural base [see 2.B.4. ]36
37
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Palliatives 1
y Fiscal austerity, Spending compression. Debt sustainability, which necessitates the cutting back2
on spending in order to pay debt, is maintained in order to protect credit rating.3
y Foreign-Assisted Projects Programming. The government attempts to coordinate Foreign4
Assisted Projects (FAPs) through Official Development Assistance (ODA) programming, like5
FOURmula One of the Department of Health. In most cases, however, the plan was also6according to a policy compelled by earlier loan conditionalities.7
8
3.D. Lack of capacity and propensity to save in the grassroots9
10
The cheap labor regime [see 5.A] limits the capacity of the worker to save part of his and her11
income for future use. This had the effect of weakening grassroots capital base which would have12
been mobilized by domestic industries and community enterprises.13
14
3.D.1. Weak provincial and rural banks that cant compete with large banking conglomerates15
3.D.2. Dependence on Government Financial Institutions (GFI) for credit in the agricultural16
sector and rural areas17
Consequences 18
Lack of savings lead to:19
20
y Due to lack of social welfare [see 7.B], the inaccessibility of abrupt health and education (which21
requires huge affront payments)22
y Weak domestic capital formation due to weak financial system [see 3.B] caused by low savings23
rate24
Palliatives 25
y Forced savings on employees that is blind on current household expenditure realities.26
y Growth in private banking sector of banks with direct links to particular domestic firms and27
capitalists (mostly in services [see 4.A palliatives]) in order to compensate for the lack of large28
industrial banks29
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4. Fragmented Industry designed for Low Value Added1
Exports2
3
Our industries are integrated individually to foreign markets, not to each other,4
relegating us to low-value added production (i.e. low-end products/services, extracted 5raw materials) and export-dependence. This is due to the lack of a trade-industrial 6
strategy, neglect of domestic market and local economies, and lack of state support for 7
increasing competitiveness.8
9
4.A. Incoherent Trade-Industrial Policy due to lack of Industrial Strategy 10
11
Trade policy in place has been successful in wiping out many industries and jobs, in eroding12
nations industrial base, agricultural base, and in setting back economic growth.13
144.A.1. Unilateral and Advanced Tariff Reduction15
4.A.2. Proactive negotiation for Bilateral and Multilateral Free Trade Agreements16
4.A.3. Unregulated importation, and thus, unregulated egress of foreign currency available for17
industry18
Consequences 19
Liberalizations primary goal is to destroy uncompetitive firms, and given the countrys weak20
industries [see 4.C] liberalization ate away our industrial base as consumers find cheaper products.21
This resulted to:22
23y Internal industrial disintegration as manufacturing and agriculture sectors are decimated24
y Widespread unemployment leading to small savings base [5.A.1. ] and low purchasing power25
[5.A.2. ] of citizens26
y Lack of foreign currency which would have been used to purchase capital goods for industrial27
development28
y Weak revenue performance due to low tariff rates29
Palliatives 30
y Services-oriented growth. Instead of the usual industrial and agricultural bases, the31
government encouraged foreign capital to go where it is already going the service industries.32
This serves as the primary buffer of the unemployed sector. This is especially through for33
Business Process Outsourcing (BPO) firms, most of which are contact centers.34
y Lack of revenues earned from trade leads the government to rely on consumption taxes, given35
importation-driven consumption due to lack of indigenous capacity to produce consumer36
goods [see 4.B.2. ] and availability of foreign currency due to remittances [see 5.A.3. ]37
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1
4.B. Neglect of the Domestic Market 2
3
The export-orientation of our domestic industry compelled it to compete against the tight and4
cutthroat global market, without having the vision to develop a strong domestic market that will5
assure sustainable returns.6
7
4.B.1. Lack of policy addressing the markets lack of purchasing power [see 5.A.1. ] (e.g. low8
wages policy, high prices)9
4.B.2. No state support for the development of the consumer goods industry10
Consequences 11
The lack of incentive and capacity to locally produce consumer goods for the domestic market12
leads to domestic producers constant search for global markets with relatively higher purchasing13
power, even if there is potential domestic demand14
Palliatives 15
y Importation of industrial consumer goods. A large part of the consumer goods the countrys16
consumer procures are manufactured abroad. This necessitates liberalization of ingress and17
egress of these goods to lift the burden of tariff from the consumers, but this cause18
unregulated egress of foreign currency [see 3.A.1. ]19
y Retail-driven Services Sector as local consumers cannot afford to buy wholesale services.20
21
4.C. Weak and Uncompetitive Domestic Firms22
23Our industry itself is incapable of producing goods which can serve as adequate and cheap24
substitutes to those which are produced abroad, and this is because our industries operate at25
more costs.26
27
4.C.1. Weak institutional and financial support for agriculture and industry modernization,28
expansion, and development29
4.C.2. Decreasing state protection of industries against globalization forces (e.g. Unilateral30
Tariff Reduction)31
4.C.3. High Cost of Entrepreneurship (e.g. Fees, Electricity costs)32
Consequences.33
In a liberalized industrial regime [see 4.A], a weak industrial sector is likely to vanish leading to:34
35
y Premature Deindustrialization resulting to:36
o High unemployment rate and/or lack of quality employment37
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o Lack of job security1
o Lack of domestic production for consumer goods/services, making us dependent on the2
global market for access3
4
y Trade and Balance of Payments deficit (excluding net factor income from abroad which is5
high due to OFW remittances)6
Palliatives 7
y Dependence on extractive industries like mining and forestry in order to augment foreign8
currency reserves used to purchase industrial inputs.9
y Labor-exportation. The lack of labor-intensiveness of the existing industrial structure forces our10
economic managers to find external sources of employment for the growing working class11
population and obtain foreign currency reserves.12
13
4.D. Underdeveloped Community Industries and Sources of Local Employment 14
15
Because of lack of institutional support, local (especially agricultural) enterprises failed to16
modernize and be competitive. Thus, community markets tend to source out its commodities from17
foreign markets, and national industries tend to source out its inputs from foreign suppliers.18
19
4.D.1. Lack of state, institutional and financial support to develop local enterprises and20
increase their competitiveness21
4.D.2. Communities patronize cheaper imported commodities22
4.D.3. Local enterprises tend to disintegrate with the presence of larger firms23
4.D.4. Lack of highly skilled personnel necessary in the modernization of local economies24
Consequences 25
Lack of incentives and capacity to source inputs and commodities from local enterprises leads to:26
27
y Dominance of retail and wholesale traders and middle-mans over direct producers28
y Domestic producers dependence on foreign sources for manufacturing inputs, because29
existing small suppliers are expensive30
y Widespread unemployment in the local [see 0], leading to exportation of skilled and educated31
labor from the communities32
Palliatives 33
y Smuggling, Intensive importation for industrial inputs especially from large manufacturing34
countries like China or Vietnam.35
y Rural to Urban migration of workers because of stagnating incomes [see 5.D.1. ]36
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5. Repressive Labor Environment 1
2
Societys creator and determinant of values, the labor sector, have been relegated to low 3
competency and low purchasing power due to the politically and economically repressive4
cheap labor policy. The lack of regulation, political agency in the status quo, and 5
recognition of the large part of the labor sector leads to further repression. 6
7
5.A. Low-wage, Low-benefits Labor Policy 8
9
Because of our cheap labor policy, we tend to end up with poverty, low savings rate, and a10
remittance-driven consumption economy. This leads to undesirable labor developments such as11
contractualization, unjust retrenchment, etc. due to an industry which needs to be competitive12
[see 4.C] despite lack of government support [see 4.A].13
14
5.A.1. Low, or at times, relative absent, purchasing power of citizens155.A.2. Low capacity to save16
Consequences 17
Since much of the physical and social needs of Filipinos are provided via the market, low18
purchasing power generally results to:19
y Poverty and social misery due to inability to afford basic commodities and needs20
y Stratification of consumption, as lower-end consumers cannot afford the new products21
enjoyed by the high-end consumers22
y Dependence on credit by small consumers, leading to personal indebtedness and further23
incapacity to consume24
Palliatives 25
y Targeted and Conditional Cash Transfers are welfare programs, in the form of cash subsidies,26
conditional upon the receivers actions. Implemented successfully by Brazil.27
y Growth in informal economy. Lack of purchasing power leads the consuming populace to rely28
on the underground market actors for commodities, maintaining the nations high29
consumption rate despite lacking the middle class that serves consumption base in most30
countries.31
325.A.3. Remittance-fueled Consumption33
Consequences 34
A remittance-based economy requires that much of the potential manpower should be converted35
into Overseas Contract Workers (OCW). This leads to:36
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y Small base of skilled domestic labor necessary for development,1
y Compromising reproductive work2
y Stagnation of hometown municipalities3
y Dehumanization and alienation of Overseas Filipino Workers (OFWs)4
Palliatives 5
y Return of service (ROS) projects to address The dissonance between the policy of producing6
too many healthcare workers for abroad and the apparent lack of health personnel for7
domestic needs8
y Glorification of labor migrancy or the intense government appreciation of, and support for9
(although support seems lacking still) OFWs10
y Encouraging the formation of Filipino communities abroad, and providing assistance as a11
social and psychological safety net for the migrant workers abroad12
13
5.B. Lack state protection for workers amid repression of democratic space14
15
Despite the existence of a labor code with progressive provisions, and the adequate protection16
stipulated in the constitution, there exists lack of mechanisms for the comprehensive protection of 17
the worker and malfunctioning regulation, resulting in labor abuse. Worse, the workers are18
removed of their political capacities to fight these abuses.19
20
5.B.1. Poor and indecent working conditions21
5.B.2. Lack of protection in bilateral agreements22
5.B.3. Lack of social security23
5.B.4. Gender and age discrimination24
5.B.5. Violation of right to organize, union-busting255.B.6. No Collective bargaining26
Consequences 27
Lack of regulation, worsened by political repression, dismantles all the safety nets the labor sector28
would have had under an industrial setup which is focused on productivity (due to the need to be29
competitive [see 4.C]). This leads to:30
31
y Decline in labor productivity32
y Erosion of workers purchasing power leading to depressed consumption, savings, and33
government revenue generation34
y Distorted labor pricing, resulting to less than optimal personal consumption 35
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Palliatives 1
y Arbitration mechanisms such as the National Labor Relations Commission (NLRC) which is2
supposed to receive the grievances of workers3
y Reliance on corporate media to expose labor abuses4
y Productivity-based approach to management such as government-sponsored Total Quality5
Management (TQM) in the shop level (DOLE)6y Conciliation and Mediation Mechanisms for Resolving Labor Disputes7
8
5.C. Marginalized Informal Employment Sector 9
10
There is a continuing lack of social support for the informal, labor sector. This includes vendors,11
home-based workers, piece-rate etc.), women workers, and those which are inadequately12
supported by existing labor regulation structures.13
14
5.C.1. Lack of recognition of the informal sector, resulting to depressed income, lack of rights15
protection and social security16
5.C.2. Lack of access to credit facility17
Consequences 18
The informally employed represents one of the largest sub-sector in the labor sector. Thus, the19
further growth of the informal employment leads to:20
21
y Depressed revenue collection on consumption22
y Breeds underground and corrupt practices, putting stress on government regulation23
(prevalence of child labor despite existing laws, human trafficking, etc.)24y Induced labor migration25
Palliatives 26
y Making micro-credit facilities available for the poorest workers, especially those engaged in27
agricultural work.28
y Providing temporary and seasonal employment to absorb section of the informal sector like29
various ad hoc programs.30
y Redefinition of labor categories (employed, unemployed, underemployed) and manipulation of 31
labor statistics.32
y Relaxation of labor and labor migration policies and regulation resulting to labor abuse33
34
35
36
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5.D. Widespread Unemployment and Underemployment in Agrarian Communities and 1
Urban Areas2
3
The classic theory of development says that labor would transfer from the agricultural sector,4
which is transitioning from a labor- to capital-intensive sector, to the bourgeoning urban growth5
areas. In the Philippines, agricultural workers suffering from stagnating income due to lack of 6
agricultural productivity migrate to urban centers which cannot and refuse to accommodate new7
labor entrants.8
9
5.D.1. Rural-to-Urban migration due to stagnating income, unemployment in agricultural10
sectors11
5.D.2. Lack of employment opportunities in the urban areas due to lack of jobs available, or12
job mismatch13
5.D.3. Industries in the urban areas concentrate on labor-saving processes, equipments14
Consequences 15
y Urban congestion, as new entrants strain government welfare and resources in the cities16
y Decreasing agricultural production [see 8.B]17
y Land use conversion [see 2.B] due to agricultural sectors lack of profitability18
Palliatives 19
y Commercialization of agricultural land in order to create jobs in the rural centers, mostly in the20
services sector21
y Emergency employment programs, and other low-paying public sector jobs22
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6. Ecologically destructive Economy vulnerable to1
Climate Disasters2
3
The environment is seen more not as an endowment to be conserved, but a resource that 4
can and must be inexhaustibly exploited. The absorptive capacity and recuperating5mechanism of the environment vis-à-vis the externalities of our economic activities are6
also overestimated, resulting to destabilization of ecology and decreased livability of 7
communities.8
9
6.A. Incoherent, Incomprehensive and Fragmented Environmental Paradigm10
11
The governments incoherent, incomprehensive and fragmented environmental policies are12
impotent in substantively responding to the climate crisis and in linking development and the13
environment.1415
6.A.1. Higly sectoralized development and environmental legislation:16
17
y on forests [PD705], fisheries [RA8550], minerals [RA7942; PD1899; RA7976], biodiversity18
[RA7586, RA9147 (wildlife), RA9072 (caves)]; solid wastes [RA9003], & air & water quality19
[RA8749 & RA9275, respectively]; EIA [PD1586]20
21
6.A.2. Highly differentiated social policies on people and environment:22
23
y eg., IPRA [RA8371]; kaingineros [PD705]; fisherfolk [RA8550]; farmers [RA8435]; small miners24
[RA7076]25
Consequences 26
The governments incoherent, incomprehensive and fragmented environmental policies are27
impotent in substantively responding to the climate crisis and in linking development and the28
environment.29
30
6.B. Environmentally-destructive Economic Sectors31
32
Protection of the natural resources and sustainability in not part of the overarching economic33
development strategy, thus the destructive nature of economic activities.34
35
6.B.1. Promotion of extractive industries36
6.B.2. Large-scale and massive forest degradation37
6.B.3. Ecologically unsound agricultural practices38
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6.B.4. Export-oriented Industrial Fishing1
Consequences 2
Protection of the natural resources and sustainability in not part of the overarching economic3
development strategy, thus the destructive nature of economic activities. 4
5
6.C. Ecologically-destabilizing Provision of Public Services6
7
While provisioning of essential services like water and power is important, the privatized nature8
[see 1.A.2. ] with which they are being provisioned resulted it being delivered in an unsustainable9
and ecologically-destabilizing manner, lacking as they are of environmental considerations and10
demand management.11
12
6.C.1. Climate change inducing energy production and industries (coal, diesel) as a13
consequence of privatized and liberalized power sector [see 10]14
6.C.2. Large dam systems for water supply (e.g. San Roque, Angat, Casecnan, Pantabangan15and Laiban)16
Consequences 17
While provisioning of essential services like water and power is important, the privatized nature18
[see 1.A.2. ] with which they are being provisioned resulted it being delivered in an unsustainable19
and ecologically-destabilizing manner, lacking as they are of environmental considerations and20
demand management.21
22
6.D. Waste-intensive production-consumption system 23
24
The absorptive capacity and recuperating mechanism of the environment vis-à-vis the externalities25
of our economic activities are also overestimated. This is demonstrated by the lack of demand and26
emissions management in industries and services.27
28
6.D.1. Services sectors are not designed based on a demand-management plan29
6.D.2. Manufacturing industries do not consider use of eco-friendly packaging technology30
6.D.3. Continuous importation (because we lack the industrial base for producing consumer31
goods [see 4.B.2. ]) of waste-intensive consumer products32
Consequences 33
The absorptive capacity and recuperating mechanism of the environment vis-à-vis the externalities34
of our economic activities are also overestimated. This is demonstrated by the lack of demand and35
emissions management in industries and services. 36
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1
6.E. Prioritized mitigation actions despite the high vulnerability of the country to2
climate change3
4
This is despite perennial climate disasters and worsening climate conditions and extreme weather5
patterns due to climate change, the government has prioritized mitigation regardless of the6
countries miniscule contribution to climate change.7
8
6.E.1. National Climate change policies are focused on mitigation9
6.E.2. Substantial allocation of funds to mitigation by the government through domestic and10
international sources.11
6.E.3. Influx of investment for mitigating climate change12
Consequences 13
This is despite perennial climate disasters and worsening climate conditions and extreme weather14
patterns due to climate change, the government has prioritized mitigation regardless of the15countries miniscule contribution to climate change.16
17
6.F. Economic development biased against indigenous communities and environmental 18
preservation19
20
The economic model dictates a development strategy that is naturally biased for urban21
communities and commercial activities, sidelining cultures and communities which was able to22
develop environmentally sound lifestyles.23
24
6.F.1. Unsustainable communities due to unequal distribution of essential resources25
6.F.2. Encroachment in ancestral lands and property26
6.F.3. Development aggression against IPs27
6.F.4. Commercialization of indigenous knowledge and Biopiracy (e.g. TRIPS)28
Consequences 29
The removal of IPs in a particular biodiversity area may lead to lost of a constituency which roots30
its cultural meaning and livelihood in environment protection31
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7. Unrecognized and Neglected Reproductive and Care1
Economy2
3
The household is only seen as a consumer of goods and public services rather than a4
producer of valuable inputs and resources. Thus, with women being the primary 5dispenser of domestic work, womens contribution to the economy is largely in this6
hidden area of production that includes care work, voluntary or civil society activity,7
subsistence production and work in the informal sector.8
9
7.A. Non-compensation of Non-market or Domestic Labor 10
11
Since there is a lack of recognition of the reproductive economy and its contribution to society,12
there is no adjusted compensation for domestic labor, leading to marginalization of women in the13
households.1415
7.A.1. Lack of purchasing power of women and the unemployed16
Consequences 17
As most of the social goods and services can only be availed in the market, lack of purchasing18
power of the unemployed and household members engaged in domestic work generally leads to19
their:20
21
y Dependence on breadwinners for sustenance22
y Marginalization and disempowerment, since who produces have the most decision-making23powers in the household or the community24
Palliatives 25
y Health benefits of women as dependents of their husbands.26
27
7.B. Externalization of Public Good Costs to Families through Commodification28
29
The government, because of fiscal austerity measures, slowly delegates to the households the30
provision of public goods and services, putting further pressure to women which are unjustly31assumed by society to deliver those.32
33
7.B.1. Privatization of water [see 9.D.1. , 9.D.3. ] and power [see 10.A] services.34
7.B.2. Deteriorating public healthcare and under-budgeted education sector35
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Consequences 1
The delegation to the households of goods and services that are previously subsidized by the state2
adds pressure for the household to earn additional income. This leads to:3
4
y Women having to take on extra work if expenses go beyond their budget.5
y Household members refraining from seeking medical care.6y Increase of drop-out rates in the education sector.7
Palliatives 8
y Programs that ease some households of education expenses, such as the Socialized Tuition and9
Financial Assistance Program (STFAP) of the University of the Philippines and the Government10
Assistance to Students and Teachers in Private Education (GASTPE).11
y Medical Insurance like PhilHealth as an attempt to establish universal healthcare12
y Lifeline Rate for electricity consumers.13
147.C. Absence of an institutional reproductive healthcare program15
16
Misconceptions on reproductive health derail the passage of the reproductive health bill in17
Congress which consequences are suffered by the mothers, the infants and the society in general.18
19
7.C.1. Lack of information regarding family planning and reproductive health20
7.C.2. Lack of reproductive healthcare services especially among the poor21
Consequences. The absence of an institutional reproductive healthcare program results to:22
y High maternal and infant mortality rates23
y High healthcare costs related to unwanted pregnancies24
Palliatives 25
y Limited reproductive healthcare programs by the Department of Health.26
27
7.D. Unfair distribution of work among genders in households28
29
The privatization of social services and the rising cost of living increase the pressure for more30 household income which increases the pressure for women to work but the expectation for them31
to perform their domestic duties does not change.32
33
7.D.1. Multiple burden for working women34
7.D.2. Lack of community/public services for needs such as child-rearing35
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Consequences 1
The need to work in the productive sector to augment household income and the need to deliver2
unpaid reproductive labor results to:3
4
y Work status inequality among genders5
y Undue social, psychological, and professional stress on women6
Palliatives 7
y Rise of paid domestic work (kasambahay ) sector in well-to-do households in order to free8
some women individuals of domestic tasks. Then again, many of these workers are women,9
which are forced to be dislocated from their families.10
y Few mandated benefits for the employed women such as maternity leave.11
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8. Crops and Fishes for the Global Supermarket 1
2
The focus of our crop production is the global market, not domestic need, thus causing3
hunger and environmental destruction. Agricultural activities are also not in line with4
sustainability principles, particularly because it interferes with the profit motive of 5
corporate and industrial agriculture.6
7
8.A. Corporate-driven Agriculture and Food consumption 8
9
Huge corporations dictate the price and quality of food to be produced, and also the price of 10
agricultural foodstuffs they buy from small farmers.11
12
8.A.1. Lack of land reform, and institutional support of agricultural reform communities13
8.A.2. Transnational and Multinational corporation-controlled food services sector14
Consequences 15
The lack of control of both producers and consumers on the production and distribution of food16
leads to:17
18
y Agrarian unrest and disincentives to agricultural production19
y Land use conversion since valuation of land is biased against agriculture [see 2.B.1. ]20
y Proliferation of standardized, globalized junk food21
Palliatives 22
Limited support on Organic Farming. The government, through the Department of Agricultural, is23
providing token support for the development of sustainable farming techniques.24
25
8.B. Stagnating Agricultural Sector due to low social priority, lack of government 26
support 27
28
Agricultural activity is not a socially valued activity, as reflected by low rural incomes and low29
government priority. This leads to an exodus of rural citizens to the cities, causing agricultural30
stagnation and overpopulation in the cities.3132
8.B.1. Low productivity in the agricultural sector33
8.B.2. Low income of agricultural workers and peasants leading to rural-to-urban migration34
8.B.3. Complete dependence of urban areas to food stuff overseas or domestic importation35
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Consequences 1
y Domestic agro-industry, forcibly made to compete in the global market [see 8.E] fail to match2
food imports due to high-cost of production3
y Migration to the cities cause congestion and widespread urban unemployment as businesses4
fail to absorb increasing labor supply5
y High food prices afflict urban citizens, vulnerable as they are from radical price changes in the6global food market [see 8.E]7
Palliatives 8
y Programs to respond to widespread hunger such as the Accelerated Hunger Mitigation9
program in cooperation of DA and NFA are in place.10
y The existence of National Food Authority sells agricultural products at a lost in order to11
counter-act the market, but at the cost of indebtedness as it continuously conducts bond12
flotation for this.13
148.C. Ecologically-unsound Agricultural and Food Production System 15
16
Primarily because of corporate agriculture [see 8.A], agricultural practices run counter to17
sustainable ends, particularly as forest lands are converted to agricultural lands as urban areas18
grow [see 2.B.1. ].19
20
8.C.1. Monoculture21
8.C.2. Use of Genetic and Hybrid Technologies to produce crops for profit22
Consequences 23
y Environmental and ecological destruction in agricultural areas, including those which are24
responsible of giving farmers sources of income and livelihood25
Palliatives 26
y Support to Sustainable Development. Philippine Agenda 21 states policies to counteract27
environmental degradation, not just from agricultural practices.28
29
8.D. Conflict-ridden and Contested Agricultural Lands 30
31
Because of agricultural lands potential for profit-making in the global food supermarket, conflicts32
on land ownership remain prevalent. This is worsened by the fact that feudal social relations33
largely remain intact even with the conversion of landlords to capitalist land owners. This causes34
conflict and agrarian unrest on the one hand, and warlordism on the other.35
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1
8.D.1. Unresolved insurgency and separatist problems in agricultural areas2
8.D.2. Landlordism and Warlordism endemic in rural areas3
Consequences 4
y Disincentivization of agricultural production as security issues are not yet resolved5
y Out-migration to safer areas, even those which are non-agricultural, leaving agricultural lands6
either untended or free to be converted to commercial lands by land-grabbers7
Palliatives 8
y Peace negotiations with armed insurgents and separatists. Limited concessions to economic9
and political demands.10
y Land reform-related land ownership settlements [see 2.A, palliatives]11
12
8.E. Liberalized and Deregulated, Food Security-based National Food System 1314
Food security paradigm argues that it is more fruitful for a country to engage in the exportation of 15
food that is demanded by the global market and to use the foreign currency exchange gained by16
buying cheaper food stuff sold by rich industrial nations. This leads to the decimation of the17
agricultural base and widespread hunger.18
19
8.E.1. Increased exportation20
8.E.2. Import-dependent commodities policy21
8.E.3. Agricultural liberalization22
Consequences 23
The liberalized setup at food leads to the exposure of small farmers, which is the main producer of 24
food in the country, to foreign competition. This leads to:25
26
y Agriculture trade decline as domestic agricultural base is decimated by foreign competition27
[see 4.A], relatively more profit due to higher price valuation on non-agricultural activities [see28
2.B.1. ]29
y Food insecurity, widespread and chronic hunger30
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9. Grossly Neglected, Fragmented, and Ill-Governed1
Water Sector2
3
National policies on water were introduced on piecemeal basis as a response to peculiar 4
challenges of the times. This resulted in numerous government authorities being5mandated to deal with various aspects of water management, regulation and 6
development. The complex web of water-related institutions, coupled with an economic 7
policy of privatization, created a fragmented water sector that is both unresponsive to8
the needs of the people and not cognizant of their human right to water. The resultant 9
effect: water resource mismanagement, water quality crisis, and seasonal water quantity 10
crisis.11
12
9.A. Treatment of water as primarily an economic good 13
14While the Constitution declares all waters as part of the national patrimony and, as such,15
necessarily public good in nature, the government treats it as any other private economic good16
that must be subjected to the dictates of market forces. This implicit attitude towards water is17
betrayed by the governments long-standing neglect of the immediate concerns of the water18
sector while it relies on the entry private investment to solve the sectors problems. Water is19
allowed to be used on more productive activities at the expense of the basic human needs of 20
millions of people21
22
9.A.1. Lack of public investment in the protection and development of water resources23
9.A.2. Steady decline in overall support for public water provision service system24
9.A.3. Proliferation of small-scale independent providers of water25
Consequences 26
y Water systems are not geared towards meeting basic human needs, especially of the poor27
y Water is made available to recreational purposes such as swimming pools, golf courses and28
other leisure and amusement uses while there are still many in the nearby areas who lack29
access to water30
y Water provision is made a business more than a service31
Palliatives 32
y About 32 agencies are mandated to regulate water sector but they remain largely ineffective33
in carrying their mandates out34
y Enactment of the Clean Water Act of 2004 ( R.A. 9275) which signals a reaffirmation that35
water is a public good, but the law is yet to be strictly implemented36
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1
9.B. Non-commitment to actual protection, management and development water 2
resources3
4
The government pays but lip-service to protection, management and development of water5
resources. The government is not even aware of the grave effects of climate change on water6 resources and supply. Accordingly, it does not have a comprehensive adaptation plan and program7
addressing climate change-related water problems8
9
9.B.1. Unabated de-forestation resulting in the diminishing holding capacity of watersheds10
9.B.2. Existing Framework and Plans on water resources protection, management and11
development are not implemented12
Consequences 13
y 90% of the official watersheds of the country are considered hydrologically critical14
y Only one-third of the countrys river systems are fit for water supply provision15y 58% of groundwater resources are found to be contaminated by untreated domestic and16
industrial wastewater17
y Waterborne diseases continue to be one of the main causes of death in the country, causing18
billions of pesos in lost income opportunity and hospitalization expenses19
Palliatives 20
y The NEDA came up with The Water Sector Roadmap in 2008 but there are now talks of 21
revising the Roadmap even before it is actually implemented22
y Enactment of the Indigenous Peoples Rights Act which, however, is more honored in its23
violation than its observance24
25
9.C. Numerous yet ineffective and uncoordinated water authorities resulting in a weak 26
institutional framework 27
28
There are at least 32 water-related agencies that have overlapping and sometimes conflicting29
functions. The sheer number makes it difficult to have a comprehensive, coordinated and30
integrated approach to the water sector. It also makes for a breeding ground for red tape and31
corruption.32
339.C.1. Difficulty in establishing an updated and accurate baseline of the water sector34
9.C.2. Lack of monitoring capacity of the National Water Resources Board (NWRB) and the35
Local water Utilities Administration (LWUA)36
37
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Consequences 1
y Highly fragmented institutional framework2
y Difficulty in exacting accountability3
Palliatives 4
y NWRBs mandate is broadened to include formation, coordination and integration of all sub-5
sectoral water policies, but the agency remains incapacitated to perform its enlarged functions6
7
9.D. Increasing privatization of water provision service focused on bulk water supply 8
9
Privatization is viewed as the primary solution to the concerns of the water sector. The policy of 10
privatization is pushed by international financial institutions such as the World Bank and the Asian11
Development Bank and made a condition for the approval and release of loans. However, it seems12
that many of the technocrats are no longer just acceding to such imposed conditions, but have13
already bought the idea that privatization actually leads to greater efficiency, improved14management, and private investment expansion.15
16
9.D.1. Privatization of the MWSS through concessions with Manila Water and Maynilad17
9.D.2. Large-scale public-private partnerships in Tagbilaran City, Bohol and in Subic, Zambales18
9.D.3. NEDA Resolution No. 4 series of 1994 and its IRR urging the LGUs to adopt varying19
degrees of privatization of LGU-controlled water utilities20
9.D.4. Encouraging private sector participation (PSP) in bulk water supply and local water21
utilities, through BOT, JVA modalities22
Consequences 23
y Continued increase in rates contrary to the promise of privatization will necessarily lead to24
decrease in rates25
y The poorer sectors of the communities are not provided with water service simply because26
they cannot afford its price27
y Those who are not serviced either dig wells to tap groundwater (which most of the time leads28
to depletion, saltwater intrusion and ground sinking) or make illegal connections to the private29
providers pipelines (which are largely pointed as the cause of leak and wastage or non-30
revenue water)31
Palliatives 32
y Regulatory bodies are established to control private providers but these are either captured by33
the private interests or simply incapable performing their functions34
35
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10. Abandoned Power Sector and Industry1
2
As mandated by the Electric Power Industry Reform Act (EPI R A), the power sector is3
thoroughly abandoned to the private sector, with generation and transmission firms4
privatized, the industry liberalized and opened up to foreign competition, and pricing5
deregulated. Demand-management is also lacking.6
7
10.A. Privatized and Private Sector-driven Power Industry 8
9
From the power crisis of the 90s forcing the government to give concessions to the new private10
sector players Independent Power Producers (IPP), after EPIRA, even the plants owned by the11
National Power Corporation (NPC) are now being privatized. This is with the view that the private12
sector knows better where and when to supply electricity [see 1.A.2. ].13
14
10.A.1. Privatization of NPC Plants to Generation Companies (GENCOs), IPP contracts to IPP15Administrators (IPPA)16
10.A.2. Sale of Transmission Corporation (TRANSCO) to State Grid of China and Monte Oro17
10.A.3. Oligarchic control of Manila Electricity Corporation (MERALCO)18
Consequences 19
Since the private sector is operating on the basis of profit, and because of the huge influence20
business titans have on government policy, a private sector-led power sector leads to:21
22
y Conversion of state monopoly in power to oligarchic control of few family-owned companies23
[see 1.A.2. consequences].24
y Private sector-led, foreign capital-driven financing [see 3.C] leads to debt accumulation. This is25
not mentioning the ballooning contingent liabilities by the national government due to26
sovereign guarantees.27
y Capital-intensiveness and huge affront costs of Renewable Energy (RE) preventing its28
development despite Philippine governments responsibility as a signatory to the Kyoto29
protocol to fight against climate crisis [see 6.E.1. ]30
Palliatives 31
y Attempts at energy planning through the Philippine Energy Plan as drafted and implemented32 by the Energy Family (DoE, NPC, PNOC, ERC, NEA, PSALM, TRANSCO, WESM), but this can only33
be implemented via an investment-attraction strategy34
y Performance Rate Based (PBR) replaces Return on Rate Based (RORB) Pricing Methodology35
supposedly to discourage inefficiency even in a lack of competition, but this has mostly been36
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an excuse to recover investments because it allows full cost recovery plus an allowable return1
of investment of up to 12%2
3
10.B. Liberalized Ownership, Investments, and Management in the Power Sector 4
5
The power crisis of the 90s forced the government to liberalized investments in the power sector.6This policy is completed by EPIRA, which mandates the complete liberalization of industry, leading7
to the creation of new markets for each of the unbundled power subsector. This led to ineffective8
energy projections and management, with power supply swinging wildly from oversupply to9
under-capacity and vice versa. The state then fails to provide adequate, reliable, and cheap energy10
supply to industry [see 4.C.1. ], households [see 7.B.1. ], agriculture [see 8.A.1. and 2.B.4. ], etc.11
12
10.B.1. Unbundling of Generation with Distribution, Transmission, and Supply and dispersal of 13
ownership among the subsectors14
10.B.2. Granting Distribution Utilities (DU) direct transmission access to IPPs, some of which15
are crossly-owned16
10.B.3. Lack of regulation on bilateral contracts between GENCOs and DUs17
10.B.4. Lack of demand-side management due to growth-based economic models18
Consequences 19
The erosion of state capacity for central and coordination planning on power with liberalization led20
to:21
22
y Due to the absence of state participation in the power sector despite lackluster private23
investments, the power sector has been characterized by failed power supply and demand24
projection:25o Overpriced excess capacity from the contracts with IPPs that the Ramos administration26
entered into during the energy crisis in the early 199027
o Under-capacity in a period of climate crisis, with El Niño compromising our hydroelectric28
and hydropower multi-purpose dams [see also 6.C.2. ]29
y Lack of economies of scale which is a barrier to entry due to the erosion of NPCs vertical30
and horizontal integration31
Palliatives 32
y Huge private sector concessions to promote a risk-free investment climate, like sovereign33
guarantees and take-or-pay provisions, in order to attract energy investors (Ramos period)34y Cross-ownership of generation and distribution, which is a form of vertical integration, but it is35
for profit instead of welfare maximization.36
y Creation of a Supply Market, or the Wholesale Electricity Spot Market (WESM), which is to act37
as a balancing system between the excess capacity not contracted by GENCOs to DUs in order38
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to ensure efficient linking of demand supply. This may have been the reason why WESM is not1
encouraged to replace bilateral contracts under EPIRA2
3
10.C. Politically-compromised, Incompetent, and Socioeconomically-detached Regulation 4
5
The Energy Regulatory Commission (ERC) is supposed to be the primary check against corporate6pricing abuses in a privatized power industry, but because it is politically appointed, its capacity to7
do so is compromised. Moreover, those who are appointed lack the competence to do their job.8
But even its very mandate is detached to social and economic goals, which are absent to begin9
with.10
11
10.C.1. Regulators are appointed by the President irrespective of regulation experience [1.D]12
10.C.2. Lack of stated social and economic development goals [see 1.A.1. ] with which13
regulation is supposed to be anchored on and biased to14
Consequences 15
y Regulatory capture, as regulators are usually political appointees of elected officials vulnerable16
to pressure from power capitalists [see 1.B]17
y Erosion of social welfare, as regulation does not consider consumers general capacity to18
purchase electricity [5.A.1. ]19
y Electricity pricing is biased against households (and thus against women, because the role is20
ensuring essential services devolves to them [see 7.B]), because they are the ones which21
cannot pass the cost to other social entities, unlike firms which can pass the cost to consumers22
Palliatives 23
y The granting of fiscal autonomy to the ERC ensures that it is not that politically dependent on24
the Department of Budget and Management (DBM) and the House of Representatives (HoR)25
for its operational budget26
y IFI-financed Capacity Building and training for the ERC, especially ones financed by the Asian27
Development Bank (ADB)28
29
10.D. Undemocratic and private sector-centric/ -dependent power sector in the LGUs30
31
Power services in the grassroots are delivered undemocratically, are heavily influenced by, and are32
heavily dependent to, private sector activities. This provides opportunities for rent-seeking33
opportunities, while increasing prices and costs of electrification.34
35
10.D.1. Privatization of Rural Electric Cooperatives (REC) through Investment Management36
Contracts (IMC)37
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10.D.2. Undemocratic management of existing RECs1
10.D.3. Slow pace of National Electricity Administration (NEA) in rural and barangay2
electrification3
10.D.4. Allowing Third Parties, instead of DUs/RECs to provide missionary electrification4
10.D.5. Private distribution utility for Metro Manila (MERALCO)5
Consequences 6
y Low rural productivity due to lack of electrification [see 8.B.1. ]7
y High electricity prices in the rural areas due to lack of regulation8
y Costly and profit-oriented missionary electrification9
y Presence of rent-seeking activities in the rural electric public utilities, even those controlled by10
cooperatives and the local government 11