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EXECUTIVE SUMMARY A. INTRODUCTION This Alternative Budget Initiative (ABI) for 2008 builds on the experience and achievements of the first-ever partnership between legislators and NGOs which resulted to the 2007 ABI. Among the achievements of the 2007 ABI the items that it proposed and were carried into the 2007 General Appropriations Act are as follows:    

P5.3 billion budget for the construction of more than 17,000 classrooms; P2 billion funding for food supplements such as milk, coco-pandesal, and vegetablebased noodles, and rice under the DepEd nutrition feeding program; P873 million for the hiring of new teachers; and P65 million in additional scholarship fund tertiary education.

The 2007 ABI also enhanced the awareness of legislators, other policy-makers and the media regarding the magnitude of outstanding debt, and the existence of several questionable and illegitimate debts. The 2007 ABI’s position on the Northrail Project to cancel the agreement or at the least, suspend payment while awaiting a full investigation was adopted by both the Senate and the House of Representatives, but was unfortunately vetoed by the President. House Resolution No. 1376, entitled “Urgent Resolution Allowing The Active Participation of Bona Fide People’s Organizations in Public Hearings On the 2007 National Budget, And In The Annual Budgets Thereafter” authored by representatives TG Guingona III and Erin Tanada III, was filed as suggested by members of the 2007 ABI. B. RATIONALE AND CONCEPT OF THE ABI The ABI, which is also practiced in countries like Brazil, Canada, Italy, India, Bangladesh, Benin and Kenya centers on the concept of people’s participation in the budget process through the civil society organizations (CSOs). In the Philippines, Social Watch Philippines has been consistently advocating for greater funding for social services for around seven years now. It has engaged several agencies of the executive department, and some members of the Senate and the House of Representatives to obtain better funding for the Millenium Development Goals (MDGs). But it was only in the crafting of the 2007 budget that a partnership between legislators and the CSOs have been officially formed, and the term “alternative budget” has been used. The partnership, in coming up with the ABI, is essential in budget advocacy as it gives all the partners a sense of ownership of the proposals. It also creates a unified front and a coherent set of actions in pushing for a set of proposals crafted through an agreed framework of analysis. The ABI, which uses the MDGs as its framework of analysis, endeavors to propose corrective funding for glaring deficiencies in achieving the MDGs. Inspite of all the government rhetorics, it is clear that unless the MDGs are given its proper share of attention and funding, such will never find achievement.


Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

As such, it is clear that the ABI will inevitably critique the government’s budgeting framework and financing strategies, particularly its deceptive and single-minded goal of achieving a “balanced budget” to the detriment of the needed additional funding in matters that truly invests in people’s long term productivity and quality of life. C. THE JOURNEY OF THE ALTERNATIVE BUDGET INITIATIVE The idea of forming a partnership between civil society organizations and legislators was actually started by then Deputy Minority Leader Alan Peter Cayetano. It was eventually picked up and coordinated by another Deputy Minority Leader, TG Guingona III. Minority Leader, Rep. Chiz Escudero and Deputy Minority Leader, Darlene Antonino-Custodio, together with Reps. Erin Tanada, Mayong Aguja, Risa Hontiveros-Baraquel and Teddy Casino eventually joined in to approve the matter as basically a minority-bloc initiative. In the Senate, the 2007 ABI obtained the support of senators, Franklin Drilon, Panfilo Lacson, Aquilino Pimentel, Jr., Jamby Madrigal, Ralph Recto, and Miriam Defensor-Santiago. But it was Sen. Drilon, who as chair of the Senate Finance Committee, fought for their inclusion in the 2007 GAA.. At the center of the 2007 ABI are the 22 civil society organizations led by the Social Watch Philippines, which took the lead role in analyzing the budget for 2007 and in proposing alternatives. The 2007 ABI was actually an exercise that empowered the CSOs in the actual budget process as it did not merely confine them to the traditional mode of simply criticizing the budget, but were given the more important role of proposing solutions. Like in any advocacy work, the help of tri-media (TV, print and radio) is indispensable to an effective campaign. From September 2006 to January 2007, articles about the ABI regularly came out in tri-media. The Philippine Center for Investigative Journalism (PCIJ) even posted the entire executive summary of the ABI in their website. For the 2008 ABI, we now have 48 CSOs convened by Social Watch Philippines, to help craft the alternative budget proposal for 2008. These CSOs had series of consultations within their clusters, with the executive, supportive legislators and as a whole, to share budget proposals. The minority bloc in the House of Representatives led by Minority Leader Rep. Ronaldo Zamora and ABI’s Convenor, Teofisto “TG” Guingona III are solidly behind this year’s initiative also in partnership with some members of the Liberal Party in the lower chamber led by Rep. Lorenzo Tañada III. The 2008 ABI, even as it is essentially a minority bloc’s initiative, is open to progressive-minded members of the majority bloc. D. THE “BALANCED BUDGET”: ATTAINABLE AND SUSTAINABLE? On October 2, 2007, Congress will initiate marathon plenary deliberations on the proposed national budget for 2008. These sessions are scheduled to last until approval on 3rd reading on October 12, 2007. No less than the president herself has proudly declared that the 2008 budget is a “balanced budget,” with P1.227 trillion in expenditures matched by an equal amount in revenues. The DBM

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secretary has declared that not a single centavo in expenditures will be funded by borrowing. Brave words indeed! These bravado statements give rise to two questions. government finances, is a balanced budget attainable? sustainable?

In the light of present state of And if it is ever attained, is it

A matter of definition. Definitions determine whether government statistics look good or not. For example, the number of households living below the poverty line can increase or decrease, depending on whether people who are not living in houses, e.g. homeless poor, are included in the definition of households. At present, families who live in pushcarts, under bridges and on street islands are not counted among the poor. In the same manner, attainment of a “balanced budget” can be a matter of definition. At present, the biggest item in the 2008 budget is the debt service which is estimated at P295.751 billion in interest payments and P328.341 in principal payments or debt repayments, resulting in a total of P624.092 billion. The present practice is to count only interest payments as an “above the line item” and exclude principal payments. Thus, more than one-half of total debt service is not included in the calculation of a balanced budget. According to the Budget of Expenditures and Sources of Financing document (BESF) , a balanced budget “occurs when revenues collected equal cash disbursements (excluding debt repayments and payments on non-budgetary accounts of the NG during a given year).” When such a material amount as principal payments is not included, the possibility of achieving a “balanced budget” is enhanced. Another interesting item in the proposed “balanced budget” is expected income from privatization at P29.562 billion. It is considered as an “above the line” item and is therefore included in the calculation of the “balanced budget.” Observers don’t agree that this should be included in the regular revenue projections since it is not certain whether sales from privatization can be generated. Furthermore, actual sales amount can’t be projected accurately since prices are determined by the market. An official of a multilateral institution has commented that income from privatization is a balancing figure. It means the figure is utilized to balance the budget but may not necessarily be accurate. Balanced budget or phantom balance? James Mikesell, whose textbook on fiscal administration is widely used in the Philippines, wrote that “governments may find it politically convenient or legally necessary to produce a balanced operating budget when reasonably produced figures would show a deficit.” “….Governments have developed a number of pragmatic devices to produce such an artificial balance.” How can a phantom balance be attained? Mikesell mentions six strategies: 1. Rosy scenarios. Phantom budget balance…can be developed by artificially high revenue estimates. 2. A revenue crutch . An unsustainable revenue boost can be produced by sale of property or other assets held by the government—a one time revenue crutch.

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

3. Interbudget manipulation. This is self-explanatory. 4. Bubbles and timing. Deficits may be managed by accelerated collection of revenue to create a cash “bubble” in the year of acceleration. 5. Ducking the decision.This can be done by delaying urgent decisions on important expenditures just to balance the budget. Worse, an artificially balanced budget may be passed , relying on supplemental appropriation to provide required funds. 6. Magic asterisk. This refers to unspecified budget savings to be identified later. Expenditures are charged against these vague “savings.” Mikesell is describing American practices but they are all very familiar to us locals. The American experience in balanced budgeting. In the light of the aspirations of the Philippines to attain a balanced budget, it is useful to look at the American experience as its struggles to contain its budget deficit. Many of the practices of the Philippines in financial management are copied from those of the United States. For the past forty-five years, the United States has been wrestling with huge deficits. It has passed many laws to contain its expenditures and limit the propensity of the Executive to spend. One of the best known laws is the Gramm-Rudman-Hollings Act, or the Deficit Reduction Act of 1985, also known as the GRH. It was later amended in 1987. This law was followed by other laws which allows the executive to “impound” or “sequester” specific expenditures in the budget. Alas and alack, the laws of public finance and economics are not bound by appropriation laws and presidential boasting. What was the result of all these exertions? The following chart shows the American experience with balanced budgeting from 1961 to the present: Figure 1.

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The above chart covers the administrations of nine presidents for forty-five years. It can be clearly seen that the American government succeeded only in attaining a budget surplus under one president. This was during the Clinton administration. This feat has not been repeated since then. The first term of the current president Bush ended with a monstrous deficit of $648 billion in 2004. At the end of 2006, Bush ended with a large deficit of $260 billion. While the Clinton administration is credited with the only budget surplus in 45 years, some experts have expressed disbelief and suspected him of achieving a phantom surplus. President Bush is claiming a steady reduction of his deficit. However, critics are accusing him of “reducing the deficits on the backs of the poor.” The Sept. 17,2007 issue of Fortune Magazine, Allan Sloan makes the following observation on the reduced Bush deficit: “Bush Budget Numbers—Don’t believe the hype: The deficit is much bigger than you think.” According to him, “If you use realistic numbers rather than what I call WAAP—Washington Accepted Accounting Principles—the real federal deficit for the current fiscal year is more than 2 ½ times the stated deficit.” The Philippine experience with budget surpluses and deficits. The Philippine experience with balancing the budget for the past twenty-four years is likewise very interesting. Since 1979, the Philippines has had five presidents—Marcos, Aquino, Ramos, Estrada and Arroyo. Only one president attained a budget surplus. This was President Fidel Ramos during the early part of his administration. However, his administration was sliding towards a deficit by the time he ended his term in 1998. Figure 2. Philippine Government Budget Surplus (Deficit), 1979-2003 (in Billion Pesos) 50

2003

2001

1999

1997

1995

1993

1991

1989

1987

1985

1983

1981

In Billions of -5 0 Philippine Peso

1979

0

-1 0 0

-1 5 0

-2 0 0

-2 5 0

Source: ADB, UNDP, PIDS

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

As in the case of Clinton and Bush, critics claimed that Ramos achieved a phantom surplus. Former DBM Secretary Diokno pointed out that during its last year, the Ramos administration collected dividends from government corporations in advance in order to produce the much acclaimed phantom surplus of P4 billion. A 2008 balanced budget: attainable and sustainable? Fiddling with definitions and concepts , as well as creating phantom balances might work—but only for a while. One-shot income from privatization is not sustainable. Expenditures can only be delayed for so long. Rosy scenarios can turn into nightmares. The president is confident that a balanced budget can be attained in 2008. The assessment of civil society is that there will be difficulty in attaining a balanced budget considering the challenges in increasing levels of revenue amidst pressures to increase expenditures. The president is bent on increasing expenditures for developing the super regions; at the same time there is pressure to increase expenditures for social development, particularly the MDGs. For 2008, gross foreign borrowings are projected at P125.432 billion. Gross domestic borrowing is calculated at P220.746 billion. The government has a history of resorting to the very strategies adopted by the American government in reducing deficits. Such stratagems are self-defeating and only creates illusions of balanced budgets. A truly balanced budget may not be attained, only a phantom balance. Even if a balanced budget can be attained in 2008, will it be sustained? A survey of literature on budget concepts and practices tells us that a balanced budget is not necessarily good or bad. The same holds true for a budget deficit. The bottom line is the impact of government expenditures on the attainment of development goals. A balanced budget might look wonderful. However, it can inhibit growth if it is attained by drastically reducing expenditures. At the same time, a budget deficit might lead to growth. However, a deficit which goes out of control can push an economy into the abyss of a debt crisis. Wanted: A mechanism to monitor government expenditures. It is repeated very often that Congress has the power of the purse. But Congressmen themselves know that over the years, such power has been eroded. A large portion of the budget is automatically appropriated. This includes the debt service, internal revenue allotment among others. The proposed 2008 budget contains a provision that the Tax Expenditure Fund of P59.991 billion will be automatically appropriated. There are four steps in the budget process: budget preparation, budget legislation, budget implementation, and budget accountability. Of these four steps, it is only in budget legislation where Congress has a major role, even as it is steadily eroded and reduced. Multilaterals have observed that there is no effective monitoring of budget implementation. Congress has no role at all in monitoring the implementation of the very budget it has approved. Reporting is usually delayed. Audit reports are submitted only 1 ½ years after the end of a fiscal

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period. For example, the Financial Audit Report for 2006 is not yet complete. Congress is deprived of a potent tool for assessing the performance of the Executive. For FY 2008, civil society is proposing that the partnership with the legislature be expanded to include monitoring of budget implementation for MDGs and other social development expenditures. The monitoring unit may report to Congress through the Special Committee on MDGs or the Committee on Social Development. The ABI proposes an additional budget of P20 million for strengthening congressional oversight of Congress. The said amount will fund oversight activities including operating cost of research, data management, meetings and congressional hearings. E. SECTORAL PROPOSALS Basic Education The preliminary report on the Millennium Development Goals prepared by the National Economic and Development Authority (NEDA) admitted that progress in achieving the targets in basic education has been slow and uneven. The report noted that given the current rate of progress, the country will most likely miss the target of achieving Universal Primary Education (UPE) by 2015. In fact, basic education, along with maternal health, is the most threatened among the MDGs.

Table 1. Assessment of MDG Goal #2: Achieve Universal Primary Education Baseline (1990) Participation Rate Cohort Survival Rate

85.1 68.65

Current Level (2005/2006) 84.44 69.9

Target by 2015 100 84.67

Ave. Rate of Progress (1990-2005/06) -0.05 0.09

Probability of Attaining the Targets Low Low

Source: Philippine Midterm Progress Report on the Millennium Development Goals, 2007.

The Department of Education reported that while enrolment figures have been increasing over the years, key performance indicators have been declining consistently. Net enrolment, cohort survival and completion rates for both elementary and secondary levels were all down. In SY 2005-2006, participation rate in elementary education went down to 84.4 percent from 90.10 percent recorded in SY 2001-2002. Meanwhile, dropout rates posted record levels in both elementary (10.57 percent) and secondary schools (15.81). The increasing fallout of children from the school system explains the low survival and completion rates and indicates the weak holding capacity of the public school system. Elementary cohort survival in SY 2005-2006 went down to 58.36 percent while completion rate declined further to 56.76 percent. The corresponding figures for secondary education are 59.10 percent and 54.14 percent, respectively.

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

Table 2. Education Key Performance Indicators Elementary Participation Rate (based on 6-11 yrs. population) Cohort Survival Rate (EFA formula) Completion Rate (EFA formula) Dropout Rate Secondary Participation Rate (based on 12-15 yrs. population) Cohort Survival Rate (EFA formula) Completion Rate (EFA formula) Dropout Rate

2001-02 90.10%

2002-03 90.42%

2003-04 88.74%

2004-05 87.08%

2005-06 84.41%

69.05%

69.97%

60.67%

60.89%

58.36%

66.95%

59.32%

59.07%

56.76%

6.51% 2001-02 57.55%

7.30% 2002-03 59.19

8.90% 2003-04 60.15

2004-05 59.97%

2005-06 58.20%

71.49%

66.00%

68.46%

69.89%

59.10%

69.97%

59.90%

63.14%

64.77%

54.14%

8.53%

13.03%

11.96%

11.30%

15.81%

Source: DepEd. Fact Sheet, Basic Education Statistics (as of August 31, 2006). http://www.deped.gov.ph/cpanel/uploads/issuanceImg/factsheet2006(Mar28).pdf

The poor and declining quality of education is clearly shown by the erratic and consistently low scores obtained by pupils in achievement tests administered by the Department of Education over the years. The increases in test results show only marginal improvement and the scores fell far short of the desirable level. Education indicators consistently point to the low and deteriorating performance of the education sector in terms of access, quality, literacy and equity. Dropouts remain alarmingly high and access is not equitable; quality is poor and declining; resources are too little; and the system is badly managed. Substantive reforms must be undertaken with immediate implications on the budget to set the education sector back on the right track. More importantly, urgent action is needed to improve access and quality of the school system and reach out to the out of school. Given these, the following policy interventions are recommended: • • • • • • •

Adequate provisions for key input Investing in teachers and teachers training Expanded alternative learning program Well targeted scholarship for the poor Reduce school cost An effective mid day meal program in context of comprehensive school based program on health and nutrition Parents and community mobilization

As a way of addressing these issues, the table below summarizes the alternative budget for basic education for FY 2008:

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Table 3. The Alternative Budget Proposal for Basic Education, 2008 Budget Item Department of Education Office of the Secretary 1. Lump-sum for New Positions Funding requirement for the creation of new teaching and non-teacher positions in FY2008 (III.e.17.a.2) 2. Lump-sum for School Furniture (Capital Outlay) (III.e.17.o.) 3. Construction of Elementary and Secondary School Buildings in Areas Experiencing Acute Classroom Shortage (B.e.) 4. Alternative Learning Programs (Non-formal Education). Field operations of Non-formal Education including Implementation of Accreditation and Equivalency System (MOOE) (III.a.1) 5. School Health and Nutrition Program Implementation of Programs for School Health and Nutrition (II.e.1.) 6. School Health and Nutrition Program (III. b.) 7. Additional School's Maintenance and Other Operating Expenses (MOOE) for Elementary and Secondary Schools 8. Provision of Full Teachers Benefits as per Magna Carta DEPED OSEC TOTAL 9. B. National Book Development Board Formulation, coordination and implementation of policies, plans and programs relative to book development (III.a)

Proposed Budget 2008

1,373,978,000

Proposed Additional Budget

330,000,000

Alternative Budget for 2008

1,703,978,000

1,000,000,000

420,000,000

1,420,000,000

3,760,000,000

760,000,000

4,520,000,000

240,420,000

509,580,000

750,000,000

18,016,000

200,000,000

218,016,000

2,587,166,000

2,000,000,000

4,587,166,000

2,000,000,000

2,000,000,000

6,000,000,000

6,000,000,000

12,219,580,000 5,046,000

2,000,000

7,046,000,000

To guide the implementation of the above-listed items, the following Special Provisions are being proposed: Special Provisions: 1. Funding for new teacher position in FY 2008. Newly created teacher positions for FY2008 may be funded under III.e.17.a.2 PROVIDED the item is part of the estimated teacher gap of 12,733 for the covered school year (based on 1:45 Teacher-to-pupil ratio). The amount of P1.55 billion under III.e.17.a.2 is allocated solely for the creation of said 12,733 teacher positions. 2. Allocation for the school feeding program. The amount allocated for the school health and nutrition program under III.b. shall be used PROVIDED, that: a. the Department of Education conducts and submits to Congress its own Review and comprehensive evaluation of the school feeding program for 2007;

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

b. the Department of Education includes in the abovementioned report the list of targeted nutritionally-depressed areas and marginalized sector that will benefit from the school feeding program; and, c. Deped makes a comprehensive strategic program of school-based health and nutrition that will strengthen the coordination of schools, local government units and communities in order to effectively address the poor health among school children 3. Support for teacher’s trainings on health education literacy. Allocate 200 million pesos under II.e. for the inclusion of teacher’s trainings on health education literacy with focus on child and adolescent nutrition, early disease detection, referral health systems and health promotion in the following priority provinces: Masbate, Sulu, Tawi-Tawi, Lanao del Sur, Maguindanao, Basilan, Negros Oriental, Zamboanga del Norte, Bukidnon, Capiz, Apayao 4. Provision for the strengthening of the Alternative Learning Programs (ALP). Allot 80 million pesos from funds under III.a. to strengthen the Alternative learning program through the following allocations: a. 10 million pesos for Curriculum Development and Materials Development to upgrade the A & E modules and adapt the contents and teaching strategies based on the needs of the learners; b. 10 million pesos for Capability Building of Staff and Monitoring System to ensure the adoption of “learning by doing” approach c. 5 million pesos for Operational Support for Mobile Teachers, Instructional Managers and Facilitators in the form of a monthly allowance for transportation and school supplies d. 15 million pesos for research and pilot testing of Assessment and Evaluation Tools for Learning Outcomes e. 10 million for pilot testing the setting up of Data Base Systems for ALP. The system includes data collection, processing and management of information to establish baseline data and its regular updating. f. 30 million for civil society organizations which Implement Quality ALS either for A & E or even Beyond A&E. Part of this allocation is for the evaluation and selection of civil society organizations that will partner with the department of education in delivering ALS. 5. Additional MOOE. The amount allocated for additional per capita Maintainance and Other Operating Expenses of schools should be released PROVIDED said funds will be used to support quality-enhancing programs and address the problems of high dropout, low survival and poor learning achievement, giving due emphasis to the poor and low-performing regions and provinces. Specifically, the following provinces have been given priority in the allocation of additional MOOE based on poverty situation, health status and education performance: 1. Kalinga 2. Apayao 3. Ifugao 4. Mt. Province 5. Camarines Norte 6. Masbate 7. Negros Oriental

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8. Negros Occidental 9. Northern Samar 10. Western Samar 11. Southern Leyte 12. Biliran 13. Surigao Del Norte 14. Surigao Del Sur

15. Agusan del Sur 16. Davao Oriental 17. Lanao del Norte 18. Misamis Occidental 19. North Cotabato 20. Saranggani 21. Zamboanga Norte

22. Basilan 23. Tawi-tawi 24. Maguindanao 25. Sulu

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6. Allocation of P2B for the implementation of the Magna carta for teachers (RA 4670) and study grant. Funds for the implementation of RA 4670 and study grants shall be used in accordance with the following: a. Under Section 22, allocate 7,000.00 per teacher for the 484,570, amounting to a total of 3,391,990,000.00 for compulsory medical examination and treatment b. Under Section 22, allocate for Free medical care and treatment - for those with tuberculosis at 6000/month for 6 months to cover anti-biotics, vitamins, laboratory, doctor's fee for 2000 teachers c. Under Section 23, allocate for Compensation for injuries, including effects of physical and nervous strain on the teacher's health the amount 1,000 for each teacher to cover 484,570 teachers amounting to 484,570,000.00. d. Under Section 19, allocate for Special hardship allowance to cover 1/5 of the teaching force, particularly those in the remote rural areas at 2,000 per teacher covering 96,914 amounting to 193,828,000.00. e. Under Section 24, allocate for Study leave/Sabbatical for 12,000 teachers at an estimated 65% of their salaries based on 10,000 monthly salary (6500/mo x 12mos = 78,000) amounting to a total of 936,000,000.00 f. Allocate for study grant, fellowship, scholarships for 50,000 teachers to cover subsidy for matriculation and other school fees, books, stipend at 20,000/year per teacher 7. Any other additional allocation to the Department of education to be sourced from the Unprogrammed Funds for new loans shall not be used to fund the Cyber Education project of Deped as neither Loan proceeds nor Government of the Philippines counterpart fund. Such additional allocation should be used instead for the Alternative Learning Program to reach out to more out of school youth of school age. 8. Allocation for programs and policies relative to book development. The additional fund of 2,000,000.00 under the B. National Book Development Board, III.a. may be used PROVIDED Deped conducts reviews on the contents of the books, including textbooks beings used by the schools and crafts corresponding policies. Rationale for the Proposed Amendments Deped’s proposed budget for 2008, specifically the Office of the Secretary (OSEC) amounts to 134,790,740,000 pesos. The alternative budget group proposes an increase of 12,219,580,000 thereby raising the total budget of Deped’s OSEC alone to 145,010,320,000. In addition, an increase of 2,000,000 is also proposed under Deped’s National Book Development Board. The alternative budget for the Department of Education covering basic education proposes nine amendments. Seven of which are increases in the proposed FY2008 budget under specific budget items such as creation of new teaching positions, the Alternative Learning Programs, School health and nutrition program, School furniture (school seats) and classrooms (or school buildings) and the Formulation, coordination and implementation of policies, plans and programs relative to book development. The two remaining amendments are additional items, particularly the additional maintenance and other operating expenses (MOOE) for both public elementary and secondary schools and the provision for full teachers’ benefits as per magna carta. Explanatory notes on the proposed increases in specific budget items are as follows:

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

1. An increase of 330,000,000 for the creation of new teaching position is proposed to adequately cover the current gap of 12,733 teachers; 8,964 of which are for schools which have no nationally funded teachers or where the teacher pupil ratio is more that 50 pupils to a teacher and the remaining 3,769 are for teachers of special groups. These estimates are based on Deped’s computation of resource gaps presented during the agency’s budget hearing in the House of Representative 2. An increase of 420,000,000 for the school furniture or school seats is proposed to cover the shortage of seats estimated at 1.77 million; this includes seats for new construction and 5% allowance to replace damage stocks.. 3. An increase of 760,000,000 for the construction of elementary and secondary school buildings in areas experiencing acute classroom shortages to adequately cover the classroom gap which currently stands at 12,418. 4. An increase of 509,580,000 in the 240,420,000

Alternative Learning Program budget from

The program aims to reach out to the out-of-school-youth currently estimated at 11.6 million, thru an expanded alternative learning system. With the proposed minimal increase, the ALS’s immediate target is some 150,000 children who are not attending school. The alternative budget is looking at the international benchmark of 3% of Education Budget for ALS such that the ALS budget would have increased to P1.0 B by SY 2010-2011. The proposed increase also hopes to cover ALS module enhancement and development, training of mobile teachers and testing development 5. An increase of 200,000,00 for the school health and nutrition program The overall concern is to expand and develop school-based health and nutrition programs to address poor health that accounts for high dropout and low learning achievement among the students. The proposed increase includes the amount for teacher’s training on health education literacy considering that teachers are the frontliners in the school-based health setting. In this light, teachers should have a fundamental health education competence in the areas of promotive and preventive health care and nutrition of his/her students. They also must know how to detect and assess the health and well-being of students and understand the referral and institutional procedures in case of position health detection. The training would focus on child and adolescent nutrition, early disease detection, referral health systems and health promotions. 6. An increase of 2,000,000,000 for the actual feeding program for malnourished school children. The World Bank and the United Nations have already come up with its survey that in the Philippines, 3.8M children are malnourished. Deped notes that in the school system 1.8 million children are malnourish. The proposed additional budget of 2 billion is meant for a real feeding program in school to arrest malnutrition of the children. 7. Additional budget of 2 billion pesos as additional maintenance and other operating expenses (MOOE) for elementary and secondary schools

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The purpose of the additional budget is to increase per capita MOOE by 20% for qualityenhancing programs to address high dropout, low survival, poor learning outcomes giving priority to poor & low-performing areas 8. The proposed additional amount of 6 billion pesos is a provision to cover full implementation of teachers’ benefits as per magna carta The overarching concern is to improve the well being of teachers, restore dignity in teaching profession and improve the quality of teaching. 9. An additional 2 million for the national book development board is a proposed budget for the review of books used in schools. In the Deped Budget only P5,046,000 is allocated for the formulation, coordination, and implementation of policies, plans and programs relative to book development. There seems to be no existing body in the DepEd which is in charge of reviewing the contents of the books being used by the schools. The proposed augmentation is therefore intended for Deped to conduct the book reviews and craft corresponding and necessary policies. Higher Education State of Education The share of national government in SUCs financing has been steadily declining from 85% in 2001 to 77% in 2005. Consequently, SUC spending per student had declined by 23% from P17,000 in 2004 to P12,930 in 2006. Contrast this to the steadily increasing cost of private higher education causing an exodus to public higher educational institutions (HEIs). From having 10% of all college students enrolled in SUCs as of 1980, it increased to 21% in 1994, and as of SY. 2002-2003, the figure was pegged at 34%. Enrollment in public higher education institutions grew by an average of 9.62 percent from 1997 to 2003. With an almost stagnant budget for SUCs and a steadily increasing student population, the direct result is a decreasing per capita budget allocation in SUCs. Thus, there is commonly a trade-off between absorption of students and the quality of education offered. This prompts the existing SUCs to conduct cost-recovery and cost-sharing as a survival strategy (e.g. user fees, community financing, etc.). It is compelled to devolve to the students an increasing part of its financial and operational burdens. The International Commission on Education for the Twenty-first Century (the Delors Commission) suggested that every country should allocate at least 6% of the GNP for education (Delors et al, 1996). For 2008, the Philippine government proposes an education budget representing a 2.19% of GNP – a far cry from the 6% international benchmark. To partly address these concerns, we are proposing a number of changes in the budget for higher education budget. The table below provides the summary.

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Table 4. The Alternative Budget Proposal for Higher Education, 2008 Budget Item Proposed Budget Proposed Alternative Budget Additional Budget for 2008 SUCs- Center of Excellence

6,644,612,000

2,084,038,704

8,728,650,704

704,000,000

284,847,306

988,847,306

University of the Philippines Capital Outlay

1,411,792,000

112,500,000 2/

1,524,292,000

Non-Center of Excelence and Development 3/

1,150,466,000

76,627,000 2/

1,227,093,000

TOTAL

9,910,870,000

2,558,013,010

12,468,883,010

CHED Scholarship

1/ Total for 23 SUCs Center of Excellence and Development additional subsidy as proportionally allocated for Maintenance and Other Operating Expenses (MOOE), Personal Services (PS) and Capital Outlay (CO) as needed to strengthen the specialized courses of those institutions that are categorized as part of the Center of Excellence and Academic Development 2/ National Center for Good Governance at NCPAG 3/ To retain the previous budget level (2007) of 12 non-center of excellence and development SUCs

The specific proposals are as follows: 1. Augment the budget of SUCs classified as Centers of Excellence and Additional budget for specific SUCs of Non Centers of Excellence and Development. The amount of P2.1 billion will be equitably distributed to 29 SUCs classified by CHED as centers of excellence. The distribution will be primarily based on student population. However, an additional of P76.6 million will be provided to some non-centers of excellence according to their areas of concerns and specialization. The list of SUCs and their suggested share will be presented in the detailed technical paper on higher education. 2. Augment CHED’s Scholarship Program for SUCs classified as non-COE. Based on the President’s Budget Message for 2008, which states that the 2008 budget provides for about Php. 704 million to sponsor 51, 207 students through its scholarship programs. We believe that this is insufficient, thus we propose that it be given an additional P284.8 million. This would mean an additional 20,719 scholars from SUCs not classified as Centers of Excellence. In return they will serve the country the total years they spent as state-sponsored scholars. Table 5. Alternative Budget Proposal for CHED Scholarship, 2008 Additional Proposed 2008 Scholars 5% total Budget for CHED Number of Total number of numbers of Scholarship Scholars students students 704,000,000 51,207 414,380 20,719

Proposed Additional CHED Scholarship Budget 284,847,306.03

3. Establishment of a National Center for Good Governance at the University of the Philippines in Diliman amounting to P112.5 million. The U.P. National College of Public Administration and Governance (UP-NCPAG) has always been at the forefront in promoting good governance over the past 55 years. As an academic institution, it offers courses on Public Administration at all

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collegiate levels (bachelor’s, master’s, and doctoral), and has in fact graduated thousands of students who now occupy prominent and non-prominent but influential positions in all sectors of the Philippine society. Additionally, UP-NCPAG has maintained good linkages with national and local governments, civil society, and businesses in the country. Over the years, UP-NCPAG has expanded and demands for its services have increased. However, its building and facilities have to be improved to be able to meet the growing demands and expectations of its national and international clients and partners. Hence, this proposal to establish a National Center for Good Governance (NCGG). NCGG will be a center for advocacy, promotion, and research for “good governance.” NCGG’s studies, conferences, and workshops will feed into the policy-making and policy implementation process for good governance in the Philippines. The detailed plan and cost is presented in the technical paper on higher education. 4. To retain the previous budget level (2007) of 12 non-center of excellence and development SUCs 5. Strike out of the proposed budget of $8.32 million for the controversial SEMP2-SEDIP loan, pending an investigation on the case. And reallocate this debt payment as part of its government subsidy to education. 6. Amend/ Repeal PD 1177 in Sec 26 (B) Book 6 of 1987 Revised Administrative Code or the Automatic Appropriations Law for Debt Servicing. With about two-thirds of our current resources being siphoned away by debt servicing, it is very clear that the government is prioritizing credit worthiness (through continuous and disproportionate paying of incurred debts) over education, which is a clear deviation from the letter and intent of the Constitution. Health The seriousness of the Philippine government’s commitment to achieve the Millennium Development Goals on health – reduce child mortality (Goal No.4); improve maternal health (Goal No.5); and combat HIV-AIDS, malaria and other diseases (Goal No.6) may be reflected by how much it allocates fund resources for public health care services. Thus, the national government’s resolve to provide health services to Filipinos may be measured by the annual budget it proposes. With the pronouncement of the Arroyo’s administration to prioritize health development, it would be timely to ask if the proposed 2008 health budget is essentially responsive in meeting the MDGs on health and if the present administration’s statement to focus on health MDG-related programs is really reflected in the 2008 proposed budget. For FY 2008, the DOH’s share in the National Budget with a total of P1.23 trillion only constitutes 1.3% – a minimal increase from its 1% share in 2007. Although the DOH budget increased from P11,398,771,000 billion in 2007 to 14,905,110 in 2008 it is still measly compared to the P56.1 billion budget of the Department of National Defense (DND). Even if the DOH received an additional P3.5 billion for FY 2008, it does not seem to result to a substantial increase in the DOH share in the national budget. DOH is not among the top five national

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agencies in terms of share in the national budget – DOH only ranks 7th, a slight improvement from being 8th in 2007. Although there have been improvements in the state of the nation’s health over the past 50 years as reflected in the decreasing death rates, the overall picture of health and nutrition of the Filipino people has not significantly changed in terms of the causes of morbidity and mortality. Communicable but preventable diseases specifically pneumonia and TB continue to be the country’s leading causes of morbidity and mortality. The country still lags behind other Asian neighbors like Indonesia and Malaysia in terms of its Maternal Mortality Ratio (MMR). The infant and child mortality rate have considerably lowered yet it is still relatively high compared to our Asian neighbors. The challenges that confront the country’s health system are multi-faceted. Inequities in access and availability of health services still persist. Geographic and socio-economic disparities are highlighted by the geographic mal-distribution of government facilities and uneven distribution of health workers across the country. Health facilities like specialty hospitals are heavily concentrated in Metro Manila. The National Capital Region (NCR) has the most number of health personnel in contrast with ARMM, Region X1 (Southern Mindanao) and CARAGA who are deprived of doctors. Another form of inequity could be gleaned from the implementation of devolution. Given a context of devolved health systems, the attainment of health-related MDGs are largely dependent on the efforts and absorptive capacity of LGUs to provide public health service delivery. In connection to this, a huge portion of the DOH budget is allocated to hospital services (55% in 2008) compared to public health allocations (24% in 2008). It is not only the devolved set-up of the health system that poses as a challenge to meeting the health targets and ensuring better health outcomes. The magnitude of the exodus of health human workforce may put the health system to further deterioration and impending ‘collapse’. It is proposed that the national government invest more on public health service delivery programs — to put more investments in ensuring ‘health in the hands of the people’. Health in the Hands of the People will be an overriding theme in designing and executing interventions. Local health service delivery network will involve various sectors of the community such as schools, micro-finance institutions, coops, and workplace settings among others. The call is to push for a pro-poor health budget which have the following features: minimize inequities in access to services improve quality of care for government sector; must reduce supply side the seller market and create conditions in the determination; and should lower cost of services. Putting more allocations for public health service delivery is believed to directly bring upon an improvement in the health status of the poor and low-income groups. In addition, better public health programs will reduce hospitals workload. In response to the foregoing, we are submitting the items in the table below as the alternative budget proposals for the health sector.

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Table 6: Alternative Budget Proposal for Health, 2008 Budget Item

Proposed Proposed Alternative 2008 Budget Adjustments Budget for 2008

Family Health 1,199,111,000 Reproductive health • Fund the purchasing of180,000,000 reproductive health commodities • Health Promotion – BBC Strategy10,611,000 and IEC Advocacy(P5M x 63 provinces) Tuberculosis Control Program 280,007,000 • Epidemiology & Disease Surveillance 120,132,000 Micronutrient Supplementation • Multiple Vitamins for pregnant women • Iron Supplements (iron tabs) for Not funded Pregnant Women • Iron Supplements (iron drops) for infants Deworming for children

36,000,000

1,281,000,000 2,480,111,000 966,000,000

1,146,000,000

315,000,000

325,611,000

100,000,000

380,007,000

50,000,000 399,526,838 56,988,036

170,123,000 399,526,838 341,928,216 56,988,036

610,586

610,586

14,000,000

50,000,000

Anti- rabies vaccines 238,742,000 98,500,000 • Rabies vaccine gap: 40,432 vials • Rabies immunoglobulin gap: 140,242,000 70,121 vials x P2,000 Allocation for Research Institute of Tropical Medicine (RITM) to support 30,000,000 250,000,000 280,000,000 local production and vaccine selfsufficiency towards reduction of cost Purchase of Autoclaves • To ensure proper waste treatment New Line Item 100,000,000 100,000,000 and sterilization prior to actual disposal of infectious wastes 2,433,268,838 TOTAL The justification for the above-cited proposals is as follows: 1. Additional 966 million on top of the 180 million allocation for purchasing reproductive health commodities (i.e pills, IUD, condoms etc.) Refer to Table Rationale: To strengthen reproductive health advocacy and support family planning initiatives.

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The additional amount of 966 million shall be utilized upon the condition that the said amount shall be suballotted by DOH to LGUs which shall apply for the utilization of the fund for the purchase of reproductive health commodities (i.e. pills, IUDs, condoms) and the conduct of family planning seminars in local communities. Refer to Table 7 to see the budgetary requirements needed to fund the purchase of family planning commodities from the period of 2007-2010.

Table 7: Budgetary Requirements for Family Planning Commodities (DOH, 2008) Budgetary Resource Requirement Gap FY s (in billion pesos) 2007 1,059 879 2008 1,146 966 2009 1,236 1,056 2010 1,250 1,070

2. Additional 315M to the 10.611M proposed FY 2008 Health Promotion and education budget Rationale: The proposal to put ‘health in the hands of the people’ and focusing on public health service would imply a need to have intensive health promotion activities. Behavior change communication (BCC) approach is important. Harnessing of local partnerships would require strong information and advocacy campaign. 2.1 Aggressive Promotion of Breastfeeding Aggressive promotion of breastfeeding has to be supported to improve mother and infant nutrition. It is important to heighten the promotion of breastfeeding to encourage exclusive breastfeeding for the first six months to continue up to two years with food supplementation. Considering that breast milk contains a high concentration of antibodies that protect children against certain infectious diseases. 2.2 Advocate Healthy Lifestyle Because of low income and lack of education on nutrition, food of low nutritional content (instant noodles and alike) have become part of the Filipino family’s diet. Consequently, unhealthy eating habits lead to frequent consumption of food with high-fat, salt and sugar content which have made people, especially children and adolescents, vulnerable to such diseases as heart disease, diabetes, kidney problems and cancer (Simbulan, N. P., unpublished paper, 2003) 2.3 Support Behavioral Change and Improved Perception on Generics A related concern is improving the credibility of generic drugs. Educating people will help induce behavioral change on the public and clear misconceptions that generic drugs are not as effective as their branded counterpart because they can be bought at a cheaper price. In addition, research work in this area must be improved, our policy on generics needs to be strengthened –guidelines, implementing rules must be provided. 3. Additional allocation of 100M to the 280M for TB program to target the total population

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Rationale: The Philippines rank No.5 among countries with the highest TB prevalence in the world. Tuberculosis is one of the top 10 killers diseases in the Philippines today. Yearly, some 70,000 Filipinos die from this infectious and communicable disease. It is a disease that is said to infect 6 in every 10 Filipinos and claims one life every 20 minutes. It is proposed that a critical shift in the DOH strategy in combating TB be considered. The DOTS framework should shift from facility-based approach to active case finding strategy. It is also proposed that a nationwide epidemiologic research assessment be conducted to gather baseline data and establish the total number of individuals afflicted with TB. Current TB statistics need to be calibrated in view of fully adopting the active case finding approach which would entail a thorough identification of TB patients. The epidemiologic research assessment will aid in identifying, reaching all individuals who suffer from the disease within communities. 4. Additional 50 M for MDG-centered Epidemiological & Disease Surveillance Research (120 M DOH proposed budget) Rationale: Intensify epidemiological and disease surveillance research particularly on infectious and emerging and re-emerging diseases (SARS, Avian Flu, among others), water-borne and pollution-caused diseases Though, the allocation for Health Information Systems and Technology which include monitoring information systems (MIS) increased from 20 million in 2007 to 145 million in 2008, this is not targeted to intensify research and programmatic studies but for monitoring activities only. Since health productivity and improved well-being of the people largely stem from quality, evidence-based research it is recommended:  

To support high-quality and multi-disciplinary research programs to contribute significantly to the control of infectious and tropical diseases is of public health importance both locally and globally. Undertake research activities in the diagnosis, control and prevention of tropical diseases that are major causes of mortality and morbidity in the Philippines and develop cost-effective strategies for their control.

5. Additional 250M to the 30M proposed budget for Research Institute on Tropical Medicine (RITM) Rationale: Support local production of vaccines for diphtheria, pertussis, polio, BCG, Hepatitis B, anti-rabies, antivenin, anti-tetanus serum, tetanus toxoid Infant mortality rate (48 deaths per 1000 live births, NDHS 2003) can be reduced to a significant extent if adequate immunization of infants against measles, poliomyelitis, diphtheria, pertussis and TB are accordingly provided. From January to December 2006, there are 447,426 children under one-year old who are not able to receive their measles immunization according to DOH. The coverage of those who are immunized could greatly increased if the Philippines, just like other Asian countries like India, could produce its own vaccines. Greater efficiency could be gained in terms of wider

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

immunization coverage if the country could be vaccine self-sufficient and would no longer need to import vaccines from other countries. The success of the immunization program is expected to accelerate once the country is vaccine self-sufficient. According to the RITM, if the country could manage to locally-produce its own vaccine, a cost reduction of 20 – 30 percent is projected to be attained. RITM also cited that in 2004, the acquisition cost through UNICEF of BCG is P100.80 per vial of 20 doses while the local production cost of BCG is only P45.00 per vial of 20 doses. A savings of 70% or more could have been achieved in 2004 when the amount needed to fund EPI vaccines was 31,969,000 million for 317,000 vials while the local production cost is only 14,271,885 million. To address the need for the country to be vaccine self-sufficient, the RITM will undertake the Vaccine Self-Sufficiency Program with an objective to significantly reduced the DOH’s procurement cost of vaccines and ensure their adequate supply through the local manufacturing of quality vaccines in accordance with Good Manufacturing Standards. The additional 250 million for the 2008 budget of RITM would mainly be allotted to intensify and support the program of the vaccine self-sufficiency program. 6. Purchase of autoclave amounting to 100M (P 500T/ autoclave, 1 per hospital) Rationale: To ensure proper waste treatment and sterilization of infectious health-related wastes prior to actual disposal. Purchasing of autoclaves will also help ensure proper healthcare waste management of Public and DOH-retained hospitals in compliance with the Philippine Clean Air Act of 1999 Proposed Source of funding: Repudiation of debt payment (interest 100M) of the incinerator Austria Medical Waste Project The additional 100 million will be used to purchase 200 units of autoclaves. This would assure that 72 DOH-retained hospitals and 128 public hospitals have an autoclave. Each unit costs 500 thousand. Recognizing that proper health care waste management is an important environmental and health concern, there is an urgent need to allocate funds to purchase an alternative nonincineration equipments that can treat infectious waste and to make sure that Public and DOH retained hospitals are complying with the non-incineration standards set out in the Philippine Clean Air Act of 1999. Infectious waste coming out from hospitals can spread pathogens in the country' open dumpsites if disposed without proper treatment, in effect exposing healthy communities to infectious diseases. 7. Additional allocation of 14 million on top of the 36 million budget for deworming program Rationale: To address the need to deworm children considering that 67% of students in public elementary school nationwide suffer from intestinal worm infection based on the 2004 National Soil-Transmitted Helminthiases (STH) Prevalence Survey. Recognizing that prevalence of intestinal worm infestations among school children pose physical and mental development at risk, it is proposed that DOH deworming program be intensified.

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8. Additional 399,526,838 million for micronutrient supplementation The amount will cover: 1) 341,928,216 million for multiple vitamins; 2) 56,988,036 million iron supplementation (iron tabs) for pregnant women; 3) iron supplementation (iron drops) for infants worth 610,586 thousand The 800 million proposed allocations to improve child health is not adequate to the improvement of child health mainly because this amount is only allotted for ten (10) provinces., In addition, no funds were allocated for adequate micronutrient supplementation which address anemia and iron deficiency. 9. Additional allocation of 238.742 million for purchasing 40,432 vials for rabies vaccine and 70,121 vials for rabies immunoglobulin. In 2004 alone, DOH reported that there were 95,568 animal bite victims and 88% of them are bitten by dogs. Likewise, in 2006, there were 139,368 animal bite victims reported. DOH recognizes that although rabies is not among the leading causes of disease and death in the country, it has become a considerable public health problem since it has been the cause of death for 200-500 Filipinos annually due to acute fatal infections. Moreso, in this day and age, the Philippines ranked number six among the countries with the highest reported incidence of rabies in the world.

Special provision: 1. To make a comprehensive evaluation of the Philippine Health Insurance Corporation (PhilHealth) programs. • •

Conduct a study on how the 3.5 billion budget allocation for PhilHealth in 2007 was utilized. Conduct a comprehensive review of the maternal and child health package of PhilHealth and examine if such package has been effective in addressing maternal and infant mortality

2. To support research and studies on advancing alternative medicines in the country • Intensify research that will harness locally produced alternative medicines. 3. To support the full implementation of the Magna Carta for Health Workers • It is proposed that the funds for the implemetation Magna Carta for Health Workers be taken from the local government budget, hence the need to set a ceiling for the minimum percentage of the local government funds that are to be allocated for health service delivery. 4. Earmark R/EVAT collections for health to address equity concerns and support moves to claim both the 2.5% sin tax share of the DOH and PhilHealth.

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Agriculture Situationer There is a seeming paradox in the agriculture sector today. Food and Agriculture Organization (FAO) aptly described the current situation of agriculture by saying that: • • • • •

Global food supply is sufficient, but 850 million worldwide are undernourished and are experiencing hunger; Use of chemical agriculture inputs is increasing, yet grain productivity is dwindling to seriously low levels; Cost of agriculture inputs is increasing, but commodity costs have been in steady decline over the past five decades; Knowledge is now provided at an instant through information technology and yet, it is taking time to curb the rise in nutritionally related diseases. Industrialized food systems cause farmers’ deaths through pesticide poisonings and a high numbers of farmers have committed suicide while millions of jobs have been lost in rural areas.

The paradox is seen in the Philippines. While agriculture accounts for 15 percent of the country’s GDP and nearly 40 percent of employment, the poverty incidence in this sector remains alarmingly high. Balisacan’s estimates (2006) show that the agriculture sector contributes 61.3 percent to total poverty. The National Anti-Poverty Commission (NAPC) reported that poverty incidence among farmers and fisherfolk is generally higher across all regions, than the average poverty level nationwide. With the average annual net income of a farmer amounting to only P16, 650, or one-fifth of the annual household poverty threshold (NEDA, 2006) it is not surprising why the population belonging to this sector remains the poorest of the poor. . Further, rice farms have become nutrition deficient over the years as farming has increasingly been chemical intensive. The Bureau of Soils and Water Management (BSWM) reported that the increasing use of nitrogenous fertilizers has led to imbalanced plant nutrients, which caused deficiencies in major plant food nutrients such as zinc and boron. The single use of urea for example has resulted in sulfur deficiency in major rice producing provinces, such as Isabela and Nueva Ecija. The dilemma faced by the agriculture sector is exacerbated by environmental factors such as nutrient deficient soil and the unusual weather conditions. With the prevalent use of chemicals and pesticides in farming, there is also a growing concern for producing safe food, which policy makers need to look into. Recommendations The government, particularly the Department of Agriculture should diversify its agricultural development program to include sustainable agriculture as one of the options for the flagship programs and not be limited only to hybrid rice and GMOs. Diversifying the government programs can also lessen the risks in case of failure of some of these flagship programs. Sustainable agriculture practices were proven to be suited for poor and cash-strapped farmers. The government’s adoption of these practices in their programs can be directed to poor farmers who have limited access to government’s programs.

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R1 recommends the integration of sustainable agriculture practices in the existing extension services of the DA. Sustainable agriculture methods should be developed and farmers should be given access to participate in every step of the research and development process – from problem identification, implementation, monitoring and evaluation. Perhaps the DA should learn from SEARICE’s experience in participatory plant varietal selection and plant breeding programs, which increase in yield by 15 percent because of improved seed quality. The programs were implemented to enhance seed selection techniques and seed storage systems of farmers (SEARICE, 2002). According to studies, the following production constraints affected the shortage in production yield: • • • • •

Insect pests and diseases – 35% Water management – 26% Fertilizer and soil management – 21% Seeds and seedling management – 9% Weeds – 9%

These show almost half of the problems affecting the production yield are poor quality soils from degradation to salinity and acidity conditions and insect pests and diseases while seeds and seedling management comprises a mere nine percent. Soil rehabilitation is necessary and the government should shift its attention and resources to organic inputs and re-channel support to more ecologically sustainable methods. Rather than just dictating to the farmers the measures to undertake, the DA should design and implement participatory and integrated soil fertility and pesticide management programs. The growing concern over extreme weather conditions that we now experience also points to the need to look into the problem of climate change. Agriculture is said to be a major contributor of greenhouse gases, such as methane, nitrous oxide and carbon dioxide. The World Food Summit reported that chemical farming together with deforestation is responsible for the 30% of carbon dioxide emissions and 90 percent of nitrous oxide emissions worldwide. Organic agriculture has the potential to reverse those trends, and reduce greenhouse gases by using significantly less fossil fuel. It also promotes aerobic microorganisms and high biological activity in soils, thus increasing the oxidation of methane. The extension agencies of the DA should demonstrate an array of options for the farmers and not just one specific product or technology. The options can range from maximization of local materials for fertilization, use of low external synthetic fertilizers to organic and biodynamic methods and even adoption of rice production planting systems like the System of Rice Intensification (SRI). Each of these methods has its track record of success based on the location of the farm’s specific conditions. Budget proposal To implement our proposal to mainstream sustainable agriculture and rice farming practices, the following funds will be added to the budget of the Philippine Rice Research Institute. On page 830 of the GAB, under the heading “Operations” sub heading “a. Developmental Programs”,

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1. On line 14, with regard to “1. Research and Development”, under MOOE, add P8 million to the P57 million allocation so that the total fund allocation for this item will be P65 million. 2. On line 17, insert the following: “3. Promotion of Sustainable Rice Farming Practices”. Under PS, specify P18 million; under MOOE specify P132.5 million On the same page, line 20, adjust the totals to reflect the additional allocation. On the same page, on line 25, insert a special provision which reads: “Special Provision” 1. Appropriation for Programs and Specific Activities. The amounts herein appropriated for the programs of the agency shall be used specifically for the following activities in the indicated amounts and conditions: Table 8. The Alternative Budget Proposal for Agriculture, 2008 Proposed Increase

Budget Item Education on sustainable agriculture (500 farmers x P500 x 6 technologies x 50 provinces) Research and development Annual convention for sustainable rice practitioners

75,000,000 3,000,000

Research on friendly technologies to climate change Production support • organic fertilizers and other organic inputs)[50 provinces x 500 farmers xP1,000 x 2 cropping seasons) setting up of provincial • vermiculture/technology showcases(Ph 50,000 x 50 provinces)

5,000,000 50,000,000 2,500,000

Extension services (Personnel, 2/province at P15,000 each) [50 provinces x P30,000 x 12 months] Establishing demonstration farms (P 50,000 x 1 hectare x 2 cropping seasons x 50 provinces) TOTAL

18,000,000 5,000,000 158,500,000

Environment The Philippine environment is in crisis. Attempts to arrest and reverse the environmental decline had been a failure. The rehabilitation of our environment as a whole has seen little improvement since 1992. Loss of environmental resources continues and existing laws intended to arrest, if not reverse, this trend have little to show since the 1992 Earth Summit in Rio. In the United Nations Economic & Social Commission in the Asia and the Pacific (UNESCAP) report on the 2005 State of the Environment in the Asia and the Pacific listed the Philippines among the countries running at an ecological deficit1. The report points to the unsustainable Ecological Deficit/Surplus is described as a measure of the productive natural resource endowment (biocapacity) with the extent to which a country’s consumption levels exceed its natural resource endowment 1

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patterns of production and consumption resulting from the frenzied drive to achieve economic growth by governments. In spite of the rapid growth however, regional review of the MDGs reveals that poverty and hunger are far from being eliminated. The Philippines is facing three broad environmental challenges: [1] urban air and water pollution; [2] natural resource degradation; and [3] declining quality of coastal and marine resources. These are otherwise known as brown, green, and blue agendas. The first set of challenges, or brown agenda, refers to pollution caused by industrial, urban, transport and energy sources and the measures to address them. Air quality has been declining in Metro Manila and key urban centers. Water quality in rivers and coastal waters has been in parallel decline due largely to increasing solid and hazardous waste generation and improper management. The second, or green agenda, includes environmental impacts caused by agriculture, deforestation, land conversion and destruction of protected species and the conservation measures intended to address them. A sound land use plan could help arrest the decline of forest cover, loss of critical habitats and biodiversity, and land degradation. The third, the blue agenda, refers to all forms of water resources management. Water supply and demand is increasingly unable to meet the needs of a growing population, especially in urban areas. Watersheds, which are being degraded faster than they could be regenerated, badly need policy and management measures. Coastal and marine resources continue to decline despite, or because of the poor implementation of, the fisheries code. There is no shortage of policy and legislation on sustainable development in the Philippines. The principles of sustainable development have been laid down in the Philippine Strategy for Sustainable Development (PSSD) of 1990 and the Philippine Agenda 21 (PA21) of 1996. The inconsistencies between these landmark documents and development plans at all levels remain a major concern. Medium-term development plans (MTPDP) and local development plans are basically plans for growing the economy, not sustainability plans that will deliver social and environmental justice. The policy-action gap has been widening. While laws addressing urgent environmental issues such as those on clean air, water, ecological solid waste management, GMO and biosafety, etc. are already in place, the implementation have been snagged in implementation bottlenecks, financing foremost among them. Environment indeed ranks low in government priority. The budget of Department of Environment and Natural Resources has not even figured as government’s Top 10 agencies -- a sad indication of lack of appreciation to the environmental crisis and its implication to sustainability. To add insult to injury, its limited budget has often been used to support unsustainable human activities. In the face of these pressing concerns about the country’s environmental sustainability the Alternative Budget Initiative is forwarding a proposal that will pursue the IMPERATIVES OF (ecological footprint). Where a country’s footprint exceeds its own biocapacity, it is said to be running at an “ecological deficit.” The ecological footprint methodology is a conservative estimate of environmental pressures - human activities such as extraction of non-renewable resources, toxic pollution and species extinction are not incorporated in the model

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GREEN GROWTH. This specifically addresses the following Green Bottomlines: (1) Climate Change, (2) Clean Air, Water & Energy, (3) Solid Waste Management, (4) Forest Management, (5) Coastal Resource Management, (6) Biodiversity Conservation and Habitat Protection, and (7) Mining and the Environment. The Imperatives of Green Growth challenges government, both the legislators and the executive, to address sustainable development beyond rhetorics. These challenges are grouped in themes and accorded with corresponding alternative allocations. 1. BUILDING A LEGACY: Ensuring the Basic Requirements of Environmental Sustainability challenges government to finish the major requirements towards comprehensive assessment of the country’s natural resources and defining a comprehensive plan on their sustainable use. This calls government to: a. Complete delineation of forest and watershed boundaries by 2010. b. Complete demarcation of Philippine archipelagic waters including ECS and EEZ by 2010. c. Complete all other surveys and mapping activities, i.e., geo-hazard maps, municipal waters, cadastral surveys of municipalities, etc. 2. DOUBLE TIME for Conservation and Protection of Natural Resources sounds the alarm that government needs to step up in its conservation and protection efforts by doubling the budget related to it. 3. Review, Revitalize & Strengthening of the PHILIPPINE COUNCIL FOR SUSTAINABLE DEVELOPMENT(PCSD) to serve as a mechanism that would usher in more civil society involvement in the planning, implementation and monitoring processes of government towards sustainable development. Among its immediate tasks upon revitalization would be to facilitate national strategies on climate change and clean air, water and energy. Table 9. Alternative Budget Proposal for Environment, 2008 Particulars 1. Building a Legacy (Sub-total)

Proposed Budget

1,205,321,600

2,407,014,600

111,124,000

111,124,000

380,000,000

487,290,600

867,290,600

821,693,000

606,907,000

1,428,600,000

1,451,190,0000

1,451,190,000

2,902,380,000

103,446,000

103,446,000

206,892,000

2.2 forest protection

473,549,000

473,549,000

947,098,000

2.3 soil & watershed management

504,398,000

504,398,000

1,008,796,000

90,982,000

90,982,000

181,964,000

1.1 delineation of forest and watershed boundaries 1.2 delineation of archipelagic waters 1.3 survey and mapping 2. Double Time for Conservation and Protection of Natural Resources (Sub-total) 2.1 CBFM

2.4 legal support strengthening

26

1,201,693,000

Proposed Alternative Additional Budget Budget for 2008

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2.5 ecosystems research and development coastal and marine resource management 2.6 protected areas and wildlife management 3. Strengthening the Phil. Council for Sustainable Development TOTAL

40,788,000

40,788,000

81,576,000

238,027,000

238,027,000

476,054,000

50,000,000

50,000,000

2,706,511,600

5,359,394,600

Debt As of end-December 2007, the total Philippine debt is pegged at P 5.902 trillion or (US$ 118.9 billion). While this is a significant improvement from the fiscal-crisis-level debt at P 6.518 trillion (US$ 116.3 billion) as of end-September 2005, this is still far from the figures just years ago: P4.5 trillion (US$ 89.78 billion) in 2000 and P 1.8 trillion (US$ 74.7 billion) in 1994. In dollar terms, our debt stock is higher than that of 2005 by as much as US$ 2 billion. This means that a favorable currency exchange rate is fundamental to our ability to pay for our external or foreign currency denominated debts. The problem with this is that 54.27% of our debts are domestic debts which have to be paid in our currency. Table 10. Outstanding Public Sector Debt as of end-December 2006 (in trillion pesos)

4.9436

Consolidated Non-financial Public Sector Debt (includes GOCCs like NPC, PNOC, MWSS)

4.4596

Financial Public Corporations (BSP and 3 GFIs – DBP, LBP, TIDCORP)

1.3264

Minus: Intrasector-debt holdings

0.8424

Table 11. National Government Debt as of end-June 2007 (in trillion pesos) NG Outstanding Debt

Note: Breakdown of totals may not sum up due to rounding of digits. The consolidated public sector comprises the general government sector, non-financial public corporations, and financial public corporations, after elimination of intra-debt holdings among these sectors. Table A.1. Department of Finance, Outstanding Public Sector Deficit (OPSD).

US$98.99 billion as of end-December 2006. The CPSD consists of debts of the national government, the Central Bank – CB-BOL, the Bangko Sentral ng Pilipinas (BSP), local government units (LGUs), the 14 monitored government-owned-and-

By Instruments

Domestic Debt

3.782 2.119

Treasury Bills

0.581

Treasury Bonds/Notes

1.515

Loans

0.022

Others

0.0

Foreign Debt (using $1=P46.35) By Creditors

Consolidated Public Sector Debt

Around 84% of the P 5.9-trillion debt is owed by the public sector. The Consolidated Public Sector Debt (CPSD) stood at P 4.944 trillion or

1.663

Multilateral

0.250

Bilateral

0.371

Commercial

0.035

Foreign Denominated Securities

1.006

NG Contingent Liabilities

0.527

Domestic Debt

0.071

Foreign Debt

0.455

Note: Breakdown of totals may not sum up due to rounding of digits. The total national government debt must take into account the contingent liabilities, so it comprises both the outstanding and the contingent debt.

27

2008 Alternative Budget Initiative Table A.2. National Government Debt. Sources: Bureau of Treasury, Statistical Data Analysis Division.


Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

controlled corporations (GOCCs), government financial institutions and assumed contingent liabilities from private sector loans. Policy Proposals I.

On the Proposed 2008 National Government Budget 1. Strike out all budget allocations as payment for loans financing anomalous projects from the 2008 National Government Budget, pending thorough investigations of the projects involved. The following are examples: Table 12. Payments for Illegitimate Debts in the 2008 NG Budget Project Name

Small Coconut Farms Development Project (SCFDP)

Austria Medical Waste Project Second Social Expenditure Management Program (SEMP2) Secondary Education Development and Improvement Project (SEDIP)

Philippine Merchant Marine Academy (PMMA) Loan

Loan no.

3204-0 PH 3204-A PH 29451000 - Bank Austria 212.060

$ 11.32 million or P 524.86 million

Bank Austria Aktiengesellschaft (Bank Austria AG)

$ 2.02 million or P 93.697 million

7118-PH

1654-PHI

Asian Development Bank (ADB)

PH-P200

Japan Bank for International Cooperation (JBIC)

Loan no. 4306551/19986660 9, Loan I.D. 27159000

Loan Account. EDC 880 PHI 7535, Loan I.D. 29450000 Loan Account: CR COMML DE FRANCE, Loan I.D. 29463000 Total

28

International Bank for Reconstruction and Development (IBRD)

International Bank for Reconstruction and Development (IBRD)

Loan no. 3961971, Loan I.D. 27159001

Telepono sa Barangay (TSB) Project

Owed to

Payment this Year (using $1=46.35)

Kreditanstalt fur Wiederaufbau (KFW) – Germanybased

Location (BESF F.Y. 2008, Table D.6.) IBRD Loans, p. 344 IBRD Loans, p. 344 Other Loans, p. 348 IBRD Loans p. 344

$ 8.32 million or P 385.81 million

ADB Loans p. 343 JBIC Loans p. 347

$ 1.2 million or P 55.596 million

Other Loans, p. 345 Other Loans, p. 345

Export Development Corporation (Phase I)

Other Loans, p. 348 $ 5.3 million or P 245.79 billion

Credit Comm'l de France (Phase II)

Other Loans, p. 348

$ 28.17 million or P 1.31 billion

2008 Alternative Budget Initiative


________________________________________________________Attaining the MDGs and Sustainable Growth with Equity

We also call for striking-out of allocations for the remaining unsecuritized loans under the tutelage of the Marcos regime. Most of these remaining loans can be found in Table B.23 of the BESF, Foreign Debt Service for Liabilities Assumed by the National Government. 2. No amount in the General Appropriations Act that are intended to fund programs, projects or activities on education and health can be subject to a negative impoundment by any of the instrumentalities of the Executive Branch, unless the president so requests in writing and is granted permission by both Houses of Congress. 3. In light of anomalous contracts such as the anomalous ZTE National Broadband Network (NBN) project and the Cyber Education Project (CEP), all laws pertaining and/or concerning public debt, borrowings, payments and contingent liabilities must be immediately reviewed and rationalized with the end view of returning the power of the purse to Congress and the satisfaction of transparency, procedures and democratic processes. For this budget, they should look into the following: a. The National Government Financing Program, Section D. of the Budget of Expenditures and Sources of Financing (BESF) for Fiscal Year 2008. This is where the borrowing program of the administration is contained. b. Financing for Foreign Assisted Projects (Tables B.14 and 15). Approving the whole budget book including this section is already an implicit approval of the loan which will finance the projects. c. Procedures followed on current borrowings and loan agreements this year2, as guided by Article VII. Section 20 and Article XII. Section 21 of the constitution and Republic Act 48603. II. To put immediate closure to the country’s problem of indebtedness, FDC also proposes the following legislative actions: 2

3

This the full text of the articles:

Article VII. Section 20. The President may contract or guarantee foreign loans on behalf of the Republic of the Philippines with the prior concurrence of the Monetary Board, and subject to such limitations as may be provided by law. The Monetary Board shall, within thirty days from the end of every quarter of the calendar year, submit to the Congress a complete report of its decision on applications for loans to be contracted or guaranteed by the Government or government-owned and controlled corporations which would have the effect of increasing the foreign debt, and containing other matters as may be provided by law.

Article XII. Section 21. Foreign loans may only be incurred in accordance with law and the regulation of the monetary authority. Information on foreign loans obtained or guaranteed by the Government shall be made available to the public.

RA 4860’s full title is as follows:

AN ACT AUTHORIZING THE PRESIDENT OF THE PHILIPPINES TO OBTAIN SUCH FOREIGN LOANS AND CREDITS, OR TO INCUR SUCH FOREIGN INDEBTEDNESS, AS MAY BE NECESSARY TO FINANCE APPROVED ECONOMIC DEVELOPMENT PURPOSES OR PROJECTS, AND TO GUARANTEE, IN BEHALF OF THE REPUBLIC OF THE PHILIPPINES, FOREIGN LOANS OBTAINED OR BONDS ISSUED BY CORPORATIONS OWNED OR CONTROLLED BY THE GOVERNMENT OF THE PHILIPPINES FOR ECONOMIC DEVELOPMENT PURPOSES INCLUDING THOSE INCURRED FOR PURPOSES OF RE-LENDING TO THE PRIVATE SECTOR, APPROPRIATING THE NECESSARY FUNDS THEREFOR, AND FOR OTHER PURPOSES

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

1. Sec. 31 (B) of Presidential Decree 1177 in Sec. 26 (B), Book 6 of the Revised Administrative Code of 1987, which ensures the automatic appropriation of payments for principal and interest on public debt, must be repealed. 2. A Congressional Debt Audit that will create a commission tasked to a) investigate all public sector debts and contingent liabilities and b) review all government policies regarding borrowings and payments of debts, must be realized. III. FDC also proposes other necessary proposals to address the debt issue such as: 1. Review government’s growing contingent liabilities particularly the executive department’s policy of extending sovereign guarantees to private enterprises. The same goes with behest loans. 2. Review future loans from foreign Export Credit Agencies (ECA) transacted through bilateral agreements and negotiations. Official Development Assistance (ODA) should also be looked into, especially the loan components. This is in the light of contentious RPChina agreements and the Japan Philippines Economic Partnership Agreements (JPEPA). 3. Review our government’s tax and non-tax revenue systems specifically on the privatization and treasury policy to generate more revenues. 4. The presence of more illegitimate debts in succeeding government budgets must be recognized, understood and acted upon by Congress.

F. SUMMARY OF PROPOSED BUDGET INCREASE AND SOURCES OF FUNDING Table 13. Summary of Proposed Budget Increase, 2008 Budget Item Proposed budget Proposed Alternative 2008 Additional Budget Budget Education Basic Education 134,790,740,000 12,221,580,000 145,010,320,000 Higher Education 9,910,870,000 2,558,013,010 12,468,883,010 Health Agriculture - Phil Rice Research Inst. Environment Strengthening Congressional Oversight of Congress TOTAL

30

14,905,110,000

2,433,268,838

20,505,110,000

95,000,000

158,500,000

228,500,000

2,706,511,600 20,000,000 20,097,873,448

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________________________________________________________Attaining the MDGs and Sustainable Growth with Equity

To fund the proposed increase for education, health, agriculture and environment, we have identified the following sources of funding together with the rationale behind the recommendation to decrease or defer its appropriation: (See table on Possible Sources of Funds to cover the Increases in the Alternative Budget ) 1. P2.7 B from National Housing Authority (NHA) The P5.0B NEP proposal in 2008 of the NHA Resettlement Program may be decreased to P2.3B in the absence of a special provision for the use and release of the huge incremental budget. In the meantime, P2.0B is recommended to be maintained for the initial roll-out of the program. 2. P3.0B from Kilos Asenso Support Fund This Special Purpose Fund has no clear cut mechanism/ procedures and is vulnerable to presidential discretion. 3. P16.2B from Miscellaneous and Personnel Benefits Fund (MPBF) The over-all increase of MPBF compared to last year’s appropriation is P36.8B. Aside from the primary use of the fund for payment of other Personnel benefits, the MPBF includes the 10% salary increase of the whole government workforce for the whole year 2008 which could be estimated by doubling the amount appropriated last year (P10.3B from July to December), totaling to P20.6B only. Hence, the lump-sum fund could be freed of about P16.2B after covering the estimated 10% salary increase and providing for (at 2007 level) the usual purpose of the fund. 4. P30.5B from Unprogrammed Fund: Support for Infrastructure Projects and Social Programs This lump-sum fund is very vulnerable to presidential discretion. Transparency and accountability are also very difficult to attain due to the absence of a special provision that specifies the use and release of the same. 5. P5.0B from Unprogrammed Fund: Gratuities, Pension and Separation Benefits The use and purpose of the lump-sum fund is the same with purpose item (2) of the Pension and Gratuity Fund with an existing appropriation of P20.9B already. 6. P1.0B from Department of National Defense: Kalayaan Barangay Program The same item of appropriation was proposed as a stand alone lump-sum fund under the Special Purpose Funds of the previous years NEP, but after budget deliberations, was eventually deleted in the GAA. The fund utilization of the Kalayaan Barangay Program is highly reliant on the discretion of the President. 7. P1.3B from the Office of the President: Purchase of Air Transportation Equipment The amount concerned is very material and there is no detailed description as to the use, purpose and release of the fund.

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Attaining the MDGs and Sustainable Growth with Equity ________________________________________________________

8. A total of P0.15B from the Department of Public Works and Highways (DPWH) National Buildings - Rehabilitation/Improvement/Construction of DPWH Buildings, Nationwide (P100M) and of Other Public Buildings (P50M) This is a lump-sum fund under the DPWH budget with unidentified project proposals and is recommended to be realigned to the Capital Outlays project under the University of the Philippines –National College of Public Administration and Governance, for the Construction of the National Center for Good Governance Building (P112.5M). 9. P1.3B Loan Reduction Proposal of the Freedom from Debt Coalition (FDC) The FDC has identified illegitimate loan that must be deferred, pending an investigation on the project financed by the loan, as follows. See earlier table by FDC for the list.

32

2008 Alternative Budget Initiative


Table 14. Possible Sources of Funds to Cover the Increases in the Alternative Budget

2007 GAA

POSSIBLE SOURCES:

2008 NEP

Suggested Amount for Alt Budget

Inc/(dec)

Remarks

Location

in P'000

Special Purpose Fund

29,644,841

87,203,698

57,558,857

57,458,857

Budgetary Support to Govt Corps

National Housing Authority: resettlement

256,775

Kilos Asenso Support Fund

-

MPBF: Salary Adjustment (maybe)

6,888,066

5,000,000

3,000,000

43,703,698

4,743,225

3,000,000

36,815,632

no special provision for resettlement program; GAB 2008 p.846, an initial P2B maybe enough to pilot the line 17 2,743,225 program

3,000,000

16,215,632

subject to discretion of President; no clear cut mechanism

GAB 2008 p.870, line 17

If for the 10% sal inc (effective July 2007), there should be a separate lump-sum for the purpose the 2007 appro for 10% sal inc is under Unprogrammed Fund, Compensation Adjustment Fund & has an appro of P10.3B (July to Dec), hence 2008 requirement maybe pegged at P20.6B

GAB 2008 p.890, line 17

Unprogrammed Fund Support for Infra Projects and Social Programs Gratuities, Pension and Separation Benefits

Department/Office

17,500,000

30,500,000

5,000,000

5,000,000

-

13,000,000 -

subject to discretion of President; no special GAB 2008 p.900, 30,500,000 provision provided lines 24 & 26 5,000,000 redundant with the USE/PURPOSE of PGF

2,618,800

2,618,800

2,418,800

-

1,000,000

1,000,000

subject to discretion of President; previously GAB 2008 p.532, 1,000,000 proposed under SPF NEP line 47

-

1,268,800

1,268,800

1,268,800

300,000

300,000

100,000

50,000

50,000

50,000

-

-

Dept of National Defense Kalayaan Barangay Program Office of the President Repair/Main of Air Transpo Equipment

Dept of Public Works and Highways National Bldgs Rehabilitation/Improvement/Construction DPWH bldgs, Nationwide National Bldgs Rehabilitation/Improvement/Construction other Public Buildings

of of

Freedom from Debt Coalition proposal

-

Budget for identified illegitimate loan that must be deferred, pending an investigation on the project financed by the loan

29,644,841

GAB 2008 p.10, line 45

Proposed to be realigned for the: University of GAB 2008 p.591, the Philipiines - National Center for Good lines 22 & 27 Governance Building (P112.5M)

1,310,000 FDC report (Sept Please see details of the identified illegitimate 2007) "Breaking loans in Table No.2 the Momentum of 1,310,000 Indebtedness"

-

TOTAL

no special provision for the purpose

89,822,498

60,177,657

61,187,657


Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

TECHNICAL PAPERS PROPOSED ALTERNATIVE BUDGET FOR BASIC EDUCATION FOR FY 2008 The proposed budget for Basic Education for FY 2008 is P 146 Billion (Total Obligation), of which the Department of Education gets 134.8 Million. This amount represents a 6% (P8 billion) increase over the budget for the current year (2007). In real terms, however, the increase is about 2.4% which is the usual annual increment in the education budget in the last ten years. Table 15. 2008 Education Budget PARTICULARS Office of the Secretary Philippine High School for the Arts National Council for Children’s Television National Book Development Board School Building Program National Museum TOTAL APPROPRIATION Automatic Appropriation (RLIP)-GS TOTAL APPROPRIATION

FY 2008 NEP (P’000S) 134,790,740 43,293 4,000 22,070 2,000,000 111,324 136,971,427 9,003,670 145,975,097

The proposed budget provides increased allocation for the construction of new classrooms, particularly in areas experiencing acute classroom shortages; additional funds for the School Feeding Program, for GASTPE and for pre school education program; and a modest increase in the budget for Alternative Learning Program and Madrasah Education. A quick review of the state of basic education in the country today, however, clearly demonstrates that the proposed budget is not enough and not allocated in a way that will best address the gaps and problems of the sector. Gaps and Shortfalls in Basic Education The preliminary report on the Millennium Development Goals prepared by the National Economic and Development Authority (NEDA) admitted that progress in achieving the targets in basic education has been slow and uneven. The report noted that given the current rate of progress, the country will most likely miss the target of achieving Universal Primary Education (UPE) by 2015. In fact, basic education, along with maternal health, is the most threatened among the MDGs. The Department of Education reported that while enrolment figures have been increasing over the years, key performance indicators have been declining consistently. Net enrolment, cohort survival and completion rates for both elementary and secondary levels were all down. In SY 2005-2006, participation rate in elementary education went down to 84.4 percent from 90.10 percent recorded in SY 2001-2002. Meanwhile, dropout rates posted record levels in both elementary (10.57 percent) and secondary schools (15.81). The increasing fallout of children from the school system explains the low survival and completion rates and indicates the weak holding capacity of the public school system. Elementary cohort survival in SY 2005-2006 went

34

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________________________________________________________Attaining the MDGs and Sustaining Growth with Equity

down to 58.36 percent while completion rate declined further to 56.76 percent. The corresponding figures for secondary education are 59.10 percent and 54.14 percent, respectively. Table 16. Assessment of MDG #2: Achieve Universal Primary Education Average Probability Current Target Rate of of Baseline Level by Progress Attaining (1990) (2005/2006) 2015 (1990the 2005/06) Targets Participation Rate 85.1 84.44 100 -0.05 Low Cohort Survival Rate 68.65 69.9 84.67 0.09 Low Source: Philippine Midterm Progress Report on the Millennium Development Goals, 2007 Table 17. Education Key Performance Indicators Elementary 2001-02 2002-03 2003-04 2004-05 2005-06 Participation Rate 90.10% 90.42% 88.74% 87.08% 84.41% (based on 6-11 yrs. population) Cohort Survival Rate 69.05% 69.97% 60.67% 60.89% 58.36% (EFA formula) Completion Rate 66.95% 59.32% 59.07% 56.76% (EFA formula) Dropout Rate 6.51% 7.30% 8.90% Secondary 2001-02 2002-03 2003-04 2004-05 2005-06 Participation Rate 57.55% 59.19 60.15 59.97% 58.20% (based on 12-15 yrs. population) Cohort Survival Rate 71.49% 66.00% 68.46% 69.89% 59.10% (EFA formula) Completion Rate 69.97% 59.90% 63.14% 64.77% 54.14% (EFA formula) Dropout Rate 8.53% 13.03% 11.96% 11.30% 15.81% Source: DepEd. Fact Sheet, Basic Education Statistics (as of August 31, 2006). http://www.deped.gov.ph/cpanel/uploads/issuanceImg/factsheet2006(Mar28).pdf The poor and declining quality of education is clearly shown by the erratic and consistently low scores obtained by pupils in achievement tests administered by the Department of Education over the years. The increases in test results show only marginal improvement and the scores fell far short of the desirable level.

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Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

ALL KEY INDICATORS ARE DOWN! ‌ CONSISTENTLY DECLINING SINCE THE MDG AND EFA SUMMITS IN 2000 Figure 3. Key Indicators - Elementary Education % 95 90 Participation Rate

85 80 75 70 65

Cohort Survival Rate

60 55 50

SY 2000- SY 200101 02

SY 2002- SY 200303 04

SY 2004- SY 200505 06

Figure 4. Key Indicators - Secondary Education % 75 Cohort Survival Rate 70 65 60 Participation Rate 55 50 SY 2000- SY 200101 02

36

SY 2002- SY 200303 04

SY 2004- SY 200505 06

2008 Alternative Budget Initiative


________________________________________________________Attaining the MDGs and Sustaining Growth with Equity

Figure 5.

Education Scorecard Alarming DROP OUT Rate and still RISING! 18 15.81%

15

HS

12

Elem

%

10.57%

9 6 3 SY 2000- SY 2001- SY 2002- SY 2003- SY 2004- SY 200501 02 03 04 05 06

1.8 Million dropouts (Primary Level) and 3.9 Million (Secondary Level)

THE GLOBAL COMPARISON

Figure 6.

There was a time when the Philippines, along with Sri Lanka, Thailand and South Korea, used to be the top education performers in Asia. Today, the country is among the lowest performers in Asia and the rest of the developing world. According to the Asian Development Bank (ADB), net enrollment ratio has deteriorated over the past two decades while survival hardly improved. The report noted that “For many years, the Philippines has had higher enrollment rates at all levels of education than those of other countries with comparable or even higher levels of income. Recently, however, several countries in the region, notably Malaysia and Vietnam, have gained an edge over the Philippines even in basic education achievement.” The report further revealed that the out-of-school ratio for primary school age children in the Philippines was worse than in Indonesia and Vietnam. UNESCO’s Global Monitoring Report for 2007 generated the EFA Development Index or EDI for 125 countries. The index is used to gauge the overall accomplishment of countries in terms of meeting the EFA goals. It is a composite measure based on enrollment ratio, adult literacy rate, EFA gender-specific index and survival rate up to grade 5. Forty seven (47) countries had high EDI marks (.95-1.00); 49 countries including the Philippines had medium EDI (.80-.95); and 29 countries had low EDI. The Philippines ranked 75th, falling behind most Asian countries such as China, Malaysia, Indonesia and Vietnam. In terms of education quality, using survival rate as proxy indicator, the

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Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

Philippines ranked 101st of 125 countries. At this level, it fared no better than some of the poorest countries in Asia and Africa such as Burkina Faso, Ethiopia and Myanmar.1 The deteriorating state of Philippine education can also be seen in its poor rating in international competitive tests. The 2003 Third International Mathematics and Science Study (TIMSS) participated in by 45 countries ranked the Philippines 41st in mathematics and 42nd in science. The country trails the Asian countries that participated in the 2003 TIMMS, including Malaysia and Indonesia. Table 18.

Education Scorecard International Comparison TIMSS 2003 Results (Trends in International Mathematic and Science Study)

Science

Ave. score

Mathematics

Ave. score

1. Singapore

578

1.

2. Chinese Taipei

571

2. Korea, Republic of

589

3. Korea, Republic of

558

3. Hongkong SAR

586

.

Singapore

605

.

34. Palestinian National Authority

435

34. Indonesia

411

35. Egypt

421

35. Tunisia

410

36. Indonesia

420

36. Egypt

406

37. Chile

413

37. Bahrain

401

38. Tunisia

404

38. Palestinian National Authority

390

39. Saudi Arabia

398

39. Chile

387

40. Morocco

396

40. Morocco

387

41. Lebanon

393

41. Philippines

378

42. Philippines

377

42. Botswana

366

43. Botswana

365

43. Saudi Arabia

322

44. Ghana

255

44. Ghana

276

45. South Africa

244

45. South Africa

264

REGIONAL AND PROVINCIAL TRENDS

The mid term report on the MDG presents the regional education statistics, showing the uneven progress and wide disparities in performance across the different regions. The report noted that only the national capital region, Central Luzon and CALABARZON have a good chance of meeting the education targets. The rest of the country lags behind particularly the poor regions of Mindanao and the Visayas.2The table below is culled from the government’s mid term report. It presents the probability of meeting the MDG targets related to education (Goals 2 and 2). Regional disparity in terms of school participation as measured by NER is quite modest compared to the wide disparity recorded in terms of survival and completion rates. Cohort survival rate shows greater variation across provinces, ranging from a high of 86.83 percent (Region 1) to a low of 36.2 percent (ARMM). The regional disparity in terms of completion rate

1

2

EFA Global Monitoring Report, UNESCO, 2007) Mid Term MDG Report. NEDA, August 2007.

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________________________________________________________Attaining the MDGs and Sustaining Growth with Equity

was also wide, ranging from a high of 85.48 percent (Region 1) to a low of 34.76 percent (ARMM).

I

Incom plete data Mediu m

Low Mediu m

Low Mediu m

II

Low

Low

Low

High No data

III

Low

Mediu m

No data

No data

IV-A IV-B

Low No data

Low No data

V

Low

High No data No data No data

CAR

Mediu m High Mediu m

No data

Regi on

VIII

Elementary participatio n rate cohort survival rate girls to 100 boys in elementary girls to 100 boys in secondary

Regi on

Elementary participatio n rate cohort survival rate girls to 100 boys in elementary girls to 100 boys in secondary

Table 19. Education Regional Performance

IX

High Mediu m

Low Mediu m

Low No data

Low No data

X

Low

Low

No data No Baseli ne

High No Baseli ne

Low No Baseli ne No baseli ne No data No data No data

Low No Baseli ne No Baseli ne No data No data No data

XI

XII CARA GA Low ARM M High

Low

High

High

High No data VI Low Low NCR No VII Low Low data High Mid Term MDG Report. NEDA, August 2007.

Low

The regional performance figures are consistent when one looks at the overall accomplishment in EFA by provinces. For this report, AER applied and generated the corresponding provincial EFA Development Index or EDI as presented in the table below. The index is based on the same indicators used by UNESCO in computing the country EDI. Table 20. EFA Development Index (EDI) by Province (These figures are still subject to integrity and validation checks) Top Provinces

Rank 1 2 3 4 5 6

Province Batanes Bataan Pangasinan Siquijor Ilocos Norte Tarlac

2008 Alternative Budget Initiative

Bottom Provinces

EDI 0.922 0.903 0.897 0.878 0.874 0.871

Rank 61 62 63 64 65 66

Province Zamboanga del Sur Kalinga Agusan del Sur Negros Occidental Basilan Negros Oriental

EDI 0.776 0.776 0.774 0.773 0.772 0.767

39


Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

7 Zambales 0.871 67 Bukidnon 0.761 8 Ilocos Sur 0.869 68 Sultan Kudarat 0.761 9 Rizal 0.866 69 Western Samar 0.755 10 Abra 0.862 70 Sarangani 0.751 11 Nueva Ecija 0.862 71 Davao del Sur 0.718 12 Guimaras 0.861 72 Lanao del Norte 0.714 13 Pampanga 0.859 73 Ifugao 0.712 14 Batangas 0.854 74 Maguindanao 0.698 15 La Union 0.854 75 Sulu 0.654 Source: AER (Basic Data culled from DepEd BEIS and NSO Census 2000 and FLEMMS 2003) The table presents the 15 provinces with the highest and lowest EDI values. As expected, Central Luzon, Calabarzon and Ilocos Norte dominated the top performing provinces as measured by the EDI. It is also significant to note that the small island provinces of Batanes and Siquijor are doing exceptionally well. These findings is consistent with other indices, specifically AER’s Quality of Life Index and the Human Development Index for Philippine provinces. On the other hand, Mindanao provinces dominate the bottom performers, but including also some provinces in CAR, Eastern Visayas and the Negros provinces. It is important to note that while our top provinces are ranked among the best in the world, the education performance of provinces with the lowest EDI is comparable to some of the poorest developing countries. Figure 7.

Education Scorecard The EDI Scorecard Global Comparison of Philippine Provinces

Batanes Bataan Pangasinan Philippines Tarlac Batangas

Masbate Sultan Kudarat Ifugao Maguindanao Sulu

40

0.99

UK,Slovenia, Finland Italy, Greece, Spain

0.95

Bulgaria, Portugal

0.90

Indonesia Viet Nam

0.85 0.80 0.75 0.70 0.65

Cambodia Lao PDR Bangladesh Malawi Eq. Guinea Rwanda Ghana Nepal

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________________________________________________________Attaining the MDGs and Sustaining Growth with Equity

EDUCATION AND POVERTY

Numerous studies have noted the strong link of income and poverty to education performance. The poor has less access to education; has lower school life expectancy; and is more likely to drop out of school. The lack of education, on the other hand, tend to perpetuate and regenerate poverty. The graph below presents the GNP per Capita Income (in log values) and the EDI scores of developing countries, indicating a highly significant correlation between income level and education performance. Thus, poor countries tend to have lower EDI scores while the rich tend to score high.

Figure 8.Scattergram of EFA Development Index (EDI) and GNP Per Capita (Log Values) of Developing Countries EDI and GNP Per Capita 1.0

.9

.8

.7

.6

EDI

.5

.4 1.5

2.0

2.5

3.0

3.5

4.0

4.5

LOGGNP

Source: AER; Basic Data culled from GMR 2007. UNESCO

The same pattern is observed in the Philippines. The government’s mid term report on the MDG “noted that participation rates in primary education by region correlate inversely with the incidence rates for food and overall poverty.” The same report also noted that regions with low poverty incidence tend to have high cohort survival and completion rates and low dropout rates. This observation is validated when one compares the EDI scores and poverty incidence of provinces. The graph below shows the strong correlation between EDI scores and poverty incidence. That means the poor performing provinces manifest higher incidence of poverty. On the other hand, provinces with higher EDI scores shows lower incidence of poverty.

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Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

Source: AER (Basic Data culled from DepEd BEIS and NSO Census 2000 and FLEMMS 2003) Figure 9. Poverty Incidence and Education Performance (EDI) By Province

EDI 2005 0.950 0.900 0.850 0.800 0.750 0.700 0.650 0.600

0

10

20

30

40

50

60

70

80

2003 Poverty Incidence (Population)

Figure 10. Education Expenditures Shrinking Piece of the Pie

?

Is the Budget Adequate

PROPOSED 2008 BUDGET Basic Educ

DepEd 11.9%

SUC 1.6%

DEBT 24.1%

DA 1.9% DPWH 7.7% 95

DILG 4.3% DND 4.2% DOTC 1.8%

Estimating the Resource GAP

Others 41.2%

Spending Level

Spending Level

Declining Per Pupil Spending Education Budget increasing only by 2% per year while Enrolment rate has been growing at 2.5% per year.

Education and Health Expenditure as Per Cent of the National Budget

%

Real Per Pupil Expenditure on Basic Education 25

Education Health

20

Shrinking share of the budget pie

19.1 17.1

16.6

16.8

15

15.6

15.5

14.9

1995 - 12.17% 1998 - 15.96% 2006 - 11.55%

10 (DepEd, 2006)

5 1997

1998

1999

2000

2001

2002

2003

2,004

2.6

2005

2.1

1.8

1.9

1.5

1.5

1.4

0

Education Spending must grow faster than the combined effect of inflation and population growth

42

1999

2000

2001

2002

2003

2004

2005

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Spending Level International Comparison The spending level of the Philippines is low compared to actual requirements and compared with spendings of other countries/regions. Under-spending trend: 1997 - 3.2% of GDP

Resource GAP in Basic Education 2001 - 2.5%

2005 – 2.1%

Public Expenditure on Education as Percent of GNP

%

Spending Level and Financing Gap in Basic Education

 About P40B per year  For 2008, P36.5 B (Est.)

6 5 4

Source: Dr. Manasan, Manasan, PIDS

3 2 1 0 North Europe America

Africa

Arab States

Phil

China, PR

South Latin Asia America

SUMMARY OF ISSUES AND CHALLENGES

In summary, education indicators consistently point to the low and deteriorating performance of the education sector in terms of access, quality, literacy and equity. Dropouts remain alarmingly high and access is not equitable; quality is poor and declining; resources are too little; and the system is badly managed. 1) ACCESS - Dramatic rise in dropouts, low survival/completion rates and alarming increase of out-of-school children. This trend indicates an apparent reversal in improved access to education which was achieved in the past two decades - 1980s and 1990s. 2) QUALITY – Poor education quality and outcomes reflected in the low achievement levels, poor teaching quality and perennial shortages in key inputs, specifically teachers, facilities and instructional materials. 3) EQUITY – The poor, malnourished and disadvantaged children are increasingly being bypassed, deprived of education and constantly at risk of falling out of the school system. 4) EFFICIENCY- Poorly designed programs, poor targeting and misplaced priorities are creating a lot of inefficiencies and wastage in the system. Substantive reforms must be undertaken with immediate implications on the budget to set the education sector back on the right track. More importantly, urgent action is needed to improve access and quality of the school system and reach out to the out of school. The following policy interventions are recommended: • • • • • • •

Adequate provisions for key input Investing in teachers and teachers training Expanded alternative learning program Well targeted scholarship for the poor Reduce school cost An effective mid day meal program in context of comprehensive school based program on health and nutrition Parents and community mobilization

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Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

For FY 2008, the following alternative budget for basic education is proposed: Table 21. The Alternative Budget Proposal for Basic Education, 2008 Budget Item Department of Education Office of the Secretary 1. Lump-sum for New Positions Funding requirement for the creation of new teaching and non-teacher positions in FY2008 (III.e.17.a.2)

Proposed Budget 2008

Proposed Amendments (Increase)

Alternative Budget for 2008

1,373,978,000

330,000,000

1,703,978,000

2. Lump-sum for School Furniture (Capital Outlay) (III.e.17.o.)

1,000,000,000

420,000,000

1,420,000,000

3. Construction of Elementary and Secondary School Buildings in Areas Experiencing Acute Classroom Shortage (B.e.)

3,760,000,000

760,000,000

4,520,000,000

4. Alternative Learning Programs (Non-formal Education). Field operations of Non-formal Education including Implementation of Accreditation and Equivalency System (MOOE) (III.a.1)

240,420,000

509,580,000

750,000,000

18,016,000

200,000,000

218,016,000

2,587,166,000

2,000,000,000

4,587,166,000

7. Additional School's Maintenance and Other Operating Expenses (MOOE) for Elementary and Secondary Schools

2,000,000,000

2,000,000,000

8. Provision of Full Teachers Benefits as per Magna Carta

6,000,000,000

6,000,000,000

5. School Health and Nutrition Program Implementation of Programs for School Health and Nutrition (II.e.1.) 6. School Health and Nutrition Program (III. b.)

DEPED OSEC TOTAL

9. B. National Book Development Board Formulation, coordination and implementtation of policies, plans and programs relative to book development (III.a)

44

12,219,580,000

5,046,000

2,000,000

7,046,000,000

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Special Provisions:

1. Funding for new teacher position in FY2008. Newly created teacher positions for FY2008 may be funded under III.e.17.a.2 PROVIDED the item is part of the estimated teacher gap of 12,733 for the covered school year (based on 1:45 Teacher-to-pupil ratio). The amount 1.55 billion pesos under III.e.17.a.2 is allocated solely for the creation of said 12,733 teacher positions. 2. Allocation for the school feeding program. The amount allocated for the school health and nutrition program under III.b. shall be used PROVIDED, that: a. the Department of Education conducts and submits to Congress its own Review and comprehensive evaluation of the school feeding program for 2007; b. the Department of Education includes in the abovementioned report the list of targeted nutritionally-depressed areas and marginalized sector that will benefit from the school feeding program; and, c. Deped makes a comprehensive strategic program for school-based health and nutrition that will strengthen the coordination of schools, local government units and communities in order to effectively address the poor health among school children 3. Support for teacher’s trainings on health education literacy. Allocate 200 million pesos under II.e. for the pilot testing of the teacher’s trainings on health education literacy with focus on child and adolescent nutrition, early disease detection, referral health systems and health promotion in the following priority provinces: Masbate, Sulu, Tawi-Tawi, Lanao del Sur, Maguindanao, Basilan, Negros Oriental, Zamboanga del Norte, Bukidnon, Capiz, Apayao 4. Provision for the strengthening of the Alternative Learning Programs (ALP). Allot 80 million pesos from funds under III.a. to strengthen the Alternative learning program through the following allocations: a. 10 million pesos for Curriculum Development and Materials Development to upgrade the A & E modules and adapt the contents and teaching strategies based on the needs of the learners; b. 10 million pesos for Capability Building of Staff and Monitoring System to ensure the adoption of “learning by doing” approach c. 5 million pesos for Operational Support for Mobile Teachers, Instructional Managers and Facilitators in the form of a monthly allowance for transportation and school supplies d. 15 million pesos for research and pilot testing of Assessment and Evaluation Tools for Learning Outcomes e. 10 million for pilot testing the setting up of Data Base Systems for ALP. The system includes data collection, processing and management of information to establish baseline data and its regular updating. f. 30 million for civil society organizations which Implement Quality ALS either for A & E or even Beyond A&E. Part of this allocation is for the evaluation and selection of civil society organizations that will partner with the department of education in delivering ALS. 5. Additional MOOE. The amount allocated for additional per capita Maintainance and Other Operating Expenses of schools should be released PROVIDED said funds will be used to support quality-enhancing programs and address the problems of high dropout, low survival and poor learning achievement, giving due emphasis to the poor and low-performing regions

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and provinces. Specifically, the following provinces have been given priority in the allocation of additional MOOE based on poverty situation, health status and education performance: 1. Kalinga 2. Apayao 3. Ifugao 4. Mt. Province 5. Camarines Norte 6. Masbate 7. Negros Oriental

8. Negros Occidental 9. Northern Samar 10. Western Samar 11. Southern Leyte 12. Biliran 13. Surigao Del Norte 14. Surigao Del Sur

15. Agusan del Sur 16. Davao Oriental 17. Lanao del Norte 18. Misamis Occidental 19. North Cotabato 20. Saranggani 21. Zamboanga Norte

22. Basilan 23. Tawi-tawi 24. Maguindanao 25. Sulu

6. Allocation of P2B for the implementation of the Magna carta for teachers (RA 4670) and study grant. Funds for the implementation of RA 4670 and study grants shall be used in accordance with the following: a. Under Section 22, allocate 7,000.00 per teacher for the 484,570, amounting to a total of 3,391,990,000.00 for compulsory medical examination and treatment b. Under Section 22, allocate for Free medical care and treatment - for those with tuberculosis at 6000/month for 6 months to cover anti-biotics, vitamins, laboratory, doctor's fee for 2000 teachers c. Under Section 23, allocate for Compensation for injuries, including effects of physical and nervous strain on the teacher's health the amount 1,000 for each teacher to cover 484,570 teachers amounting to 484,570,000.00. d. Under Section 19, allocate for Special hardship allowance to cover 1/5 of the teaching force, particularly those in the remote rural areas at 2,000 per teacher covering 96,914 amounting to 193,828,000.00. e. Under Section 24, allocate for Study leave/Sabbatical for 12,000 teachers at an estimated 65% of their salaries based on 10,000 monthly salary (6500/mo x 12mos = 78,000) amounting to a total of 936,000,000.00 f. Allocate for study grant, fellowship, scholarships for 50,000 teachers to cover subsidy for matriculation and other school fees, books, stipend at 20,000/year per teacher 7. Any other additional allocation to the Department of Education to be sourced from the Unprogrammed Funds for new loans shall not be used to fund the Cyber Education project of Deped as neither Loan proceeds nor Government of the Philippines counterpart fund. Such additional allocation should be used instead for the Alternative Learning Program to reach out to more out of school youth of school age. 8. Allocation for programs and policies relative to book development. The additional fund of 2,000,000.00 under the B. National Book Development Board, III.a. may be used PROVIDED Deped conducts reviews on the contents of the books, including textbooks beings used by the schools and crafts corresponding policies. Rationale for the Proposed Amendments.

Deped’s proposed budget for 2008, specifically the Office of the Secretary (OSEC) amounts to 134,790,740,000 pesos. The alternative budget group proposes an increase of 12,219,580,000 thereby raising the total budget of Deped’s OSEC alone to 145,010,320,000. In addition, an increase of 2,000,000 is also proposed under Deped’s National Book Development Board.

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The alternative budget for the Department of Education covering basic education proposes nine amendments. Seven of which are increases in the proposed FY2008 budget under specific budget items such as creation of new teaching positions, the Alternative Learning Programs, School health and nutrition program, School furniture (school seats) and classrooms (or school buildings) and the Formulation, coordination and implementation of policies, plans and programs relative to book development. The two remaining amendments are additional items, particularly the additional maintenance and other operating expenses (MOOE) for both public elementary and secondary schools and the provision for full teachers’ benefits as per magna carta. Explanatory notes on the proposed increases in specific budget items are as follows: 1. An increase of 330,000,000 for the creation of new teaching position is proposed to adequately cover the current gap of 12,733 teachers; 8,964 of which are for schools which have no nationally funded teachers or where the teacher pupil ratio is more that 50 pupils to a teacher and the remaining 3,769 are for teachers of special groups. These estimates are based on Deped’s computation of resource gaps presented during the agency’s budget hearing in the House of Representative 2. An increase of 420,000,000 for the school furniture or school seats is proposed to cover the shortage of seats estimated at 1.77 million; this includes seats for new construction and 5% allowance to replace damage stocks. 3. An increase of 760,000,000 for the construction of elementary and secondary school buildings in areas experiencing acute classroom shortages to adequately cover the classroom gap which currently stands at 12,418. 4. An increase of 509,580,000 in the 240,420,000

Alternative Learning Program budget from

The program aims to reach out to the out-of-school-youth currently estimated at 11.6 million, thru an expanded alternative learning system. With the proposed minimal increase, the ALS’s immediate target is some 150,000 children who are not attending school. The alternative budget is looking at the international benchmark of 3% of Education Budget for ALS such that the ALS budget would have increased to P1.0 B by SY 2010-2011. The proposed increase also hopes to cover ALS module enhancement and development, training of mobile teachers and testing development 5. An increase of 200,000,00 for the school health and nutrition program The overall concern is to expand and develop school-based health and nutrition programs to address poor health that accounts for high dropout and low learning achievement among the students. The proposed increase includes the amount for teacher’s training on health education literacy considering that teachers are the frontliners in the school-based health setting. In this light, teachers should have a fundamental health education competence in the areas of promotive and preventive health care and nutrition of his/her students. They also must know how to detect and assess the health and well-being of students and understand the referral and institutional procedures in case of position health detection. The training

2008 Alternative Budget Initiative

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Attaining the MDGs and Sustaining Growth with Equity ________________________________________________________

would focus on child and adolescent nutrition, early disease detection, referral health systems and health promotions. 6. An increase of 2,000,000,000 for the actual feeding program for malnourished school children. The World Bank and the United Nations have already come up with its survey that in the Philippines, 3.8M children are malnourished. Deped notes that in the school system 1.8 million children are malnourish. The proposed additional budget of 2 billion is meant for a real feeding program in school to arrest malnutrition of the children. 7. Additional budget of 2 billion pesos as additional maintenance and other operating expenses (MOOE) for elementary and secondary schools. The purpose of the additional budget is to increase per capita MOOE by 20% for qualityenhancing programs to address high dropout, low survival, poor learning outcomes giving priority to poor & low-performing areas Various studies have noted that education deprivation is strongly linked to poverty – the poor has less access to education, has lower school life expectancy and is more likely to drop out of school. Thus, the lack of education perpetuates and regenerates poverty. 8. The proposed additional amount of 6 billion pesos is a provision to cover full implementation of teachers’ benefits as per magna carta The overarching concern is to improve the well being of teachers, restore dignity in teaching profession and improve the quality of teaching. 9. An additional 2 million for the national book development board is a proposed budget for the review of books used in schools. In the Deped Budget only P5,046,000 is allocated for the formulation, coordination, and implementation of policies, plans and programs relative to book development. There seems to be no existing body in the DepEd which is in charge of reviewing the contents of the books being used by the schools. The proposed augmentation is therefore intended for Deped to conduct the book reviews and craft corresponding and necessary policies.

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ADVANCING HIGHER EDUCATION, CAPACITATING PEOPLE TOWARDS NATIONAL DEVELOPMENT Proposed Alternative Budget for Higher Education for FY 2008

RATIONALE Mandated Policy on Education and the Education Budget 1. Article 15, Section 1 of the Philippines Constitution stipulates that “The State shall protect and promote the right of all citizens to quality education at all levels and shall take appropriate steps to make such education accessible to all.” Article 15, Section 2 tells us how this is to be done: “The State shall (1) establish, maintain, and support a complete, adequate, and integrated system of education relevant to the needs of the people and society.” Aside from the Constitution, the Philippines is also signatory to treaties and conventions which call on states to prioritize the education of its people. The “International Covenant on Economic, Social and Cultural Rights (ICESCR), operating under the principle of “progressive implementation” of “compulsory education free of charge for all”, in Part 3, Article 13 (2) states that “The States Parties to the present Covenant recognize that, with a view to achieving the full realization of this right: (a) Primary education shall be compulsory and available free to all; (b) Secondary education in its different forms, including technical and vocational secondary education, shall be made generally available and accessible to all by every appropriate means, and in particular by the progressive introduction of free education; (c) Higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education; (d) Fundamental education shall be encouraged or intensified as far as possible for those persons who have not received or completed the whole period of their primary education; (e) The development of a system of schools at all levels shall be actively pursued, an adequate fellowship system shall be established, and the material conditions of teaching staff shall be continuously improved.” 2. In terms of the budget, Chapter 2, Section 3 of the Administrative Code of the Philippines states that it shall be “the policy of the State to formulate and implement a National Budget that is an instrument of national development, reflective of national objectives, strategies and plans.” As to what national objectives the budget should be pegged, we need only look at the Constitution: “Article 7, Section 1. The goals of the national economy are a more equitable distribution of opportunities, income, and wealth; a sustained increase in the amount of goods and services produced by the nation for the benefit of the people; and an expanding productivity as the key to raising the quality of life for all, especially the underprivileged.” Note that social mobility, capability building, and expanded productivity are necessary consequences of a quality, relevant and accessible education system, which can only be provided if the State shall allocate enough resources for the development of the sector. Article 14, Section 5 (5) of the Constitution underscores this: The State shall assign the highest budgetary priority education and ensure that teaching will attract and retain its rightful share of the best available talents through adequate remuneration and other means of job satisfaction fulfillment.” 2008 Alternative Budget Initiative

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Attaining the MDGs and Sustainable Growth with Equity________________________________________________________

3. Under the principle of subsidiary, the State is mandated and required to take up as an endeavor essential social services that cannot be provided by the private sector in the most effective, efficient, and just manner. In the case of the education sector, given the existing conditions as earlier stated, it is obvious that the private sector effort is not enough to mitigate the educational crisis caused by dwindling State subsidy and the rise in the demand for tertiary education. Government Priorities 1. Debt Servicing. The most evident impact of the Philippines’ continued reliance on debt and the government’s lack of prudence in assuming debt is the ever-increasing burden of repayment. In 2006 alone, the national government paid P 721.66 billion pesos in interest and principal debt payments. This amount represents roughly 85 percent of the country’s total revenue and 52.7 percent of the total government budget for the same year. State of Education 1. Role of Higher Education: Education, being the tool for economic development and poverty alleviation needs to be accessible to the youth. In industrialized nations, high school graduates are prepared for basic employment wherein they are capacitated with necessary skills, knowledge and values needed for productive work so that those who wish to be employed will contribute to the need of the country. With this, higher education’s primary role is to alleviate poverty by raising the level of students’ competency to handle more sophisticated and technical jobs necessary for national and human development. 2. Higher Education in the Philippines: Looking at the primary and basic education, we see that it has a dismal status. Education as delivered in the country fails equip to students of essential life skills and fundamental skills for productive work. Because of this failure, we have also been conditioned to relegate much of the responsibility for acquiring productive skills to higher education. Thus, higher education (instead of basic education) serves as the primary vehicle towards basic employment. There is an unnecessary demand for a college degree for an individual to qualify even for the simplest of jobs. 3. Under-funded, Ill-managed Public Higher Education: But noting the current condition of our public tertiary education, it seems that it fails to fulfill even this role. We have a public higher education system suffering not only from a lack of resource inputs but also from a defective governance framework. Although the government plan is to create more state schools, it is coupled with a contradicting policy of massive budget reductions in public tertiary education.

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Figure 11. SUC Budget per college entrant from 1995-2008. Source: CHED SUC Budget per College Entrant 30000 25000 20000 15000 10000 5000

19 95 19 199 96 6 19 199 97 7 19 199 98 8 19 199 99 9 20 200 00 0 20 200 01 1 20 200 02 2 20 200 03 3 20 200 04 4 20 200 05 5 20 200 06 6 20 200 07 7 -2 00 8

0

The share of national government in SUCs financing has been steadily declining from 85% in 2001 to 77% in 2005 as schools are forced to shoulder their own expenses. Consequently, SUC spending per student had declined by 23% from Php 17,000 in 2004 to Php 12,930 in 2006. 4. Exodus from Private to Public The cost of private higher education is steadily increasing, causing an exodus of college students to public higher education institutions (HEIs). However, the lack of effective government investment on public HEIs both in terms of budgetary allocation and governance support have resulted in the sheer volume of students that cannot afford tertiary education and the quality of students produced by our HEIs. Figure 12. Percentage of students in public and private higher education institutions Exodus of Students

years

2002-2003 2000-2001 Private 1998-1999

Public

1996-1997 1994-1995 0.00%

20.00%

40.00%

60.00%

80.00% 100.00%

Number of Students

From having 10% of all college students enrolled in SUCs as of 1980, it increased to 21% in 1994, and as of A.Y. 2002-2003, the figure was pegged to 34%. This was due to the inability of many students on the tertiary level to afford private tertiary education. Enrollment in public higher education institutions grew by an average of 9.62 percent from 1997 to 2003. 2008 Alternative Budget Initiative

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Attaining the MDGs and Sustainable Growth with Equity________________________________________________________

5. Proliferation of Diminutive and Underdeveloped HEIs The exponential increase in the number of public HEIs in the last decade, contrary to the moratorium on the creation of SUCs as proposed by the Presidential Commission on Education Reforms (PCER), continue to compromise the quality of tertiary education. The practice of building more negligible public HEIs rather than strengthening existing ones is actually a consequence of patronage politics. These HEIs are not created to provide for the quantitative or qualitative needs of the education sector but primarily to increase the popularity and political esteem of local government officials among their constituents. The direct result is a decreasing per-unit budget allocation to public higher education, compromising the absorptive capacity of the public HEIs. Thus, there is commonly a trade-off between absorption of students and the quality of education offered. Figure 13. Public Expenditures on Education in some ASEAN countries, 2004.

Neglecting Education 30

Public expenditures on education in some ASEAN countries, 2004 27.5

Source: World Bank, World Development Indicators 2006 25

20.3 20

17.8

15

9

10

8.1

4.2

5

3.2 1.1

0 INDONESIA

PHILIPPINES

PUBLIC EXPENDITURE ON EDUC AS % OF GDP

THAILAND

MALAYSIA

PUBLIC EXPENDITURES ON EDUC AS % OF TOTAL GOV'T EXPENDITURES

Source: World Bank: world development indicators 2006/ excerpt from Former DBM Secretary Benjamin Diokno presentation.

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This prompts the existing public HEIs to conduct cost-recovery and cost-sharing as a survival strategy (e.g. user fees, community financing, etc.). It is compelled to devolve to the students an increasing part of its financial and operational burdens. 6. International benchmark for Education The International Commission on Education for the Twenty-first Century (the Delors Commission) suggested that every country should allocate at least 6% of the GNP for education (Delors et al, 1996). Out of the 139 countries for which figures on education expenditure exist, 107 had spent less than the recommended amount. (UNESCO 2000). The proposed budget for 2008 reflects that education spending is 2.19% of GNP while its expenditure as percent of GDP will be 2.48%. As such, the Philippine government invests less in public education provided the international benchmark to commit education accessible for the people. Effect: Declining Enrollment Though the number of students transferring to SUCs from private HEIs is increasing, devolving costs to the students has discouraged enrollment in public HEIs, as students cannot afford to shoulder additional costs. And since students cannot afford private higher education either, the overall annual percentage growth in enrollment drastically slows down. Figure 14. Historical Enrolment by Region and Sector 1995-2004

12.00% enrollment in percent

10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% 1995- 1996- 1997- 1998- 1999- 2000- 2001- 2002- 20031996 1997 1998* 1999 2000 2001 2002 2003 2004 -4.00% year

Source: CHED data

Diaspora of College Graduates Due to lack of employment opportunities and relatively low compensation, the current trend for college graduates is to seek greener pastures abroad. This is actually in line with the current labor-exportation policy of the Arroyo administration. For some people of the government, this serves us a disincentive to invest in public higher education institutions. 2008 Alternative Budget Initiative

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Attaining the MDGs and Sustainable Growth with Equity________________________________________________________

Population aged 15-29

Figure 15. Migration of Filipino Laborers Overseas 1995-2004 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Year

Policy Gaps on the Education Sector 1. Section 42 of Batas Pambansa 232 or the Education Act of 1982. Section 42 allows private schools to determine the rate of its school fees without regulation. Even if the Supreme Court ruled in 153 SCRA 622 (Philippine Consumer’s Foundation vs. Secretary of Education, Culture, and Sports) that the power to regulate school fees falls on the Department of Education, the apparent lack of established mechanisms fails to mitigate the impact of school fees deregulation. 2. RA 7772 or Higher Education Act of 1994. The law that created the Commission on Higher Education (CHED) failed to give CHED the power to regulate tuition increases, and to penalize violators. Given that it had been the policy of the state to privatize the education sector, it is unfortunate that there had been no provisions that would empower CHED to regulate and stabilize private education cost and there are no mechanisms to ensure accountability on the part of CHED. 3. RA 6782 or Government Assistance to Students and Teachers in Private Education (GASTPE). While Section 10 of GASTPE requires consultations before any increase is to be made, it does not guarantee bargaining powers to consulted parties. As such, there are no mechanisms that would prevent these consultations from being mere announcements of fee increases. Furthermore, the practice of rechanneling to other contracting schemes of government financial assistance in the form of voucher systems by preferred LGUs open the program to the whims and dictates of trapo politics. 4. EO 46 Created by Executive Order no. 46, creating PCER (Presidential Commission on Educational Reforms); PCER Recommendations 2 and 4. PCER is mandated to define a budget-feasible, and doable program of reform for the education sector and identify executive priority policy recommendations and items for legislative

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action. Two of its proposals allowed for the gradual reneging of government’s responsibility to the education sector through rationalization and privatization. Rationalization, within a Moratorium Period, of the Creation and Conversion, of State Universities and Colleges. PCER recommended a moratorium on the creation of SUCs, during which period a massive rationalization program will be done on the sectors, including mergers, decentralization (to LGU), privatization, and abolition of SUCs. *Although we support the call for a moratorium in the creation of more state schools to give way for the strengthening and progressive conversion of these schools as institutions of quality public tertiary education, we however deplore “rationalization” schemes which promotes blatant privatization of our education and the streamlining of employment which fundamentally attacks the security of tenure of teachers and non-teaching personnel.





Re-orienting the Premises for Financing Higher Education. The use of the large allocations of the government budget for public higher education is perceived to be inefficient and inequitable by PCER, so they recommended steps to slowly devolve the duty of financing SUC from the government to the private sector, most notably the students.

5. Section 4 of RA 8292 or the Higher Education Modernization Act (HEMA) of 1997 (offshoot of PCER). In supplement of its corporatization, governing boards of SUCs are given the power to engage in private and profit-oriented transactions. This facilitates the slow relinquishing of state responsibility on education, since it forces SUCs to find other means to sustain its own operations. This is inconsistent with the mandated policy of the state (as stipulated in the constitution) to prioritize education in the allocation of its resources. POLICY PROPOSALS A Targeted Return-of-Service Program Increase job opportunities for newly graduates and make them accountable for our economic development. The newly graduates should render service in our country, with government providing at least two or three years employment contract.

Proposal no. 1 The distribution of the budget for SUCs will be allotted to SUCs acknowledged as centers of excellence and academic development. However, the improvement of the quality of other State Universities and Colleges will also be taken into consideration.

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Table 22. Proposed Budget for Identified Centers of Excellence and Development per region

Region

I

II

III

IVA IVB

V VI

VIII

56

Institution

Mariano Marcos State University Pangasinan State University Cagayan State University Isabela State University Bulacan State University Central Luzon State University Tarlac State University Cavite State University Palawan State University State Polytechnic of College Palawan Bicol University Panay State Polytechnic College West Visayas State University Leyte Institute of Technology Leyte Normal University Samar State

Proposed 2008 BUDGET In thousand PESOS

Student Population (2006-2007) Adjusted

Proposed Budget per Adjustment Student per per Student year in PESOS

Alternative Increase

250,818

9,232

27,168.33

27,168.33

-

190,525

10,622

17,936.83

21,124.16

33,855,850.94

238,291

13,150

18,120.99

21,124.16

39,491,733.00

294,653

17,293

17,038.86

21,124.16

70,647,137.01

146,534

17,501

8,372.89

21,124.16

223,159,962.75

215,558

8,114

26,566.18

26,566.18

5,167,000

103,757

11,100

9,347.48

21,124.16

130,721,200.48

153,742

12,163

12,640.14

21,124.16

103,191,184.90

131,176

15,870

8,265.66

21,124.16

204,064,454.19

81,985

4,681

17,514.42

21,124.16

16,897,203.28

303,958

11,946

25,444.33

25,444.33

156,613,000

171,484

9,100

18,844.40

21,124.16

20,745,876.07

290,233

14,486

20,035.41

21,124.16

15,771,613.70

223,088

7,653

29,150.40

29,150.40

-

76,612

6,001

12,766.54

21,124.16

50,154,097.39

84,868

3,402

24,946.50

24,946.50

-

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IX

X

XI

XII

NCR

CAR TOTAL

Polytechnic College Visayas State College of Agriculture Western Mindanao State University Zamboanga State Coll.of Marine Sci.and Tech. Central Mindanao University Mindanao Polytechnic State College Mindanao State University Iligan Institute of Tech. University of Southeastern Philippines Mindanao State University University of Southern Mindanao Philippine Normal University Polytechnic University of the Philippines Technological University of the Philippines Benguet State University 29 SUCs

2008 Alternative Budget Initiative

223,088

4,177

53,408.67

53,408.67

-

219,624

8,940

24,566.44

24,566.44

223,273,000

64,091

2,530

25,332.41

25,332.41

203,927

5,384

37,876.49

37,876.49

10,000,000

82,865

6,369

13,010.68

21,124.16

51,674,789.08

312,772

10,471

29,870.31

29,870.31

4,641,000

145,725

10,281

14,174.20

21,124.16

71,452,511.63

1,088,530

29,715

36,632.34

36,632.34

-

204,588

12,325

16,599.43

21,124.16

55,767,299.18

260,046

13,273

19,591.96

21,124.16

20,337,117.36

575,634

50,016

11,509.00

21,124.16

480,912,096.85

317,948

18,090

17,575.90

21,124.16

64,188,094.29

202,363

11,062

18,293.53

21,124.16

31,312,482.31 2,084,038,704

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Attaining the MDGs and Sustainable Growth with Equity________________________________________________________

Given that there had been a palpable decrease in percentage allocation for SUCs, coupled by the increase in number of tertiary education level entrants and a tangible lack of educational resources since 2002, there is a need to peg the SUC budget closer to what is demanded. We are specifically calling for additional subsidy proportionally allocated for Maintenance and Other Operating Expenses (MOOE), Personal Services (PS) and Capital Outlay (CO) as needed to strengthen the specialized courses of those institutions categorized as Center of Excellence and Academic Development. While this is a track in the right direction, we maintain that public tertiary education deserves more! These specialized courses should reinvigorate the students’ competitiveness and qualification for the welfare of our development.

The solution, therefore, is for the government to immediately 1) stop the budget cuts of education, 2) provide a monitoring scheme of SUC’s expenses and income generation funds, 3) halt the flawed policy of creating more SUCs and 4) implement a program for the strengthening and conversion of present state schools into institutions of quality tertiary education without succumbing to privatization and “rationalization” schemes. Proposal no. 2 Table 23. Additional fund of CHED’s COE/COD SUCs REGIONS POVERTY INCIDENCE OF FAMILIES (%) 2003 data of NSCB NCR 5 Region I 24.4 Region II 19.3 Region III 13.7 Region IV-A (CALABARZON ) 14.9 Region IV-B (MIMAROPA) 39.7 Region V 40.5 Region VI 31.3 Region VII 23.7 Region VIII 35.5 Region IX 44.1 Region X 37.9 Region XI 28.1 Region XII 32 CAR 24.8 ARMM 45.7 Caraga 47.3

58

Scholarship Program for the Students in nonPROPORTION

0.98% 4.80% 3.80% 2.70%

Proposed Numbers Additional Scholars 204 995 787 559

Alternative of Budget for CHED Scholarship 2,804,167 13,684,336 10,824,085 7,683,418

2.93%

608

8,356,418

7.82% 7.97% 6.16% 4.67% 6.99% 8.68% 7.46% 5.53% 6.30% 4.88% 9.00% 9.31%

1620 1652 1277 967 1448 1799 1546 1146 1305 1012 1864 1930

22,265,088 22,713,754 17,554,087 13,291,753 19,909,587 24,732,755 21,255,588 15,759,420 17,946,670 13,908,669 25,630,088 26,527,422 284,847,306

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Proposed 2008 Number of Total number Budget for Scholars of students CHED Scholarship 704,000,000 51,207 414,380

Additional Scholars 5% total numbers of students 20,719

Proposed Additional CHED Scholarship Budget 284,847,306.03

The President, through her Budget Message for 2008, proposed the amount of Php. 704 million to sponsor 51, 207 students through its scholarship programs. Then again, we believe that this is not enough. In the immediate, we recommend that the proposed fund for the scholarship program be increased by Php. 284.8 million to assist an additional scholars of 20,719 students coming from SUC’s, which are not considered part of Center of Excellence and Academic Development. Furthermore, the scholarship program must be made available specially to students from the regions with high level of poverty incidence. Proposal no.3 The University of the Philippines additional budget amounting Php. 112.5 million pesos for the establishment of National Center for Good Governance (see UP-NCPAG proposal) The U.P. National College of Public Administration and Governance (UP-NCPAG) has always been at the forefront in promoting good governance over the past 55 years. As an academic institution, it offers courses on Public Administration at all collegiate levels (bachelor’s, master’s, and doctoral), and has in fact graduated thousands of students who now occupy prominent and non-prominent but influential positions in all sectors of the Philippine society. Additionally, UPNCPAG has maintained good linkages with national and local governments, civil society, and businesses in the country. Over the years, UP-NCPAG has expanded and demands for its services have increased. However, its building and facilities have to be improved to be able to meet the growing demands and expectations of its national and international clients and partners. Hence, this proposal to establish a National Center for Good Governance (NCGG). NCGG will be a center for advocacy, promotion, and research for “good governance.” NCGG’s studies, conferences, and workshops will feed into the policy-making and policy implementation process for good governance in the Philippines. Proposal no. 4 To retain the previous budget level (2007) of 12 SUCs which are not categorized as centers of excellence and development (or restore the proposed amounts in MOOE and CO):

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Table 24. Proposed Additional Budget for Non-Center of Excellence SUCs

2007 1. PHILSCA 2. RTU 3. Batanes State College 4. Quirino State College 5. Batangas State College 6. Partido State University 7. Iloilo State College of Fisheries 8. Southern Leyte State University 9.Leyte State University 10. JH Cerilles 11.MSU Tawi-Tawi College of Technology and Oceanography 12.Adiong Memorial Polytechnic State College Subtotal

2008

Addition to the 2008 proposed budget

Total Alternative Proposed Budget

76,629,000 140,493,000 23,905,000 32,654,000 160,562,000 87,585,000

52,384,000 140,039,000 15,271,000 28,727,000 159,748,000 78,262,000

24,245,000 454,000 8,634,000 3,927,000 814,000 9,323,000

76,629,000 140,493,000 23,905,000 32,654,000 160,562,000 87,585,000

114,411,000

106,400,000

8,011,000

114,411,000

102,582,000

98,342,000

4,240,000

102,582,000

223,412,000

223,088,000

43,299,000

29,934,000

204,717,000

203,160,000

16,844,000

15,111,000

1,227,093,000

1,150,466,000

324,000 13,365,000 1,557,000 1,733,000

76,627,000

223,412,000 43,299,000 204,717,000 16,844,000

1,227,093,000

Proposal no. 5 Strike out of the proposed budget of $8.32 million for the controversial SEMP2-SEDIP loan, pending an investigation on the case and reallocate this debt payment as part of its government subsidy to education. Proposal no.6 Amend/ Repeal PD 1177 in Sec 26 (B) Book 6 of 1987 Revised Administrative Code or the Automatic Appropriations Law for Debt Servicing As stipulated in the Constitution: “ Article 14, Section 5 (5). The state shall assign the highest budgetary priority to education and ensure that teaching will attract and retain is rightful share of the best available talents through adequate remuneration and other means of job satisfaction fulfillment.� With about two-thirds of our current resources being siphoned away by debt servicing, it is very clear that the government is prioritizing credit worthiness (through continuous and disproportionate paying of incurred debts) over education, which is clear deviation from the aforementioned Article.

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IMPERATIVES FOR HEALTH IN THE HANDS OF THE PEOPLE Proposed Alternative Budget for Health for FY 2008

I.

Introduction

President Gloria Macapagal-Arroyo expressed that there are three key areas of development that her administration will prioritize. Health is one of these areas —education and infrastructure are the two other key areas. In PGMA’s 2008 budget message, she mentioned that the allocation for the health sector for 2008 is centered on meeting the Millennium Development Targets (MDGs) on health –reduce child mortality (Goal No.4); improve maternal health (Goal No.5); and combat HIV-AIDS, malaria and other diseases (Goal No.6). This is the first time the Chief Executive expressed her administration’s commitment to align budget priorities to meet MDG health targets. The challenge in determining whether the 2008 health budget heeds to the call of the President is two-pronged. The first challenge is to examine if the 2008 budget is really responsive in meeting the health MDGs; and second, If the allocated budget for the health sector translates to significantly positive health outcomes? II. Proposed DOH Budget for FY 2008 For Fiscal Year (FY) 2008, the Department of Health (DOH) proper budget including the Population Commission (PopCom) and National Nutrition Council (NNC) amounts to PhP15,393,158 billion. The total DOH budget including its attached agencies, corporations and allocation for indigent premium subsidy (ALGU) amounts to 20,056,350 billion. The detailed DOH budget is shown in table 1. Table 25: DOH and Its Attached Agencies’ Budget (FY 2008) DOH and Attached Agencies Department of Health DOH Proper Commission on Population National Nutrition Council Attached Corporations Lung Center of the Philippines National Kidney and Transplant Institute Philippine Children's Medical Center Philippine Heart Center Phil. Institute for Traditional and Alternative Health Care Allocation to LGUs Premium Subsidy to Indigents in the National Health Insurance Program (NHIP) Total

Amount of Budget (in million pesos) 15,762,790 14,905,110 386,560 471,120 793,560 157,560 185,000 236,000 185,000 30,000 3,500,000 3,500,000 20,056,350

Source: DOH Program of Work (CY 2008), “Better Investments for the MDGs”; Sep. 2007.

From P11, 398,771,000 billion in 2007, the DOH-Office of the Secretary’s budget notably increased by P 3.6 billion in 2008. The DOH proper was given an additional P 3.5 billion as per the President’s instruction. On the other hand, the P 1.3 billion was pre-allocated to upgrade

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__________________________________________

facilities and infrastructures while the remaining P 2.2 billion is reserved to boost key MDG projects. The DOH’s share in the National Budget with a total of P 1.23 trillion only constitutes 1.3% –a minimal increase from its 1% share in 2007. This is certainly measly compared to the P56.1 Billion budget of the Department of National Defense (DND). The DOH from being 8th in 2007, now ranks 7th in terms of share in the national budget. Figure 1 shows the top ten national agencies with the highest budget allocation for FY 2008. The additional P 3.5 billion to the DOH budget hardly made a dent in its share in the national budget pie. Apparently, health care is not a priority. Figure 16: DOH Share in the Total National Budget (FY 2008) S pecial P urpos e Funds 58% Other A genc ies 9%

DOH 1.3%

DepE d 12% DP W H 8%

DOTC 2%

DILG 4%

DND 4%

S UCs 2%

Source: DOH Program of Work (CY 2008), “Better Investments for the MDGs”; September 2007 A comparison with the health expenditure of other Asian countries as percentage of GDP shows that the Philippines is way below the World Health Organization (WHO) benchmark of minimum health expenditure of 5% for developing countries. Table 26: Cross-country Comparison of Health Expenditures as % of GDP Total Expenditure on Health Country as % of GDP 2001* 2004** Vietnam 5.1 5.5 Singapore 3.9 3.7 Thailand 3.7 3.5 Malaysia 3.8 3.8 Philippines 3.2 3.4 Indonesia 2.4 2.8 Source: * 2003 National Health Accounts, National Statistical Coordination Board (NSCB) ** WHO 2007 Health Statistics on National Health Accounts

percentage increment of 59.1%. Capital outlay also increased by 76.9 percent —from P969,898 in 2007 to P1,716,018 billion in 2008. Whereas, the personal services merely rose 0.3%.

In terms of allocation by expense class, the MOOE budget accounts for 49% in the DOH proper budget for 2008 and has a greater allocation than PS which comprises 39%. Whereas, for FY 2007, PS allocation was 50% followed by MOOE with 41%. Meanwhile, the capital outlay covers 12% from 9% in 2007. Figure 17 shows that the MOOE increased from P4,639,809 in FY2007 to P7,383,649 in FY2008 a C o 17. mpa r is o n o f D Oof H DOH 2 0 0 7 Expense a n d 2 0 0 Class 8 Figure Comparison B u d g e t in 2007 and 2008 Budget 8,000,000 7,000,000 6,000,000 5,000,000

2007

4,000,000

2008

3,000,000 2,000,000 1,000,000 -

62

PS

MOOE

CO

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The move to provide higher MOOE allocation for FY 2008 might be viewed as a logical step to put in more funds for operating expenses and programs instead of pouring allocations on personal services which receive the highest allocation by expense type in FY 2007. With regard to health allocation by function, hospital Services still receive the highest allocation. For FY 2008, hospitals constitute 55% which is more than half of the DOH proper budget, followed by public health, governance and then regulation. On the other hand, DOH noted that there has been an 8% decrease in the proportion of budget allocated for hospitals from 63% in 2007 to 55% in 2008. While public health service delivery allocation increased in proportion from 14% to 28% in 2008. A comparison of the FY 2007 and 2008 allocation by function is shown in figure 3. Based on a three fiscal year reference shown in Figure 3, hospital services consistently eat up more than 50% of the total DOH Proper budget. On the other hand, the financing trend on public health service delivery allocation has largely remained below 15% with an exception in FY 2008 where it doubled from 14% (2007) to 28%. The question is whether the government can sustain and further improve Public Health allocations in the future in order to ensure that it won’t dip to a low 12% such as in FY 2006. Figure 18: Comparison of FY 2006, 2007 & 2008 Allocation by Function (DOH Proper) 67% 65%

FY 2006

55%

FY 2007 FY 2008 28%

16% 17%

12% 14%

11%

5% 6% 6% Regulation

Public Health

Hospital

Governance

Source: DOH Program of Work (CY 2008) Low Public-Health Allocations Why has public health allocations been considerably low compared to Hospital Services allocation? The implementation of the Local Government Code in 1992 that led to the devolution of our health care system has been said to be the primary reason why the budget allocation for public health services is comparatively low in contrast to hospital allocation.

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With the devolution of basic health services to LGUs the DOH’s role in direct health service delivery is now confined to operating retained hospital facilities, providing technical assistance and other advisory services to LGUs (DOH; 2007). For instance, basic supplies for maternal and child health programs like syringes, safety boxes, procurement of supplies for iron supplementation and drugs for the control of acute respiratory illness and diarrhea has been the responsibility of LGUs. Even the procurement of supplies for reproductive health is 100% an LGU responsibility. The most common problem with the devolved structure of the country’s health system has been the lack of commitment of some LGUs to invest and prioritize public health concerns. It is truly disheartening the lack of public funds have often become the excuse of some LGUs for poor health performance and ill-managed local health systems. Figure 4 illustrates that local governments are expected to make the necessary budgetary counterpart in implementing health service programs. More than half of the Maternal Care program expenditures should come from the coffers of LGUs, the same applies with childcare immunization programs. In contrast, disease-related expenses are significantly shouldered by the central DOH. Figure 19: Fund Requirements for MDGs (2008)

in millions

Fund Requirem ents for M DG s (2008) 3000 2500 2000 1500 1000 500 0

LG Us DO H

Child care

M aternal care

D iseases

Source: 2007 DOH Paper (unpublished) based on Dr. Manasan’s study, 2005. Meanwhile, the total administrative DOH proper budget allocation for hospitals according to geographical area significantly decreased from P 8,522,881 in 2007 billion to P 5,460,623 in 2008. The budget share of Luzon, which has the highest population, decreased from 66.75% in 2007 to 50% in the proposed 2008 budget. On the other hand, the allocation for Visayas considerably improved from 14.25% in 2007 to 21.1% in 2008. The per capita distribution of Luzon, Visayas and Mindanao are P53.73, P63.30 and P73.50 respectively. Table 27: Distribution of DOH Budget by Geographical Area (FY 2007 and 2008) Area Luzon Visayas Mindanao PHILIPPINES

Estimated 2005 Population 50,638,300 18,317,100 21,501,800 90,457,200

Budget Allocation FY 2007 5,340,466 (65.75%) 1,587,424 (14.25%) 1,624,991 (20.01%) 8,522,881 (100%)

FY 2008 2,720,768 (50%) 1,159,430 (21.1%) 1,580,425 (28.9%) 5,460,623 (100%)

Source: DOH Program of Work (CY 2008), “Better Investments for the MDGs”; September 2007

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Although most of the proposed allocations for programs have increased under the Regulation, Public Health, Administration and Governance categories, there are still some doubts whether these would be adequate to finance the health MDG targets. (Refer to Table 39 to see the comparison between the 2007 GAA budget allocation and the proposed 2008 budget) The next section will show that based on recent health statistics, there are good reasons to be alarmed considering the poor health condition among children, considerably high maternal mortality rate in the country vis-à-vis other pressing health issues such as the exodus of health workers, uneven distribution of health providers among others. III. Are we Meeting the MDG targets on Health? According to NEDA, the Philippines is “on track” on the two health-related MDGs such as reducing child mortality and combating malaria, HIV-AIDS and other diseases. However, NEDA reported that the country is ‘lagging behind’ in terms of improving maternal health. A. MDG 4: Reduce Child Mortality Although gains in reducing the IMR as well as the underfive mortality rate have been achieved, the deterioration in the fully immunized child (FIC) coverage between 1998 and 2003 put these gains at risk.

Table 28: Prevalence of Undernutrition by Age Group, 2003 Population Percent A.1. Poor Nutrition among School Children group/Indicator 0-5 years old According to National Nutrition Council (NNC), various 26.9 • Underweight forms of malnutrition continue to afflict Filipino children as 30.4 • Stunting well as adults. These include Protein-energy malnutrition 5.5 • Wasting (PEM), Iron Deficiency Anemia (IDA), Iodine Deficiency 6-10 years old Disorders (IDD) and Vitamin A deficiency Disorders 26.7 • Underweight (VADD). Results of the 6th National Nutrition Surveys of 36.5 • Stunting DOST-Food and Nutrition Research Institute (FNRI) in 26.6 2003 shows that the prevalence of undernutrition by age Pregnant women Adults, 60 years and 23.6 and physiologic age group are as follows: above Source: National Nutrition Among preschoolers, 0-5 years old Surveys of DOST-FNRI in 2003  27 out of every 100 preschoolers are underweight  30 out of every 100 are stunted or has lower height than that of normal  5 out of 100 are wasted or thin Among school-age children, 6-10 years old  26 out of every 100 are underweight  32 out of every 100 children are stunted Based on the same survey (FNRI 2003), the prevalence of anemia among infants from 6 months to less than one year in 2003 (66.2%) is higher than in 1998 (56.6%). Meanwhile, the prevalence of vitamin A deficiencies among children 6 months to 5 years of age increased from 35.3% in 1993 to 40.1% in 2003. Anemia, lack of vitamin A among other micronutrients deficiencies in children should be seriously addressed especially since lack of essential nutrients hamper the brain development

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in children and contributes to poor intellectual function among children. In addition to that, the prevalence of VADD increases a child’s risk of dying with diarrhea and measles by 20-24%. A.2 High Intestinal Worm Infestations among School Children Based on the 2004 National Soil-Transmitted Helminthiases (STH) Prevalence Survey conducted by DOH in coordination with DepEd, the University of the Philippines-College for Public Health (UP-CPH) and the United Nations Children's Fund (UNICEF), at least 67 percent of students in public elementary schools nationwide suffer from intestinal worm infestation. The extent of the STH infestation is quite alarming since intestinal parasites could pose debilitating health hazards on children. Intestinal worm infestation such as the STH is found to cause anemia, vitamin C deficiency and malnutrition among school children. It could also lead to a significant decrease in the mental functioning and the quality of performance of children in schools. B. MDG 5: Improve Maternal Health Table 29: MMR and Under-five Mortality Status Indicators If we are to achieve our MDG target for maternal health, we need to reduce the maternal mortality rate (MMR) at a faster pace than our historical performance (based on actual rate of reduction between 1993 and 1998). Despite the decrease of MMR from 209 in 1993 to 172 in 2003, there are still too many Filipino women who die during pregnancy or childbirth given available knowledge, means and services for their proper care (DOH AO No.2006-0008 dated 10 May 2006)

Indicators Infant Mortality (per 1,000 live births) (percent reduction, 1993 ref. period) Under-Five Mortality (percent reduction, 1993 ref. period)

NDHS 1993

NDHS 1998

FPS 2006

2015 (target)

38

35

24

--

64

8% 48

37% 32

-21

25%

50%

67%

Maternal Mortality Ratio (MMR) 209 172 162 53 (percent reduction, 18% 22% 75% 1993 ref. period) Source: NDHS 1998, FPS 2006 and 2007 DOH Paper (unpublished) based on Dr. Manasan’s study in 2005

Other health-related practices affecting maternal health are shown in Table 6. Whereas, ‘the percentage of pregnant women with at least four prenatal visits decreased from 77% in 1998 to 70% in 2003; pregnant women who received at least two doses of tetanus toxoid (TT) also decreased from 38% in 1998 to 37% in 2003; and 23% of pregnant women have not received iron supplementation during pregnancy. Table 30: Health-related Practices Affecting Maternal Health Maternal Health Practice NDHS 1993 NDHS 1998 Pregnant women with at least 4 prenatal 77% 70% visits Pregnant women with at least 2 doses of TT 38% 37% Births attended by professional health 56% 60% providers Births delivered in a health facility 34% 38%

FPS 2006

62.3% 43.5%

Source: DOH, Health Policy Development and Planning Bureau (HPDPB), 2007

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Efforts to significantly reduce maternal mortality should be doubled in order to hit the target of reducing maternal deaths to 52 deaths by 2015 from 162 deaths per 100,000 births (2006 Family Planning Survey). B. 1.Skilled attendants like Midwives attend a significant percentage of birth deliveries. According to the NDHS 2003 survey, nearly 66% of births are delivered at home, with wide regional disparities. In Metro Manila, professional health workers attend to 92% of births and 72% of these occur in health facilities. In Table 31: Percentage of Live Births Delivery contrast, in ARMM health professionals Assistance by Birth Attendants (in percent) attend to only 16% of births and only 6% 1993 1998 2003 of these are done in health facilities. Health professionals 52.8 56.4 59.8 Nationwide, health professionals attend to Doctor 26.0 30.9 33.6 only about 56% of deliveries. The rest Nurse/midwife 26.8 25.5 26.2 give birth with the help of a traditional Traditional birth birth attendant (hilot), a family member, or 45.3 41.3 37.1 attendant with no help at all. Source: NDHS cited in 2007 DOH Paper

MDG 6: Combat HIV-AIDS, Malaria and other diseases HIV-AIDS Based on surveillance reports from the National Epidemiology Center, the number of sexually transmitted infections (STIs) remains high. Likewise, the number of HIV cases continues to increase despite interventions being implemented by a multi-sectoral collaborative effort for its control (DOH, 2006). Based on the DOH’s AIDS Registry, the total reported number of HIV and AIDS cases, as of December 2006, was 2,719. Of this number 72 percent were asymptomatic and 28 percent were AIDS cases. The cumulative death toll from AIDS was posted at 298. Malaria Malaria is still a public health problem and continues to impede economic progress in areas where malaria persists. According to DOH, populations at risk are communities that belong to 5th and 6th class municipalities which are hard-to reach. According to DOH, from 2002 to 2004, the malaria morbidity rate increased from 48/100,000 to 59/100,000 cases respectively (DOH Accomplishment Report, 2006). Tuberculosis Despite the advancements in medicine and the government’s relentless campaign to control TB in the Philippines, the TB situation remains a policy concern (Joseph Capuno et.al., ‘Policy Analysis of Private Sector Participation in TB DOTS’, PhilTIPS; 2003). The Philippines ranks 9th among nations with the highest burden of tuberculosis in the world with a prevalence rate higher than Vietnam, Myanmar, Cambodia, Zimbabwe, Uganda, and Afghanistan (WHO Global TB Report, 2006).

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TB is the sixth leading cause of morbidity and mortality in the country. Approximately 78 Filipinos die from the disease every day. The annual economic burden of TB in terms of loss in wages alone was estimated to be at P7.9B in 1997 (Peabody et. al., ‘Measuring the Burden of Disease and Economic Consequences of Tuberculosis in the Philippines’; 2003). Although some gains have been made in combating TB through the implementation of the Directly Observed Treatment Short-Course (DOTS) strategy by DOH, the government has not been fully successful in dealing with tuberculosis. DOH reported that the country’s tuberculosis rate has ‘surpassed’ the global standard of Case Detection Rate of 70% when it reached 72%; and the Cure Rate of 80% when it reached 81% respectively (DOH Accomplishment Report, CY 2007). The government is still confronted with certain issues and constraints in its fight against TB. The DOTS strategy is generally limited to facility-based case finding. Only those who visit health facilities are accordingly treated and are able to receive needed medical attention. Within the DOTS framework, identification of individuals with active TB in communities is not aggressively pursued. Another constraint that needs to be addressed is the difficulty of treating drug resistant TB. Those TB strains are resistant to single drug and have been documented in every country. According to Philippine Coalition Against TB [PhilCAT] in 2005, “Drug resistant TB is caused by inconsistent or partial treatment –when patients do not take the prescribed dosage of drugs regularly for the period prescribed because they start to feel better, or when doctors or nurses prescribe the wrong treatment regimens or when the drug supply is unreliable. The results of a nationwide drug resistance survey in 2003-2004 showed a Multi-Drug resistance-TB prevalence of 4.5% in new smear positive cases. Poorly managed TB programs due to weak case finding, detection, and inability of tracing of defaulter (refers to persons who stopped and discontinued TB medication) pose as a ‘threat to make TB incurable’. It is recommended that there should be a critical shift in the DOH strategy in combating TB. The DOTS framework should shift from being a facility-based strategy to an active case finding strategy. Other health concerns (1) Rapid Population Growth The Philippines presently ranks12th among nations with the largest population. The current population of 88.7 million is expected to balloon to an alarming 160 million in 2038 (House Bill No.17, 14th Congress; Rep.E.Lagman). With the rapid increase of population, the country’s poverty level is also expected to exacerbate. Studies suggest that population and poverty are intimately connected. For example, the odds of a child becoming underweight and stunted are greater if she/ he belongs to a household with 5 or more members (FNRI 1998) while large family size is associated with negative determinant of school participation and poor health and survival rates among children (Rep. Lagman; HB 17, p.3). (2) Low Family Planning Practice According to the 2006 Family Planning Survey (FPS), there is a high unmet need in family planning especially among poor. That is, one in six married women has an unmet need for family planning (15.7%) based on the 2006 FPS (Population Commission, 2007). Moreover, the

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2003 NDHS survey showed that 61% of currently married women do not want to have additional children. In addition, the Contraceptive Prevalence Rate (CPR) or the portion of all married women of reproductive age using modern methods slightly decreased from 36% to 35% while the use if traditional methods increased to 13.8% from 13.2%. Nonetheless, the overall CPR slightly increased to 50.6% in 2006 from 49.3% in 2005.

Table 32. Current Use of Contraceptives by Married Women (in percent) 1993 1998 2003 Modern methods 25 28 33 Traditional methods 15 18 16 Not currently using 60 54 51 Total 100 100 100 Source: NDHS cited in 2007 DOH Paper

The POPCOM also pointed out that there is an increasing incidence of teenage pregnancy. Reports show that 10% of all births are among ages 15 to 19 years of age while 23% of adolescent aged 15-24 engaged in premarital sex. On the other hand, 97% of all Filipinos believe it is important to have the ability to control one’s fertility or to plan one’s family (2004 Pulse Asia Survey; cited in HB 17). The lack of women’s access to contraceptive services in developing countries contribute to maternal deaths as pointed out by UNFPA – “one in three deaths related to pregnancy and childbirth could be avoided if all women have access to contraceptive services” (UNFPA cited in HPPDB, 2007). Thus, the government should ensure that reproductive health care services are delivered and is made available to the population. Rep. Lagman expressed that there is a need to provide the enabling environment for couples and individuals to enjoy basic right to decide freely and responsibly the number and spacing of children and to have the information, education, and access to safe, effective, affordable and acceptable methods of family planning of their choice (HB 17, p.2). (3) Malnutrition. Malnutrition continues to affect a significant portion of the Filipino children having detrimental consequences to the development of their capacities. The Commission on Population (Pop Com) reports that as the number of people living below the poverty line continues to grow, 15.3 million Filipinos begin their day without breakfast (Sarmiento, Jr. Philippine Daily Inquirer, July 26, 2001). There is an interplay of complex socio-economic reasons (poverty, population, unemployment, poor economic condition among others) that account for the poor nutrition among children (poverty, population, unemployment, poor economic condition among others Based on the results of the Food Insecurity and Vulnerability Information and Mapping Systems (FIVIMS) under the National Nutrition Council (NNC) food insecurity in the Philippines is prevalent in 49 provinces in varying degrees with 38 provinces labeled as Vulnerable, 8 provinces as Very Vulnerable, and 3 provinces as Very, Very Vulnerable as shown in Table 9. Only 18 provinces (23.4%) and (13%) were not vulnerable and less vulnerable respectively.

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Table 33: List of Nutritionally Vulnerable Regions (FIVIMS, 2004) Region 1 Region 6  La Union  Aklan CAR  Antique  Abra  Iloilo  Ifugao  Negros  Mountain Occidental Province Region 7 CALABARZON  Bohol  Quezon Region 8 Cluster 3 MIMAROPA  Leyte Vulnerable  Marinduque  Eastern Samar (V)  Occ. Mindoro  Northern Samar  Palawan  Samar  Romblon  Southern Leyte Region 5 Region 9  Albay  Zamboanga del  Camarines Norte Sur  Camarines Sur  Catanduanes  Sorsogon CAR Region 7  Apayao  Negros Oriental Cluster 4 Region 9 Very Region 6  Zamboanga del Vulnerable  Capiz Norte (VV) Region 10  Bukidnon Cluster 5 Region 5 ARMM Very, Very  Masbate  Sulu Vulnerable  Tawi-Tawi (VVV)

Region 10  Camiguin  Misamis Occi.  Lanao del N. Region 11  Davao del N.  Davao del Sur Region 12  Cotabato  Sarangani  South Cotabato  Sultan Kudarat CARAGA  Agusan del Norte  Agusan del Sur  Surigao del Norte  Surigao del Sur ARMM  Lanao del Sur  Maguindanao  Basilan

Source: NNC 2006 Briefing Kit; www.nnc.gov.ph

Threat of Lifestyle-related Diseases. Although morbidity in the country remains to be caused by infectious diseases such as diarrhea, pneumonia, bronchitis among others, hypertension and diseases of the heart ranked 5th and 7th respectively in the 2003 FHSIS Annual report. These two degenerative diseases consistently ranked among the top ten leading causes of illnesses in the country from 2001 to 2003. These figures suggest that lifestyle-related diseases may be linked with the lifestyle behaviors and diet of people. According to the Philippine Coalition for the Prevention and Control of Non-communicable Disease (PCPNCD), mortality statistics in 1997 shows that 7 out of 10 leading causes of deaths in the country are diseases which are lifestyle related (diseases of the heart and the vascular system, cancers, chronic obstructive pulmonary diseases, accidents, diabetes, kidney problems). Furthermore, it was found out that 2 in every 10 Filipino adults, 20 years and over, or 21% of the population, are hypertensive and is increasing in prevalence after age 40 years (FNRI 1998 cited by PCPNCD).

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IV. What’s the Real Score? A Look at the Philippine Health System Geographic and Socio-economic Disparities A. Uneven Hospital Distribution There is a notable geographic maldistribution of government health facilities in the country. Eight (8) out of 19 medical centers are located in Metro Manila, the rest are scattered in the different provinces. There are only 12 regional hospitals which imply that not all of the country’s 16 regions have at least one. Almost all the specialty hospitals are situated in Metro Manila (11 out of 12), except for one in Cebu (V. Bautista, UP Press; 2002).

Table 34: Regional Distribution of Health Human Resources employed in the government sector: Philippines, 2002 Region

Doctors

Nurses

Dentists

CAR

85

159

33

NCR

658

745

540

Region 1

158

203

96

Region 2

175

267

58

Region 3

297

382

161

Region 4

350

648

256

190 338 85 The National Capital Region (NCR) accounts Region 5 for only about 14% of the country’s total Region 6 226 433 112 population but hosts almost 28% of the total 229 379 115 number of hospital beds in the country. It has a Region 7 bed-to-population ratio of approximately one Region 8 153 233 109 bed to 352 persons. The biggest concentration Region 9 90 196 55 of private hospitals is in Region IV with 15.2% 99 189 71 of the total number of hospitals, followed by Region 10 Region XI with 12%, and NCR with 11.3%. Region 11 79 161 71 However, many of the hospitals in the Regions 84 158 32 IV and XI only offer only primary and Region 12 secondary levels of health care. NCR ranks the ARMM 69 99 23 highest when it comes to the number of tertiary CARAGA 79 130 54 hospitals (42 hospitals) and the percentage 3,021 4,720 1,871 share of bed capacity (27.8%) among private Phil. hospitals in the country (V. Bautista, UP Press; Source: 2004 Philippine Statistical Yearbook, NSCB 2002).

For 2005, the Bureau of Health Facilities and Services issued Licenses to Operate to 404 hospitals and other health facilities – 86 dental labs, 181 blood banks, and 605 clinical laboratories among others. These health facilities are still inadequate to address the number of Filipinos that need hospital and medical services (DOH, 2005). B. Uneven Distribution of Health Human Resource It is not only the health facilities and providers that are unevenly distributed –health personnel are also unequally distributed across regions as shown in Table 10. According to the 2004 Philippine Statistical Yearbook published by the National Statistical Coordination Board (NSCB), the ARMM, Region X1 (Southern Mindanao) and CARAGA are the most deprived of doctors. On the other hand, the region with the most number of health personnel—doctors, nurses and dentists is the National Capital Region (NCR).

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Who pays? Health Expenditures Figure 20: Health Expenditures Account, 2004 Figure 5 shows that the most common source of funds for actual health care needs in the country today is still out-ofpocket payments.

National Health Accounts (2004) Out-ofPocket 48%

Private Insurance 2%

Only 16% is covered by the national government while the LGUs share is only 14%. Out-of-pocket expenditures coming from people should be lessened. Meanwhile, the government share should be made to cover a much larger share in the total health expenditure.

Social Insurance 9%

HMOs 5%

Employer Plans 4%

Local Govt 14% National Govt 16%

Others 1%

Private Schools 1%

The Disappearing Doctor Paradox The migration of doctors as nurses has seriously changed the assumptions for the Philippine health system for the next decade. Decline in the interest of young Filipinos to study medicine – evidenced by a drop of 53% (as of 2005) in NMAT examinees with Yr. 2000 as baseline. Around 80% of government physicians have taken up or are enrolled in nursing (Galvez-Tan, 2006) A sizable number of government Table 35: Deployment of Health Workers Abroad, 1995-2003 health worker plantilla positions Year Doctors Nurses Midwives Caregivers remain unfilled. Around 200 hospitals have closed down in 1995 69 7,584 161 No data recent years, 800 hospitals have 1996 47 4,734 142 No data partially closed one to two wards (PHA, November 2005). Also, the 1997 82 4,242 113 No data nurse to patient ratios in provincial 1998 55 4,591 149 No data and district hospitals is 1:40-1:60. 1999 59 5,413 66 No data Furthermore, the highest proportion 2000 27 7,683 55 No data of unfilled positions in DOH2001 61 13,536 190 465 retained government health facilities was observed among 2002 129 11,867 312 5,383 occupational therapists (42.3), 2003 112 8,968 276 18,878 physical therapists (8.6 %), Source: Figure derived from POEA, CFQ records, 2005; ILO doctors, (8.2%) and nurses (5.9%). Study, 2004 The highest proportion of unfilled plantilla positions were precisely those categories that are in great demand abroad (ILO Study, 2004).

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We can no longer build up the Philippine health system assuming that there will be doctors in the countryside. A highly functional, next-generation, doctorless system has to be evolved to serve areas without doctors and to complement the services provided by the remaining physicians. Mass Exodus of Health Professionals The health system is also faced with the challenge of steadily increasing number of outmigration cases among health workers. An estimated 163,756 Filipino nurses or 85 percent of all employed Filipino nurses are working outside the Philippines in 46 countries. Since the late 1980s, there has been a steady increase in the number of health workers seeking employment abroad. From the mid-1990s until 2000, the migration of highly skilled professionals has been rising from 25 percent to 31 percent (PLCPD Primer). The outflow of Filipino midwives in the last decade started in 1992; it slowed a bit in 2000 and reached its peak in 2002. While the outflow of deployment on nurses and caregivers have steadily increased over the years. A sharp turn of caregiver outflow was reported in 2003 when the movement tripled in number. Access to Affordable and Quality Medicines Drug prices in the Philippines remain one of the highest in Asia next to Japan. The DOH’s effort to deliver affordable medicines to the people is coursed through the Botika ng Barangay (BnB) program under one of the Regulatory programs in its budget. BnBs sells overthe-counter and selected prescription drugs 50% cheaper than major drugstores, in keeping with the DOH’s goal of delivering affordable medicines. According to the DOH, as of June 2007, a total of 9,847 Botika ng Baranggay (BnB) are already established. But only 4,190 have been issued Licenses to Operate. The most common problem is the lack of adequate capital outlay among baranggay. The 369,632,000 million, proposed budget for Botika ng Barangay does not represent a significant portion in the PhP 100 Billion pharmaceutical arena. Uneven distribution of BnBs across the region also casts doubt on whether the program is reaching poverty-stricken populations in rural areas. This is compounded by imperfections in the market for medicines. Monopolies exist from the manufacturing to distribution chain of the market cycle for medicines. DOH data reports 70% of sales in the industry is dominated by Multinational Companies (MNCs), 60% of Retail sales is controlled by one drug store chain, 80% of wholesale distribution. To enable the BnB to compete in this unleveled playing field and fulfill its mandate, allocations should be reserved to purchase medicines for expanding the product range and distribution networks. V. Is the Budget Adequate? Financial Hurdles in Meeting Health MDG Targets Notable shortfalls in health MDG budget allocations are viewed as the most immediate hurdle in financing health programs. In 2006, DOH Undersecretary Mario Villaverde pointed out that a total amount of P8.9 billion is needed to finance all the health-related MDG (May Pera Pa ba? 2006). In Dr. Manasan’s study, it showed that for instance, a total of 606 million is needed to finance the country’s TB program.

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A gap of 326 million is needed to fund the TB program requirements since only 180 million was allocated in 2007. For FY 2008, the resource gaps on some public health concerns such as maternal and childcare and diseases are indicated in Table 8. Table 36: Summary of Budgetary Gaps in Funding MDG Goals on Child Care, Maternal Health and Diseases Available Resources (FY 2008)

Resource Requirement for FY 2008

Resource Gaps

Maternal and Child care EPI for women and child 444.8 520 75.2 Micronutrient supplementation 30 72 42 Diseases STI and HIV/ AIDS 91.7 239 147.3 Malaria treatment and control 138.4 1,865 1,726.6 Tuberculosis treatment and control 280 606 324 TOTAL 984.9 3,300.00 2,315.10 Source: Data on resource requirements are taken from Dr. Manasan’s study; 2005

DOH has No Budget for the Procurement of Iron Supplements for Pregnant Women There is no budget allocation for the procurement of multiple vitamins and iron supplements for pregnant women and iron drops for infants for 2008. Due to the limited budget of DOH, a total of P399,526,838 for supplementation have not been allocated. It is disheartening to note that the procurement of micronutrient supplements was not funded. Indeed, this is unfortunate since the prevalence of anemia among pregnant women (43.9%) and lactating women (42.2%) have not significantly improved from 50.7% and 45.7% respectively in 1998 and 2003. DOH admits that these levels still indicate a serious public health problem among this group. On the other hand, micronutrient malnutrition particularly vitamin A deficiency disorders (VADD) and iron deficiency Anemia (IDA) continue to be a public health problem. The prevalence of VADD among children 6 months to five (5) years increased from 35.3% in 1993 to 40.1% in 2003. VADD in children increases by 20%-24 the risk of dying with diarrhea and measles. Adequate funding is necessary if we want to improve maternal and child health. Any government that takes seriously the health and well-being of mothers and professes to look after the future of children must find ways to provide the needed essential nutrients among pregnant women and children. VI. Proposed Alternative Budget for 2008 Given all the challenges that confront the health system, the following alternative budget recommendations are proposed:

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1. Additional 966 million on top of the 180 million allocation for purchasing reproductive health commodities (i.e pills, IUD, condoms etc.) Refer to Table Rationale: To strengthen reproductive health advocacy and support family planning initiatives. The additional amount of 966 million shall be utilized upon the condition that the said amount shall be suballotted by DOH to LGUs which shall apply for the utilization of the fund for the purchase of reproductive health commodities (i.e. pills, IUDs, condoms) and the conduct of family planning seminars in local communities. Refer to Table 13 to see the budgetary requirements needed to fund the purchase of family planning commodities from the period of 2007-2010. 2. Additional 315M to the 10.611M proposed FY 2008 Health Promotion and education budget

Table 37: Budgetary Requirements for Family Planning Commodities (DOH, 2008) Budgetary Resource Requirement Gap FY s (in billion pesos) 2007 1,059 879 2008 1,146 966 2009 1,236 1,056 2010 1,250 1,070

Rationale: The proposal to put ‘health in the hands of the people’ and focusing on public health service would imply a need to have intensive health promotion activities. Behavior change communication (BCC) approach is important. Harnessing of local partnerships would require strong information and advocacy campaign. 2.1 Aggressive Promotion of Breastfeeding Aggressive promotion of breastfeeding has to be supported to improve mother and infant nutrition. It is important to heighten the promotion of breastfeeding to encourage exclusive breastfeeding for the first six months to continue up to two years with food supplementation. Considering that breast milk contains a high concentration of antibodies that protect children against certain infectious diseases. 2.2 Advocate Healthy Lifestyle Because of low income and lack of education on nutrition, food of low nutritional content (instant noodles and alike) have become part of the Filipino family’s diet. Consequently, unhealthy eating habits lead to frequent consumption of food with high-fat, salt and sugar content which have made people, especially children and adolescents, vulnerable to such diseases as heart disease, diabetes, kidney problems and cancer (Simbulan, N. P., unpublished paper, 2003) 2.3 Support Behavioral Change and Improved Perception on Generics A related concern is improving the credibility of generic drugs. Educating people will help induce behavioral change on the public and clear misconceptions that generic drugs are not as effective as their branded counterpart because they can be bought at a cheaper price. In addition, research work in this area must be improved, our policy on generics needs to be strengthened –guidelines, implementing rules must be provided.

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3. Additional allocation of 100M to the 280M for TB program to target the total population Rationale: The Philippines rank No.5 among countries with the highest TB prevalence in the world. Tuberculosis is one of the top 10 killers diseases in the Philippines today. Yearly, some 70,000 Filipinos die from this infectious and communicable disease. It is a disease that is said to infect 6 in every 10 Filipinos and claims one life every 20 minutes. It is proposed that a critical shift in the DOH strategy in combating TB be considered. The DOTS framework should shift from facility-based approach to active case finding strategy. It is also proposed that a nationwide epidemiologic research assessment be conducted to gather baseline data and establish the total number of individuals afflicted with TB. Current TB statistics need to be calibrated in view of fully adopting the active case finding approach which would entail a thorough identification of TB patients. The epidemiologic research assessment will aid in identifying, reaching all individuals who suffer from the disease within communities. 4. Additional 50 M for MDG-centered Epidemiological & Disease Surveillance Research (120 M DOH proposed budget) Rationale: Intensify epidemiological and disease surveillance research particularly on infectious and emerging and re-emerging diseases (SARS, Avian Flu, among others), water-borne and pollution-caused diseases Though, the allocation for Health Information Systems and Technology which include monitoring information systems (MIS) increased from 20 million in 2007 to 145 million in 2008, this is not targeted to intensify research and programmatic studies but for monitoring activities only. Since health productivity and improved well-being of the people largely stem from quality, evidence-based research it is hereby recommended:  

To support high-quality and multi-disciplinary research programs to contribute significantly to the control of infectious and tropical diseases is of public health importance both locally and globally. Undertake research activities in the diagnosis, control and prevention of tropical diseases that are major causes of mortality and morbidity in the Philippines and develop cost-effective strategies for their control.

5. Additional 250M to the 30M proposed budget for Research Institute on Tropical Medicine (RITM) Rationale: Support local production of vaccines for diphtheria, pertussis, polio, BCG, Hepatitis B, anti-rabies, antivenin, anti-tetanus serum, tetanus toxoid Infant mortality rate (48 deaths per 1000 live births, NDHS 2003) can be reduced to a significant extent if adequate immunization of infants against measles, poliomyelitis, diphtheria, pertussis and TB are accordingly provided. From January to December 2006, there are 447,426 children under one-year old who are not able to receive their measles immunization according to DOH. The coverage of those who are

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immunized could greatly increased if the Philippines, just like other Asian countries like India, could produce its own vaccines. Greater efficiency could be gained in terms of wider immunization coverage if the country could produce vaccines locally and and would no longer import vaccines from other countries. The success of the immunization program is expected to accelerate once the country is vaccine self-sufficient. According to the RITM, if the country could manage to locally-produce its own vaccine, a cost reduction of 20 – 30 percent is projected to be attained. RITM also cited that in 2004, the acquisition cost through UNICEF of BCG is P100.80 per vial of 20 doses while the local production cost of BCG is only P45.00 per vial of 20 doses. As much as 70% savings could have been achieved by government in 2004 when the amount needed to fund EPI vaccines was P31,969,000 million for 317,000 vials. The local production cost for the same number of vials is only P14,271,885 million. . To address the need for the country to be vaccine self-sufficient, the RITM will undertake the Vaccine Self-Sufficiency Program with an objective to significantly reduced the DOH’s procurement cost of vaccines and ensure their adequate supply through the local manufacturing of quality vaccines in accordance with Good Manufacturing Standards. The additional 250 million for the 2008 budget of RITM would mainly be allotted to intensify and support the program of the vaccine self-sufficiency program. 6. Purchase of autoclave amounting to 100M (P 500T/ autoclave, 1 per hospital) Rationale: To ensure proper waste treatment and sterilization of infectious health-related wastes prior to actual disposal. Purchasing of autoclaves will also help to ensure proper healthcare waste management of Public and DOH-retained hospitals in compliance with the Philippine Clean Air Act of 1999 Proposed Source of funding: Repudiation of debt payment (interest 100M) of the incinerator Austria Medical Waste Project The additional 100 million will be used to purchase 200 units of autoclaves. This would assure that 72 DOH-retained hospitals and 128 public hospitals have an autoclave. Each unit costs 500 thousand. Recognizing that proper health care waste management is an important environmental and health concern, there is an urgent need to allocate funds to purchase an alternative nonincineration equipments that can treat infectious waste and to make sure that Public and DOH retained hospitals are complying with the non-incineration standards set out in the Philippine Clean Air Act of 1999. Infectious waste coming out from hospitals can spread pathogens in the country' open dumpsites if disposed without proper treatment, in effect exposing healthy communities to infectious diseases. 7. Additional allocation of 14 million on top of the 36 million budget for deworming program Rationale: To address the need to deworm children considering that 67% of students in public elementary school nationwide suffer from intestinal worm infection based on the 2004 National Soil-Transmitted Helminthiases (STH) Prevalence Survey.

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Recognizing that prevalence of intestinal worm infestations among school children pose physical and mental development at risk, it is proposed that DOH deworming program be intensified. 8. Additional 399,526,838 million for micronutrient supplementation The amount will cover: 1) 341,928,216 million for multiple vitamins; 2) 56,988,036 million iron supplementation (iron tabs) for pregnant women; 3) iron supplementation (iron drops) for infants worth 610,586 thousand The 800 million proposed allocations to improve child health is not adequate to the improvement of child health mainly because this amount is only allotted for ten (10) provinces., In addition, no funds were allocated for adequate micronutrient supplementation which address anemia and iron deficiency. 9. Additional allocation of 238.742 million for purchasing 40,432 vials for rabies vaccine and 70,121 vials for rabies immunoglobulin. In 2004 alone, DOH reported that there were 95,568 animal bite victims and 88% of them are bitten by dogs. Likewise, in 2006, there were 139,368 animal bite victims reported. DOH recognizes that although rabies is not among the leading causes of disease and death in the country, it has become a considerable public health problem since has been the cause of death for 200-500 Filipinos annually due to acute fatal infections. Moreso, in this day and age, the Philippines ranked number six among the countries with the highest reported incidence of rabies in the world. Special provision: 1. To make a comprehensive evaluation of the Philippine Health Insurance Corporation (PhilHealth) programs. • •

Conduct a study on how the 3.5 billion budget allocation for PhilHealth in 2007 was utilized. Conduct a comprehensive review of the maternal and child health package of PhilHealth and examine if such package has been effective in addressing maternal and infant mortality

2. To support research and studies on advancing alternative medicines in the country •

Intensify research that will harness locally produced alternative medicines.

3. To support the full implementation of the Magna Carta for Health Workers •

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It is proposed that the funds for the implementation of the Magna Carta for Health Workers be taken from the local government budget, hence the need to set a ceiling for the minimum percentage of the local government funds that are to be allocated for health service delivery.

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4. Earmark R/EVAT collections for health to address equity concerns and support moves to claim both the 2.5% sin tax share of the DOH and PhilHealth. Table 38: Alternative Budget Proposal for Health, 2008 Budget Item Family Health Reproductive health • Fund the purchasing of reproductive health commodities • Health Promotion – BBC Strategy and IEC Advocacy(P5M x 63 provinces) Tuberculosis Control Program • Epidemiology & Disease Surveillance Micronutrient Supplementation • Multiple Vitamins for pregnant women • Iron Supplements (iron tabs) for Pregnant Women • Iron Supplements (iron drops) for infants Deworming for children

Proposed 2008 Budget

Proposed Additional Adjustments 1,199,111,000 1,281,000,000 180,000,000

966,000,000

1,146,000,000

10,611,000

315,000,000

325,611,000

280,007,000

100,000,000

380,007,000

120,132,000

50,000,000 399,526,838 56,988,036

170,123,000 399,526,838 341,928,216 56,988,036

Not funded

610,586

610,586

36,000,000

14,000,000

50,000,000

Anti- rabies vaccines 238,742,000 • Rabies vaccine gap: 40,432 98,500,000 vials • Rabies immunoglobulin gap: 140,242,000 70,121 vials x P2,000 Allocation for Research Institute of Tropical Medicine (RITM) to support 30,000,000 250,000,000 local production and vaccine selfsufficiency towards reduction of cost Purchase of Autoclaves • To ensure proper waste treatment and sterilization prior New Line Item 100,000,000 to actual disposal of infectious wastes TOTAL 2,433,268,838

2008 Alternative Budget Initiative

Alternative Budget for 2008 2,480,111,000

280,000,000

100,000,000

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Table 39: 2007 Actual Budget and 2008 Proposed Budget Budget Item

2007 Actual Budget

REGULATION Regulation of Food and Drugs including Regulation of Food Fortification and Salt 125,700,000 Iodization Regulation of Health Facilities and 27,811,000 Services Regulation of Devices and Radiation 23,107,000 Health Quarantine Services and International 44,647,000 Health Surveillance Program to make drugs and medicines more affordable (Botika ng Baranggay)

Proposed 2008 Budget

183,988,000 35,653,000 47,929,000 80,968,000

319,632,000

369,632,000

37,781,000

100,826,000

444,857,000 232,098,000 139,007,000

483,857,000 1,199,111,000 280,007,000

29,609,000

138,443,000

28,939,000

91,797,000

1,703,000

133,441,000

22,282,000 37,781,000

120,132,000 100,826,000

Local Health assistance at the 16 CHDs 228,158,000

1,109,020,000

Implementation of health regulations and standards at the 16 CHDs PUBLIC HEALTH Expanded Program on Immunization Family Health Tuberculosis Control Program Elimination of Rabies, malaria, schistosomiasis, leprosy & filariasis Control of other infectious diseases emerging and re-emerging diseases (HIV-AIDS, dengue, etc.) Environmental and Occupational health Epidemiology & Disease Surveillance Health Promotion

Health Emergency Management HOSPITAL

11,265,000

168,204,000

Formulation of policies, standards and 122,914,000 plans for hospital & other health facilities

137,451,000

National Voluntary Blood Services Program and Operation of Blood Services (new line item) Health Facilities Enhancement 43,500,000 Operation of Drug Abuse Treatment and 226,042,000 Rehabilitation Centers GOVERNANCE

80

150,436,000 1,307,522,000 227,638,000

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Budget Item

2007 Actual Budget

Formulation & Development National 25,730,000 Health Policies and Plans Inc. Health Research Health Information Systems and 20,787,000 Technology Development Local Health Systems Development 16,243,000 Health System Development 127,472,000 Development of Policies, Support 16,667,000 Mechanisms for International Health Cooperation Health Human Resource Policy 18,112,000 Development and Planning Implementation of Doctors to the Barrios 36,284,000 and Rural Health Practice General Administrative Support 226,139,000

2008 Alternative Budget Initiative

Proposed 2008 Budget 41,360,000 145,671,000 23,852,000 247,500,000 21,531,000 52,193,000 42,284,000 388,000,000

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__________________________________________Attaining the MDGs and Sustainable Growth with Equity PROPOSED ALTERNATIVE BUDGET FOR AGRICULTURE Situation There is a seeming paradox in the agriculture sector today. Food and Agriculture Organization (FAO) aptly described the current situation of agriculture by saying that: • • • • •

Global food supply is sufficient, but 850 million worldwide are undernourished and are experiencing hunger; Use of chemical agriculture inputs is increasing, yet grain productivity is dwindling to seriously low levels; Cost of agriculture inputs is increasing, but commodity costs have been in steady decline over the past five decades; Knowledge is now provided at an instant through information technology and yet, it is taking time to curb the rise in nutritionally related diseases. Industrialized food systems cause farmers’ deaths through pesticide poisonings and a high numbers of farmers have committed suicide while millions of jobs have been lost in rural areas.

The paradox is seen in the Philippines. While agriculture accounts for 15 percent of the country’s GDP and nearly 40 percent of employment, the poverty incidence in this sector remains alarmingly high. Balisacan’s estimates (2006) show that the agriculture sector contributes 61.3 percent to total poverty. The National Anti-Poverty Commission (NAPC) reported that poverty incidence among farmers and fisherfolk is generally higher across all regions, than the average poverty level nationwide. With the average annual net income of a farmer amounting to only P16, 650, or one-fifth of the annual household poverty threshold (NEDA, 2006) it is not surprising why the population belonging to this sector remains the poorest of the poor. . Further, rice farms have become nutrition deficient over the years as farming has increasingly been chemical intensive. The Bureau of Soils and Water Management (BSWM) reported that the increasing use of nitrogenous fertilizers has led to imbalanced plant nutrients, which caused deficiencies in major plant food nutrients such as zinc and boron. The single use of urea for example has resulted in sulfur deficiency in major rice producing provinces, such as Isabela and Nueva Ecija. The dilemma faced by the agriculture sector is exacerbated by environmental factors such as nutrient deficient soil and the unusual weather conditions. With the prevalent use of chemicals and pesticides in farming, there is also a growing concern for producing safe food, which policy makers need to look into. Critique of the DA’s budget proposal Hybrid Rice Commercialization Program In the 2006 and 2007 budget deliberations, legislators questioned the massive subsidies spent on hybrid seeds and the cost-efficiency of DA’s Hybrid Rice Commercialization Program (HRCP). Ginintuang Masaganang Ani (GMA) Rice Director Frisco Malabanan assured legislators that 2007 will be the last year of government subsidy for hybrid rice based on the recommendation of the Technical Working Group headed by PhilRice.

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However, early in 2007, DA Secretary Arthur Yap recommended to President -Arroyo the extension of the hybrid rice seeds subsidy program for another three years to help the farmers cope with increasing price of farm inputs like fertilizer and pesticides. (Businessworld, 1/31/07. The DA reported that the production target area for hybrid rice seeds in 2008 is 500,000 hectares. The government’s subsidy for each bag of 20 kilos of hybrid seeds is P1,000. Assuming that a hectare of rice land will need 1 bag of hybrid rice seeds, the government will spend P500 million for hybrid rice subsidy covering 500,000 hectares or 12.5 percent only of the total rice lands. The total area of rice-harvested land in the country is 4 million hectares. For certified seeds which costs P440 per bag and will cover 1.1 million hectares, government will spend P484 million for 27.5 percent of the total rice lands. . A recent World Bank report on public expenditures of the DA criticized the largest slice of production support (about 85 percent) allocated to the GMA rice program, in particular for the HRCP. The same report found the sizeable amount of money and public human resources spent on HRCP did not produce much net social benefit. The farmers’ adoption of hybrid seeds has been slow, reaching peak coverage of 11 percent of total rice area in 2005. The size of the target area was bigger than the actual area planted with hybrids because of seed deterioration and geographic/time mismatch between demand and supply. While the rate of hybrid seed adoption increased from 5 percent in 2004 to 11 percent in 2005, the drop-out rate revealingly ranged from 50 to 99 percent. In addition to the hybrid rice subsidy, the HRCP gave an additional P200 monthly to LGU staff to sell hybrid rice seeds, provide training for farmers, monitor the program progress and collect debts from participating farmers. The said task and incentive diverted the attention of LGU employees away from more relevant projects. International NGO, Southeast Asia Regional Initiative for Community Empowerment (SEARICE) found the LGU staff’s promotion of the HRCP sowed doubts on the efficiency of the hybrid rice among the farmers. Problems came up when the seeds did not germinate and encountered pest and diseases as LGU extension workers do not have the technical expertise to deal with these problems. Recommendations The government, particularly the Department of Agriculture should diversify its agricultural development program to include sustainable agriculture as one of the options for the flagship programs and not limited only to hybrid rice and GMOs. Diversifying the government programs can also lessen the risks in case of failure of some of these flagship programs. Sustainable agriculture practices were proven to be suited for poor and cash-strapped farmers. The government’s adoption of these practices in their programs can be directed to poor farmers who have limited access to government’s programs. R1 recommends the integration of sustainable agriculture practices in the existing extension services of the DA. Sustainable agriculture methods should be developed and farmers should be given access to participate in every step of the research and development process – from problem identification, implementation, monitoring and evaluation.

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__________________________________________Attaining the MDGs and Sustainable Growth with Equity Perhaps the DA should learn from SEARICE’s experience in participatory plant varietal selection and plant breeding programs, which increase in yield by 15 percent because of improved seed quality. The programs were implemented to enhance seed selection techniques and seed storage systems of farmers (SEARICE, 2002). According to studies, the following production constraints affected the shortage in production yield: • • • • •

Insect pests and diseases – 35% Water management – 26% Fertilizer and soil management – 21% Seeds and seedling management – 9% Weeds – 9%

These show almost half of the problems affecting the production yield are poor quality soils from degradation to salinity and acidity conditions and insect pests and diseases while seeds and seedling management comprises a mere nine percent. Soil rehabilitation is necessary and the government should shift its attention and resources to organic inputs and re-channel support to more ecologically sustainable methods. Rather than just dictating to the farmers the measures to undertake, the DA should design and implement participatory and integrated soil fertility and pesticide management programs. The growing concern over extreme weather conditions that we now experience also points to the need to look into the problem of climate change. Agriculture is said to be a major contributor of greenhouse gases, such as methane, nitrous oxide and carbon dioxide. The World Food Summit reported that chemical farming together with deforestation is responsible for the 30% of carbon dioxide emissions and 90 percent of nitrous oxide emissions worldwide. Organic agriculture has the potential to reverse those trends, and reduce greenhouse gases by using significantly less fossil fuel. It also promotes aerobic microorganisms and high biological activity in soils, thus increasing the oxidation of methane. The extension agencies of the DA should demonstrate an array of options for the farmers and not just one specific product or technology. The options can range from maximization of local materials for fertilization, use of low external synthetic fertilizers to organic and biodynamic methods and even adoption of rice production planting systems like the System of Rice Intensification (SRI). Each of these methods has its track record of success based on the location of the farm’s specific conditions. Budget proposal To implement our proposal to mainstream sustainable agriculture and rice farming practices, following funds will be added to the budget of the Philippine Rice Research Institute. On page 830 of the GAB, under the heading “Operations” sub heading “a. Developmental Programs”, 1. On line 14, with regard to “1. Research and Development”, under MOOE, add P8 million to the P57 million allocation so that the total fund allocation for this item will be P65 million. 2. On line 17, insert the following: “3. Promotion of Sustainable Rice Farming Practices”. Under PS, specify P18 million; under MOOE specify P132.5 million

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On the same page, line 20, adjust the totals to reflect the additional allocation. On the same page, on line 25, insert a special provision which reads: “Special Provision� 1. Appropriation for Programs and Specific Activities. The amounts herein appropriated for the programs of the agency shall be used specifically for the following activities in the indicated amounts and conditions: PROGRAMS AND ACTIVITIES A. PROGRAMS Table 40: Current Operating Expenditures Current Operating Expenditures III.Operations a. Development Programs 1. Research - General -

Climate change adoptable rice technology

-

Annual convention of sustainable agriculture practitioners

PS

MOOE

CO

TOTAL

57,000,000.00 5,000,000.00

3,000,000.00

2. Technology Transfer 3. Promotion of Sustainable Rice Farming Practices a. Training (Education on sustainable agriculture (500 farmers x P500 x 6 technologies x 50 provinces)

75,000,000.00

52,500,000.00

b. Production Support 1.organic fertilizers and other organic inputs (50 provinces x 500 farmers

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__________________________________________Attaining the MDGs and Sustainable Growth with Equity xP1,000 x 2 cropping seasons) 2. setting up of provincial vermiculture/technology showcases(Ph 50,000 x 50 provinces)

18,000,000.0 0

c. Extension Services (Personnel, 2/province at P15,000 each) [50 provinces x P30,000 x 12 months] d. Demonstration Farms (P 50,000 x 1 hectare x 2 cropping seasons x 50 provinces)

5,000,000.00

Summary Notes: Table 41: The Alternative Budget Proposal for Agriculture, 2008 Proposed Additional Budget

Budget Item Education on sustainable agriculture (500 farmers x P500 x 6 technologies x 50 provinces) Research and development Annual convention for sustainable rice practitioners

3,000,000

Research on friendly technologies to climate change Production support • organic fertilizers and other organic inputs)[50 provinces x 500 farmers xP1,000 x 2 cropping seasons) setting up of provincial • vermiculture/technology showcases(Ph 50,000 x 50 provinces)

5,000,000 50,000,000 2,500,000

Extension services (Personnel, 2/province at P15,000 each) [50 provinces x P30,000 x 12 months] Establishing demonstration farms (P 50,000 x 1 hectare x 2 cropping seasons x 50 provinces) TOTAL

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75,000,000

18,000,000 5,000,000 158,500,000

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THE IMPERATIVES OF GREEN GROWTH: SUSTAINABLE DEVELOPMENT BEYOND RHETORICS The Proposed Alternative Budget for FY 2008 I. The State of the Philippine Environment Various literatures on the state of the Philippine environment paint gloomy scenarios. Two of these documents are the United Nations Economic and Social Commission in Asia and the Pacific (UNESCAP) 2005 State of the Environment in Asia and the Pacific Region and World Bank’s Philippine Environmental Monitor 2004. The UNESCAP report points to emerging role of the Asia-Pacific region as a new global center of production characterized by rapid growth rates achieved at a very high cost to the environment. The tremendous pressure in the ecosystems and natural resources has been a result of unsustainable production and consumption patterns linked to four (4) major trends: 1) the growth of pollution and resource-intensive Industry, 2) the intensification of agriculture, 3) urbanization and globalizing consumption patterns, and 4) heightening demand for raw materials, energy and water. As it is, the Philippines is listed among the 18 Asian countries running at an ECOLOGICAL DEFICIT ---- a measure of the productive natural resource endowment (biocapacity) with the extent to which a country’s consumption levels exceed its natural resource endowment (ecological footprint). Where a country’s footprint exceeds its own biocapacity, it is said to be running at an “ecological deficit.” The ecological footprint methodology is a conservative estimate of environmental pressures as it excludes human activities such as extraction of nonrenewable resources, toxic pollution and species extinction in the model. On the other hand, the World Bank report zeroed in on how the Philippines fare in the set of environmental indicators classified under the “brown”, “green”, and “blue” environment. An assessment of these indicators was made by Mr. Isagani Serrano, Co-convenor of Social Watch Philippines and Senior Vice-President of the Philippine Rural Reconstruction Movement (PRRM), in his paper entitled Ensuring Environmental Sustainability. The assessment cites that “most indicators point upwards or downwards when they should be pointing in the opposite desired direction.” The paper further summarized the environmental quality derived from the World Bank’s Philippines Environmental Monitor 2004 as illustrated below: Table 42: Classification of Environmental Issues Classification of Environmental Issues BROWN ENVIRONMENT

Indicators

 Ambient TSP level in Metro Manila, Cebu, Davao, 1. Air Pollution in Baguio Metro Manila & Urban Centers

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General Trends, Status, Comments

Declining particulate concentrations in urban centers but annual averages still exceed national standards. Nonconventional and area sources like biomass burning and re-

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__________________________________________ suspended dust need controlling

2. River and Coastal Water Quality

3. Solid & Hazardous Wastes

4. Mining Pollution

GREEN ENVIRONMENT 1. Forest Cover

88

 No. of highly polluting vehicles on MM roads

Declining; rising production of cleaner motorcycles and vehicles; rapid increase in motor vehicles points to urgent need for public transport and transport management

 % population with access to sanitation and sewage

Access to sanitation rising slowly. Urban access to piped sewerage in MM is very low (8%) are investments in sewerage are inadequate.

 Contamination of ground water

Total coliform contamination increasing with domestic wastewater accounting for majority of the pollution load.

 % industrial waste treated

More waste treated but total production as well as illegal solid, toxic/hazardous waste, dumping is rising

 Solid and hazardous waste generated

Rising with population while services are not keeping up with demand

 % of waste recovered for recycling

More LGUs practicing ecowaste management; level of composting and recycling is rising

 % of residual waste disposed in environmentally sound manner

Open dumping and burning continue as main means of disposal

 No. of closed/abandoned mined

Twenty sites surveyed for rehabilitation and revegetation

 Mercury levels in surrounding and downstream water bodies

Rising mercury pollution resulting from artisanal mining. Better management of mining sites and handling of wastes needed.



% of forest cover

Total forest cover improving but forest protection and rehabilitation need expanding.

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 Annual rate of reforestation 

Open access areas

2. Critical Habitats and  No. of rare, Biodiversity threatened, and endangered wildlife species

 Soil erosion and flooding



Yield/hectare (mt/ha)

Slowing in recent years Increasing forest areas under management or co-management One of the highest biodiversity loss in the world. Shrinking habitat along with commercial exploitation in spite of more area under protection Increasing soil erosion and flooding. Deforestation and land conversion continue to add to the problem. Static yield/hectare decreasing despite inputs. Increasing deforestation from logging, natural disasters, and residential development.

BLUE ENVIRONMENT 1. Water Supply

2. Watersheds

 Water supply (in per capita availability/year)

National water demand expected to outstrip supply.

 Water demand in major cities (in MCM/year)

Critical seasonal shortages worsening as demand continues to rise with population and economic growth.

 % of population with access to improved water source

Steady improvements in access to improved water source.

 % of watersheds considered degraded

Minor improvements noted.

3. Coastal and Marine  Mangrove cover Resources  % of coral reefs in excellent condition

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Increasing but threats continue. Declining. Destructive fishing, construction, solid and hazardous waste disposal continue to threaten coastal and marine resources. More active participation of LGUs and communities needed.

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__________________________________________

Sea grass cover

 Fishery production from municipal waters GLOBAL ENVIRONMENT

Reclamation and pollution continue to threaten seagrasses. Going down even with increased fishing effort.

 ODS consumption (in Consumption of ozone depleting metric tons) substances (ODS) in the Philippines declined to 1422 metric tons by 2003, ahead of international commitments.

Brown Environment The first set of environmental problems relates to the brown environment or pollution and waste management-related problems. This is characterized by persistent air quality problems, declining water quality in river and coastal waters, and increasing solid and hazardous waste generation and improper waste management. In Metro Manila, Baguio, Cebu and Davao particulate levels are declining but national averages continue to exceed national standards. Deterioration of air quality has adverse impacts on public health particularly among drivers and commuters in the area. Similar to air quality, nearly half of the country’s classified rivers fall below normal quality standard. While some rivers in the country are still pristine, particularly in Mindanao, these may have already been subjected to varied forms of environmental pressures that could result to decrease in water quality. Laguna de Bay, the country’s biggest fresh-water body and a source of drinking water for some parts of Metro Manila is presently subjected to expanding agroindustrial activities and urbanization, and is already facing nutrient loads and increasing siltation. As a result, the culture period of some fish species (bangus and tilapia) has been noted to lengthen. Fish kills have occurred seasonally in the western portion of the lake where industries and settlements are concentrated, to the detriment of the livelihood of the poor fisher folks. The quantity and quality of groundwater have likewise been adversely affected. Since 1955, the groundwater table in Metro Manila has been estimated to recede by 5-15 meters per year. This has led to salt water intrusion in a 2-kilometer coastal strip extending from Cavite to NavotasMalabon. Household solid waste and industrial hazardous waste have likewise risen significantly and its widening disposal to the environment is a growing threat to the quality of water, air and land. Compounding this problem is the lack of environmentally sound disposal and treatment facilities and the low budget allocation for solid waste management. Improper waste management has also caused tragic human and environmental consequences. Green Environment The second set of problems concerns the green environment or natural resource degradation that threatens agricultural production, forests and biodiversity. Land degradation persists with massive conversion of forest and grasslands into agricultural lands and urban use.

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The principal direct causes of deforestation in the country are logging, slash and burn farming, forest fires, and conversion of forestlands to agricultural lands, human settlements and other development projects which government has not substantially addressed. While there registered an improvement in forest cover, forest composition and quality are declining suggesting failure to arrest loss of biodiversity. It is also observed that the annual rate of reforestation has been slowing in recent years. Forest protection and rehabilitation remain a big challenge as reforestation performance lagged behind annual deforestation record. The continuing onslaught of the country’s forest cover and habitat also threatens its rich biodiversity. The Philippines is one of the countries identified to have the highest biodiversity loss rates among the world’s biodiversity hotspots. The country experiences shrinking habitat along with commercial exploitation in spite of more area under protection. Soil erosion and flooding are on the rise while deforestation and land conversion continue to add to the problem. Findings from recent biodiversity assessment indicate that existing infrastructure − roads, power and energy, ports and harbors and growth area (including residential development) − badly endanger the country’s biodiversity-rich ecosystems. Conversion of uplands into agricultural areas is also on the rise. Widespread poverty and limited livelihood opportunities have resulted to the influx of migrants to the upland areas. As of 2000, about 20 million people have been residing in these areas including the Indigenous Peoples. Most of them depend on upland resources for livelihood. This huge population has continued to exert pressure on the fragile upland resources. The government’s adoption of Community-Based Forest Management as the national strategy for sustainable forestry and social equity has not made significant results in terms of protection, conservation and rehabilitation due to the very limited funding from government to pursue this strategy. Blue Environment The third set of environmental problems concerns the blue environment, which deals on water resources-related issues. Major problems under this category include the difficulty of meeting water demand, watershed degradation, and declining coastal and marine resources. While national demand for water is less than one third of the renewable water available, some areas of the country continue to experience water shortage. These include densely populated cities such as Metro Manila, Cebu and Baguio City. The mismatch in the demand and supply of water in these areas has been attributed to lack of infrastructure. In rural areas such as the remote uplands of Mindanao, problems of potable water supply have been attributed to absence of government infrastructure and environmental degradation resulting to contamination of rivers and lakes. Many of the country’s river basins are in varying state of degradation. Identified causes of watershed degradation include lack of clear overall watershed strategy, fragmented land management, limited resources for development and protection, and increasing population pressure. Like the other forms of natural resources, coastal and marine resources are likewise deteriorating. The country’s coral reefs are in poor situation with only barely 4% in excellent condition (BFAR, 2007). Even this is under threat from siltation, pollution, over-fishing and destructive fishing techniques. Mangrove forests are likewise vanishing rapidly. Moreover, growing population and a rise in export have increased pressure on marine fisheries over the last 30 years. Declining fish yields have been observed as a result of over fishing in open access fisheries, siltation of inshore reefs, and poor fishing techniques.

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II. Sustainable Development as an Imperative The country’s declining environmental quality manifests itself in the frequent occurrence of environmental disasters such as destructive floods and landslides during rainy season, prolonged drought during dry season, and large scale poisoning and death of fishes and other aquatic resources, to name a few. These in turn, persist to claim human lives and destroy valuable infrastructures and properties including poor people’s major sources of livelihood. Even the gains of economic growth are being diminished and/or negated by the numerous forms of environmental destruction. Needless to say, the impacts of environmental deterioration are most severe among the poor since they are the most vulnerable to all forms of risks and disasters. The impacts are wideranging and covers such areas as socioeconomic, geographic, demographic and cultural (Environment and the Poor, Overseas Development Council, 1989). The 1992 Earth Summit in Rio de Janeiro has laid down a development approach which identifies sustainability as central to any development endeavor. Sustainable development, defined as meeting the needs of citizens of today without limiting the options of future generations to fulfill their needs (1987 Brundtland Commission Report), as an approach to the pursuit of progress also identifies active participation of various stakeholders in development. In the Philippines however this concept remains rhetoric. In spite of numerous documents stating government’s affirmation to this approach, it has not successfully filtered into the country’s development plans and practice. Sustainable Development Rhetorics in the Philippines After the 1992 Earth summit, the country was among the first nations to develop its sustainable development agenda known as the Philippine Agenda 21. In fact, as early as 1990, the Philippine Strategy on Sustainable Development (PSSD) has been laid down with the subsequent creation of the Philippine Council for Sustainable Development (PCSD) as a venue for government and various stakeholders for collectively defining the country’s development path. The ensuing performance of this mechanism and the adoption of the PSSD in development planning however leave much for assessment. The PCSD has been rendered moribund in at least the last five years with no significant impact or influence to the country’s development planning, while the PSSD remains just another document. Policy-Action Gap Through the years government has been reported to being signatory to important international environmental agreements. It also stands as one of the most overlegislated countries when it comes to environmental laws and policies (Ronquillo and Morala, 2007). While the country’s policy environment has substantially been laid down, the accompanying actions remain lacking to reverse the country’s environmental trends.

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International Environmental Agreements Signed into by the Philippine Government 1. Montreal Protocol, to phase out the use of Ozone Depleting Substances. 2. UN Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol. 3. Stockholm Convention on Persistent Organic Pollutants 4. Basel Convention Hazardous Wastes. 5. Convention on Biological Diversity. 6. Ramsar Convention on Wetlands (RAMSAR).

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As pointed out in the paper Ensuring Environmental Sustainability (Serrano, 2006), one of the problems lies in the widening gap between policy and actions. It is apparent that what is on paper is not exactly what is being done. Environmental legislations were rendered meaningless, if not altogether useless, by lack of necessary funding for implementation. This has been the continuing fate of critical laws such as the Clean Air Act, Clean Water Act, and the Ecological Solid Waste Management Act.

7. Convention on International Trade in Endangered Species of Flora and Fauna (CITES). 8. International Convention for the Prevention of Marine Pollution from Ships (MARPOL). 9. Bonn Convention on the Conservation of Migratory Species of Wild Animals (CMS). 10. United Nations Conference on the Law of the Sea (UNCLOS). 11. Millennium Development Goals Source: Environmental Insecurity: The Cost of Mis-Governance. Ronquillo and Morala, 2007.

Institutional Inconsistencies Another area that poses great environmental challenge is the existence of institutional inconsistencies. The Department of Environment and Natural Resources (DENR) is generally perceived by environmental advocates as franchiser of exploitative human activities such as mining, logging, etc. The current thrust of the administration in pursuing its economic agenda has greatly compromised the DENR's mandate of being "the primary agency responsible for the conservation, management, development, and proper use oft he country's environment and natural resources." (In the proposed 2008 budget, the Preisdent earmarked 30% of DENR's budget for the promotion of agri-business in Mindanao) Of recent years, we also saw DENR subjected to constant change in leadership. Notwithstanding the questionable credentials of the appointees vis-à-vis environmental sustainability, the Department’s role and functions in conservation and protection of natural resources have already been greatly compromised. The current thrust of the administration in pursuing its economic agenda has virtually transformed DENR into an agency that promotes exploitation of the country’s rich natural resource. The Medium Term Philippine Development Plan (MTPDP) and the Medium Term Philippine Plan (MTPIP), to be pursued through the Super Regions dream, are the development recipes which the UNESCAP report have been pointing out as key reasons for ecological degradation in the region. MTPDP (2004-2010) Development Areas for Environment & Natural Resources 1. Sustainable and more productive utilization of natural resources to promote investments and entrepreneurship 2. Promotion of responsible mining that adheres to the principle of sustainable development; economic growth,

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Ronquillo and Morala also cited the hellbent determination of the administration in reviving and promoting mining to jumpstart its economic agenda. Evidence of this is the recently signed Executive Order (E.O.) 636, transferring the Philippine Mining Development Corporation from the DENR to the Office of the President. This is a follow-up to

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__________________________________________

environmental protection, and social equity; 3. Focusing on and strengthening of the protection of vulnerable and ecologicallyfragile areas, especially watersheds and areas where biodiversity is highly threatened 4. Creation of healthier environment for the population 5. Mitigation of the occurrence of natural disasters to prevent he loss of lives and properties

E.O. 270 detailing the National Policy Agenda on Revitalizing Mining in the Philippines. Though mining development has been packaged as “sustainable/ responsible” the government’s capability to ensure proper monitoring and regulations are not in place. Facilities such as laboratories are lacking, with the DENR only possessing one such laboratory located at its Central office.1

This is alarming considering government is already facilitating the establishment of 32 mining operations (medium and large-scale) in the country, while it continues to scrounge for funds to rehabilitate old abandoned mining sites.2 III. Pushing the Green Bottomlines in the Government’s Budget Process For the FY 2008, the alternative budget for environmental sustainability entitled “The Imperatives of Green Growth: Sustainable Development Beyond Rhetorics” calls the attention of both Congress and the Executive on the ecological situation of the country. The proposal highlights critical deficiency and misplaced priorities of government that continues to exacerbate this situation. The Congress, with its legislative functions and power of the purse, is being challenged to effect substantial intervention on government priorities as reflected in the proposed 2008 National Government Budget prepared by the Executive, as well as move towards addressing key policy issues. The proposal has been crafted to facilitate ease in monitoring of implementation as well as oversight functions not only by civil society organizations but also by the legislators. Specifically the proposal stresses on what is termed as the Green Bottomlines. These include: (1) Climate Change (2) Clean Water, Air & Energy (3) Solid Waste Management (4) Forest Management (5) Coastal Resource Management (6) Biodiversity Conservation and Habitat Protection, and (7) Mining and the Environment. Policy Issues on the Budget for Environment 1. Environmental sustainability as a priority must be reflected in the budget. The DENR has been receiving less than 1% of government budget (0.68% under the 2008 proposed budget) and have failed to even figure in the Top 10 agencies since 2005. It is therefore A conservative estimate of establishing laboratory facility for monitoring of mining is Php 1 billion to cover for basic equipment. The DENR has targeted rehabilitation of only two (2) abandoned mining sites out the identified twenty-one sites, to be funded by a $57million World Bank loan (PH-38670 or the National Program Support for Environment & Natural Resource. Program availment for 2008 is at US$5-M). Data show that middle-of-the-road estimate for remediation of one mining site is at least $230 million, with remediation spanning from 50-100 years. 1 2

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apparent that the agency has been suffering from lack of funding, which must be increased for it to effectively perform its protection and conservation functions. 2. The success of sustainable development is premised on active participation of communities and other stakeholders in crafting the development path of the nation. The Philippine Council for Sustainable Development which came to being through the participative process among various stakeholders must be reviewed and assessed as a possible mechanism for genuine tripartite interaction on environment planning, program implementation and monitoring of development plans. Currently, the PCSD is part of NEDA with negligible role and influence. 3. The DENR budget must strictly adhere to its mandate as the “primary government agency responsible for the conservation, management, development and proper use of the country’s environment and natural resources.” The DENR budget should not include allocations that are meant to promote extractive industries such as mining. Particular to the Mines and Geo-science Bureau, its monitoring and regulation functions must be strengthened. 4. In relation to item no. 3, the President’s pronouncement earmarking thirty percent (30%) of DENR’s operations budget to Mindanao in support of agri-business ventures is highly contentious and once again reflects institutional inconsistencies. Actual amount and activities related to this must be properly assessed for environmental impacts. Those found to be detrimental to environmental sustainability and not related to promotion of conservation and protection of the environment and natural resources must be realigned towards genuine programs on such. 5. The Green Philippines Highway Project is a misplaced priority given the urgent need (and limited funds available) to reforest the country’s natural and upland forests, watersheds, including the rapidly diminishing mangrove areas. Further, recent experience with typhoon Milenyo has put to waste an estimate of 60% of trees planted along highways. We propose that reforestation efforts for 2008 must be focused in watersheds, natural forests, and not highways. 6. Unfunded and unimplemented have been the continuing fate of many environmental laws due to the very limited budget and low priority given to environmental sustainability. Among these are the Clean Air Act, Water Crisis Act, Solid Waste Management Act, and the Toxic Substances & Hazardous & Nuclear Wastes Control Act. Actions must be taken immediately by Congress to resolve the issues around unfunded laws. 7. Foreign assistance has become the government’s primary strategy for generating funds for environment-related programs and projects. This has rendered implementation contingent to availability of foreign funding but also propagates the country’s debt problem not to mention instances of dismal implementation problems that beset some of these foreign-assisted projects. Alternative financing that may be sourced through a creation of a Special Fund to which collections arising from use of environmental resources, and penalties for the sole purpose of restoring the country’s ecological integrity. Currently, these fees and penalties are treated as income and remitted directly to the National Treasury, with just a portion for the use for environmental conservation, rehabilitation and protection. 8. Review of the current policy to accelerate the development of mining industry in view of the lack of appropriate facilities to properly monitor mining operations must be undertaken. The environmental costs resulting from mining disasters and rehabilitation far exceed the economic benefits projected by government.

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For FY 2008 the following alternative allocations totaling to Php 2.706 billion to the environment and natural resource sector are being proposed to ensure a more programmatic and decisive intervention towards arresting further deterioration of the country’s ecological well-being. Details of the alternative allocations are as follows: 1. Building a Legacy: Towards Rationalizing the Use of the Country’s Natural Resources challenges government, including the legislature, to work for the completion of basic requirements towards crafting the country’s comprehensive Land and Water Use Plan by 2010. This includes delineation of forest and watershed boundaries, demarcation of Philippine archipelagic waters, geo-hazard mapping to assess areas with high vulnerabilities to disasters resulting from climate change, and immediate reproduction of maps. 1.1 Complete delineation of forest and watershed boundaries by 2010. DENR reports a balance of 55,039 kilometers for delineation of forest boundaries. To achieve completion by 2010, an annual target of 18,346.3 km must be made over the three-year period. Consistent to this, the proposed 2008 target requires an increase of 9,260.3 km or an additional allocation of Php 111,124,000, computed at Php 12,000 per km. Table 43: Delineation of forest boundaries Status of Implementation Balance as of 2007:

Yearly Targets for 3 years (km)

Proposed Increase from 2008 Target (km)

Proposed Increase in Allocation (Php)

18,346.3

9,260.3

111,124,000.00

55,039 km 1.2 Complete demarcation of Philippine archipelagic waters including ECS and EEZ by 2010. The demarcation of the country’s archipelagic waters is a locally-funded project (RP Extended Continental Shelf Delimitation Project) with allocations ascribed to the National Mapping and Resource Information Authority (NAMRIA). To achieve completion by 2010, it is proposed that NAMRIA targets an annual area of 342,352 square km starting 2008. This requires an increase of 192,352 sq. km from the original target of 150,000 sq. km. or an additional allocation amounting to Php 487,290,600.00, computed at Php 2,533/ sq. km. We further propose the prioritization of ECS (i.e., Palawan, Sulu, Samar), targeting its completion by 2008. Being potential oil and gas areas, the country’s claim over these areas must immediately be established to avoid future conflicts over jurisdiction.

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Table 44: Demarcation of Philippine Archipelagic Waters Status of Implementation

Yearly Targets for 3 years ( sq. km)

Balance as of 2007:

Proposed Increase from 2008 Target (km)

342,352

Proposed Increase in Allocation (Php)

192,352

487,290,600.00

1.027 million sq. km 1.3 Fast-track Survey and Mapping Activities. a) Target the completion of geo-hazard mapping for the remaining 457 priority municipalities by 2008. This is one of the crucial instruments in defining the country’s plan of action vis-a-vis climate change. b) Complete production of remaining 1,799 large-scale 3 and 270 medium-scale 4 topographic maps by 2008. c) Complete nautical and harbor charts by 2010. d) Complete delineation of municipal fishery waters within six (6) years, or by 2013. e) Complete coastal and land (including PRS 92 and CARP-related surveys) surveys within six (6) years, or by 2013. f) Complete cadastral surveys of the remaining 705 municipalities by 2013. g) Upgrading and improvement of NAMRIA’s information management system that would allow public’s easy access to available data, e.g., website development. For the above-listed endeavors, an aggregate additional funding of Php 606,907,000.00 is being proposed to allow the concerned agencies to adjust their targets for 2008. Table 45: Proposed additional funding for NAMRIA Budget Item

Original Allocation (Php)

Proposed Increase (Php) [Doubling of Original Allocation]

NAMRIA – Operations [2008 NEP p. 130] OSEC – Operations Land Mgt (land surveys) [2008 NEP p. 114] OSEC – Operations Land Mgt (survey of foreshore reservations, etc. covered by CARP) [2008 NEP p. 115]

3 4

688,772,000.00

500,000,000.00

126,014,00.00

100,000,000.00

6,907,000.00

6,907,000.00

Scale-scale maps are the final output of geo-hazard mapping activities. Medium-scale maps reflect road networks, etc.

2008 Alternative Budget Initiative

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Attaining the MDGs and Sustainable Growth with Equity

__________________________________________

2. Double Time for Conservation and Protection of Natural Resources calls on government to improve its intervention in conserving and protecting the natural resources. Investing in these efforts addresses several economic and environmental issues such as poverty, soil and water conservation, improving the microclimate, creating new habitats for wildlife, etc. As a starting point, it is being proposed that allocations for the following programs be doubled to augment capital outlay and MOOE to allow expansion of scope and coverage of programs. 2.1 Strengthening the role of communities in sustainable management of forest resources through CBFM 2.2 Forest Protection, Soil and Watershed Management 2.3 Coastal & Marine Resource Management 2.4 Protected Areas and Wildlife Management 2.5 Legal Support Strengthening Table 46: Proposed additional funding for OSEC Budget Item/ Reference OSEC – Operations Forest Mgt (CBF Program) [2008 NEP p.112] OSEC – Operations Forest Mgt (forest protection) [2008 NEP p. 112] OSEC – Operations Forest Mgt (soil & watershed mgt) [2008 NEP p. 113] OSEC – Operations/ Ecosystems Research and Development Coastal & Marine Resource Mgt [2008 NEP p. 119] OSEC – Operations Protected Areas & Wildlife Mgt [2008 NEP p. 116] OSEC – Support to Operations Legal Services, including operations against unlawful titling of public lands [2008 NEP p. 109] OSEC – Support to Operations Provision for operations against illegal forest resource extraction, etc. (PD 705) [2008 NEP p. 110] TOTALS

98

Original Allocation (Php)

Proposed Increase (Php)

103,446,000.00

103,446,000.00

473,549,000.00

473,549,000.00

504,398,000.00

504,398,000.00

40,788,000.00

40,788,000.00

238,027,000.00

238,027,000.00

85,982,000.00

85,982,000.00

5,000,000.00

5,000,000.00

1,451,190,000.00

1,451,190,000.00

2008 Alternative Budget Initiative


________________________________________________________ Attaining the MDGs and Sustainable Growth with Equity

3. Strengthening the Role of the Philippine Council for Sustainable Development Active participation of civil society in planning, implementation and monitoring has long been identified as important ingredient in pursuing sustainable development. One such mechanism for interaction between government and other sectors of society is through the Philippine Council for Sustainable Development. It is currently coordinated and headed by the Director General of the National Economic and Development Authority (NEDA) to which its role has been rendered moribund in the last 5 years. It is therefore proposed that an additional amount of Php 50 million be earmarked for the review, revitalization and strengthening of the PCSD by 2008. The amount shall include additional staffing, as may be required in the course of the review process, including possible hiring needs as a consequence of its revitalized role. Among its initial programs would be to initiate review and assess key ecological issues such as Climate Change; Clean Air, Energy and Water. 4. Summary of Proposed Additional Allocations Table 47: Summary of Proposed Additional Allocations Particulars

Proposed Additional Allocations (Php)

1. Building a Legacy (Sub-total) 1.1 delineation of forest and watershed boundaries 1.2 delineation of archipelagic waters 1.3 survey and mapping

1,205,321,600.00 111,124,000.00

2. Double Time for Conservation and Protection of Natural Resources (Sub-total) 2.1 CBFM 2.2 forest protection 2.3 soil & watershed management 2.4 coastal & marine resource management 2.5 protected areas & wildlife management 2.4 legal support strengthening

1,451,190,000.00

3. Strengthening the Phil. Council for Sustainable Development TOTAL

2008 Alternative Budget Initiative

487,290,600.00 606,907,000.00

103,446,000.00 473,549,000.00 504,398,000.00 40,788,000.00 238,027,000.00 90,982,000.00 50,000,000.00 2,706,511,600.00

99

2008 Alternative Budget Initiative  
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