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CRITIQUE OF THE MEDIUM-TERM PHILIPPINE DEVELOPMENT PLAN (MTPDP) FOR 2001-2004 AND SOME POLICY RECOMMENDATIONS FROM THE BASIC SECTORS By Arnel F. de Guzman *

I. Introduction Any discussion on financing for development cannot be complete without a critical look at the Medium-Term Philippine Development Plan or the MTPDP. In fact, it should be the starting point. This is because the blue print that outlines in bold strokes the development path that the Philippines will traverse under the incumbency of the executive leadership is contained in the MTPDP. Institutionalized by Marcos a few years after seizing power through martial law, the plan is crafted by the government’s foremost think tank—the National Economic and Development Authority (NEDA), a government agency created by a presidential fiat for that purpose. Cielito F. Habito, former NEDA Director General, with a twinge of derision, commented that “(T)he MTPDP gets better every time. Or so the National Economic and Development Authority (NEDA) tends to assert with each new Medium Term Philippine Development Plan (MTPDP) it churns out.” 1 Is it really getting better, especially in the context that the MTPDP’s formulation came with some consultations with a few of NEDA’s more favored civil society groups? This paper will try to critically examine the MTPDP (henceforth referred to as the Plan) of the Gloria Macapagal-Arroyo administration for the remaining years of its incumbency (2001-2004). A synoptic appraisal, this paper is by no means exhaustive and is limited in focus to what the author and his colleagues in the Basic Sector of the National Anti-Poverty Commission (NAPC) deemed essential and have direct bearing to the fight against poverty. The paper benefited a great deal from the inputs of the Agriculture, Agrarian Reform, and Natural Resources Working Group of the NAPC Basic Sector as well as the inputs of the workshop that tackled the first draft of the paper during the National Consultation on Financing for Development: Civil Society Agenda Building, as well as from comments and suggestions of colleagues and friends in and outside of NAPC. The author is, however, solely responsible for whatever error in interpretation and analysis forwarded in this paper. II. Structure of the MTPDP *

Prepared for the National Consultation on Financing for Development: Civil Society Agenda Building, sponsored by Social Watch Philippines, August 13-15, 2001, SEAMEO-Innotech Bldg., Diliman, Quezon City. The author is a Sectoral Representative of the Formal Labor and Migrant Workers Council of the National AntiPoverty Commission (NAPC). He is also a lecturer at the Department of Sociology and Anthropology of the Ateneo de Manila University. 1 Cielito F. Habito, “The MTPDP 199-2004 (a.k.a. Angat Pinoy 2004): How Not to Implement a development Plan,” manuscript, undated.


Previous plans since the time of Aquino have envisioned the country to be free from the shackles of poverty. This one is no exception. It is even bold and daring in its pronouncement “to continue the battle against poverty and seeks victory within the decade.� 2 The Plan aims to expand and equalize access to economic and social opportunities, inculcate receptivity to change, and promote personal responsibility. 3 To win the battle against poverty, the Plan calls for the implementation of a responsible deficit reduction program; raise government revenues; spend prudently on fundamental priorities such as basic education and training, health, agricultural modernization, and targeted poverty alleviation programs; and create jobs, among other standard concerns. The revised draft (Second Edition, 24 July 2001 version) of the Medium-Term Philippine Development Plan (MTPDP) for 2001-2004 is divided into four parts: 1) Macroeconomic Stability and Equitable Growth, 2) Poverty Alleviation and Comprehensive Human Development, 3) Agricultural Modernization with Social Equity, and 4) Good and Effective Governance. Macroeconomic Stability and Equitable Growth, the most voluminous of the four parts, is made up six chapters, namely: 1) Ensuring Sustained Growth with Equity and Macroeconomic Stability, 2) Promoting Full, Decent and Productive Employment, 3) Gearing for International Competitiveness in Industry and services, 4) Bridging the Digital Divide Through Information and Communications Technology, 5) Putting the Philippines on the International Tourism Map, and 6) Strengthening Government and Private Sector Partnership in Infrastructure Development. Part II, which is about Poverty Alleviation and Comprehensive Human Development, tackles Enhancing Human Capacities Through Health, Education and Housing (Chapter 7), Protecting Vulnerable Groups (Chapter 8), Reducing Regional Disparities Through Regional and Urban Development (Chapter 9), and Pursuing Sustained Peace and Development in Mindanao (Chapter 10). These four chapters correspond to and are akin to the five main strategies by which the Arroyo Administration hopes to eradicate poverty within the decade. These are (1) asset reform program or the redistribution of physical and resource assets, particularly land and credit; (2) human development services, particularly basic education, health, shelter, water, and electricity; (3) social protection of the poorest and most vulnerable sectors and communities through social welfare assistance, local safety nets and social security and insurance; (4) participation of the poor in governance, and (50 security and protection against violence, including in the home. Rural development takes center stage in Part III with the lone chapter on accelerating rural development by way of a meaningful implementation of the Agriculture and Fisheries Modernization Act (AFMA).

2

Medium Term Philippine Development Plan (MTPDP) 2001-2004, Manila, Philippines, 24 July 2001, p. xxv. The implication here is that it aims to eradicate not just alleviate poverty before 2010. 3 Ibid.

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Part IV on Good and Effective Governance is elaborated by a single chapter that calls for a governance resting on sound moral foundation, a philosophy of transparency, and an ethic of effective implementation through a leadership by example. Each chapter of the four parts is organized following a common flow: policy framework, assessment and challenges, targets and strategies and priority legislative agenda.

III. Lessons not Learned: The Continuing Policy of Liberalization and Other Anti-Poor Prescriptions One striking feature of the three year plan of the Arroyo Administration is it adherence to a policy framework that has been proven to bring havoc to the lives of the people. This is the policy of liberalization and its other derivatives like globalization, deregulation, and privatization. Sugar-coating the terms so that it becomes palatable and seemingly neutral, the Arroyo Administration has professed to continue to pursue ”liberalization and regulatory reform policies that free the economy from ineffective government interventions and protection systems, and promote competition.” 4 The Arroyo Administration has not radically departed from the economic track of previous administrations, i.e. an export-oriented, import dependent economy bereft of genuine industrialization, and relying on labor export to boost its foreign exchange earnings and ease its unemployment woes. In a way this is hardly surprising. Gloria Macapagal-Arroyo has been, ever since, the champion of neo-liberalism. It was under the co-chairmanship of then Senator Gloria Macapagal-Arroyo and Blas Ople that the Committee of the Whole of the Senate recommended and consequently ratified the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) signed in Marrakesh, Morroco on April 15, 1994, thereby ushering the country’s membership to the World Trade Organization (WTO) in January 1995. Even the Supreme Court uphold the policy of liberalization when it threw the petition of Senators Wigberto Tanada and Anna Dominique Coseteng and Congressmen Gregorio Andolana and Joker Arroyo to nullify the approval of Philippine membership to the WTO. Supreme Court Justice Jose Artemio Panganiban, who wrote the decision in 1997, said: Liberalization, globalization, deregulation and privatization are ushering us in a new borderless world of business by sweeping away as mere historical relics the heretofore traditional modes of promoting and protecting national economies like tariffs, export subsidies, import quotas, quantitative restrictions, tax exemptions and currency controls. 5 With our formal membership to the WTO, the era of globalization has dawned with the promise of higher output as reflected in the Gross National Product (GNP) and Gross 4 5

Ibid, p. 3-1. Nati Nuguid, “Fair Trade, Not Free Trade,” Philippine Free Press, June 24, 200, p. 8.

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Domestic Product (GDP); higher economic activity in agriculture, industry and services; more jobs; lower prices and interests rates; lower budget deficits; and better trade balance position. 6 Then President Fidel V. Ramos made additional sales pitch when he was urging the Senate to ratify the treaty by saying that our membership to the WTO “will improve Philippine access to foreign markets, especially its major trading partners, through the reduction of tariffs on its exports, particularly agricultural and industrial products.” 7 But these turned out to be empty promises. Six years after GATT and continuing liberalization, our growth has been faltering compared to our neighbors. As of April 2001, there are 4.461 million unemployed Filipinos according to the National Statistics Office (NSO). Inflation is double digit. The peso is continuously sliding vis-à-vis the US dollar. And in agriculture, which was projected to be the number one gainer, no less than Senator Edgardo Angara, former Secretary of the Department of Agriculture under the Estrada Administration and in whose term as Senate President the GATT was ratified, has this to say, albeit, without remorse: The WTO is gradually killing off our agriculture. We have turned from net agricultural exporter to importer, the only country in ASEAN with this experience. It seemed like a magical call to open up our markets for trade liberalization. But in embracing the WTO, we failed to take into account one very important distinction in the application and implementation of global trade among developed and developing countries. This distinction, which the developing countries are fighting for today, is the special and differential treatment, which should be considered in applying and implementing global trade as far as developing countries are concerned. 8

Growth-Oriented Paradigm Versus Equity With Growth. Very much tied up with the overt policy of liberalization is the growth-oriented paradigm that has become the staple formula of the World Bank in its anti-poverty drive. The assumption here is that anti-poverty efforts will not succeed without growth. A truism indeed if taken in absolute term. The burning obsession here is to raise the growth rate as measured by the Gross National Product to a percentage that is doubled the population growth so that when the volume is divided by the population the income surpasses the limit set for the poverty threshold. Neat. However, the definition of poverty has now gone beyond the income indicator and takes into account other human development indexes, including access to assets and opportunities. Growth, even if followed by the adjective with equity, is not a foolproof guarantee that the marginalized will benefit from its trickle-down effects. If the claim of the Arroyo Administration that the fight against poverty is very much tied to distributive justice, in the same manner that it was social justice for the Estrada Administration, then it should follow 6

Jocelyn F. Cajiuat and Aurora A. Regalado, “Dynamics of Civil Society and Government in the GATT-UR Debate in the Philippines. Lessons for Policy Advocacy,” Philippine Democracy Agenda: Vol. 2 State-Civil Society relations in Policy-Making, The Third World Studies Center, 1997, p. 181. 7 Nuguid. Loc. Cit. 8 Ibid.

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that the approach cannot be other than equity-led growth. Unfortunately, this is not the case in the Plan. Thorough-going reforms that will ensure a paradigm shift to the primacy of equity, even when there is so much lip service to asset reforms and the like, are sorely missing or just plain ignored in the Plan. On the Assessment and Challenges Without admitting that the policy framework of liberalization is flawed (although admitting that globalization has its perils 9and could be bearer of ill-tidings) the Plan conveniently lays the blame for our present economic woes to the ineptitudes and misdemeanors of the previous tenant in Malacanang. The assessment of the economic conditions obtaining in the country at the moment has been largely limited to the “sins” of Erap. External factors affecting the country prior to the impeachment proceedings were conveniently left out, e.g. weak performance of the European economy and other international events that have direct bearing on the local situations like OPEC (Organization of Petroleum Exporting Countries) continuously raising the price of crude oil. The MTPDP is likewise deafeningly silent on the issue of debt and automatic debt appropriation while it constantly harps on debt reduction and its repeated promise to shy away from budget deficit spending. It admits though that “on the average, the government will borrow around US$644 million per year from official development assistance (ODA) from 2001-2006” (p. 1-18). This is lamentable considering that “there is a strong consensus in the international community that the debt burden is a serious barrier to the creation of any meaningful development strategy. The Secretary General’s (United Nations) report rightly identifies debt as a significant obstacle to development in low-income, middle-income and transition economy countries.” 10 All Philippine development plans since the time of Marcos have ignored this critical issue to the detriment of the people.

On the Targets The basis for the targets set has not been adequately established. It is not clear how the projection came about. For one, even the main objective of the Plan with respect to poverty is not precise. What does it mean when it says it will win the battle against poverty before the decade is over? Is it poverty reduction, alleviation or eradication? Perhaps, targets are set on assumptions that things are equal and life is without hitches. Unfortunately, in reality, that is not always the case. Developments in the world scene as well a petty crime in a far-flung barrio that has been sensationalized can send shock waves that may affect economic performance and offset the most cautious of projections.

9

Martin P. Marfil, “Gloria cites perils of globalization as she signs S’pore deals”, Philippine Daily Inquirer, August 26, 2001, p. A2. 10 Ecumenical Team’s Statement on Debt as contained in the Women’s Consultation Lobbying Paper, manuscript, undated.

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On the Priority Legislative Agenda Many of the policies enunciated in the Plan are hinged on legislative fiats. This in itself is problematic. Congress, both the Senate and the House of Representatives, is not known to work that fast. Moreover, it is prone to politicking, horse-trading, and other shenanigans, that eventually it dishes out mediocre and half-baked laws. To date, the Senate has been side-tracked by an on-going investigation (purportedly in aid of legislation) on the alleged involvement of Senator Panfilo Lacson, former Director General of the Philippine National Police (PNP), in drug-trafficking, money laundering, murder, and kidnapping, among other crimes attributed to him.

Editorial Style One small comment on the editorial style of the Plan--there are too many motherhood statements and acronyms used. Sections, especially on the assessment and challenges portion are repetitive, making the MTPDP verbose in the process.

IV. Specific comments and some policy recommendations A. Macroeconomic Stability and Equitable Growth Part I on macroeconomic stability and equitable growth focuses on fiscal policies, employment generation, international competitiveness in industry and services, plans for information and communication technology, tourism, and infrastructure. The first two shall merit more attention, while the rest will be treated in a general manner. Is it difficult to disagree with general pronouncements that are akin to what may look like sound economic fundamentals, e.g. well-coordinated fiscal, monetary and exchange rate policies that lead to a sound fiscal and debt position, stable and low rates of inflation, and a healthy external balance will bring about macroeconomic stability which is a prerequisite for sustained and equitable growth. Of course this is an a priori statement that is premised on a neo-liberal framework that need not be belabored at this point. Be that as it may, the foregoing critique on the main components of the Plan proceeds by tackling what are given. In the assessment and challenges portion for this chapter (1), one cannot help but say that punishing tax evaders, who are not lacking in perennial presidential threatening, have not also been seriously pursued during the administrations of Aquino and Ramos, two staunch allies of the present administration. This puts into question the political will of President Arroyo. Corollary, it puts into focus the efficient collection of taxes as the main problem. 11

11

See Filomeno Sta. Ana III, Policy Paper on Mobilizing Domestic Resources, manuscript, August 2001 and Habito, loc. Cit.

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A challenge that was posed in relation to poverty reduction was to make the banking system and microfinance institutions more responsive to the credit demand of small but viable borrowers without undermining prudential standards (p. 1-10). This is very correct, but one must hasten to note that the Land Bank itself, which is supposed to be for the small farmers, is not paving the way for rural credit but has gone the more lucrative path taken by regular commercial banks, e.g. speculative investment, commercial and industrial loans. Inflation is targeted to decline from 6.0 to 7.0 percent in 2001 to 4.5 to 5.5 percent in 2006 (sic, p.1-13). What is the basis for this projection when the current trend is already showing that this is not being met? A specific target to raise revenues to finance the ambitious targets in the three-year plan is through Tax Reforms, which include improving tax administration and collection, and restructuring of the tax system. There are strong reasons to doubt these will ever take place. For one, the tax system is largely regressive, thanks but no thanks to the Comprehensive Tax Reform Package (CTRP) which Enrile and John Osmena made sure to be full of loopholes in favor of corporate taxpayers to the detriment of small taxpayers. Moreover, the proposed reforms will be the subject of further study. One wonders how long will the study be completed before the proposed reforms can take place. Maybe the saying in Tagalog will be appropriate here—“aanhin pa ang damo kung patay na ang kabayo.” Perhaps the warning of Prof. Habito, former NEDA Director General, in his critique of the Angat Pinoy 2004 (the Medium-Term Plan of the Estrada Administration), is worth repeating here: The public has gotten used to (or tired of?) hearing economic officials assert that the country’s economic fundamentals remain good, even through the Asian financial crisis…Deterioration in some or all of these should be a cause for concern, as an economic slowdown or recession could very well be not far behind.12

On Promoting Full, Decent and Productive Employment The four strategies of employment generation, preservation, enhancement, and facilitation assume that conditions are the same for each labor category, such as, local, formal, informal, and overseas. This notwithstanding, there is no clear measure as to how employment generation will be brought about except to say that this is the role of the private sector, notably the ones to be generated by foreign investment the administration hopes to lure. It mentioned of developing globally competitive industries but did not specify what kind. Heavy industrialization is not mentioned at all as it has long been conceded that we could not afford its costs and to go into that would only put us at a great disadvantage. Of course, other economists, like Alejandro Lichauco, disagree with this prognosis.

12

Habito, loc. Cit., p. 5.

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To its credit, the Plan recognizes that investment in education and skill acquisition on the labor supply side is key to employment generation. However, there is no detail as to how this will be carried out. The Plan also made mentioned of the existing industrial peace, but perhaps this refers to the peace of the cemetery as the high retrenchment and closure rate made strikes moot and academic. Overseas Filipino Workers (OFWs) were also prominently mentioned in this chapter, but the clear message that is put across is the pragmatic consideration that labor export is much too valuable to let go as an official policy, no matter the lip service on the social costs of international contract migration. Similarly, the amendments it seeks on R.A. 8042 were mostly on peripheral issues and completely ignored the substantial ones like the deregulation of the recruitment process. On a positive note, it recognized the need to pass a law that strengthens the constitutional right to self-organization, and the passage of a bill on absentee voting. On the negative side, it is not too resolute on the issue of labor subcontracting.

International Competitiveness in Industry and Services This chapter (3) is an all out exultation of all that is good and beautiful with liberalization in the industry and service sectors. In spite of the fact that there were only “modestâ€? growth in these sectors in 1999 and 2000, the Plan remains optimistic in its projection that liberalizing and deregulating trade and investments, streamlining government bureaucracy, and providing the necessary infrastructure and regulatory support will improve the performance of these two sectors. Likewise, it pins its hope on foreign direct investments in particular to facilitate the transfer of new technology and inflow of capital, providing the opportunities needed to improve and diversify local products. Apparently, we have not learned our lessons in the Structural Adjustment Program (SAP) that was imposed upon us in 1980-1985 by the World Bank. It is instructive here to quote at length the admonition of former legislator Wigberto E. Tanada: What is happening now is the same as what happened in 1980-85 in the Structural Adjustment Program (SAP) agreed upon by the World Bank, Cesar Virata, and Gerardo Sicat. In 1978-1980, the technocrats of the Marcos regime projected increases in exports and employment opportunities as well as promotion and expansion of industries because of the SAP. The restrictions in the economy were relaxed by lowering the tariffs on industries, lifting the restrictions on imported products, floating the interest rate, and privatizing government-owned corporations‌But what really happened was quite contrary to what was anticipated.

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With the sharp increase in the interest rate and the deluge of imported items, many industries suffered a crisis even before the assassination of Ninoy Aquino in 1983. 13

Information and Communication Technology, Infrastructure, Tourism In a general sense, the Plan is on track when it focuses on bridging the digital divide currently obtaining in Information and Communication Technology (ICT). Prof. Amado Mendoza of the UP Political Science Department, citing Harvard professor of political communications Pippa Norris, says there are three kinds of digital divides in the contemporary world: global, social, and democratic. The global divide refers to the divergence of Internet access between industrialized and developing countries. The social divide refers to the gap between the information rich and poor within each nation while the democratic divide “signifies the difference between those who do, and do not, use the panoply of digital resources to engage, mobilize, and participate in politics and the public life.”14 The social divide in the Philippines is not only based on class (the rich and the poor), but also on gender, age, and ethnicity. It will be indeed a great challenge on how this prevailing social divide will be bridged given the current state of affairs in this emerging sector. As for infrastructures, the wish list is very grand if not totally ambitious. However, one item that is lost in all the proposed infrastructure projects is the rehabilitation and development of a railroad network that could bring farm products to urban centers in a cheap, fast, and efficient manner. There is not much to say on the thin discussion on tourism except to pray that the prospective tourists will overcome the negative travel advisory of their foreign affairs departments and visit the country. B. Poverty Alleviation and Comprehensive Human Development Part II of the Plan focuses on poverty alleviation. Without acknowledging it, perhaps due to political expediency, this section draws heavily from the National Anti-Poverty Action Agenda (NAAA) crafted by the National Anti-Poverty Commission (NAPC) during Estrada’s second year in office. But because of this propensity to reinvent the wheel by each new administration, the NAAA had to be pruned and styled to suit the requirements of the present dispensation. Special focus was given to health, education, and housing (Chapter 7). The issue that remains to be solved would be the financial aspect. Take for example housing. The Plan estimates the total housing need for the period at 3.3 million households, broken into 1.1 million backlog and 2.2 million new households. The allocation for 2000 is only 1.4 percent of the annual budget. The increase of 2002 is not much also. One way the Plan 13

Wigberto E. Tanada, “Are We Ready for GATT?” Text of his privilege speech delivered in the Senate on April 26, 1994 and reprinted in Kasarinlan, Vol. 9, No. 4, 2nd Quarter 1994, Third World studies Center, University of the Philippines, pp. 68-73. 14 Amado M. Mendoza, Jr., “Digital Divide (Part I)” in his Bytes, Business & Governance column of July 9, 2001 at the Inquirer on-line.

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proposes to raise revenue is again through privatization. It is recommending the conversion of viable national government hospitals into corporate entities purportedly to promote autonomy and assure provision of quality services, and reduce the Department of Health’s annual appropriation for hospital operations (underscoring supplied). 15 Once again, this reeks of a typical SAP prescription on spending less (for social services) and earning more (temporarily at that, by disposing of viable assets). The chapter (8) on protecting vulnerable groups is not exhaustive and comprehensive. Moreover, for some reason or the other, it left out the indigenous peoples (IPs). Related to the IPs are the issues concerning potential conflicts between the ancestral claims of the IPs and the power of local government. Any development plan should have a clear interfacing mechanism to handle such conflict. Likewise, there is a need to address in this section the matter of capability building so that the IPs can participate more meaningfully in charting their lives.

Reducing Regional Disparities On Chapter 9: Reducing Regional Disparities, the recommendations of the Mindanao Economic Development Council (MEDCO) is worth considering: •

• • •

Policy framework to detail as well integrative mechanism(s) that will link-up all regional concerns to the national body in order to institute policy reforms geared towards addressing immediate problems of the regions that are coherent to the national framework. Discussion on regional economic cooperation to also include gains from its formation in order to determine more specific strategic interventions. Strategies to include a strategy for socio-cultural if it is premised that the country is fragmented in terms of culture and socio-political concerns. Discussion on Effective Regional Development Administration to include an assessment of the effects of the devolution process and specific mechanisms designed to address any adverse effects, if any. If and when possible, it would also be good to establish an islandbased scenario for better understanding and appreciation. Discussion on Spatial Development Strategies to adopt the Mindanao 2000 Development Framework Plan-espoused Area Development Zone (ADZ) concept as a basic unit of planning to comprise a group of spatially contiguous urban and rural centers which displays a strong economic and socio-cultural ties. This will simplify the regional groupings identified in this section.

Likewise, the following are also recommended to be pursued: •

15

Incorporate additional socio-economic indicators to support the discussions and show the actual scenario, e.g. trends in population, employment, unemployment, available social,

MTPDP, p. 7-29.

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• •

economic, and infrastructure services. This is premised on the need to base targets on actual scenario. Incorporate information on success stories among local government units which can possibly be replicated in other areas. Highlight as well urban realities in the Visayas and Mindanao. Discussions practically focused more on Metro Manila.

Sustained Peace and Development in Mindanao For Chapter 10: “Pursuing Sustained Peace and Development in Mindanao”, again the author deferred to those who are based and operating in the area. MEDCO has put forward the following recommendations: •

• •

Framework to cover all peace related issues and areas in Mindanao. Focus should not be limited to Central Mindanao and the Autonomous Region in Muslim Mindanao (ARMM). The plight of the potential conflict and non-conflict areas should also be taken into account. Assessment and Challenges section to provide a more comprehensive and in-depth analysis of the historical background of the Mindanao conflict. This shall facilitate better understanding of the Mindanao conflict, which did not only begin in 2000, and the identified strategies. Strategies section to detail and classify strategic interventions for the conflict, potential conflict, and non-conflict areas which, as stated are not totally unaffected. On the strategies, it maybe noted that the Mindanao Lumads may have other issues not embodied in the IPRA Law.

C. Agricultural Modernization with Social Equity

On the Policy Framework Not necessarily condoning the policy of liberalization which is still at work in this section, the Working Group of the Basic Sector of NAPC assigned to tackle this portion generally agrees with the Plan’s policy framework. There are three sets of policies mentioned, namely: the modernization of the agriculture and fisheries sectors, the empowerment of rural stakeholders, and a sustainable rural development that include safeguarding of environmental or ecological integrity. These are general principles that are hard to disagree with. However, the need for a qualifying statement on the modernization policy is being advanced so as to make it more explicit. In particular, the Working Group would want an asset reform, small producers-based modernization of the agriculture and fisheries sectors. The group is of the belief that modernization would not effectively bring sustainable rural development unless asset reform is given importance first (underscoring supplied). This has been made explicit under Section II of the 1997 Agriculture and Fisheries Modernization Act

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(AFMA) with the pronouncement that the “State shall promote industrialization and full employment based on sound agricultural development and agrarian reform, through industries that make full and efficient use of human and natural resources, and which are competitive in both domestic and foreign markets.” Actually, the entire part relies heavily on the proper implementation of the AFMA.

On the Assessment and Challenges The policy on trade liberalization as implemented under the GATT-WTO was cited as one of the causes for the relative low yield in agriculture and fisheries vis-à-vis our Asian neighbors. As to the last sentence of the last paragraph, which attribute the slowdown of activities in some sectors to policies designed to promote sustainable development, the group would want to know what sectors is being referred to. The idea that this analysis may have been advanced by commercial operators was brought up. Another reason brought out that for the slowdown of activities in some sectors was that these sectors have already reached the maximum sustainable yield as of the mid-80s.

On the Targets Looking at the table on Agriculture Gross Value Added Targets for 2001 to 2004, the group was at a loss as to the bases of these targets because the figures are presented in percentages. Moreover, it was advanced that the GVA as a measure of target is not enough and that the GVA, as an instrument, is only applicable to the modernization objective.

On the Strategies 1. Improving the effectiveness of public sector interventions in the following areas: A. Rationalizing public policy and investment There were eight strategies presented under this section. Discussions however focused on # 1 (“Adopt a prioritized and strategic public investments program which focuses on public goods and services”) and # 4 (“Continue providing safety nets and the effective and transparent use of the Agriculture Competitiveness Enhancement Fund to enable the sector to cope with increased competition and trade liberalization under the GATT-WTO”). As to the former, it was strongly recommended that the public investment program should focus on the rural areas and that investment should be reflected in increased budget. For the latter, three recommendations were agreed upon, as follows:

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• • •

Moratorium in implementation unless the safety nets committed by the State seven years ago be delivered first; Renegotiate for a slow down in the opening of the Philippine economy, especially on agriculture and fishery products; and Indemnify the sectors affected by the implementation of the GATT-WTO through subsidies.

B. Improving support services delivery The group recommends the following: 1.

2.

The creation of a separate department that would take care of the problems, issues, and concerns, etc. relative to fisheries and water in general. This new department will be called the Department of Fisheries and Oceans. It was noted that up to this time, the fisheries sector is seemingly not given much importance as the concerns of the sector are attended to only by an office no higher than a bureau, and an attach agency only of the Department of Agriculture. The group believes that as an archipelagic country with one of the longest shoreline in the world, no less than a full-pledge department is necessary to handle its varied concerns. The creation of one million jobs in rural areas for the rural poor.

2. Promoting equitable access to productive resources Originally presented as strategy no. 5 in the MTPDP, the group believed that it should be given more importance and placed it as no. 2. Moreover, the group recommends that objective no. 4 of strategy no. 4 be transferred as part of this strategy. It pertains to the affirmation and enforcement of ancestral land rights and the rights of indigenous communities to develop and manage their domain using sustainable land management practices. As regards the institutionalization and rationalization of the delivery of support services, the group would like to widen its scope to include all small producers, which include among others the Agrarian Reform Beneficiaries (ARBs). In addition, the following objective is recommended: Fast track the delineation of municipal waters using DAO # 17, s. 2001 which ensures the participation of civil society. 3. Mobilizing entrepreneurship, private sector investments and participation in agriculture, fisheries and natural resources production The group believes that the promotion of private investment should not be limited in the area of agribusiness but should also include the agro-industrial sector. The following objectives are recommended:

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A. Creation of an enabling environment for small producers/fishers, through their cooperatives that will allow them to successfully engage in social enterprises. This would include among others capability building and amendments to Land Bank policies on credit. B. Mobilize private sector investment and at the same time regulate licensing through taxation based on resource rent. C. Mobilize private sector investment to build rural economies. 4. Encouraging value-added-based technology-based agriculture, fisheries and natural resources This focuses mainly on R & D. However, to protect further the depletion of natural resources, the group would like to include an objective that would generally discourage the exportation of raw materials. Raw material exportation may only be allowed if value added is created through additional processing. Otherwise, an increased fee may be charged for the extraction of natural resources. Moreover, the group would like to ensure the protection of the country’s biodiversity. In general, the group supports the call of “no to the patenting on life forms”. It believes that no private firms or individuals should be given an intellectual property right over any plant variety.

On the Priority Legislative Agenda Among the legislative agenda listed, the group recommends the deletion of the proposed “Plant Variety Registration and Protection” bill. This is clearly in compliance of the GATTUR provisions on Trade-Related Intellectual Property Rights (TRIPS) where patents are assigned to nature’s product. Such patenting of traditional seed varieties and medicinal plants, it is argued, will only benefit multinational pharmaceutical and seed companies, prevent small farmers from making commercial use unless they pay royalty. To ensure that small fisherfolks are not further marginalized and taking cognizance of the fact that the Philippines is an archipelago of more than 7,000 islands, the enactment of a National Water Use Act and the creation of the Department of Fisheries and Oceans deserves top priority.

D. Good and Effective Governance The Arroyo Plan, like its predecessor, the aborted Angat Pinoy 2004, recognizes that governance is not a concern of the government alone but should be a partnership of public, business, and civil society. Six principles are invoked by the Plan to guide its call for good governance: (1) results orientation; (2) subsidiarity; (3) circumscribed governance; (4) accountability and transparency; (5) empowerment; and (6) strategic partnerships and critical

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collaboration. And again, like its predecessor, the Plan addresses three aspects of governance: administrative, economic, and political. In the aspect of economic governance, the Plan apparently failed once again to focus on what Habito terms as “stronger corporate governance” which “include defining the regulation of international financial flows, roles and accountabilities of corporate directors, and stronger prudential rules on the banking system, among other things.” 16 Habito also warns on the perils of privatization as part of economic governance. He says there is much rethinking now on this issue especially in the light of past experiences where government carried the undue share of the risks of Build-Operate-Transfer scheme and its variants. 17 And finally, it is noteworthy that the Plan recognizes the lack of participation of the marginalized sectors in decision-making, both at the local and national levels, as one of the main stumbling blocks to better governance in the country. 18 The question is: What is the Arroyo government doing about it? For one, the president, who is chair of the NAPC has not convened the commission since her ascension to power last January 2001. This body, which is a creation of law (R.A. 8425), is supposed to be the mechanism by which the basic sectors can participate in policy formulation with respect to anti-poverty and the monitoring and evaluation of related programs and projects.

V. Financing for Development President Gloria Macapagal-Arroyo was quoted in the papers the day after she delivered her State of the Nation Address (SONA) as saying she knows her arithmetic when asked where she will get the money to finance the things she promised to the people. GMA may know her arithmetic, but it is not a simple matter of addition and subtraction. With all the important items listed in the MTPDP vying for budgetary support, the government must seriously identify where the money will be coming from. Speaker Jose de Venecia suggests that a settlement with the Marcoses and Danding Cojuangco be negotiated and that the government cash in on the operation this October of the Malampaya natural gas project off the coast of Palawan to raise the 25% counterpart in order to be able to avail of the US$12.5 billion in foreign aid committed to the Philippines since the Aquino Administration.19 This is easier said than done and may entail a political and economic backlash that will be counterproductive later on. Beside ODAs are not necessarily grants but are loans that will have to be repaid with gargantuan interests. 20 As things now stand, the Philippine has a total debt of US$89.787 billion or PhP4.489 trillion, with guaranteed payments of 20 to over 50 percent of the country’s annual income because of the policy of automatic appropriations as mandated by Marcos’s Presidential Decree 1177, which remains effective up to this day. 21 16

Habito, loc. Cit., p. 8. Ibid. 18 MTPDP, p. 12-1. 19 “JDV knows where to get gov’t funds,” Philippine Daily Inquirer, August 12, 2001, p. A15. 20 For a detailed discussion on the ODA to the Philippines, see Eduardo C. Tadem’s “Some Immediate Issues in Official Development Assistance to the Philippines”, manuscript, August 2001. 21 From a Freedom from Debt Coalition brochure citing Bangko Sentral ng Pilipinas figures. 17

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Clearly, the matter of moratorium on illegitimate debts, if not outright cancellation must be articulated in any development plan if it would want to seriously address the problems of massive poverty. In the proposed P780 Billion for 2002, one can notice that debt servicing automatically grabs approximately 35 percent of the budget. Meanwhile, the expenditures for the military and police account for a 10 percent lion-share of the budget, almost equal to that which is to be given to education, which according to the Constitution should have the biggest share of the budget. The Basic Sector of NAPC has consistently advocated for the primacy of “asset reform” as a primary component and a key element if dents are to be made against poverty. The Plan has adequately paid lip service to asset reforms. However, the asset reform agenda is lost in the myriad of programs and projects the Arroyo government wishes to embark in three years time. The land targeted for distribution to farmers beneficiaries is worth mentioning here at length illustrate to the point that it is not putting its money where its mouth is. Fr. Nono Alfonso, S.J. of the Institute on Church and Social Issues said that the target 100,000 hectares of land for distribution under the Comprehensive Land Reform Package is even lower than the yearly average of 133,000 hectares distributed during the two years of the Estrada administration. With this pace and volume, the backlog of 1.2 million hectares cannot be possibly be distributed by 2008, the deadline set by law. 22 If priorities are to be set, and assuming that revenues are generated scrupulously, hard earned money of the country should go to comprehensive countryside development via genuine land reform and education and training. Providing access to land and enhancement of skills will harness the vast potentials of the rural area where more than 65 percent of the country’s 72 million population are located, and of which 70 percent are living below the poverty line. In this sense, the approach and financing for development follows the paradigm of equity-led growth rather than the trickle down system of the nice-sounding “growth with equity” which has not worked since the Aquino presidency.

22

Nono Alfonso, S.J. “Farmers, NGOs ask Braganza to resign: Honeymoon is over,” Philippine Daily Inquirer, September 5, 2001, p. A7.

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VI. Conclusion

A Philippine development plan anchored on the much-ballyhooed paradigm of liberalization will not be effective in curbing significantly, not to mention eradicating, the high and scandalous poverty incidents that have plagued the country for years. A critical review of this policy framework is long overdue. Alongside an honest to goodness review process is the need for a moratorium on the implementation of the country’s commitments to the provisions of the GATT-WTO. Not only has the government failed to deliver on its promises of safety nets to farmers, but blind obedience to the WTO and the structural adjustment programs of the World Bank-International Monetary Fund (WB-IMF) has wrought havoc to the lives of small farmers and livestock growers. No matter how beautiful the rhetoric of global competitiveness sounds, the reality is that small Filipino farmers cannot compete with the European and American farmers who are not only mechanized but enjoy subsidy from their governments. A moratorium on payments, if not outright cancellation, of illegitimate debts are also in order if we are to finance the development needs of the Filipino people, especially the close to 27 million Filipinos who are considered poor. Financing for development entails a scrutiny of the budget. Vigilance and strong pressure from civil society to ensure that asset reforms take priority over counterproductive expenditures like debt servicing and military spending are the order of the day. Similarly, it is also important to lobby Congress to revive the 20:20 initiative that had already gained ground in the 11th Congress. The MTPDP conveniently ignored this. In the same vein, the numerous priority legislative agenda enumerated in the MTPDP need to be closely monitored, critiqued, and pushed. Reviewing and comparing the priority agenda of the Arroyo Administration with the Legislative Agenda of the first batch of Basic Sector representatives in NAPC, one can see some commonalities. However, some of the Legislative Agenda of the vulnerable groups like Persons with Disabilities (PWD), Senior Citizens, Indigenous People, and Women are not fully considered in Chapter 8. The MTPDP while almost completed is not written on stone. While a large segment of civil society was not a party to the Plan’s crafting, there are nevertheless avenues and channels by which the Plan can still be influenced so as to rightfully serve the interest of the Filipino people. The forthcoming budget hearing is one arena. International fora where the Philippines made grandiose commitments are another. Time and again, the political will of each administration has been called to task. Time and again, it has failed the challenge. The only political will shown so far by the Arroyo administration is to push for the power reform bill in spite of protest from civil society. Perhaps the political will of civil society to effect change is the better and logical call. This is because we could no longer afford to fail. For, assuming the Arroyo Administration would be able to improve the lives of the poor even a teeny-weeny bit in the next three years, it is still susceptible to a lot of rumblings from the poor, and even the non-poor. In fact, it if will not succeed completely, it will only create a “revolution of rising expectations”. The plausible

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idea here is that “as bad conditions improve people acquire both a sense of what they have suffered and a hope that all suffering may be eliminated.”23 James Davies, appropriating the ideas of de Tocqueville and Marx predicts that people rebel when an intolerable gap appears between what they want and what they get: “when a prolonged period of objective economic and social development is followed by a short period of reversal. People then subjectively fear that ground gained with great effort will be quite lost; their mood becomes revolutionary.” 24 While we hope the social volcano does not fully erupt, that the “rebellion of the unwashed” manifested last May 1, 2001 is not a portent of things to come, civil society must continue engaging the government for more meaningful reforms to be put in place. Otherwise, the Plan will just remain a compendium of convoluted text.

23 24

John Walton, Sociology and Critical Inquiry, The Dorsey Press, 1986, p. 344. Ibid., p. 345.

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PP MTPDP Critique 2001-2004  
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