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Vol. XIV No. 5

September - October 1996

commitment to the Summit. The discussants were Assistant Director-General Nestor Mijares representing Dr. Cielito F. Habito, Secretary of Socioeconomic Planning and National Economic and Development Authority (NEDA) Director General; Assistant Secretary Gloria S. Mallare of the Department of Social Work and Development (DSWD); Aurora Tolentino, Executive Director of the Philippine Business for Social Progress (PBSP); Antonio C. Asper, Vice-President for International Affairs of the Federation of Free Workers (FFW); Dr. Rene Ofreneo of the University of the Philippines’ School of Labor and Industrial Relations; and Prof. Solita C. Monsod of the UP School of Economics who acted as the panel moderator.

ISSN 0115-9097

What's I nsides

World Summit for Social

Financing the Social Sectors

Increase to Come from Budget Restructure

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Development:

"Only Through Collaborative Efforts..."

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DSWD Reports...

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NGOs in Social and Human Development

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A Year After he Philippines may be one of the developing countries which has seriously worked towards the fulfillment of its commitments under the Copenhagen Declaration and Programme of Action but a lot more needs to be done not only by the government but all the concerned sectors to implement and realize these commitments. These were the collective observations of the participants in the panel discussion conducted by the PIDS, with the support of the International Center for Economic Growth (ICEG), on September 23, 1996, about a year after the World Summit for Social Development was held in Copenhagen, Denmark.

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The Institute invited a panel of government, nongovernment and other experts on the issue to review the policies and programs for social and human development put into action by the Philippine government and to assess the implications of the country’s

For Social and Human Development

Tapping the Potentials of Labor Unions

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APEC Seminal Thinkers Share Vision for the Region's Progress

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One Fine Week at PIDS

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Editor's Notes

Just how accurate is man’s social development being measured? This question has, in recent years, emerged as a growing global concern among the world communities. It has, in fact, sparked the holding of international summits and related fora to gather commitments from governments and to ensure that social development goals are addressed. This same concern led to the holding by PIDS, in collaboration with the ICEG, of a forum in September wherein a distinguished panel of experts was gathered to discuss, evolve some policy recommendations and focus public attention to this issue.

The commentaries, reports and recommendations from this panel discussion are featured in this DRN’s issue. Hopefully, they can serve as eye-openers to the country’s leaders and decisionmakers on the many neglected aspects of social development that need to be further looked into. Also in this issue is a report on a symposium with APEC’s seminal thinkers held in Marawi City. And finally, for the first time in the pages of DRN, we feature snapshots showing the PIDS staff as one happy family, taken during the celebration of PIDS’s 19th anniversary.


DEVELOPMENT RESEARCH NEWS

he Philippines has increased its financing of the social sectors to 20 percent of the total budget. Yet this is only half of the United Nations Development Programme (UNDP) standard of 40 percent and still below the 32 percent average for the least developing countries’ (LDCs) social allocation ratio. This is one of the major findings of a study1 funded by the United Nations Children’s Fund (UNICEF) and authored by PIDS Research Fellows Dr. Rosario G. Manasan and Dr. Gilberto G. Llanto, and Wilfredo G. Nuqui of UNICEF. The highlights of this study were presented by Dr. Manasan during the seminar on the “World Summit for Social Development: A Year After” conducted by PIDS on September 23, 1996.

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The study focused on the possible restructuring of the budget to favor the social sectors by moving financing intersectorally from nonsocial to social sectors. It also looked at possibilities of realigning funds intrasectorally within the social sectors to support human development priorities, such as increased cost recovery in devolved hospitals and state colleges and universities and reduction of outlay for general administrative services in the health department due to devolution. Social allocation ratio is that proportion of the budget spent for social services. In 1995, the country’s social allocation ratio increased to 20 percent from 16.1 percent in 1990. Yet, this is still lower than the peak of 22 percent in 1989. The human development priority ratio (or the proportion of the budget spent on human development priorities such as basic education, basic health care, low-cost water and sanitation) likewise rose from 10.3 percent in 1993 to 12 percent in 1995. The 1995 figure, although higher than the

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1990 and 1993 figures, is still lower, though, than the peak of 13 percent in 1988. Meanwhile, the 1993 human development priority expenditure in real per capita stood at P237, improving considerably to P308 in 1995, but still lower than the peak of P315 in 1990.

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What can be done to improve the ratios?

Reviewing the GPAs No matter what happens to the economy, the most stable portion of the budget—the general public adminis-

Financing the Social Sectors

Increase to Come from Budget Restructure The country has posted economic improvements in the past three years but has not really recovered much from the economic crises in the early 1980s or the mild recession in 1991 where there was always a reduction in social welfare expenditures. How does the Philippines compare with other countries? The average social allocation ratio for a selected sample of least developed countries (LDCs) is 32 percent, the United Nations Development Programme (UNDP) norm is 40 percent while that of the Philippines is only 20 percent.Thus, the country’s best achievement, to date, is just half of UNDP’s standard and considerably less than the average for LDCs. On the other hand, the country’s human development priority ratio in 1995 was only 12 percent or about equal to the average for selected LDCs but still less than the UNDP norm of 20 percent.

tration (GPA) portion—remains unaffected. Regardless of recessions or positive economic growth, the GPA portion grows continuously and never suffers any cutbacks.The GPA includes expenditures on the Congress, the judiciary, and those that run the government. It normally involves administrative expenses such as salaries, including capital expenditures (CAPEX). This study by Manasan et al. made a sharper focus on this area and saw some possibilities. Looking at other countries, Thailand, for example, spends only about 1.2 percent of its GNP on GPA, in contrast to the Philippines’ 1.8 percent. What happens if the Philippines emulates Thailand and simply spends 1.2 percent of its GNP on GPA? The study ———————— 1 The study will soon be published as a book by PIDS entitled “Financing Social Programs in the Philippines: Public Policy and Budget Restructuring” by Rosario G. Manasan, Gilberto M. Llanto and Wilfredo G. Nuqui.


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DEVELOPMENT RESEARCH NEWS

argues that a shifting exercise or trimming of the bureaucracy would save the country some P8.3 billion a year!

Table 1 Potential Sources of Additional Financing for Social Sector Programs, On a Yearly Basis

No budget reductions despite devolution Because of the implementation of the Local Government Code of 1991, the Department of Health (DOH) and the Department of Social Work and Development (DSWD) transferred a number of their personnel to local government units (LGUs). This implies that their respective administrative budgets should have been trimmed down. Yet, both departments have not quite trimmed down their administrative expenditures in proportion to the personnel that they shed. In 1993, for instance, DOH should have saved P382 million and DSWD, around P93 million. Their potential savings should have been even higher in 1994 and 1995. Yet, DOH and DSWD have not responded appropriately to the devolution of personnel from the national agencies to the LGUs.

Sources of financing The study identified potential sources of additional financing for the social sectors (see Table 1) which include, among others, the following: c P1.8 billion to come from curbing tax evasion;

Source

Increased Revenues1 Curbing tax evasion Privatization Improved capacity to absorb ODA II. Inter-Sectoral Reallocation1 Reduced domestic interest rate Reduced outlay for general administrative services in DSWD Withdrawal of NFA subsidy Restructuring of BOI incentives III. Intra-Sectoral Reallocation c Health and Nutrition Reduced outlay for general administrative services due to devolution Increased cost recovery in DOH-retained government hospitals Increased cost recovery in devolved hospitals Improved logistics system Review nature, approaches to treatment and cost effectiveness of present interventions in mental health and leprosy Shift to more cost-effective intervention like ORT, BHS treatment and use of simple diagnostic procedures for ARI, etc. c Education Increased cost recovery in SUCs Improved internal efficiency in public schools c Water and Sanitation Improved collection efficiency of LWUA Reduced water losses of MWSS Increased community participation in management of level I water and sanitation systems Increased disbursement rates of appropriation for level I water and sanitation systems IV. Grand Total I.

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c P200 million from withdrawal of the National Food Authority (NFA) subsidy; c P500 million from increased cost recovery from both local and devolved hospitals;

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c P600 million from increased cost recovery from state universities and colleges; and

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Amount (In P billion) 2.8 1.82 0.43 0.64 1.4 0.35 0.1 0.26 0.8 2.0 0.4 0.2 0.3 –7 –7 –7 0.6 –7 0.28 0.39 –7 –7 6.2

Gross estimates of incremental resources from this source were scaled down by marginal propensity to spend on the social sector. Based on past performance, this is assumed to be equal to 0.2 except for DSWD item. This assumes that the margin of error in the estimated evasion level is 50 percent and that the government is able to collect 25 percent of the amount of taxes evaded in the first year after a concerted program to improve collection efficiency is instituted. This assumes that the privatization program will wind up in five years and that the proceeds from government divestment from the remaining assets (valued at P66 billion) are evenly spread out over this period. Net recovery rate is assumed at 0.4. This assumes an increase in the availment rate of 149 program and project loans to 80 percent based on 1992 scheduled availment. The stock estimate of P9.2 billion thus derived was further assumed to be spread out evenly over a three-year period. This assumes a one percentage point reduction in the interest rate on Treasury Bills. This refers to the explicit subsidy only. Estimate not available. This assumes an improved collection efficiency of 72 percent as compared to 55 percent in 1992. This is equal to the average annual government equity infusion to LWUA in 1988-1992. This assumes a three percentage point improvement in water recovery per year to achieve a target rate of 57 percent in five years from 42 percent in 1991. This amount is roughly 85 percent of the P295 million average annual government equity infusion to MWSS in 1988-1992.


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September - October 1996

World Summit for Social... Page 1

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According to the DSWD, the country has kept track of its commitments to the Copenhagen Summit by continuing to “focus on policies and programs for sustained economic growth, on improved global competitiveness, on strengthening human capital and on providing for an environment for a more empowered civil society.” Poverty reduction, job creation and social integration are the country’s commitment to the Summit and are specifically contained in the DSWD’s medium-term plan for 1996-1998. These commitments are, in fact, part of the country’s long-term plan for economic, social and political development. Tasked to monitor the implementation of these commitments is the Multisectoral Committee on Interna-

tional Human Development Commitments (MC-IHDC) made up of concerned sectors which the Philippine government created in 1995.

Listening intently to comments from the floor are PIDS President Ponciano Intal, Jr., NEDA's ADG Nestor Mijares, UPSE Prof. Solita Monsod, and DSWD Asst. Secretary Gloria Mallare.

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In the speech of Secretary Habito read by ADG Mijares, he reaffirmed

“Only Through Collaborative Efforts...” The following are excerpts from the speech of Secretary Cielito F. Habito read by Assistant Director General Nestor Mijares during the panel discussion conducted by PIDS last September 23, 1996 on “World Summit for Social Development: A Year After.”

A government commitment c The World Summit for Social Development-Multisectoral Committee (WSSD-MC), which the Philippine government created in 1995 through Social Development Committee Resolution No. 1-95, hopes to fully coordinate efforts to realize its commitments during the World Summit for Social Development held in Copenhagen, Denmark.

c Close collaboration and partnership among government, academe, legislature, nongovernment organizations (NGOs), people's organizations (POs), private sector and other equally concerned sectors is required to realize this commitment. c The WSSD-MC functions as a special subcommittee of the Social Development Committee (SDC) under the National Economic and Development Authority (NEDA) Board. This year, we have expanded the WSSD-MC to cover not only the monitoring of WSSD agreements but also those of the recent round of international human development conferences, such as the International Conference on

Population and Development in Cairo, Egypt in 1994; the Fourth World Conference on Women in Beijing, China in 1995; and the Second International Conference on Shelter and Human Settlements in Istanbul, Turkey in 1996. The WSSD-MC has now been renamed the Multisectoral Committee on International Human Development Commitments (MC-IHDC). The efforts of the Committee serve as a coordinative framework that harmonizes all follow-up activities resulting from international human development conferences. The Committee hopes to bring about a more holistic development by integrating all efforts and commitments forged during such conferences.


DEVELOPMENT RESEARCH NEWS

the government’s continuing commitment to the Copenhagen Summit, citing this panel discussion as a way of showing concern for the progress in the implementation of the commitments. He noted that the discussion strengthens the country’s conviction to uphold the global responsibility of working toward a “unified and concerned global village against poverty, unemployment and social disintegration.” He realized that the Copenhagen Declaration and Programme of Action needs to be implemented by all the concerned sectors—government, academe, legislature, nongovernment organizations, people’s organizations, and the private sector, among others. He concluded that present efforts at attaining human development goals will determine the future of the children. Representing the workers’ organizations was Antonio C. Asper who expressed his doubts about the seriousness of some sectors toward social

Upcoming activities c This October, NEDA, in collaboration with the members of the Multisectoral Committee, the United Nations Development Programme (UNDP) and other concerned agencies, will be conducting a series of workshops to discuss various follow-up activities in compliance with the agreements made during the international human development conferences. The outcome of the series of workshops will be, among others, a matrix containing issues and gaps with corresponding project activities and resource requirements needed to fully implement the agreements to such international conferences. The output will be presented to the United Nations (UN) System and other bilateral and multilateral donors for possible funding assistance.

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and human development. He, however, noted that the country may be one of the developing countries which “has undertaken serious and substantive efforts in fulfilling its commitments ... to the Summit.” He further noted that the government has not fully tapped the labor unions in realizing the goals of development. In his assessment, the economy may have grown but not enough jobs are being created and workers feel that they have not benefited from this growth. Although government reports claim that poverty levels have gone down, many, according to him, still remain poor. In addition, the path toward so-

September - October 1996

cial integration has been marred by controversies such as the Southern Philippines’ Council for Peace and Development. Meanwhile, the social sector’s financing can be further improved through budget restructuring—that is, by shifting financing from nonsocial to social sectors. PIDS Research Fellow Dr. Rosario G. Manasan presented the results of a study on restructuring the national budget in favor of the social sectors and showed that this is possible (see related story on page 2), including tapping possible sources of additional financing to these sectors. DRN

DSWD Reports... The following are excerpts from the speech delivered by Assistant Secretary Gloria S. Mallare for Secretary Lina Laigo of the Department of Social Work and Development (DSWD) during the panel discussion on "World Summit for Social Development: A Year After” conducted last September 23, 1996 by PIDS.

Poverty Reduction The Committee on Poverty Alleviation is chaired by the Presidential Commission to Fight Poverty (PCFP). It is in charge of monitoring the implementation of policies, plans and programs for Commitment 2Poverty Alleviation as follows: “We commit ourselves to the goal of eradicating poverty in the world, through decisive national actions and international cooperation, as an ethical, social, political and economic imperative of human kind.” The PCFP coordinates and monitors government organizations (GOs), nongovernment organizations (NGOs), and local government units (LGUs) in implementing programs and projects for

the poor including economic opportunities for women. It sees to it that nationwide implementation of projects under the Social Reform Agenda (SRA) is ensured, which covers an array of sectoral programs for specific clientele groups. Various Executive Orders (EOs) institutionalized working arrangements for the SRA’s localization. The Strategy to Fight Poverty provides government and all other key players in Social Reform and Poverty Alleviation with a blueprint for action. The People’s Credit and Finance Corporation (PCFC) has been created to develop an alternative finance mechanism for the programs and projects intended for the poor and to mobilize local and international funding sources.

Job Creation The Committee on Employment is chaired by the Department of Labor and Employment (DOLE). DOLE takes the lead in implementing Commitment 3-Employment as follows: “We commit ourselves to promoting the goal of full employment as a

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DEVELOPMENT RESEARCH NEWS

Only Through Collaborative... Page 5

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On resource mobilization c One of the major agreements during the Copenhagen Summit was the 20:20 initiative. The 20:20 initiative calls on interested developed and developing country partners to allocate, on the average, 20 percent of official development assistance (ODA) and 20 percent of the national budget, respectively, to basic social programs which include basic education, primary health care, water and sanitation, nutrition and reproductive health.

How the Philippines fares c Based on recent estimates of the Department of Budget and Management (DBM), 15.8 percent of the total national government expenditures was spent on basic social programs in 1995 and in 1996. This percentage is expected to slightly increase to 16.4 percent in 1997. We can see from this that there is plenty of room for improvement in terms of resource mobilization for priority social programs. At the local level, local government units (LGUs) are also encouraged to in-

DSWD Reports... Page 5

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basic priority of our economic and social policies, and to enabling all men and women to attain secure and sustainable livelihoods through freely chosen productive employment and work.” Several GOs and NGOs are involved in creating employment opportunities and promoting work productivity in both rural

crease their spending on human development priorities. During the recent launching of the 1996 Human Development Report, recognition was given to LGUs which have the highest budget and spending for human development priorities. Such local efforts are very much needed to complement resource mobilization at the national level.

Gaps to fill More than a year since the Copenhagen Summit, and despite major efforts being done in collaboration with various sectors of the society, we acknowledge that there are still gaps that must be filled up if we are to fully implement the Copenhagen agreements. First, there is the need to strengthen efforts on poverty alleviation, employment expansion and social integration. In addition, there is the need to formulate intermediate and quantitative indicators based on agreed upon long-term and qualitative indicators contained in the Copenhagen Programme of Action. Such indicators will translate the broad statements into doable and specific activities that will facilitate future monitoring and evaluation. On the 20:20 initiative, much advocacy still needs to be done especially with the donor community and the local government units. DRN

and urban sectors. Various programs and projects are being implemented for the welfare and protection of workers. The Technical Education and Skills Development Authority (TESDA), created through Republic Act No. 7796, is primarily tasked to formulate policies on technical education and skills development for a highly competitive workforce. On the other hand, the Department of Social Welfare and Development (DSWD) has existing programs and projects for the elderly, youth, disadvantaged women, families, and persons with disabilities by providing them with oppor-

September - October 1996

n the NGO community...the definition of an NGO means anything that is not government...that NGOs are nongovernment organizations, nonprofit in nature and have a mandate to do development work.

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—— ] ] ] —— ... I do agree with the proposition that economic growth has to be in the context of participation and democracy to make it truly sustainable.

—— ] ] ] —— Communities want what we all want for them. They have innate resources to pursue development; thus NGOs need to build on these resources so that communities can understand, articulate and participate in the process as well as benefit from that development.

—— ] ] ] —— A study commissioned by the World Bank looked at the role of NGOs in relation to the local or national government. Government and NGO collaboration should be based on their comparative advantages. The government’s strength lies in pursuing programs on a large scale; the NGOs in insuring that projects conform with local conditions. Government collaboration with NGOs appears necessary when c project outcomes or post-intervention sustainability depend on the

tunities to engage in income-generating activities.

Social Integration The Department of Social Welfare and Development (DSWD) is the Vice Chair of the Multisectoral Committee on International Human Development Commitments (MC-IHDC) and Chair of the Committee on Social Integration which monitors the implementation of policies, plans and programs for Commitment 4Social Integration as follows: “We commit ourselves to promoting social integration by fostering so-


DEVELOPMENT RESEARCH NEWS

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September - October 1996

NGOs in Social and Human Development

difficult to immediately transform themselves into enterprise builders and managers. Their capabilities, community solidarity and skills must be strengthened first. Thus, beyond conducting community-organizing activities and continually nuancing their projects, NGOs usually end up creating the institutional arrangement—mechanisms and resources—needed to make collective action possible.

—— ] ] ] —— Excerpts from the speech delivered by Aurora Tolentino, Executive Director of the Philipine Business for Social Progress during the panel discussion on “World Summit for Social Development: A Year After” conducted by PIDS last September 23, 1996. community’s ownership of or conformity to a project specifically designed for local conditions, and/or c politically acceptable communitybased initiatives or social innovations need a more receptive policy environment for resource support. When the outcome or sustainability of a local project depends on community ownership, NGOs might have a distinct advantage over government agencies or local government units (LGUs). This is because, in such case, nuancing and community organizing are important factors and this is where NGOs are very good at.

—— ] ] ] —— What is the strategic role of NGOs? The nuancing role covers different tasks

cieties that are stable, safe and just and that are based on the promotion and protection of all human rights, as well as nondiscrimination, tolerance, respect for diversity, equality of opportunity, solidarity, security, and participation of all people, including disadvantaged and vulnerable groups and persons.” The Committee on Social Integration prepares and provides substantial inputs in the preparation of reports on this commitment. It also works with various NGOs, people's organizations (POs) and other GOs, while exploring linkages with church groups and other religious organizations.

There’s a lot of discomfort even now when asked: What is the role of NGOs in relation with that of local and national

that span from policy formulation, program development and management, and down to the level of service delivery. In service delivery, NGOs create innovations that develop the community as stakeholders rather than recipients of project planning and implementation. Likewise, NGOs initiate new approaches in program development and management. Finally, NGOs try to put a human face to development by bringing in marginalized sectors in the agenda. In the process of nuancing, NGOs, in essence, initiate an innovative instrument. Thus, NGOs have similar roles as that of a social entrepreneur. Social entrepreneurs, as coined by Prof. Eduardo Morato of the Asian Institute of Management (AIM), are concerned about helping others (less privileged or poorer segment of the society) prosper. Individually, the poor may find it

The ultimate goal of social integration is to create a society for all where every individual has his own task and responsibility to play. The Summit’s aim is not merely to integrate social dimension into the development process but to attain the very concept of a socially relevant development. The member agencies of the various committees continue their efforts to streamline operations and activities to respond to the reengineering efforts of the government. The ultimate goal is to be able to focus the programs and

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PBSP Executive Director Aurora Tolentino expounds on the role of NGOs.

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government? I often hear legislators say: who elected these NGOs? Who are they accountable to? And that’s valid. There are many organizations who call themselves NGOs and some are there because resources are available. But there are situations where GOs, especially at the local level, are beginning to see that perhaps the agenda put forth by both POs and NGOs are not very dissimilar from theirs. Perhaps that’s where collaboration must begin. DRN


DEVELOPMENT RESEARCH NEWS

The following are excerpts from the paper prepared by Antonio C. Asper, Vice-President for International Affairs of the Federation of Free Workers, for the panel discussion on “World Summit for Social Development: A Year After” conducted last September 23, 1996 by PIDS.

The role of labor unions Labor unions exist to defend and promote the economic and social interest of workers. Three classical means are used to achieve these ends: collective bargaining, legislation, and mutual aid and protection.

—— ] ] ] ——

Social activities of trade unions Almost all unions in the Philippines offer financial aid to their members who are in need due to fortuitous or calamitous events through a fund created for such

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Currently, the labor sector is represented by trade unions in various tripartite agencies, in Congress, and other groups that decide or implement social policy. Workers’ representatives are also asked to participate in summits called to address social concerns, ranging from crime prevention, anti-poverty, employment and others.

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The participation of workers’ organizations in the development process has not only made possible the realization of “development through democracy” but also helped in widening the scope of their involvement from the narrow confines of collective bargaining and legislation to the broader field of social and human development. This trend follows the policy of tripartism, which was nominally pursued in

Tapping the Potentials

Labor Unions

purpose. Some unions even have insurance schemes for their members. Unions also engage in social enterprises such as cooperatives, credit unions, owning/running a hospital and radio station, and undertake social action such as projects on eradicating child labor, promoting environmental consciousness, health and safety in the workplace, promoting the concerns of indigenous and tribal peoples, and supporting agrarian reform and rural development.

Service through Research Support Philippines 2000

Harnessing the potentials of a rich human resource

For social and human development

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September - October 1996

the beginning but seriously implemented and broadened when democracy was regained. Getting involved in the decisionmaking on social and economic policy and programs gave unions a wider perspective and insight on how they may continue to promote and defend the economic and social well-being of workers and the society as well.

Important lessons may be learned from these experiences: c Grassroots-based organizations, including labor unions, by their very nature, are directly engaged in social and human development. Thus, they are the best vehicles for undertaking development due to their involvement with the people who are the object and subject of development. c Genuine people participation opens a rainbow of possibilities and opportunities that will lead to greater and better social and human development. c While participation of the people is the key to the success of development efforts, government policies are still crucial in encouraging more participation in social and human development. c More freedom creates committed participation and responsible involvement. This gives way to greater democracy which, in turn, builds the environment for more freedom, more committed participation and more responsible involvement and so on in a virtuous cycle.

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Reaping the benefits of workers’ participation Employers and governments, and workers—all the more—would agree to the vital importance of workers’ participation as a factor of development... Looking back from twenty years ago, much had been accomplished by the social partners in their efforts to advance social and human development. But much more should and can be done to release the potentials of unions for social and human development. DRN


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onsensus-building in a forum like Asia-Pacific Economic Cooperation (APEC) could help neutralize a potential arms race. This was the assessment made by former Philippine Foreign Affairs Secretary Raul Manglapus during the “APEC Seminal Thinkers Speak...Symposium” held on August 26 at the Mindanao State University (MSU) in Marawi City, Mindanao. MSU, an active member of the Philippine APEC Study Centers Network, played host to the symposium in cooperation with the Philippine Institute for Development Studies, the Department of Foreign Affairs and the Philippine National Oil Company (PNOC).

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“Energy thirst” could lead to arms race According to Manglapus who now chairs the PNOC, the potential arms build-up is a consequence of the “energy thirst” among industrialized and newly industrializing countries in East Asia. Japan, which consumes oil three times more than any East Asian country, imports 95 percent of its oil. South Korea has more than tripled its per capita consumption of energy since 1975. Taiwan imported 40 times more crude oil in 1993 compared to the figures in 1975. China’s demand for oil is expected to shoot up to 175 million tons by the year 2000 due to rapid industrialization. The oil wells of Indonesia have been producing lesser oil, and imports from Russia are constrained due to short-run infrastructural requirements and security risks. That leaves Middle East, which now supplies 70 percent of East Asia’s oil requirements, as the sole major oil supplier of the region. By the year 2010, supply would easily climb up to 95 percent.

September - October 1996

APEC Seminal Thinkers

Share Vision for the Region’s Progress The lifeblood of East Asian industries must be borne by the seafaring fleets plying the waters of the Arabian Sea and Indian Ocean. This, according to Manglapus, logically explains all the investments made in arms build-up, particularly in naval capability, since the safety of these unarmed oil-carrying tankers must be ensured. The APEC, which reaches beyond Southeast Asia and across the Pacific, can initiate a dialogue and suggest concrete measures to minimize conflicts and plan for development cooperation.

APEC’s strength In the same gathering, former Foreign Minister of the Republic of Korea Choi Ho-joong who was among the seminal thinkers of APEC when it was conceived in 1989 (along with Manglapus), said that APEC’s strength lies both in its diversity and in the high degree of complementarity of its human, technological and natural resources. East Asia, with its vast potential resources, is well positioned to benefit from the APEC process. Energy exploration, infrastructure development and tourism promotion are areas with greatest potential for APEC’s development cooperation. Korea, known worldwide for its success story in economic development, can offer a number of lessons for

other countries. Thus, Korea, according to Mr. Choi, will continue to increase its contribution to development cooperation in APEC in the form of technical training, expertise-sharing and model projects. He also admitted the heavy dependence of Korea on foreign sources of energy supply, mainly petroleum, from Middle East and natural gas from Indonesia. However, Korean businessmen have accumulated expertise in their long-standing ventures in domestic and foreign markets. Their extensive experience, particularly in energy exploration, could be harnessed. Therefore, they welcome the prospect of using and sharing their experience wherever and whenever possible. In the field of energy, APEC created in 1990 a working group in Singapore to provide a venue for policy exchanges including those on supply and demand, conservation, research and development, environment, and technology transfer. Since then, the working group has produced concrete achievements such as the creation of an energy database and the formulation of working guidelines for development cooperation. In the spirit of APEC cooperation, the PNOC announced its joint projects with Malaysia in the exploration of Cotabato oil basin and those in Algeria and Turkmenistan. There is

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APEC Seminal Thinkers... Page 9

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also the potential sharing of geothermal technology with Indonesia and the Trans-ASEAN gas pipeline project in year 2007.

APEC to transcend geographical bounds The APEC seminal thinkers, including Malaysian Domestic Trade Minister and former Foreign Minister Dato Haji Omar who was also present during the August symposium, are op-

ymposia, workshops and the annual loyalty awards usually marked the Institute’s celebration of its anniversaries. This year, however, the Institute’s 19th anniversary week-long celebration included activities designed to enhance the tie that binds the PIDS staff into one big happy family.

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timistic that APEC will evolve into a potent economic community that transcends continental and regional bounds. They foresee that differences will not be a hindrance. APEC will instead orchestrate and mobilize different economic forces for greater growth in the region. The symposium held at MSU is the first of a two-part series of symposia wherein former Foreign Ministers of the APEC founding member-economies are invited to speak before members of the Philippine APEC Study Centers Network, the academic community, local government units, nongovernment organizations and the

September - October 1996

private business sector to share their thoughts and new perspectives about APEC and other related concerns. The series of symposia will help highlight the APEC Study Centers Network’s activities in the Philippines and help crystallize ideas for the forthcoming leaders’ Summit based on the thoughts and perspectives of the former Foreign Ministers under whose terms the concept of APEC was born. The second and final symposium is scheduled on November 11, tentatively with the Foreign Ministers of Japan, Indonesia and the Philippines as guest speakers. DRN

One Fine Week at PIDS Aside from the regular discussions on topics such as the implications of the World Summit for Social Devel-

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Hands to their chests, the kids sing the national anthem during the opening ceremonies of PIDS Family Day.

WINNERS ALL. Parents pose with their winning children (from left, 1st row) Family Day Committee Chairman Corazon Desuasido; Jet Tolentino, 3rd prize-Category B;

opment on the Philippines, water policies, effects of uniform tariffs, and a presentation of the Data Information

Nitz Tolentino; Sierra Desuasido, 2nd prize-Category B; Mela Cruzado; Gene Rose Estrabon, 1st prize-Category B; PIDS President Dr. Pons Intal, Jr.; Zeny Isip; Merle Galvan and son Adrian (hidden); Director Jenny Liguton; (2nd row) Miko Salcedo, 3rd prize-category A; Eric Ferrer, special prize; Mary Allen Pasion, special prize; Erwin Isip, 2nd prize-Category A; and Jana Galvan, 1st prize-Category A.


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September - October 1996

and sponsored by the PIDS Credit Cooperative. There were several prizes at stake but the major prize went to Dr. Marian delos Angeles. And to cap the week-long celebration? A dinner-testimonial was held in honor of PIDS outgoing Board member, Dr. Edita Tan, who contributed a lot in the strengthening of the Institute's research agenda and operational systems. DRN

WE ARE THE CHAMPIONS! Members of the first and second place winners of the bowling tournament pose for the camera. (From left) Jane Alcantara, Edith Laviña, Susan Pizarro, Eden Villanueva, Edwin Guillartes, Gemma Triunfante, Connie Chua, Mela Cruzado, Mel Isip and Al Pasion.

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AT THE BINGO GAME: Rare photo showing hardworking Fellows at play. Dr. Linda Medalla (center) seems to say, “I hope I’ll win!” She does not, Dr. Ann delos Angeles (left) does while Dr. Chat Manasan (right) looks on approvingly.

Vol. XIV No. 5 September-October 1996

Editorial Board Dr. Ponciano S. Intal, Jr. President Dr. Mario B. Lamberte Vice-President Ms. Jennifer P.T. Liguton Director for Research Information Mr. Mario C. Feranil Director for Project Services and Development Ms. Andrea S. Agcaoili Director for Operations and Finance Atty. Roque A. Sorioso Legal Consultant

and Resource Project (DIRP), the Institute held a Family Day, a bowling tournament, a visual arts contest for the children of PIDS staff, an Executive Memo Writing Contest and a game of bingo to allow the staff to relax from their usually rigid and deadline-oriented work schedules. Children took the limelight during the first PIDS Family Day and Visual Arts Contest held on September 22, a Sunday. The drawing contest "demanded" their best to interpret the theme of “PIDS, my Country, and the World.” Winners in the two categories—three each for Category A (5-12 years old) and Category B (13-18 years

old)—were given plaques, gifts and cash prizes. The judges were Joy Lozare of EEI-TOEI, Odie Rodolfo of Creative Response, Inc., both known graphic designers and artists, and Noli San Jose of the Development Bank of the Philippines’ Corporate Affairs Center. After the little ones, the older ones had their time to shine in the bowling lanes of SM MegaMall. The highest pointers for men and women were Santiago Salazar and Josefina Vinluan, respectively. Perhaps the most exciting activity for the week was the Bingo Socials held at the Makati Skyline in Legaspi Village, Makati City

Staff Jennifer P.T. Liguton Editor-in-Chief Corazon P. Desuasido Issue Editor Ma. Lourdes M. Salcedo and Genna J. Estrabon Contributing Editors Valentina V. Tolentino and Rossana P. Cleofas Exchange Delia S.Romero, Galicano A. Godes, Necita Z. Aquino and Federico D. Ulzame Circulation and Subscription Jane C. Alcantara Lay-out and Design


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c P500 million from improved collection and reduced water losses. The study noted that the country has been liberalizing and reducing tariffs yet there were still huge amounts of tariff exemptions in the last two to three years. The rates are going down but exemptions are still being given to a number of industries. The study suggests that if these exemptions can be done away with, additional revenues can be raised that could possibly be spent on the social sectors. The study also compared the 1994, 1995 and 1996 allocations in the President’s Budget (PB) presented to Congress and the General Appropriations Act (GAA or the approved budget). In 1994, the ratio of GAA to PB was 0.99 which means that Congress did not impose a reduction on the PB. However, the GAA was 3 percent higher than the PB in 1995 and 4 percent higher in 1996. What Congress did was to reduce debt service or interest payments and the savings, which were automatically appropriated, were then reallocated to other sectors. There were some improvements in the allocation to the social sectors in 1994 but not in 1995 and 1996. Although the social sectors seemed to get a little more, the economic sectors have bigger appropriations in the GAA than the social sectors. Moreover, an analysis of the PB and GAA in 1993-1994 showed that the legislature tended to favor the economic service sectors. It is commonly observed that the Congress is inclined to increase outlays for highly visible projects, such as infra-

September - October 1996

structure, that boost their ratings among their constituents. The Senate, on the other hand, is known to favor both economic and social service sectors although preference is given to the latter.

Matching resources with needs To attain the Philippine government’s mid-decade goals (MDG) for health, education and water and sanitation, an additional amount of P5.6 billion per year will be needed. The potential financing resources identified in the study are thus sufficient enough to cover the financing of the government’s MDG. However, this is easier said than done. Budget restructuring opportunities are easy to identify but every administrative, legal and political economy constraint must be properly understood to determine the feasibility and successful harnessing of these opportunities. DRN

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DEVELOPMENT RESEARCH NEWS

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projects toward protecting and integrating the marginalized sectors of the society into the mainstream of national development.

Implications of the Philippine Commitments The Philippine commitments are very real and binding to the present and future administrations. If the collective efforts of implementing these commitments succeed, it will mean a better quality of life for the Filipino family. A year after the 1995 summit in Copenhagen, much still needs to be done especially when other summits such as the Cairo International Conference on Population and Development, the Beijing 4th World Conference on Women, the Turkey 2nd International Conference on Shelter and Human Settlements are equally considered. All these commitments are expected to move the country toward Philippines 2000. DRN

DEVELOPMENT RESEARCH NEWS is a bi-monthly publication of the PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS). It highlights the findings and recommendations of PIDS research projects and important policy issues discussed during PIDS seminars. PIDS is a nonstock, nonprofit government research institution engaged in long-term, policy-oriented research. This publication is part of the Institute's program to disseminate information to promote the use of research findings. The views and opinions expressed here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the studies contained in this publication, or any of the PIDS papers, as well as suggestions or comments are welcome. Please address all correspondence and inquiries to: Research Information Staff Philippine Institute for Development Studies Room 304, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village 1229 Makati City, Philippines Telephone Numbers 892-4059 and 893-5705 Telefax Numbers (632) 893-9589 and 816-1091 E-mail Address: publications@pidsnet.pids.gov.ph Re-entered as second class mail at the Makati Central Post Office on April 27, 1987. Annual subscription rates are: P150.00 for local subscribers; and US$20.00 for foreign subscribers. All rates are inclusive of mailing and handling costs. Prices may change without prior notice.


APEC Seminal Thinkers Share Vision for the Region's Progress