A Common Country Assessment of the Philippines 1-51

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A Common Country Assessment of the Philippines 1-51

  1. 1. A Common View, A Common Journey A Common Country Assessment of the Philippines 2004
  2. 2. 2 A Common View, A Common Journey United Nations Resident Coordinator Message T HE United Nations’ Common Country Assessment (CCA) presents an analysis of the development situation of the country. It analyzes the major challenges that the Government of the Philippines, key stakeholders and the United Nations system have identified as being critical for the Philippines. It builds upon the challenges identified in the Medium Term Develop- ment Plan of the Government of the Philippines and the principles and goals arising from United Nations conventions and global conferences, particularly those of the Millennium Declaration and the Millennium Development Goals (MDGs). The Common Country Assessment clearly identifies a number of key issues which, when addressed, can effectively make the greatest impact on the lives of the poor and the vulnerable. The United Nations’ Common Country Assessment analysis sets the stage for the United Nations Development Assistance Framework (UNDAF), which represents the best thinking of how the United Nations system can support the government and people of the Philippines in addressing these issues. The formulation of a Common Country Assessment is an integral part of the reform agenda of the Secretary General to bring about “a greater unity of purpose” within the United Nations System’s operational activities for development. The United Nations system is grateful to the Government of the Philippines and key develop- ment partners for providing valuable inputs to this analysis. We are confident that the United Nations Development Assistance Framework, which is based on the Common Country As- sessment, will support the Philippines in its efforts to advance the development of the country and its people. DEBORAH LANDEY United Nations Resident Coordinator
  3. 3. A Common Country Assessment of the Philippines 3 United Nations Country Team Message W e, the peoples of the United Nations determined... to reaffirm (our) faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small, and to establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and to promote social progress and better standards of life in larger freedom... and to employ international machinery for the promotion of the economic and social advancement of all peoples... have resolved to combine our efforts to accomplish these aims. –– Preamble to the UN Charter The United Nations System has been working with the government and people of the Philip- pines to promote and preserve the basic rights outlined in the UN Charter for peace, security and development. The Common Country Assessment (CCA) aims to provide a concise over- view of the Philippines’ key development challenges in 2004 and identify priority areas for con- tinued and future UN collaboration and coordination efforts. CCA findings set the stage for more coherent and coordinated UN system programming under the United Nations Develop- ment Assistance Framework (UNDAF). This common analysis is an integral part of the recent reform agenda of the Secretary General to bring about “a greater unity of purpose” within the UN System’s operational activities for development. It builds upon the challenges encountered in the Medium Term Development Plan (MTDP) of the Government of the Philippines and prin- ciples and goals arising from UN conventions and global conferences, particularly those of the Millenium Declaration and the Millenium Development Goals (MDGs). The UN System is grateful to the Government of the Philippines and key development part- ners for providing valuable inputs to this analysis. We are confident that the United Nations Development Framework (UNDAF), which is based on this common analysis, will support the Philippines in its efforts to advance the development of the country and its people.
  4. 4. 4 A Common View, A Common Journey Kariya Mei Werner Konrad Blenk FAO Representative ILO Sub-regional Director Kyo Naka Dr. Zahidul A. Huque UNDP Deputy Resident Representative UNFPA Country Representative Dr. Nicholas K. Alipui Dr. Raffaello Tarroni UNICEF Country Representative UNIDO Country Representative Thamrongsak Meechubot Dr. Jean Marc J. Olive UNHCR Representative WHO Country Representative Dr. Ma. Elena F. Borromeo Lowie C. Rosales UNAIDS Country Coordinator UN-Habitat Country Coordinator Sylvia Olive-Inciong Atty. Brenda Pimentel UNIC National Information Officer IMO Regional Coordinator Deborah Landey UN Resident Coordinator
  5. 5. A Common Country Assessment of the Philippines 5 EXECUTIVE SUMMARY T he Common Country Assessment (CCA) is an in-depth analysis of the development prob- lems in the Philippines, undertaken through a participatory process of consultations among United Nations agencies, its development partners both in the government and civil society, and with other donor agencies in the country. It builds upon the programme of reform launched by the UN Secretary-General in 1997, preparing the UN for the challenges of the 21st century and emphasising its mandate in developing standards and goals arising from UN conventions and global conferences. In particular, the CCA was driven by the principles and goals of the Millennium Declaration, especially the Millennium Development Goals (MDGs). It also builds on the development objectives of the Government of the Philippines, articulated in its Medium Term Development Plan as well as commitments made in the context of international conven- tions, conferences and protocols. The CCA process involved systematic issues analysis, in order to identify strategic areas of cooperation. The CCA will form a part of the UN Development Assistance Framework (UNDAF), an exercise to prioritise development challenges in the Philippines to be addressed commonly by the UN system in future programming cycles. Notwithstanding pockets of optimism, there is a shared concern that without concerted and intensified action, the Philippines will fall short of achieving the Millennium Development Goals by 2015. The glaring inequalities in Philippine society are unsustainable and reflect core issues of ownership and access to resources, capital, information and power. The CCA, therefore, argues that the poor and vulnerable groups must be at the core of the development agenda. These groups include: the rural and urban poor; child workers; children without primary caregivers; abused/trafficked women; displaced persons; children caught in armed conflicts; and Indigenous Persons. Their multiple vulnerabilities make them among the most marginalised groups in Philippine society. The assessment argues that the key underlying causes of poverty and exclusion may be found in inequitable economic growth, unequal access to opportunities and basic social services, inadequate economic and social infrastructure, unregulated trade liberalisation, gender inequities and high fertility rates. Within the framework of the diverse expertise of the United Nations organisations, key de- velopment issues were identified, relating to governance, peace and security, ecological stew- ardship, the rural and urban economies, as well as health, education, basic services and social protection. It is believed that the United Nations can continue to add value in all of these areas. The assessment concludes that though the challenges are great, the potential for progress is high if all development partners –- including national and local governments, the private sector, NGOs/CSOs, the academic community, the media, as well as the donor community – renew their commitments to practice responsible governance, mobilise new resources, and better target their assistance to areas that are characterised by the greatest disparities. It outlines priorities and themes that should guide the development of the UNDAF. Finally, it stresses that even augmented efforts will fail unless inequities are minimised, fertility rates are significantly reduced, armed conflicts are resolved, and an HIV/AIDS pandemic –- which is potentially just around the corner –- is averted.
  6. 6. 6 A Common View, A Common Journey CONTENTS Message of the United Nations Resident Coordinator 2 Message of the United Nations Country Team 3 Executive Summary 5 SECTION 1: INTRODUCTION 8 Objective of the CCA 8 Scope of the CCA 9 The CCA Process 10 Methodological Challenges 11 Document Organisation 12 SECTION 2: DEFINING THE DEVELOPMENT CHALLENGE 12 COUNTRY PROFILE IN BRIEF 12 DEFINING POVERTY AND VULNERABILITY 13 Income Poverty 14 Rural Poor 14 Urban Poor 14 Child Labour 15 Children Caught in Armed Conflict 16 Children without Primary Caregivers 16 Abused / Trafficked Women 16 Displaced Persons 17 Indigenous Peoples 17 Migrant Workers 17 UNDERLYING CAUSES OF POVERTY AND VULNERABILITY 18 Growth has been poor and not “pro-poor” 18 Inequities in Access to Opportunities and Basic Services 19 Poor Quality and Inefficient Distribution of Economic Infrastructure 20 Trade Liberalisation 20 Fertility Rates 21 Gender Inequities 22 SECTION 3: AREAS OF DEVELOPMENT COOPERATION 23 GOOD GOVERNANCE 23 Corruption 24 Weak Fiscal Management 24 Decentralisation 25 An Inefficient Bureaucracy 26 Concerns about the Judicial System 26 Deficiencies in the Political and Electoral System 27 PEACE AND SECURITY 27
  7. 7. A Common Country Assessment of the Philippines 7 ECOLOGICAL SECURITY 28 State of the Environment 28 Challenges to Ecological Security 29 SOCIOECONOMIC DEVELOPMENT 30 Sustainable and Decent Employment and Work Opportunities 30 Agricultural and Rural Development 31 MSME Development and the Informal Economy 32 HUMAN DEVELOPMENT 33 Health 33 Education 38 Basic Services 40 Social Protection 42 SECTION 4: FORGING A DEVELOPMENT PARTNERSHIP 44 Defining the Objective 44 Defining the Roadmap 44 Key Obstacles to MDG Realization 44 A Rights-Based Development Framework 45 Defining the Partnership: The Role for the United Nations System 46 The UN Comparative Advantage 46 Clear Priority Setting 47 Greater Engagement with Stakeholders 48 A Sense of Urgency 48 Peace and Security 49 HIV/AIDS 49 End Notes 50 SECTION 5: CCA INDICATOR FRAMEWORK 52 Explanatory Note Indicator Framework A. Millennium Development Goal Indicators 53 B. Contextual Indicators 59 C. Development Indicators 61 Thematic Indicators 61 Conference Indicators 87 D. Data Gaps 91 Tables, Side Boxes and Figures 92 Regional/Provincial Disaggregation of Some CCA Indicators 120 Acronyms 132 List of References 134
  8. 8. 8 A Common View, A Common Journey SECTION 1: Introduction OBJECTIVE OF THE COMMON COUNTRY ASSESSMENT (CCA) In 1997, the UN Secretary-General launched a reform programme to prepare the United Nations for the challenges of the 21st century. These reform initiatives emphasised the role of the United Nations in developing a powerful set of standards and goals arising out of UN conventions and global conferences. As part of the programme, several measures were pro- posed to enhance the organisation’s capac- ity to implement its development mandate, particularly at the country-level. The Com- mon Country Assessment (CCA) and the UN Development Assistance Framework (UNDAF) are integral parts of the Secretary- General’s initiative. This CCA represents a common instru- ment of the United Nations to analyze the national development situation of the Philip- pines and to identify key development issues. It articulates a shared vision and framework for the UN system in the country and provides the basis to formu- late and implement an UNDAF. The CCA also represents a process to bring together the voices of stakeholders, experts, and development part- ners to review and assess the national development situation, and within this, identify the strategic priorities for the UN system over the coming years. Intended as an objective assessment, it provides the basis for consensus building during the UNDAF process. It is also hoped that the CCA will help inform the ongoing efforts of the country to forge a path of more equitable growth and human development. The next general election is scheduled for May 2004, with an incoming Administration set to take office in July. This timing is particularly impor- tant, as the current Government’s Medium
  9. 9. A Common Country Assessment of the Philippines 9 Term Development Plan (MTPDP), which the key challenge –- is the principle of a sets out its overall development roadmap rights-based development approach. This and programme thrusts, will also lapse at means putting poor and vulnerable groups at that time. Preparations for the next MTPDP the core of the development agenda while are already under way. Clearly, the actions strengthening the accountability of the state of the next Administration will directly affect and other duty-bearers to citizens and the ability of the Philippines to meet the families, including the provision of mecha- challenges agreed to in the UN Millennium nisms for access, participation, and redress. Declaration. The Philippine government is Full compliance with the commitments the most significant duty-bearer in the contained in the international conventions protection, promotion, and fulfillment of signed and ratified by the Philippines will go human rights in the country. a long way to promote a greater respect for the rights of all (Tables SCOPE OF 2, 3, 4, pp.93-95). THE CCA The first Philip- The overarching pines Progress framework of the CCA Report on the MDGs is the Millennium (MDGR) was issued Declaration. The by the Philippine Millennium Declaration, Government in close adopted in 2000 by 189 collaboration with the countries including the UN Country Team Philippines, sets out (UNCT) in January key development 2003. The report challenges facing humanity, articulates a asserts a high probability of meeting the response to these challenges, and outlines goals and targets related to eradicating concrete measures for gauging perfor- extreme poverty, improving access to clean mance. In addition to committing to eight water, universal access to primary education, specific, time-bound goals, or Millennium gender equality, reducing child mortality and Development Goals (MDGs), in the areas of halting HIV/AIDS. On the other hand, it health, education, environment, governance, projects a medium probability of attaining the and a global partnership for development targets on maternal health care, and only a (Table 1, p.92), the Declaration pays special low probability of achieving the targets on heed to the responsibility of all nations to hunger (malnutrition). The methodology protect the vulnerable, and in particular used to estimate these probabilities consid- children and civilian populations that suffer ered the difference between the rate of disproportionately from the consequences of annual change needed and the current natural disasters, genocide, armed conflicts, annual rate of progress. Clearly, the rate of and other humanitarian emergencies. change to date is inadequate. Underlining the significance of the MDGs, Another report, which in fact predated the Philippine President Arroyo affirmed that “the MDGR, assesses the resource require- MDGs provide a standard for governance by ments necessary to attain the MDGs in the which the people and the international specified timeframe. This report, the “Philip- community can judge the ability to provide a pines Country Study on Meeting the Millen- life with dignity for all Filipinos, especially the nium Development Goals,” commissioned poor.”1 So far, the capacity and will of the by the UNDP in advance of the 2002 country to make the necessary improve- Monterrey International Conference on ments is already the subject of concerted Financing for Development, paints a much attention. less optimistic picture than the MDGR. The In addition to focusing specifically on the report concludes that the Philippines will not MDGs, the CCA also seeks to illuminate how succeed in reaching any of the MDGs unless development strategies affect marginalised major shifts are achieved in economic groups in society (Figure 1, p.103). At the expansion and population growth rates, and heart of this aspiration –- and representing unless government resources for social
  10. 10. 10 A Common View, A Common Journey services are increased significantly and used opment challenges, within their mandates. more effectively. The assessment comes to To make their initial assessment, UNDP this worrisome conclusion even when the used the Early Warning and Preventive optimistic forecasts contained in the MTPDP Measures Composite Analysis where the (2001-2004), as regards population and “nugget” or intersecting root causes of the economic growth, are assumed. Already, the various issues per area, ie. economic, country has fallen short of its MTPDP targets political, social and external, were identified. for both GDP and population growth. UNFPA, on the other hand, used the causal- Finally, the CCA sketches out the elements ity tree analysis, analyzed the linkages of for a roadmap for development cooperation. issues by clustering or assessing reinforc- In doing so, the CCA highlights key obstacles ing/balancing loops, and identified the that stand in the way of full realisation of the strengths, weaknesses, opportunities and MDGs, especially as regards the poor and threats (SWOT) both of the UN and the marginalised, and the urgency of acting now. stakeholders that would facilitate or hinder The intent is not to dwell on negative sce- achievement of development goals. Both narios or to point the finger at any one duty- UNDP and UNFPA tried to also build various bearer. Instead, the objective is to identify development scenarios from their analysis. real vulnerabilities and, in so doing, identify The development challenges identified at major opportunities for the Philippines today these workshops constituted the basis for to move its development forward. discussion at a stakeholders’ workshop with NEDA and other partners on 19-20 June THE CCA PROCESS 2003. More than one hundred participants Work on the CCA began in earnest in from sixty organizations representing UN May 2002, with the agreement by the UNCT agencies, other international funding agen- on the broad scope of the exercise, terms of cies, government agencies and NGOs/ reference of a CCA inter-agency Core Group CSOs participated in a day and a half and a process framework for making the consensus-building exercise on the priority analysis of the development situation. From development problems in the country. More this, six theme groups were formed to in-depth analysis of these development consider key development issues facing the challenges was conducted by each work- Philippines, within the context of MDGs and shop group. Each group prepared a “causal- other international commitments, namely: (i) ity tree” for the priority problems, analyzed income-poverty, employment and population the linkages among these development (MDG 1); (ii) health and nutrition (MDG challenges and made a SWOT analysis to 1,4,5,6); (iii) education and early childhood identify the comparative advantages of the care and development (MDG 2); (iii) envi- UN to address these challenges. Subse- ronment (MDG 7); (iv) peace, justice, human quently, consolidation and priority-setting security and protection (MD Chapter VI); and efforts were undertaken by the CCA Core (v) governance and partnerships in develop- and Theme Groups, in close consultation ment (MDG 8). These theme groups were with the programme staff of the UN agen- composed of representatives from UN agen- cies, NEDA, and selected major partner cies, academia, CSOs and the public sectors. agencies. Assessment reports were pre- The assessment process involved sented in a plenary workshop held on 8 extensive research, analysis, and consulta- August 2003. tion. Preparatory activities involved a review Drafting of the CCA was undertaken with of existing assessment reports, studies and the assistance of selected consultants. The programme documents available within the UNCT, supported by the CCA Core Group UN and from the government and other and the lead Theme Group conveners, donor agencies - these reports included, played an active role in guiding and review- among others, the UN gender assessment ing the drafts of the CCA. Draft documents study2 and the Progress Report on the were submitted to the Regional Support MDGs. In-house workshops were then Group in Bangkok and the National Advisory conducted at UNDP, UNICEF and UNFPA, to Group for further refinement. A final CCA produce an initial assessment of the devel- document was approved in March 2004.
  11. 11. A Common Country Assessment of the Philippines 11 METHODOLOGICAL cies are doing their own estimates, the CHALLENGES methodology for estimation varies and may The limited and uneven availability of not be representative. For example, to a timely and disaggregated data was a major large extent only those abused women and obstacle. To assist in presenting consistent children affected by conflict who seek the data, the UNCT relied primarily on official services of the Department of Social Wel- (government) statistics, supplemented by fare are counted. As we move forward, data from nongovernment sources where baseline data will need to be established, in appropriate and available. The reason for this order to properly monitor trends. emphasis was twofold. First, official statis- National Surveys are normally limited to tics, used to monitor the condition of the regional and provincial level statistics. While country by almost all agencies, were col- census statistics reach down to barangay lected through statistically-sound methodolo- level3, the data is limited to basic demographic gies of data collection and estimation and statistics only. Hence, some Local Govern- (with notable exceptions) are relatively ment Units conduct surveys at the barangay current. Second, the process of building the level just to obtain information about their own CCA matrices of indicators facilitated impor- localities, e.g. Community-Based Information tant discussions with key agencies about System (CBIS). However, there is often an how gaps in data collection and reliability absence of technical know-how in these could be improved. By the time of the next communities, resulting in data inaccuracies. CCA, it is hoped that many of these gaps will 3. Normally long delays between the begin to be addressed. Notable gaps include: conduct of a survey and data processing, 1. Long intervals between data collec- adding to the delays in reporting and reducing tion, including: its relevance to policy makers: Education a. Functional Literacy (normally every five participation and cohort survival rates, for years, but the most recent collection interval example, are among the victims of such was eight years i.e. 1994 and 2003, respec- delays. tively. Lowest disaggregation is at the prov- 4. Reliability of provincial estimates: ince level). Many provinces do not have enough b. Data on Mortality and other demo- samples to produce reliable poverty esti- graphic data (normally every five years, the mates. For example, among the statistics latest was in 2003). Funding support was collected in the ten poorest provinces, three provided by USAID with a small contribution have a coefficient of variation greater than from the government. Lowest disaggrega- 104. However, reliability problems also tion level is regional. It would be very costly occur at the national level, such as in the to further disaggregate as it would require case of maternal mortality rates. additional sample households. 5. Inaccessibility of the data: Some data c. Income data (from Family Income and are not accessible to researchers. Not all Expenditure Survey to measure poverty government agencies offer a central deposi- every three years). Annual income data are tory of data. Or, if there are libraries, the data not available, again, due to budgetary con- in the libraries are not kept up-to-date. The straints. However, data on social statistics researcher will have to go to the concerned and rough estimates of income are gathered division in-charge of the data to research yearly through the Annual Poverty Indicator unpublished and unsourced printouts. This Survey. In the latter survey, however, pov- explains why many of the references in this erty incidence and related statistics cannot CCA simply refer to the bureau providing the be derived. The lowest level of disaggrega- data. tion is provincial. 6. Inconsistency between survey data and 2. The difficulty of identifying the where- administrative-based data: Some statistics abouts and profiles of key target groups, have several sources. However, in most including abused women, disabled persons, cases the figures vary. An example of such Indigenous Peoples, and displaced persons: an inconsistency relates to access to safe A special sampling design is required to water provided by both the Department of capture these groups. While certain agen- Health and by the National Statistics Office.
  12. 12. 12 A Common View, A Common Journey In retrospect, a more thorough investiga- tion of alternative sources of data as a supplement to official statistics would have enhanced the discussion about the status of development issues, brought to clearer light the severity of development challenges in poor regions and facing vulnerable groups, and revealed additional deficiencies in monitoring mechanisms. Exposing differ- ences in reported indices may have also generated constructive debate among stakeholders and with the UNCT about the extent of development challenges in the country. Regardless, what clearly emerged is a need to develop surveillance mecha- nisms that illuminate successes and failures in identifying and reaching marginalised groups across the country and that track how the various duty-bearers are contribut- ing to such trends. The success of develop- ment programmes should be measured, fundamentally, by how they reach and empower the most disadvantaged. DOCUMENT ORGANISATION This CCA is organised as follows: Sec- tion One (above) has outlined its objectives and scope, summarised the process of its development, and highlighted key method- ological challenges. Section Two provides an overview of poverty and vulnerability in the Philippines, and discusses their underly- ing causes. Section Three highlights the major development challenges facing the Philippines, viewed particularly through the SECTION 2: prism of the priorities set by the Millennium Declaration. Section Four sets out a frame- work for moving forward and underlines the Defining the urgency of making demonstrable progress. Finally, Section Five presents a three-part COUNTRY PROFILE IN BRIEF indicator framework that can be used to The development challenges of the monitor progress on selected development Philippines are considerable and they are indicators over the coming years. pressing. The country has a land area of about 300,000 square kilometers, spread over 7,000 islands - many communities are remote. The quality of transportation and communication systems is uneven throughout the country, cutting off many communities from goods and basic ser- vices. The population (in 2003) of 82 million is growing at one of the highest rates in the world — by roughly 25% during the last decade of the 20th century — and is expected to reach 108.5 million
  13. 13. A Common Country Assessment of the Philippines 13 Development Challenge by 2015 –- the target date to reach many DEFINING POVERTY AND of the MDGs. The fertility rate is 3.5 VULNERABILITY children per woman, well above many The face of poverty in the Philippines is countries in Asia. With the urban popula- manifested in chronic deprivation in many tion growing at a rate of 28.8% (between rural and urban areas and the ubiquitous 1990-2000) already close to half of the presence of pockets of slums in urban population now live in urban centers, areas5. Many others experience transient primarily in coastal areas. This trend is poverty, not persistently poor, but highly expected to persist. Environmental degra- vulnerable even in the best of times6. dation has reached critical levels. The UN concept of poverty is rooted in Given the Philippines’ rich multilinguistic, a state of powerlessness and not merely multiethnic, and geographically dispersed the absence of assets and services to population, a nuanced picture of its diversity meet basic needs. Vulnerability, as distin- is necessary to promote, and progressively guished from poverty, refers to the debili- achieve, the rights of each citizen. tating effect of major obstacles to the
  14. 14. 14 A Common View, A Common Journey fulfillment of one’s human rights and Rural Poor: commonly refers to the disadvantaged and Poverty in rural areas is pervasive and oppressed. There are varying degrees of persistent. Roughly two-thirds of the entire vulnerability within and among distinct population of Filipino poor reside in rural groups. Together with those Filipinos areas– indeed, four of 10 rural families are living in poverty, the vulnerable must also poor. The rural poor consist mostly of small be placed at the center of development and landless farmers, farm workers, efforts. The Millennium Declaration com- fisherfolk, and Indigenous Persons.11 The mitted to improving the lives of both the strong ties of the rural poor to the environ- poor and the vulnerable.7 ment increase their vulnerability to erratic weather patterns and Income Poverty: natural occurrences. Lowering the The inability to own incidence of poverty the land on which has been a stated top they work discour- priority of national ages diversification development efforts into new, higher- from the 1980s up to value crops. Unequal the present. Income access to ownership poverty8 was signifi- of resources also cantly reduced in the discourages sustain- decade preceding the able practices. Asian financial crisis Household bud- which slowed down gets of the rural poor economic growth and tend to be already increased unemploy- stretched. As in- ment in the region. After this point, poverty come decreases, demand for health ser- incidence in the Philippines rose from vices — that may be some distance away 28.1% in 1997 to 28.4% in 2000.9 In other — declines and the perceived opportunity words, 4.3 million families or 26.5 million costs of keeping children in school rise. Filipinos are living below the poverty line, Fragmented policies and under-funded 2.5 million persons more than in 1997. government programmes have largely failed The incidence of families living at a sub- to deliver on stated intent to increase ac- sistence level has declined, but there cess to basic services, raise agricultural were still 2 million food-poor families, in productivity, ensure technical improvements, the year 2000. diversify rural incomes, and build the Certain regions face the gravest capacity of local government units to conditions. The four provinces of the develop vibrant rural communities. This Autonomous Region of Muslim Mindanao failure is in part attributable to: (i) graft and (ARMM) are among the 10 poorest prov- corruption; (ii) political instability at the LGU inces (Table 5, p.95), making the region the level leading to sporadic programming; and poorest in the country (Table 6, p.96). Ifugao (iii) a lack of trust in government leading to province of the Cordillera Autonomous nonacceptance of programs by the in- Region on Luzon, home to one of the tended beneficiaries. largest Indigenous Persons populations, is also among those provinces with Urban Poor: severe poverty. 10 Communities in these The high incidence of urban poverty at two regions are particularly isolated and 15 percent12 is a spillover effect of destitu- under-serviced, live amid uncertainty and tion in rural areas, as many migrate in the conflict (although the nature and scale of hopes of finding better opportunities in the the conflict are not comparable across cities. The fast rate of urbanisation has these regions), and benefit from little produced new problems for the urban poor, investment in economic or social infra- including underemployment and unemploy- structure. ment, poor housing, lack of basic services,
  15. 15. A Common Country Assessment of the Philippines 15 and enormous pressures on urban carrying capacities, particularly solid waste man- agement, and air and water pollution. Some 262,000 informal settlements are situated in what may be considered high- risk or danger areas—riverbanks, railroad tracks, shorelines, dumpsites, low-lying areas susceptible to flooding, under bridges, relocation sites lacking amenities and tenurial security, and areas under threat of eviction.13 Improving the performance of urban areas in terms of poverty reduction, as engines of economic development, and as Child Labour: attractive living environments, is a major The incidence of child labour in the Philip- challenge. Many of the urban poor earn a pines is pervasive and alarming. In 2001, an meager living in the informal services estimated four million Filipino children, aged sector. The right to secure tenure, or the 5-17, were economically active, or 16.2 right to feel safe in one’s home, the right to percent of the total for this age group (Figure 2, control one’s own housing environment and p.104). About 60 percent are exposed to the right to a process of eviction or dis- hazardous and exploitative working condi- placement mitigation, forms the core tions such as in mining and quarrying, pyro- element of the urban poor’s advocacy for technics, construction and deep-sea fishing. social inclusion in the cities.14 There is the Over 37 percent of working children, or about absence of an integrated urban develop- 1.5 million, work as long as five to eight hours ment strategy to guide planners, a day, leaving no time for schooling and policymakers and other stakeholders in recreation. addressing complex housing and urban Between 60,000 and 100,000 children development issues. Most often, these nationwide are victims of commercial sexual policy frameworks tend to address symp- exploitation.16 Data show that children toms rather than causes of urban prob- trapped in commercial sexual exploitation lems. Sustainable urbanisation is a pro- are concentrated in tourist destinations such cess and a long-term vision for the Philip- as Regions 1, 3, 4, 8 and the NCR. Sexually pine urban system, but requires a net- exploited children suffer from trauma and worked and decentralised approach that are highly vulnerable to substance abuse, harnesses bottom-up and top-down forces physical violence, STIs and HIV/AIDS. from government, the private and the civil The causes of child labor are complex sectors.15 and interrelated, but fundamentally they derive from poverty. In addition, barriers to education, weak labor markets, and lack of employment opportunities for household members also increase the propensity of children to work. Beliefs and practices that tolerate abuse and exploitation are also harmful. Unethical business practices persist, without which demand-side forces would be lessened. The elimination of child labor, particularly in its most hasardous forms, is the subject of concerted efforts by government and its partners in the private sector and flow directly from the country’s ratification of the ILO Convention on the Prohibition and Immediate Elimination of the Worst Forms of Child Labour, (No. 182).
  16. 16. 16 A Common View, A Common Journey Children Caught in Armed Conflict: with adult offenders and therefore have been There is an increasing trend in the num- conditioned to criminal behavior. Many jails ber of children involved in armed conflict in and prisons are congested and are main- different parts of the country. The Office of tained in subhuman conditions, with inad- the Presidential Adviser on the Peace equate living spaces, poor sanitation facili- Process17, for example, reports that the Abu ties, and low quality food. The weak capac- Sayyaf Group has used children as combat- ity of parole, probation and corrections ants in its operations against the Armed officers is also evident in the practice of a Forces of the Philippines. Evidence also punitive rather than a corrective and rehabili- shows that the New People’s Army and the tative jail system, thereby increasing the Moro Islamic Liberation Front have been legal insecurity of disadvantaged groups. recruiting children to become combatants, The UN Committee on the Rights of the cooks, medics and messengers. Thus, Child expressed concern about the Philip- children become victims of the armed pines’ administration of juvenile justice and conflict twice over: by being deprived of its lack of compatibility with the principles human needs, security and rights (including and provisions set out by the Convention on the psycho-social impact, displacement, the Rights of the Child and other interna- and effects of landmines), and by being tional standards relating to juvenile justice. forced to become child-soldiers. The AFP Current efforts to rectify these deficiencies estimated in 2002 that children involved in are encouraging. armed conflict account for 13 percent of the total rebel population. In response to this situation, the government put in place a Comprehensive Programme Framework for Children in Armed Conflict in November 2001. Soldiering by children is one of the worst forms of child labor. Children without Primary Caregivers: Children without primary caregivers are deprived of their first source of protection and are either orphaned, forced away from their families, or have to leave in search of income-generating opportunities. A study commissioned by UNICEF and the National Programme on Street Children reported 246,011 street children in the Philippines.18 This number includes about Abused / Trafficked Women: 45,000-50,000 highly visible street children The difficulty of calculating accurate in the major cities and urban centers of the estimates of domestic violence is common country. The hazards and risks faced by among all societies, and the Philippines is these street children include prolonged no different. Even when victims are in near- separation from their families, exposure to death situations or brought to hospitals after drugs, prostitution, early pregnancies, STIs assaults, the abused women face the risk of and HIV/AIDS. With neither access to basic more violence, public ridicule and economic services nor better opportunities, their powerlessness.19 Of the 6,074 women in futures remain bleak. especially difficult situations, served by the This group also includes children caught Department of Social Welfare and Develop- up in the judicial system. In 2001, the ment in 2001, 38.2 percent were physically Bureau of Jail Management and Penology abused, battered and/or maltreated, 13.4 reported 5,905 children in such circum- percent were trafficked, while 11.6 percent stances, the majority of whom had been were sexually abused. The number of adult subjected to pretrial detention. While in women in prostitution is estimated at detention, these children have been mingling 400,000-500,000.20
  17. 17. A Common Country Assessment of the Philippines 17 Displaced Persons: cause of their low educational status and A variety of reasons, including natural unique social and cultural norms, they have disasters and development projects, have been subjected to historical discrimination caused displacement in the Philippines. and exploitation. Malaria prevention and Of particular concern, and the focus of the treatment is also sporadic in IP communi- May-June 2002 visit of the Special Rappor- ties. Notwithstanding the weight that many teur on the human rights of migrants, is the Indigenous Peoples attach to securing forced displacement in Mindanao resulting protection for ancestral lands, progress to from armed conflict between the Moro this end has been disappointing. Islamic Liberation Front (MILF) and the Many IP children and youth are caught Armed Forces of the Philippines. At the in armed conflict and get recruited into peak of the conflict (2000-2001), an esti- armed rebel groups. The plight of women mated 932,000 people, half of whom were in situations of armed conflict renders them children and young people, were displaced. vulnerable to physical abuse. These While many have returned to their homes, specific groups are subjected to varying deep concerns persist about the conditions degrees and forms of abuse, violence and to which they return, their ability to reclaim exploitation, or to multiple vulnerabilities, land and assets, and the status of those and are among the most marginalised. who are still displaced. Over 6,400 homes were totally destroyed; the displaced found Migrant Workers: shelter in 276 evacuation centers, and Overseas Filipino Workers (OFWs) among relatives outside the path of conflict. increasingly comprise women and vulner- As of 23 July 2003, a total of 32, 414 fami- able young persons, who move overseas in lies or 157, 043 individuals remain dis- search of higher wages or better opportuni- placed. Some continue to be housed in ties than at home. Based on the results of 101 evacuation centers in 170 barangays in the Survey of Overseas Filipinos conducted the 10 provinces of Central Mindanao and by the NSO, the number of OFWs in 2001 the ARMM.21 This pattern of displacement and 2002 was estimated at 1.029 million has been a continuing experience over and 1.056 million, respectively. These decades of armed conflict. From the figures represent just over 2 percent of records of the Department of Social Wel- the total population of the country, 15 fare and Development (November 2001), years old and over. the most significant displacements were Currently, women comprise nearly half recorded in Maguindanao, Sulu, Lanao del of all OFWs, and their ranks are further Norte, North Cotabato and Marawi City. In increasing as women account for roughly August 2001, the total cost of assistance 50 percent of workers going abroad each for evacuees was PhP342M in the form of year. Around 10 percent of the total num- relief supplies, bunkhouses, core shelters ber of overseas workers belong to the 10- and evacuation centers. More than 81, 711 14 age category and two out of every families or 411,849 persons were displaced three overseas workers in this age cat- beginning January 2003 by the escalation egory were girls.23 While both women and of armed hostilities between the AFP and men, as migrant workers, are vulnerable the MILF. to HIV/STI diseases and exploitation, the types of jobs that many women take, Indigenous Peoples: such as domestic work and entertain- About 140 indigenous ethno-linguistic ment, make them particularly vulnerable groups, representing 15-20 percent of the to isolation and sexual harassment and total population22, are found in more than 50 abuse. Once overseas, these workers, of the country’s 78 provinces (Figure 3, who send home substantial remittances, p.105). They are mostly located in remote may be discouraged by their families and but resource-rich areas, many in protected communities from repatriation. If they do and ecologically fragile environments. return, their reintegration is often rocky, Because of their remote location, they have as they face difficulties securing decent poor access to basic services; and be- work opportunities.
  18. 18. 18 A Common View, A Common Journey UNDERLYING CAUSES OF POVERTY AND VULNERABILITY The underlying causes of poverty and vulnerability are complex and reflect deep- rooted cultural and institutional dynamics, embedded in decades if not centuries of tradition. But as we assess the development challenges of the Philippines today, and consider why the poor remain poor and the vulnerable become increasingly so, a num- ber of explanations arise about why the Philippines has not realised widespread improvements to human development and security. These explanations relate to three broad themes: economic growth and the underlying structural inequities and founda- tions in the economy; a sense of insecurity relating to societal harmony and political uncertainty; and the failure to iron out many of the imbalances and inequities that prevent key agents of change — including women, the poor and the marginalised — from playing more active roles in improving their lives and those of others. While the Govern- ment of the Philippines and development partners have devoted considerable effort and funding to improve the level of develop- the fiscal deficit and debt burden remain ment of the country, this assessment fo- substantial, and markets remain vulnerable cuses on what more needs to be accom- to political and investor uncertainty. In plished. general, low investment reflects weak investor confidence explained by a number Growth has been poor and not “pro-poor”: of internal factors, among others: (a) the The growth of the Philippine economy instabilities in the political situation and has not been strong enough or equitable peace and order problems; (b) the fiscal enough to contribute to a reduction in poverty. imbalance, banking and financial market Even during periods of somewhat steady uncertainties; (c) institutional and gover- growth, growth has been modest. Both nance issues such as are reflected in the external and internal factors are behind this. low international rating of the Philippines for The Philippine economy has fallen victim the rule of law, including the enforcement of to a number of regional and global develop- contracts; (d) inadequate infrastructure and ments. The Asian financial crisis, the US- (e) the high cost of engaging in business in led war in Iraq, global retrenchment in the the country.24 All of these contribute to a high- technology and electronics sectors, and broad perception by domestic investors that the El Niño phenomenon have hampered opportunities abroad are relatively more global demand, strained domestic production, attractive. That the Philippines runs an and created greater investor unease in the external account surplus — which reflects country and region as a whole. Economic the fact that national savings exceeds policy reforms and programming imple- national investments — is in part an illus- mented over the past few years have been tration of this. Indeed, investment in the credited with generating the modest growth Philippines is among the lowest in South- levels posted and for preventing even more east Asia, at around 20 percent of the GDP, citizens from falling into poverty. compared to a norm of 30-35 percent for However, the economy remains fragile, other newly industrialised countries.
  19. 19. A Common Country Assessment of the Philippines 19 That said, there is a clear need to im- policy thrust aimed at addressing conten- prove productivity, diversify beyond national tious issues such as the high concentration resource-intensive products, increase of wealth among a few select families or the domestic value-added, and build the com- related issue of land reform. The inequitable petitiveness necessary to access wider distribution of productive resources has led markets. The industry sector, for example, to alarming disparities in economic status has failed to expand into a source of high- across populations, no matter the level of income, high-productivity employment. growth. This inequity appears to be widen- Moreover, this sector, which contributes ing. The Gini ratio26 in 2000 was 0.48 –- more than 20 percent of the value-added in notably higher in 1985, when the ratio was the country, generates as little of half that 0.44 (the closer the ratio is to 1.0, the amount in employment opportunities.25 greater is income inequity). Indeed, during Whereas large firms dominate the less this same time period (1985 and 2000), the labor-intensive manufacturing and export share in national income of the poorest 20 sectors, micro and small enterprises — percent of the population declined from 4.8 many of which are active in the informal percent to 4.4 percent, while the share of the sector — absorb the most labor. Medium- richest 20 percent increased from 52.1 sized enterprises, representing the bridge percent to 54.8 percent. A study showed between small and large enterprises, are that had income distribution been the same underdeveloped and few and far between. as the 1985 level, poverty incidence would Investments in human capital –- through have declined by as much as 16.5 percent- access to quality and relevant vocational age points, instead of the net decline of 9.4 education and higher education and through percentage points that was actually life-long learning of the labor force —have achieved over the period.27 been inconsistent. Innovation, a driver of At the individual level, the inability to break technological capacity and industrial devel- the cycle of poverty is largely a result of opment, has not been successfully nurtured these disparities and inequalities in access- in the country. ing the resources and benefits of develop- ment and the lack of accountability placed Inequities in Access to Opportunities on duty-bearers. Issues relating to inequali- and Basic Services: ties in accessing productive assets and Since the restoration of democracy in basic social services were examined: the 1986, the number of civil society groups and varying levels of resource development (i.e. peoples’ organisations has grown consider- human, physical, natural resources); and ably. With the power of modern communi- the presence of physical and social barriers cations, civil society has become a formi- to participation in development initiatives, dable influence, as manifested in popular among others. It was unanimously con- uprisings better known as ‘People Power.’ cluded that this factor is greatly undermining Moreover, the government has established rights-based development in the country. venues for people’s participation in gover- Farmers have little ability to accelerate land nance, such as sectoral representatives reform against long-standing powerful through the party-list system, and as mem- landlords. Indigenous peoples, who are bers of national and local special bodies, seeking to protect ancestral lands from technical working groups, and project task mining, deforestation, or other development, forces and has encouraged the participation have little power to serve as a counterweight of Civil Society Organisations (CSOs) and to the influences of large, often corporate, the organised basic sectors to engage in interests, who seek the interpretation of policymaking and planning. The Philippines conflicting national laws in their favor. With- benefits from a vigorous free press leading out such shifts in power dynamics, and the to vigorous public discussions. more effective “voice” that this would bring, Notwithstanding the tremendous the marginalised will remain so. Inevitably, progress towards meaningful engagement when there is inconsistency and conflict in of civil society, the democratic process has various laws, the larger entities (local or not produced a strong unified consensus or foreign) have greater room for maneuver.
  20. 20. 20 A Common View, A Common Journey Poor Quality and Inefficient Distribution of Economic Infrastructure: The Philippines has pressed ahead with important reforms to improve the availability and adequacy of infrastructure. The enact- ment of the Build-Operate-Transfer law, telecommunications liberalization, and deregulation of the domestic transportation industry, for example, were important steps taken.28 The Philippines telecommunica- tions sector is recognised as being one of the most advanced in the region. During the 1997 Asian financial crisis, the strength of the economy lay in the construction sector that rose 16.2 percent, while the transporta- tion, communication, and storage sector grew by 8.2 percent. However, poor quality of infrastructure and support facilities, the slow adoption of advanced technology, and the low level of research and development contribute to low productivity and competitiveness29 and prevent SMEs from engaging more in inter- investment liberalisation improves access to island and international trade. Indeed, the pollution-control technology and cleaner 2002 World Competitiveness Yearbook30 energy inputs. The Doha Round of negotia- ranked the Philippines as 30th among large tions under the World Trade Organisation, countries31 on the question of basic infra- for example, has the potential to yield many structure –- including in the road, rail, mari- benefits to Filipinos and the Philippine time, and aviation sectors. Electricity costs economy more generally. If new disciplines are high, and there are growing concerns in the trade of agricultural goods result in about the country’s capacity to supply dramatic reductions in trade-distorting adequate power a few years hence. Though subsidies, quantitative import restrictions, further reforms to regulation and competition and tariff levels in OECD countries, Filipino policy affecting this sector are encouraging, agricultural producers and processors could financial investments are also required. In become more internationally competitive. this regard, the World Bank estimates that According to a World Bank report33, agricul- the Philippines would have required between tural subsidies in rich countries, which $38B and $48B to meet its investment currently stand at $350 billion, is roughly requirements in infrastructure during the 10- seven times the amount spent on interna- year period ending 200432. Remote com- tional aid. Similarly, clearer disciplines munities in mountainous provinces and relating to Trade-Related Intellectual Prop- distant islands have benefited the least from erty (TRIPs) are on the table as are disci- infrastructural development. plines relating to the trade in services. Such changes to the multilateral trading Trade Liberalisation: system could help the Philippines promote The latest trends toward globalisation are efficiency in resource allocation, enhance viewed with both optimism and concern — consumer welfare, expand international a sentiment underscored in the Millennium market access for Philippine agricultural Declaration. Clearly, liberalisation can goods, stimulate the “backroom” services support democratic principles, facilitate the sector, and open up the market for more transfer of new technology and technological affordable prescription drugs, to name a few innovation, and attract much-needed invest- benefits. Many of these benefits, however, ment that domestic capital markets are are not solely dependent on multilateral unable to generate. Similarly, trade and action. By continuing selective liberalisation
  21. 21. A Common Country Assessment of the Philippines 21 efforts, including in the agricultural sector, Fertility Rates: where tariffs in the Philippines remain High fertility rates reflect a lack of access relatively high within the region, the consum- to, and demand for, family planning services, ers and producers alike could realise con- lower educational attainment, and poverty. siderable gains. The unmet demand for family planning However, freer trade will benefit only services is evidenced by a total fertility rate of those producers who can compete and in 3.5 children per woman. This is, on average, those sectors where the Philippines has a one child higher than the number reportedly comparative advantage. In this way, the preferred by Filipino women.35 Government growth of international trade and investment policy is based on responsible parenthood has sharpened development challenges. and family planning. Muslim religious leaders Many businesses and supporting institutions in the country have recently issued a are ill-prepared for the intensified competi- “fatwah” or decree declaring Islam’s support tion it brings, in part due to past restrictive for reproductive health and family planning. policies and in part because of overall The population competitiveness. In the Philippines, un- growth rate of the skilled labor has been rendered redundant Philippines has by less expensive labor abroad and through serious conse- automation or mechanisation of production quences at every level processes. Machinery, rural feeder roads, of the development and post-harvest facilities are outdated or challenge. At the inadequate in many parts of the country, national level, high leaving the prospects for many commodity population growth producers discouraging. rates express them- Consequently, unless considerable selves in discouraging strides are made to attract capital and levels of per capita GNP. The country’s technology to combine with domestic labor, population growth, at 2.36% (average annual the unskilled workforce will continue to be growth rate from 1995 to 2000), is one of the marginalised into subsistence activities world’s highest, almost twice the global rate of (including self-employment and micro 1.3 percent. With population growing at this business in the informal economy) and rate, the growth of output per capita averaged dependency on imports (including food only 1.4 percent from 1980-2000. Given the imports) will intensify. Better social protec- rate of GDP over the last three decades, it is tion measures must go hand in hand with estimated that per capita GDP would have further liberalisation, to increase labor been 50 percent higher than it now stands, market flexibility and encourage entrepre- had population (in 2003) only grown at the neurship, innovation, and product diversifica- same rate as Thailand’s, where fertility rate tion, while catching those who are unable to is 1.8, as against the 3.5 of the Philippines36. adjust in time. The Committee on the Elimi- A high savings rate — a prerequisite to nation of Discrimination warned34 that domestic investment — is also undercut by women are particularly vulnerable to the a high dependency rate. impact of liberalisation, especially those in At the local level, high fertility rates in- free-trade zones and in rural areas. crease pressures on the environment, Owing to weak management of natural escalating harvesting rates of scarce natural resources and ineffective export controls, resources and compounding problems of air, the globalisation of demand has also accel- water and land quality, and human and erated exploitation and destruction of pre- industrial waste disposal. Moreover, the cious resources, including natural forests gaps between supply and demand for basic and coral reefs. In the absence of an institu- social services such as education, heath and tional framework that clarifies tenure and water widen as the ability of government to thwarts rent-seeking behavior in using the secure additional funding to pay for more country’s environment and natural re- services is not forthcoming. sources, this demand will only worsen the At the individual level, high fertility rates state of the environment. have a demonstrated impact on the health
  22. 22. 22 A Common View, A Common Journey and well-being of children and their mothers. paying positions. The low labor force involve- Large families, particularly those with low ment of women reflects the greater prefer- spacing between births, experience higher ence given to the employment of men. For infant and maternal mortality and morbidity example, only 21 percent of judges in all and are less likely to see their children attend courts are women, and most of them are in school. With more children to feed, the the lower courts. The number of women in incidence of domestic abuse and child labour public office also remains few. Men dominate increases. Women prefer smaller families posts for local government chief executives than do men, yet do not have an equal say in and middle-and senior-level ranking career the decision. officers. Their positions in government and in the courts directly affect the public policies. Gender Inequities: Many laws, particularly those dealing with civil The Philippines has made considerable law (that is, involving spousal and family progress to advance the status of women. relations) are still biased against women. Access to schooling for girls is higher than for Quality standards for health care program- boys, based on cohort survival and repetition ming and delivery have yet to be made fully rates. Filipino women, particularly those with gender-sensitive. Despite progress, the high higher education are marrying at a later age, level of maternal mortality is a symptom of and their acceptance into public service has underinvestment in services for women. even been higher than men. Women appear However, if gender equality is to be con- to have gained more from national health sidered there is a need as well to begin progress, as suggested by life expectancy addressing the emerging problem of boys’ and mortality rates. Two of the last four educational underachievement and to identify Presidents have been women. strategies that will effectively improve boys’ Building on this foundation, there is still and girls’ participation in schools. progress to be realised. The potential of At the cultural level, unequal power rela- women and girls to contribute to development tions between men and women persist, efforts — as decision-makers, consensus leading to violence against women, a lack of builders, managers of households, and control over women’s reproductive health income generators — and their ability to choices, and the inability to pursue meaning- exercise their rights as equal partners, will ful employment. Behind these power rela- directly affect the speed of rights-based tions is patriarchy — the social structure is development. As noted in the Millennium constructed, reinforced and perpetuated by Declaration, development that is “truly sus- sociopolitical institutions, put in place by men tainable” depends on making real progress and thereby ensure that men, by virtue of towards the empowerment of women. their gender, have power and control over At the institutional level and in the workforce, women and children. Until women and girls women are under-represented and tend not to are perceived as equal partners, develop- occupy the higher occupational ranks or best- ment will be hindered.
  23. 23. A Common Country Assessment of the Philippines 23 SECTION 3: Areas of Development Cooperation F lowing from the previous discussion of poverty and vulnerability, this section attempts to identify a subset of development GOOD GOVERNANCE In the Philippines, as elsewhere, gover- nance is of central importance to delivering issues that most directly affect the poorest on any and all the MDGs. Since the rein- and most vulnerable. In particular, the statement of democracy in 1986, there have criteria for selecting these specific issues been major and welcome reforms in many are: (a) addressing the issue is seen as a aspects of governance, i.e. political, eco- necessary catalyst for change and improve- nomic, judicial and administrative. Through ment in other areas; (b) past successes and its commitment to the eighth MDG in sup- best practices can be identified; and (c) they port of the global call for “an open, rule- are critical to the achievement of the MDGs. based, predictable, nondiscriminatory In addition, the key development issues trading and financial system...both nationally generally focus on the key areas of compe- and internationally” and in making debts tence and comparative advantage of the sustainable in the long-term, the Govern- United Nations system in the Philippines — ment has reiterated its commitment to in other words, where a critical mass of continue reforms in the areas of trade and technical expertise, best practices and tariffs and government procurement, and for global, regional, and local networks provide greater efficiency and effectiveness in public the groundwork for targeted support to expenditures and financial management. stakeholders in the country. The recent ratification by the Philippines of
  24. 24. 24 A Common View, A Common Journey the UN Convention against Corruption campaigns in schools and communities. underscores how seriously many policy Despite these efforts, large-scale and makers take this issue. petty corruption is pervasive throughout However, progress in carrying out even various levels of Philippine government. The approved reforms has been hampered by draft report of the “Consultations on the UN many factors, including: inadequate budget- Conference on Financing for Development” ary resources; conflicting interpretation, if cited that out of a total national budget of not gaps, in the implementing rules and PhP781 billion in 2001, PhP100 billion, or 13 regulations of new laws; consequent pro- percent, was at risk of being lost to corrup- longed litigation to resolve disputes in legal tion; 70 percent involved public works interpretations; inadequate capacities or contracts while 30 percent involved the resistance within the bureaucracy to imple- purchase of supplies and equipment.37 The ment reforms and modernise its systems; Office of the Ombudsman estimated that a graft and corruption; intense partisan politics total of USD48 billion was lost to graft and and political disruptions. In the absence of corruption over the past 20 years, and that substantial headway to curb graft and only 60 percent of the national budget was corruption, improve the responsiveness and actually spent on government programmes effectiveness of all three branches of gov- and projects. Whatever the precise figure, ernment, enhance resource mobilisation the magnitude is large and the broader efforts, and optimise public expenditure costs are extremely heavy (Table 7, p.97). decisions, the MDGs and other development commitments will not be attained. Weak Fiscal Management: The Reports on the MDGs cite serious Corruption: gaps between current funding levels and Corruption damages the development those required to attain the MDGs. process in many ways: it undermines social Recognising the impact that the fiscal condi- confidence in the willingness and capacity of tion (and therefore deficit reduction) has on public institutions to fulfill their obligations to macroeconomic stability, the government the people; and it reinforces existing power should continue to give priority to raising relationships that are themselves typically revenues and improving the efficiency of the part of the development problem. Losses bureaucracy so that more and better quality due to corruption deepen poverty as they public service can be delivered. deprive the disadvantaged sectors of much- Following the onset of the Asian financial needed programmes and environmental crisis, the government deficit deteriorated stewardship. Incidences of bribery and graft quickly, mainly due to slippages in revenue are often front-page news, leading the public collection. The major causes of the decline to perceive them as the norm rather than the include tax evasion and weakness in the tax exception in government transactions, structure. Moreover, the private corporate further reducing the incentive or willingness and banking sectors — major contributors to to increase taxpayer compliance. the national coffers — were weighed down The Government has recently introduced by nonperforming assets. Tax revenues, as affirmative actions toward addressing this a share of GDP, fell from 13.9 percent in problem such as the passage of the Pro- 2000 to 13.5 percent in 2001. About PhP150 curement Act, the implementation of lifestyle billion is lost to tax evasion, PhP92 billion of check among government officials, and the which constitutes uncollected income tax. reactivation of the Inter-Agency Anti-Corrup- In succeeding years, these translated into tion Committee (IAGCC) to synchronize the higher debt service payments, which along various anti-corruption initiatives of the with the nonpassage of important tax mea- national government. National and commu- sures, created a vicious cycle of higher nity-based civil society organizations have deficit and debt. Recognising the major also contributed their share by monitoring causes of declining revenue collection, the government projects, increasing citizen’s government began in 2002 to implement awareness through investigative reporting in reforms in both the Bureau of Internal Rev- media, and conducting anti-corruption enue and Bureau of Customs.
  25. 25. A Common Country Assessment of the Philippines 25 On the expenditure side, expenditure lution of fund management remains limited. reduction programs were also put in place, School heads thus often remain unable to such as the Government Electronic Procure- undertake school-specific improvements, ment System. The culmination of actions reforms, and innovations. translated into a deficit that is now P2.1 billion Insufficient public spending and invest- lower than its program. If legislative propos- ment in the Philippines, the lowest among als to restructure excise taxes are passed, ASEAN countries, also thwart early child the Government expects further progress care and development efforts. Resources towards deficit reduction. Moreover, the at all levels (i.e. family, community, local passage of the Debt Cap Act is expected to government and national government) are ease the problem of rising interest payments. inadequate to support family care-giving and However commendable, the deficit- to direct service delivery to children. In reduction program has crowded out much- public day care centers, the costs of send- needed expenditures for basic services and ing children to day care centers are still derailed the implementation of many priority borne largely by families.39 In the private reforms which are only partly funded, such sector, the cost of early child care and as the Comprehensive Agrarian Reform development (ECCD) services is prohibitive Programme (CARP)38, the Urban Develop- for many families. ment and Housing Act (UDHA) and the Similarly, the budget for the Department Clean Air Act, among others. Based on a of Environment and Natural Resources 2001 Social Weather Stations study, real (DENR) declined by roughly 60 percent in real spending on basic social services by the terms, from 1998-2003; the ratio of allocations national government steadily dropped from for Personnel Services and Maintenance to PhP418 million in 1997 to PhP378 million in Operations increased from about 60:40 in 2000. In other words, social services 1990 to approaching 95:5 today. expenditures as a share of GDP, decreased from 6.4 percent in 2000 to 6.0 percent in Decentralisation: 2001. This trend is also reflected among Decentralisation was intended to make Local Government Units (LGUs). government services more accessible and On a sectoral basis, the National Health local institutions more accountable and Accounts reveal that the ratio of health transparent and to promote working partner- expenditures to GNP dropped from 3.4 ships between local governments and their percent in 1997 to 3.25 percent in 2000, respective constituencies, particularly the compared to the WHO-recommended poor. After more than a decade of standard of five percent (Table 8, p.97). Lack of decentralisation, some important gains and funds also led to insufficient social health breakthroughs have been achieved that insurance coverage, especially among poor have benefited the disadvantaged sectors at families, preventing access to timely and the community level. Innovative approaches quality health and nutrition interventions. and partnership arrangements have been Comparative statistics also show that the pursued by LGUs, national agencies, the Philippines spends less per capita for basic private sector, CSOs and communities to education than neighbors such as Malaysia collectively manage programmes and and Korea, though more than China (Table enforce policies on the ground. A number of 9, p.98). By category of expenditure, the best practices in local governance were largest allocation of the basic education recognised in a host of social and economic budget goes to Personnel Services, i.e. services, in the promotion of justice and in teachers’ salaries, leaving very little for mainte- peace-building and conflict management. nance and other operating expenses (MOOE) However, government decentralisation and Capital Outlay, where funds for enhancing has also created challenges, particularly education quality (teacher training, instructional pertaining to division of labour and financial materials, support to school improvements) responsibility. About 90 percent of local are sourced (Table 10, p.98). Moreover, despite governments continue to depend on the efforts by the DepED to release resources national government’s Internal Revenue directly to elementary schools, actual devo- Allotment (IRA) despite the Local Govern-
  26. 26. 26 A Common View, A Common Journey ment Code’s provisions allowing them to Concerns about the Judicial System: generate resources from local taxes (albeit The role of the Judiciary is vital in main- limited) and other forms of resource taining the rule of law and in providing an mobilisation (Table 11, p.99). This depen- enabling environment conducive to develop- dence weakens their capacities to deliver ment, particularly by ensuring social equity adequate basic services to their constituen- and empowering the poor and less privi- cies and increases their vulnerability to leged. The Judiciary has initiated a compre- political influence from the national level. hensive reform program to transform itself The poorest regions, whose citizens are in into “an independent, impartial, effective and greatest need of investments in economic efficient Judiciary, protective of the rights of and social infrastructure and basic services, the people and democratic institutions.” also have the fewest revenue-generating Current efforts are directed to address opportunities. A major challenge is to iden- issues such as access to justice by the tify innovative ways to share revenue more poor, corruption, case backlogs, competen- equitably among regions. cies of judges and personnel and fiscal Recommendations to improve the effec- autonomy, in partnership with the pillars of tiveness of decentralisation include: (a) justice including civil-society organisations further and substantial financial and legal professional associations.Many decentralisation to effectively carry out questions have been raised about the devolved functions; (b) continued capacity- reliability and competence of the judicial building for LGUs to manage devolved system in the Philippines, and whether functions; (c) greater inter-LGU arrange- citizens and foreign investors alike can be ments and standardisation; (d) serious assured of justice. There have been particu- attention at the local level to the adverse lar concerns about interventions in specific effects of urbanisation and the shortage of commercial disputes, contributing to a basic services; and (e) strengthened ac- climate of unpredictability and uncertainty for countability and performance measurement investments and private-public partnerships. systems of local governments to local citi- The Philippine judiciary faces a host of zens and service users. Individuals and problems in its internal and external environ- communities have an important role to play ment. Internally, the outdated and highly by voicing their needs and concerns to local centralised judicial system is constrained by government officials to ensure they receive a low budget, a lack of fiscal autonomy, low the goods and services to which they are salaries for judges and court personnel entitled (Table 12, p.99). (which can lead to corruption), judicial ineptitude, a tarnished public image, and a An Inefficient Bureaucracy: weak community relationship.41 Docket Past Philippine administrations have congestion is a serious problem. Parties of carried out reorganisation and reengineering the poor, in particular, have to wait years for schemes for the bureaucracy, in an effort to their disputes to be resolved. The resolution improve efficiency and reduce corruption. of cases involving reform programmes Studies about the Philippine civil service (such as land reform) takes particularly long. system point to several deficiencies that Indeed, the rate of disposition of cases at include: (a) weak mechanisms for planning, the Department of Agrarian Reform (DAR) agenda-setting and policymaking; (b) failure takes five times longer than those of regular to implement and maintain an appropriate courts.42 performance management and measure- There is a dearth of legal practitioners ment system; (c) overlapping and duplica- vis-à-vis the increasing number of cases, tive government functions and activities; (d) particularly those involving agrarian conflicts, overemphasis on rules and procedures labour-management disputes, urban poor rather than direct resource management community evictions or IP community towards the realisation of intended out- displacement. Legal professionals in gov- comes and impacts; (e) a highly politicised ernment earn meager salaries compared to bureaucracy, and (f) lack of required mana- lawyers in private practice, a primary ob- gerial and technical competencies.40 stacle to recruiting new lawyers.43 Citizens

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