hanep for 11th fdc congress (draft)

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Working Draft as of August 17, 2010.

The National Economic Platform. c/o the Freedom from Debt Coalition (FDC). www.fdc.ph. 11 Matimpiin

St. Barangay Pinyahan Quezon City. 1100. Telephone (02) 9211985. Telefax (02) 9246399. [email protected]. 2

Table of Contents

New Economics for a New Administration .................................................................................................... 3

Executive Summary .................................................................................................................................... 11

Chapt er 1: ............................................................................................................................................... 22

Towards Modernity and Prosperity. Next Stop: Philippines 2020. ............................................................ 23

1. Activist Developmental State ......................................................................................................... 24

2. Equitable and Strategic Land Ownership and Use for Sustainable Development and Livability of

Communities.......................................................................................................................................... 26

3. Domestic Capital-driven Development ........................................................................................... 29

4. Integrated, Modernized, and Ecologically-sound Industry focused on developing Sustainable Local

Economies and Domestic Markets ......................................................................................................... 32

5. Empowered Labor Sector ............................................................................................................... 35

6. Ecologically Sustainable and Climate-adaptive Economy ............................................................... 37

7. Strong Social Support and Safety Net System for Households and the Reproductive Economy ..... 40

8. Food Sovereignty............................................................................................................................ 42

9. Active State Participation towards an Integrated, Sustainable and Humane Management and

Development of the Water Sector ......................................................................................................... 45

10. Strong State Participation towards a Rational and Participatory Power System ........................ 48

Chapt er 2: ............................................................................................................................................... 51

Why are we poor? Going Beyond the Corruption Discourse ..................................................................... 521. Weak, Elite-Captured State ............................................................................................................ 58

2. Inequitable Land Ownership and Lack of Social and Strategic Outlook on Land Use and

Management.......................................................................................................................................... 62

3. Foreign Capital-dominated Open Economy .................................................................................... 65

4. Fragmented Industry designed for Low Value Added Exports ........................................................ 68

5. Repressive Labor Environment ....................................................................................................... 71

6. Ecologically destructive Economy vulnerable to Climate Disasters................................................. 75

7. Unrecognized and Neglected Reproductive and Care Economy ..................................................... 78

8. Crops and Fishes for the Global Supermarket................................................................................. 81

9. Grossly Neglected, Fragmented, and Ill-Governed Water Sector .................................................... 84

10. Abandoned Power Sector and Industry ...................................................................................... 87






New Economics for a New Administration1

By Rep. Walden Bello , President of the Freedom from Debt Coalition (2008-2010)*2

3The dominant feature of the Arroyo administration was pervasive corruption, but its most4

destructive legacy in the long term will probably be its policy failures. The ascent to power of a new5

president, backed by a new Congress, provides the opportunity for a fundamental shift in policy in order6

to end poverty and re-launch the Philippines on the road to development.7

8

The policy paradigm of the administration was one it inherited from previous administrations. This9

was a pro-market, neoliberal approach the key prongs of which were accelerated trade and financial10

liberalization, deregulation, and privatization. In addition, Arroyo continued her predecessors policy of 11

fully servicing the foreign debt, dealt with the ever-widening budget deficit by imposing a 12 per cent value-12added tax that hit mainly the middle class and the poor, and left it to the market to address poverty and13

income inequality.14

15

With its pro-market orientation, the Arroyo presidency followed the lead of previous administrations16

in refusing to pursue an industrial policy, reducing budget support for agriculture to a minimum, and17

radically bringing down tariffs on both agricultural and manufacturing imports. Abandoned to global18

market forces as the administration embraced the ideology of globalization, the economy was channeled to19

the massive export of labor, export-oriented low-value-added manufacturing, particularly of electronic20

components, and providing personnel for the outsourced operations of transnational corporations like call21centers.22

23

Failure of a Paradigm24

25

Not surprisingly, the countrys GDP growth rate was consistently significantly below those of its Asian26

neighbors, the radical reduction of tariffs decimated manufacturing, the country was turned from a net27

food exporter to a net food importer, the poverty rate stubbornly refused to go below 30 per cent of the28

population, and income distribution worsened. In addition, the ecological crisis intensified, owing to29

desultory environmental management and failure to promote a reproductive health policy for fear of 30offending the Catholic Church hierarchy.31

32

The countrys plight under the lash of wrong policies over the last four administrations becomes33

clearer in a comparative perspective. According to the United Nations Development Programs Human34






Development Report, the Philippines registered the second lowest average yearly growth rate, 1.6 per cent,1

in Southeast Asia in the period 1990-2005lower than Vietnam (5.9 per cent), Cambodia (5.5 per cent),2

and Burma (6.6 per cent). The only country registering average growth below that of the Philippines was3

Brunei, which, being an oil-rich, high-income country, could not afford not to grow.4

5

Except perhaps for allowing the passage of the law extending the period for the redistribution of 6land under land reform and providing funding for much needed support services, it is difficult to find bright7

spots in Arroyos economic record. The only mitigating factor in this dismal performance is that it cannot8

be separated from that of the previous three administrations.9

10

In the last two years, the seemingly unending crisis of the domestic economy has been exacerbated11

by the worst global economic crisis since the Great Depression, a development that is a product of the12

same principles of deregulation and trade and financial liberalization. This dual crisis coincides with the13

arrival of a new president and provides an unparalleled opportunity to break with the paradigm that has14

condemned this country to stagnation for nearly three decades.15

16

A Pro-active State17

18

First and foremost among the necessary changes is the transformation of the Philippine state from a19

passive actor into an proactive agent of development. The role of the state is not simply to regulate or20

discipline the market and the private sector, though this is an important function. More important, this21

state must lead in developing and implementing a strategic program for Philippine development, one that22

harnesses the energies of the public sector, civil society, and the market to achieve development targets.23

Planning, which has become a dirty word in recent years, must again take pride of place among the24instruments of economic development, with the National Economic Development Authority (NEDA) ceasing25

to be simply a statistical collection agency and becoming the planning agency it was originally meant to be.26

27

The revival of an economy with a solid industrial and agricultural base must be among the key aims28

of the activist state since industry and agriculture are the main sources of solid growth in the economy.29

This means engaging in industrial policy, or the strategic deployment use of tariffs and other mechanisms30

not only to protect domestic manufacturing from unfair competition but, more important, to give it depth,31

diversity, coherence and complementarity. It also means making agriculture again a centerpiece of the32

economy through the strategic management of tariffs, quotas, subsidies for farmers, and sustainable agro-33

technology. The long-awaited completion of agrarian reform is, of course, a central element in the34

agricultural policy package, and the presidents electoral campaign promise to distribute Hacienda Luisita to35

its tenants would give the green light for this. 36






Income and Asset Redistribution1

2

Market-driven export-oriented industrialization and export-oriented agriculture were the main3

prongs of the old, discredited paradigm. It is time to make the domestic market again the driver of growth.4

This can only be done, however, by increasing the purchasing power of Filipinos in the lower income5

groups. This will inevitably involve income and asset redistribution, including a deepening of the land6reform program. Higher wages for workers, income subsidies for the poor, and strengthened support7

services for peasant farmers are also mechanisms to achieve this goal of activating a vibrant domestic8

market that will be the locomotive of growth. In the current global economic crisis, the Philippines and9

other countries, via stimulus programs. have fallen back on the domestic market to make up for the10

shortfall in foreign markets. This reorientation must be made permanent, a prescription that is underlined11

by the poor prospects of recovery by export markets in the next few years.12

13

Asserting the role of an activist developmental state does not mean a return to the old14

developmental paradigm of the 1960s and 1970s. The old paradigm focused on achieving high growth15rates, prioritized industrial development, made equity a secondary consideration, and paid little attention16

to environmental damage.17

18

The New Economic Policy, in contrast, stresses the quality of development, with a strong emphasis19

on equity and ecological stability. A lower rate of growth that would meet the needs of development and20

poverty reduction without destabilizing the environment is not a utopian dream, but it can only be brought21

about on the basis of a more equitable sharing of the fruits of growth. Thus, equity in the distribution of 22

income, assets, and resources fulfills simultaneously the needs of demand-driven growth, environmental23

sustainability, and social justice.2425

Democracy and Development 26

27

The New Economic Policy is not out to create an authoritarian state. Indeed it sees democratic28

governance as central to creating consent and thus giving legitimacy to the states economic initiatives.29

This means fundamental economic decisions, such as which industries should be promoted owing to their30

disproportionately positive impact on development and employment, must be arrived at democratically. It31

means the establishment of mechanisms of accountability of government agencies to civil society bodies32

such as peasant and workers production councils and consumer associations. Democracy strengthens33government, not weaken it.34

35

The New Economic Policy must acknowledge the value of womans work. For too long, womans36

central role in the reproduction of the economy has not been acknowledged, leading to the devaluation of 37






womans work and generating systemic inequality in income distribution between the sexes. That the1

majority of the poor are women is not an accident. Addressing the inequality created by gender will involve2

coming up with a set of complementary mechanisms including income support, affirmative action in3

employment, and promotion of women-friendly methods of family planning.4

5

Production, consumption, equity, and ownership of the means of production are closely linked. In6contrast to a system where one form of property subjugates others, an equity-oriented system of 7

production combines various forms of ownership including state ownership, private property, cooperatives,8

and ancestral domain or communal property.9

10

Full recognition and protection of ancestral domain or communal forms of ownership as enshrined11

in the Indigenous Peoples Rights Act of 1997 is the best guarantee for enhancing the economic welfare of 12

indigenous peoples. Their well being can also be promoted through the establishment of and effective13

maintenance of protected areas where environmental management will be in the hands of indigenous14

communities. Such sanctuaries must be created not only in forest and mountain areas but also in the seas15

and lakes. Fishing in waters at a designated distance from the shore must be reserved for artisanal fishing16

communities.17

18

SustainableDevelopment and Provision of Public Goods19

20

Mining for natural resources is an important economic activity. Yet government policies have21

supported foreign corporations that have brought little of their profits to the country and left mainly22

environmental disasters like the Marinduque mining disaster in 1992. Constitutional restrictions on the23

nationality of owners of mining firms must be fully respected, mining policy must favor mainly small24operators, tight environmental restrictions must be instituted, and profits from mining operations must25

flow mainly to mining communities. Repeal of the 1995 Mining Act will be necessary to bring about such a26

pro-people mining regime.27

28

In all areas of the economy, there must be a concerted shift to green technology. In agriculture, for29

instance, land reform and a reversal of destructive trade liberalization is not enough. To be sustainable,30

agricultural technology must be made less dependent on the chemical-intensive technology that has31

proven so ruinous to the environment and public health. At the same time, it must avoid the illusion of a32

new Green Revolution based on genetically engineered seeds that are owned by transnational33

corporations. Organic agricultural methods suitable to small-scale farming must be developed and34

promoted with the aid of the state and our local scientific community.35

36

The last three decades have witnessed a disastrous experiment in the privatization of power, water,37

and other public goods. Privatization has resulted in higher profits for the private sector but it has not38






brought about more efficient management and lower costs of power and water. People have a basic right1

to power and to water, and production and delivery of these goods by public or cooperative enterprises is2

the best guarantee that their price remains within the reach of all citizens. Making public goods affordable3

will sometimes involve some form of subsidization in which richer classes and organizations assist, through4

transfer payments, the poorer sectors of the community.5

6The Fiscal Challenge and the Debt 7

8

Taxation is an indispensable mechanism for government to raise the resources to spend for the9

public welfare. The problem in the Philippines is a system that is regressive, where owing to reliance on the10

value added tax and other forms of indirect tax, the burden of taxation falls principally on the poor and11

middle classes. The key to raising resources is to shift the burden of taxation to the rich through higher12

marginal tax rates for those in the upper income brackets, more efficient collection of income taxes and13

corporate taxes, and increasing taxes on socially unhealthy activities such as gambling, drinking, smoking,14

and carbon emissions. This mix of measures will yield a significant part of the resources to cover the now15gargantuan budget deficit.16

17

Fiscal balance will not, however, be achieved without addressing the debt problem. 22 to 25 per18

cent of the budget now goes yearly to servicing the national debt, a far greater proportion than in most of 19

our Asian neighbors. Debt servicing has become the most important single item contributing to the20

government deficit, especially since the government is now borrowing at higher and higher rates of interest21

mainly to repay debt coming due. Servicing the debt has become the top national priority, and this has had22

not only fiscal consequences but also developmental ones. This practice has contributed to the massive23

reduction in public capital expenditures, which has in turn caused a decline in the rate of investment since24government is the biggest investor in the economy. And this, in turn, has translated into a depressed rate25

of economic growth.26

27

Without a radical change in our debt management policy along the lines of a debt moratorium or a28

negotiated or unilateral reduction of the governments debt burden, successfully implementing a new29

economic policy that will launch the Philippines anew on the road to development will not be possible. A30

fundamental change in debt management similar to Argentinas decision in 2002 to pay only 25 cents to31

every dollar it owed to foreign creditors is the sine qua non of a change in the direction of economic policy.32

The president himself recognizes the need for bold action in this area when he spoke about the need for33

debt repudiation during the electoral campaign.34

35

In sum, a golden opportunity awaits the administration of President Benigno Aquino III. A break36

with past policy, however, is necessary. The contours of a new strategy that will relaunch the country on an37

ecologically and socially benign developmental path are discernible: an activist state, industrial policy,38






reinvigorating agriculture through a reversal of trade liberalization, domestic market-driven growth made1

possible by more equitable income distribution, environmentally benign production processes in industry2

and agriculture, affirmative action policies for women and indigenous peoples, a mixed property regime,3

state provision of public goods and services, and an aggressive progressive tax regime.4

5

Instituting such an alternative comprehensive program will take a great deal of courage and6determination, especially at the beginning. A Chinese proverb says that every journey of a thousand li7

begins with a first step. That first step is to take the bold measures necessary to tackle the biggest problem8

weighing down the country: the foreign debt.9

10

*Walden Bello is the president of the Freedom from Debt Coalition (FDC), a member of the House of 11

Representatives representing Akbayan, and senior analyst of Focus on the Global South. For most of the12

ideas expressed here, the author is indebted to Milo Tanchuling, secretary general of the FDC, and James13

Matthew Miraflor, who headed up FDCs New Economic Policy Project.14

15

16

The article appeared in: 17

18

19

Perspective, Business Mirror - July 30, 2010 20

21

Viewpoints/Columns, Inquirer.net (under Bello's column Afterthoughts) - July 29, 2010 22






FDCs SON A 2010 Statement 1

On President Benigno Aquinos First State of the Nation Address (SONA)2

3

4

PRESS STATEMENT5

Freedom from Debt Coalition6

11 Matimpiin St., Pinyahan, Quezon City 1100, Philippines7Phone: +63.2.921.1985 | Telefax: +63.2.924.6399 | Website: www.fdc.ph 8

9

Please refer to:10

Milo Tanchuling, FDC secretary-general, +63.920.901.871111

12

FOR IMMEDIATE RELEASE13

25 July 201014

15

Keeping an eye on Aquinos commitment to change16

17

The new administration of President Benigno S. Aquino III begins with an extremely high trust rating of 8818percent higher than any of the post-dictatorship presidents. This is a measure of peoples belief in the19

commitment of the Aquino administration to reverse the anti-poor policies implemented during the regime20

of Gloria Macapagal-Arroyo.21

22

We in the Freedom from Debt Coalition (FDC) submitted to the President an Agenda outlining demands for23

changes in the debt and public finance policy, the power industry, the water sector, and governments24

stance on climate negotiations and responses to climate crisis. This is in the context of a looming fiscal crisis25

due to the record-breaking deficit and empty public coffers left by the Arroyo administration, electricity26

prices soaring past major Asian cities save Tokyo, a water crisis that is pushing Filipinos to desperate27

extremes, and a looming La Niña that might bring us another devastating Ondoy.28

29 This, for we believe that the Aquino administration should stop Arroyos practice of using band-aid30

solutions to the countrys chronic problems. A business-as-usual approach will only delay the inevitable31

descent of the economy to oblivion, but it will not change its course. Conditional cash transfers to the32

extremely marginalized, or emergency employment, or may sound like valid ambulatory actions, but at33

best, they can only provide breathing space. These measures can never serve as platform in strategically34

resolving the problem of poverty and under-development.35

36

The Aquino administration should not hesitate to be more strategic in its approaches. It is with this belief 37

that FDCs Agenda is part of an alternative National Economic Platform or New Economic Policy (NEP), a38

summary of which we also submitted to Aquino. NEP is a set policy framework statements which outlines a39

vision towards a sustainable and modern Philippine economy to be achieved by 2020. We hope that the40

elements of our NEP would be integrated and used in the drafting of the 2011-2016 Medium-term41Philippine Development Plan (MTPDP). This, for the MTPDP outlines the strategy and governance42

framework of the Aquino administration for its entire term.43

44






NEP incorporates elements of an alternative paradigm that sharply diverges from the mainstream market1

fundamentalist framework imposed by International Financial Institutions (IFIs) such as the World Bank, the2

International Monetary Fund (IMF), and the Asian Development Bank (ADB):3

4

1. Instead of merely a Strong Republic, NEP centers on the need to establish a Strong5

Developmental State that mobilizes governments regulatory and procurement powers to6

discipline the market and direct resources towards national development and social welfare;7

8

2. Instead of creating Super-Regions which has as its prime purpose spurring economic growth in9

the countryside but ignores equity and environmental issues, NEP pushes for a National Land and10

Water Use Act taking off from the completion of urban and rural land reform and with a sustainable11

development perspective;12

13

3. Instead of capital accounts liberalization championed by IMF, NEP insists on the need for controls14

on capital flow and management of the domestic capital structure;15

16

4. Instead of export-oriented industry focused on exports of raw material and low-value services,17

NEP advocates for an integrated industry focused on developing local economies and servicing the18

needs of a strengthened domestic market;1920

5. Instead of cheap labor policy, NEP champions a high-wage, high-income regime in order to build21

a strong national consumption, savings, and revenue base;22

23

6. Instead of city-centric development that harms the environment through wastage and pollution,24

NEP takes it as primary advocacy the prioritization of adaptation needs and low-carbon25

development;26

27

7. Instead of delegating reproductive tasks to households, NEP champions the provisioning of free28

public universal healthcare and valuation of unpaid labor by women;29

30 8. Instead of an import-dependent food security approach championed by ADB, NEP recommends31

a Food Sovereignty model which seeks food self-sufficiency not just on the national but up to the32

community level.33

34

9. Instead of encouraging private sector participation (PSP) in bulk water supply and local water35

utilities, NEP explores Public-Public Partnerships (PPP) in small-scale water systems that involves36

local government units and cooperatives37

38

10. Instead of a privatized and deregulated industry outlined by the Electric Power Industry Reform39

Act (EPIRA) of 2001, NEP insists on strong government intervention that facilitates the40

strengthening of community-based power systems and rural electric cooperatives.41

42This SONA is merely a start of a challenging six-year rule for the Aquino administration, starting with43

exposing the current national situation after Arroyo. We in FDC hope that the inputs coming from the44

people itself will be heard and sincerely incorporated by the new government. FDC will be watching the45

Aquino administration closely as it wields government power towards its promised reforms. (30) 46






HA NEP2020

Executive Summary

I. Economic Governance

1. State

Critique Alternative

1. Weak, Elite-Captured State

The current Philippine State, because of its

weakness, is captured by the interests of a

cynical and opportunistic elite class. This results

to the incapacity of the state to act objectively

for economic development and risk

redistribution. Instead, the state becomes the

primary conduit for translating private interests

of elite class into binding public policies.

1.A. Pro-market Economic Management,

Limited Government Role inDevelopment and Welfare

1.B. Malfunctioning Regulation

1.C. Unmitigated widening of Income and

Asset Distribution Gap

1.D. Political Patronage, Rent-Seeking, in the

Public Sector

1. Activist Developmental State

Mobilize states regulatory and procurement

powers for national development and equitable

redistribution of ensuing risks and create

conditions for further growth via provision of

basic welfare, infrastructure improvements,

and support for local entrepreneurship.

1.A. Strong, Sovereign, and Developmental

Orientation

1.B.

Caring Mandate1.C. Assets Reform towards a Democratized

and Equitable Ownership Structure

1.D. Good Governance

1.E. Technocracy-dominated, Manila-centricEconomic Management

1.E. Participatory and Democratic EconomicManagement






II. Macroeconomic Fundamentals towards National Development

2. Land


2. Inequitable Land Ownership

and Lack of Social Outlook and

Strategic Vision on Land Use

and Management

Because our land is under the private property

regime, land use is oriented towards private

profit, not public gain. This promotes non-

agricultural land use conversion and inhibits

land reform, leading to poorly planned and

vulnerable societies and unstable food

production. For the land converted to urban

areas, there is lack of deliberate design leading

to increased risk for residences and businesses.

2.A. Land under the Private Property-Regime

2.B. Lack of Rational Planning on Regional

Zoning, Land Use and Management

2.C. Lack of Effective Development Planning

on Urban Land Use and Management

2. Equitable and Strategic Land

and Land-based Assets Use and

Management for Sustainable

Development and Livability of

Communities

Restructure the ownership of land and land-

based assets and enterprises according to new

ownership instrumentalities and regulatory

environments that, in rural areas, encourages

agricultural development and that is aligned

with a rational and sustainable land and water

use plan, and urban areas, intelligent urban

design and planning.

2.A. Restructuring of Ownership of Land and

Land-based Assets and Enterprises

2.B. Sustainable Rural Land Use and

Regional Planning geared to

strengthening agriculture

2.C. Strategic and Intelligent Urban

Development Planning

2.D. Development strategy centered on

growth-oriented Super-regions

2.D. Using the Bioregion-approach in

Creating and Maintaining Communities






3. Capital


3. Foreign Capital-dominated

Open Economy Our economy is rendered open to foreign

capital competition, leading to the destruction

of our productivity and inevitably, dependence

and foreign capital domination.

3.A. Current Accounts (Financial)

Liberalization

3.B. Weak Banking and Financial Sector

detached from the Industrial Base

3.C. Foreign-financing Dependence

3. Domestic Capital-driven

Development

Accelerate the shift from a foreign capital-led

industry to a domestic-driven one by instituting

capital management instruments,

strengthening domestic financial base by

socially re-embedding the central bank and

monetary policy, and ending the resource gap

problem of public finance by resolving the debt

problem.

3.A. Strategically-managed Capital Structure

and Flows

3.B. Development-oriented and Socially-

embedded Central Bank, Banking

Sector, and Monetary Policy

3.C. Policies towards Fiscal Freedom

3.D. Lack of capacity and propensity to save

in the grassroots

3.D. Public Grassroots Savings Program






4. Industry and Trade


4. Fragmented Industry designed

forL

ow Value Added ExportsOur industries are integrated individually to

foreign markets, not to each other, relegating

us to low-value added production (i.e. low-end

products/services, extracted raw materials) and

export-dependence. This is due to the lack of a

trade-industrial strategy, neglect of domestic

market and local economies, and lack of state

support for increasing competitiveness.

4.A. Incoherent Trade-Industrial Policy due

to lack of Industrial Strategy

4.B. Neglect of the Domestic Market

4.C. Weak and Uncompetitive Domestic

Firms

4. Integrated,Modernized, and

Ecologically-soundIndustryfocused on developing

Sustainable Local Economies

and DomesticMarkets

Pursue an industrialization strategy that

synergistically links an integrated domestic

industry that scales the entire value chain with

a strengthened domestic market for demand

and sustainable local economies for supply, and

one that facilitates technological leapfrogging

and creates uncontested market spaces.

4.A. Strategic, Coherent and Activist Trade

and Industrial Policy

4.B. Tapping the Domestic Market Supply of

Capital and Demand for Goods and

Services

4.C. Facilitating Leapfrogging towards a

Modernized and Sustainable Industry

that is able to create uncontested

market spaces

4.D. Underdeveloped Community Industries

and Sources of Local Employment

4.D. Empowering Local Enterprises through

institutional support and creation of

community and national trade linkages






5. Labor


5. Repressive Labor Environment

Societys creator and determinant of values,the labor sector, have been relegated to low

competency and low purchasing power due to

the politically and economically repressive

cheap labor policy. The lack of regulation,

political agency in the status quo, and

recognition of the large part of the labor sector

leads to further repression.

5.A. Low-wage, Low-benefits Labor Policy

5.B. Lack state protection for workers amid

repression of democratic space

5.C. Marginalized Informal Employment

Sector

5. Empowered Labor Sector

Empower the workers economically andpolitically to ensure that that the sector that

primarily creates (through production) and

determines (through consumption) value

remain to be dynamic, productive, and capable.

Increase and improve the existing labor force

by continuous search for tasks that contribute

to national development and continuous

training and capacitating new sets of workers.

5.A. Economically-capacitated Workforce

towards a Strong Consumption,Savings, Investments, and Tax Base

5.B. Political Empowerment of the Labor

Sector to prevent Labor Income

Distortion

5.C. Transition Program for the Marginally

Employed

5.D. Widespread Unemployment and

Underemployment in Agrarian

Communities and Urban Areas

5.D. Employment Program according to the

agro-industrial development plan






6. Ecology


6. Ecologically destructive

Economy vulnerable to ClimateDisasters

The environment is seen more not as an

endowment to be conserved, but a resource

that can and must be inexhaustibly exploited.

The absorptive capacity and recuperating

mechanism of the environment vis-à-vis the

externalities of our economic activities are also

overestimated, resulting to destabilization of

ecology and decreased livability of

communities.

6.A. Incoherent, Incomprehensive and

Fragmented Environmental Paradigm

6.B. Environmentally-destructive Economic

Sectors

6.C. Ecologically-destabilizing Provision of

Public Services

6.D. Waste-intensive production-

consumption system6.E. Lack of Adaptation Planning for Climate

Disasters

6. Ecologically Sustainable and

Climate-adaptive EconomyAdoption of an economic program that is

geared towards a sustainable and ecologically-

sound development. Ownership instruments,

and demand-supply circuits should operate on

the framework of conservation, rather than

maximum utilization, of natural resources.

Knowledge on biological and ecological systems

should be protected and enhanced, not

commercialized.

6.A. Pass Comprehensive Environment Code

6.B. Rebuilding Terrestrial Carbon Sinks to

increase GHG Sequestration

6.C. Low-emission and Sustainable

Provision of Essential Services

6.D. Demand management in all aspects of

consumption and production

6.E. Climate Adaptation measures to

ameliorate socio-economic effects of extreme weather events

6.F. Economic development biased against

indigenous communities and

environmental preservation

6.F. Protecting Ecologically Sustainable

Practices of Indigenous Communities






III. Essential Services towards Full Social and Human Development

7. Reproductive Economy


7. Unrecognized and Neglected

Reproductive and Care

Economy

The household is only seen as a consumer of

goods and public services rather than a

producer of valuable inputs and resources.

Thus, with women being the primary dispenser

of domestic work, womens contribution to the

economy is largely in this hidden area of production that includes care work, voluntary

or civil society activity, subsistence production

and work in the informal sector.

7.A. Non-compensation of Non-market or

Domestic Labor

7.B. Externalization of Public Good Costs to

Families through Commodification

7.C. Absence of an institutional reproductive

healthcare program

7. Strong Social Support and

Safety Net System for

Households and the

Reproductive Economy

Establish components of strong social welfare

and social security, take back privatized public

goods and essential services, and transfer

components of unpaid care economy to the

community domain in order to relieve

households and women of undue burden.

7.A. Social Compensation System for all

Citizens, Valuation of Unpaid

Reproductive Labor

7.B. State Reclamation of Public Goods and

Essential Services externalized to

Households

7.C. Effective implementation of an

institutional reproductive healthcare

program.

7.D. Unfair distribution of work among

genders in households 7.D. Integrating components of the

Household and Care Economy into the

Public and Community Domain






8. Food


8. Crops and Fishes for the Global

Supermarket The focus of our crop production is the global

market, not domestic need, thus causing

hunger and environmental destruction.

Agricultural activities are also not in line with

sustainability principles, particularly because it

interferes with the profit motive of corporate

and industrial agriculture.

8.A. Corporate-driven Agriculture and Food

consumption

8.B. Stagnating Agricultural Sector due to

low social priority, lack of government

support

8.C. Ecologically-unsound Agricultural and

Food Production System

8.D. Conflict-ridden and Contested

Agricultural Lands

8. Food Sovereignty

Shift from an export-oriented Food Securitymodel to Food Sovereignty approach.

Production-consumption circuits must be as

close to the community as possible. Agriculture

must be based on principles of inclusive

decision-making, participatory central planning,

sound demand-management, cultural integrity,

and environmental stewardship, in

consideration of a national economic plan for

land use, agriculture, and food.

8.A. Recognition and Realization of FoodProducer and Consumer Rights

8.B. Government-led, Community-

facilitated Food Self-Sufficiency and

Agricultural Modernization Program

8.C. Supporting and Practicing Sustainable

and Ecologically-friendly Agriculture

8.D. Increasing Livability and Democracy in

Communities

8.E. Liberalized and Deregulated, Food

Security-based National Food System

8.E. Reorganizing Food Trade based on

citizens need and not corporate

dictates






9. Water


9. Grossly Neglected, Fragmented,

andIll-Governed

Water Sector

National policies on water were introduced on

piecemeal basis as a response to peculiar

challenges of the times. This resulted in

numerous government authorities being

mandated to deal with various aspects of water

management, regulation and development. The

complex web of water-related institutions,

coupled with an economic policy of

privatization, created a fragmented water

sector that is both unresponsive to the needsof the people and not cognizant of their human

right to water. The resultant effect: water

resource mismanagement, water quality crisis,

and seasonal water quantity crisis.

9.A. Treatment of water as primarily an

economic good

9.B. Non-commitment to actual protection,

management and development water

resources

9.C. Numerous yet ineffective anduncoordinated water authorities

resulting in a weak institutional

framework

9. Active State Participation

Towards anIntegrated,Sustainable, and Humane

Management and Development

of the Water Sector

Water is essential to life. While water is a finite

resource and surely has an economic value, the

human right to water must be made the

cornerstone of a national water policy. The

human right to water calls for prioritization of

the right of the people to a continued supply of

clean, safe, adequate and affordable water.This necessarily involves a comprehensive,

holistic and integrated approach to water

resources protection, management and

development. It also entails the effective

supervision, regulation and control of water

provision service.

9.A. State recognition and full

implementation of the human right to

water

9.B. Effective regulation of water resourcestowards security in water supply and

quality

9.C. Rationalization and integration of

water-related institutions within a

participatory framework

9.D. Increasing privatization of water

provision service focused on bulk water

supply

9.D. Public-Public Partnerships in small-

scale water systems to ensure equity

and responsiveness






10. Power


10. Abandoned Power Sector and

Industry

As mandated by the Electric Power Industry

Reform Act (EPIRA), the energy sector is

thoroughly abandoned to the private sector,

with generation and transmission firms

privatized, the industry liberalized and opened

up to foreign competition, and pricing

deregulated. Demand-management is also

lacking.

10.A. Privatized and Private Sector-driven

Power Industry

10.B. Liberalized Ownership and Investments

in the Energy Sector

10.C. Politically-compromised, Incompetent,

and Socioeconomically-detached

Regulation

10. Strong State Participation

towards a Rational andParticipatory Power System

The backbone of economic development has

always been the energy sector as such, its

development as a sector is indispensable to

economic and social success. Since much of the

power industry can be classified as natural

monopolies, the state should intervene so as to

remove inefficiencies and corruption, mitigate

market failures, ensure accessible and

inexpensive energy to households andbusinesses, manage electricity demand, and

facilitate citizens participation in energy supply

and demand planning.

10.A. Regaining strong state presence in the

power industry

10.B. Regulation and Redesigning an

Appropriate, Efficient, and Sustainable

Power System that incorporates

intelligent technologies

10.C. Competent, Independent, and Multi-

sector Regulatory Bodies Re-embedded

to Socioeconomic and Development

Goals

10.D. Undemocratic and private sector-

centric/ -dependent power sector in the

LGUs

10.D. Facilitation of community modes of

power utilities ownership, Participatory

planning and Demand-side

management






IV. The Local Economic Alternative Program (LEAP)

CommunityDemocratization towards Local Development and Empowerment


1.

Technocracy-dominated, Manila-centricEconomic Management [from 1.E] 1.

Participatory and Democratic EconomicManagement [from 1.E] 2. Development strategy centered on

specialized Super-regions [from 2.D] 2. Using the Bioregion-approach in Creating

and Maintaining Communities [from 2.D] 3. Lack of capacity and propensity to save in

the grassroots [from 3.D] 3. Public Grassroots Savings Program [from

3.D] 4. Underdeveloped Community Industries and

Sources of Local Employment [from 4.D] 4. Empowering Local Enterprises through

institutional support and creation of

community and national trade linkages[from 4.D]

5. Widespread Unemployment and

Underemployment in Agrarian

Communities and Urban Areas [from 5.D] 5. Employment Program according to the

agro-industrial development plan [from

5.D] 6. Economic development biased against

indigenous communities and environmental

preservation [from 6.F] 6. Protecting Ecologically Sustainable Practices

of Indigenous Communities [from 6.F]

7. Unfair distribution of work among gendersin households [from 7.D] 7. Integrating components of the Household

and Care Economy into the Public and

Community Domain [from 7.D] 8. Liberalized and Deregulated, Food Security-

based National Food System [from 8.E] 8. Reorganizing Food Trade based on citizens

need and not corporate dictates [from 8.E] 9. Increasing privatization of water provision

service focused on bulk water supply [from

9.D]

9. Public-Public Partnerships in small-scale

water systems to ensure equity and

responsiveness [from 9.D]

10. Undemocratic and private sector-centric/ -dependent power sector in the LGUs [from

10.D]

10. Facilitation of community modes of powerutilities ownership, Participatory planning

and Demand-side management [from 10.D]






Chapter 1:

New School Economics

A Comprehensive Alternative Economic Policy

For the Philippines

HA NEP2020 Holistic Alternative

National Economic Platform

A Project of the Freedom from Debt Coalition

11 Matimpiin St. Barangay Pinyahan Quezon City. 1100.

Telephone (02) 9211985. Telefax (02) 9246399.

[email protected]. www.fdc.ph.






TowardsModernity and Prosperity. Next Stop: Philippines 2020.1

The neoliberal paradigm, as we know, relegated the country to the backwaters of the global2

economy, while throwing millions of Filipinos to poverty and misery for several decades. Now, we3

begin to explore the alternatives to neoliberal model pillars of a new, cutting-edge, radical4

economic paradigm that will bring the Philippines to modernity and prosperity.5

The speed with which our neighbors have leapfrogged from poverty to development is proof that6

progress, while it will entail difficulties and sacrifices, is not necessarily a long and protracted7

process. Thus, the alternative economic paradigm offered is one that promises in less than a8

generation to lay the foundation of a different economy an economy that is by 2020 already9

facilitates the transition towards a sustainable, gender-equitable, poverty-free, and modernized10

Filipino society.11

At this point, the Philippines having been exposed to the failure and bankruptcy of the succession12

of the old development models employed by its leaders, a new vision is in order a vision that is13

inspirational and unifying in form and revolutionary in substance, a vision that can capture the14

imagination of the mainstream economic community and propel it towards fulfilling a15

transformative project to achieve a modern and prosperous Philippines. 16

It is on this context that we use HANEP! as the main name for our campaign on a new economic17

platform. In Filipino slang, Hanep! is an expression that shows amazement, equivalent to the18

English expression Wow! . We intend that the alternative economy this paper puts forward19

evoke the same emotion an emotion of hope that the Philippines can zoom forward towards an20

amazing and impressive economic and human development.21

While the alternative may not necessarily follow the development path and model of Northern22

industrialized nations and/or their current features, it provides a vision of a future society that is23

sustainable, gender-responsive, and socially just, and at the same time technologically-developed,24

efficient, and productive.25

Clearly, it is time that our economy graduate from high school the old-school laissez-faire26

economy that threw us to poverty and low-development path to an economy of the future. Its27

time to go one step further and commence our path towards a better way of development. 28






1. Activist Developmental State1

2

Alternative to: Weak, Elite- Captured State3

4

Mobilize states regulatory and procurement powers for national development and 5

equitable redistribution of ensuing risks and create conditions for further growth via6

provision of basic welfare, infrastructure improvements, and support for local 7

entrepreneurship.8

9

10

1.A. Strong, Sovereign, and Developmental Orientation11

12

The state must have a large role in the management of the markets, and must determine the13

boundaries of market competition. It must facilitate conversion of privatized essential services into14

public modes of ownership, and facilitate the nationalization of strategic raw-material industries.15

For this purpose, the state should endeavor to capacitate and make more efficient the corporate16

government sector so it can engage in these endeavors.17

18

1.A.1. Developmentalist, Strategic, Sovereign, and Sustainable Economic Planning19

1.A.2. State Ownership of Vital Services and Resources and State Management of Strategic20

Industries and Assets and Natural Monopolies 21

1.A.3. Competitive, Productive and Socially Necessary State Operated Enterprises (SOE)22

engaged in Public Goods Provision, Industrial Pace-setting, and Global Competition 23

24

1.B. Caring Mandate25

26

The state must use its regulatory powers to protect its citizens and ensure economic security for27all, necessitating large government role in risk redistribution and welfare.28

29

1.B.1. Large government role in providing welfare, including essential services, healthcare [see30

7.B], and unemployment subsidy [see 5.D.1. ]31

1.B.2. Rights-based Governance that is gender-responsive, culturally-sensitive and respective of 32

right to self-determination33

1.B.3. Regulation of economic activity with huge negative externalities (e.g. pollution)34

1.B.4. Regulation of pricing in prime commodities or services markets which lack competitive35

pricing (e.g. oil, electricity)36

37

1.C. Assets Reform towards a Democratized and Equitable Ownership Structure38

39

The state must democratize the economy by ensuring that the citizens equitably own, manage,40

and benefit from domestic resources, and that citizens are themselves involved in economic41

governance not as mere clientele of the government but also as stakeholders and implementers.42






Assets reform and redistribution must be completed, and ownership instruments must be revised,1

in order to ensure the most equitable and optimal distribution and management of resources.2

3

1.C.1. Facilitating transition to Public modes of Equitable Ownership and Management of 4

Essential Services and major sources of grassroots employment5

1.C.2. State-implemented Urban and Rural Land Reform, Land-based Assets Reform [see 2.A]6

1.C.3. Reformed Taxation on Idle Assets and Inheritance, Discouraging Unproductive Economic7Activities through Taxation8

1.C.4. Redistributive and Progressive Fiscal and Monetary Policy9

10

1.D. Good Governance11

12

For the government to be effective in carrying out its mandate, it should be professional, governed13

by rules, and composed of civil servants that are competent and decent. The government must14

also possess the means of propagating its values via an education system that is geared towards15

economic patriotism and a subsidized independent media apparatus.16

171.D.1. Strong and Coherent Democratic Institutions under the rule of law18

1.D.2. Competent Civil Service and Independent Bureaucracy19

1.D.3. Public Education System geared towards national development and economic patriotism20

1.D.4. State-subsidized media that is disembodied from the state apparatus and the market21

22

1.E. Participatory and Democratic Economic Management 23

24

There should be a reengineering of governments developmental planning and implementation25

systems towards participatory democracy. The bureaucracy should not be the prime determinant26

of development decisions, but more of an enabler of citizens and conduit of people's consensus.27

28

1.E.1. Recognition of Citizens as part Owners and shareholders of society29

1.E.2. Participatory Governance Structures accessible to local government and territorial30

constituencies and sectors31

1.E.3. Decentralized Economic Governance (vis-à-vis central planning mechanisms) and32

Participatory Budgeting (ala Porto Alegre)33

1.E.4. Consensus-based and Culturally-sensitive Community Development Planning34

1.E.5. Ensuring local and national participatory mechanisms in crafting development strategies35

1.E.6. Including participatory decision-making in enterprises as a part of the agenda towards36

political empowerment of workers [see 5.B]37

1.E.7. Practicing more democratic forms of Collaborative Strategic Goal Oriented38Programming (CoSGOP) in long-term infrastructure projects39






2. Equitable and Strategic Land Ownership and Use for1

Sustainable Development and Livability of 2

Communities3

4

Alternative to: Inequitable Land Ownership and Lack of Social Outlook and Strategic Vision on Land Use5

and Management 67

Restructure the ownership of land and land-based assets and enterprises according to8

new ownership instrumentalities and regulatory environments that, in rural areas,9

encourages agricultural development and that is aligned with a rational and sustainable10

land and water use plan, and in urban areas, intelligent urban design and planning.11

12

13

14

Tenure instruments, which should go beyond agrarian reform to include coastal areas owned by15

fisher-folks and uplands managed indigenous communities, should serve the dual purpose of 16

equity/social welfare, and agricultural-industrial development. Land reform that encourages land17

stewardship through institutional support must be fully implemented.18

19

2.A.1. Completion of the long-overdue Land and Assets Reform Project20

y Culturally-Sensitive and Gender-responsive Agrarian Reform i.e. the right to self-21

determination and the right of women to own land 22

y Land ownership rights should be on the form of land stewardship with government 23

support.24

y Creation of Land Tenural Instruments for Indigenous People, Fisherfolks and Peri-25urban communities26

y Urban Land Reform in order to resolve settlement problems in the cities27

2.A.2. Public ownership and management modes of Agricultural Enterprises 28

y Similar to Chinas Township and Village Enterprises (TVE) 29

30

31

32

All aspects of rural land ownership, use and conversion, and investment must be aligned with the33goals of a National Land Use Plan. This entails stringent regulation on the land market and land34

converting industries such as extractive industries. The state will actively promote agriculture in35

land use and regional planning.36

37

2.B.1. Enact a National Land and Water Use Plan38

2.A. Restructuring of Ownership of Land and Land-based Assets and Enterprises

2.B. Sustainable Rural Land Use and Regional Planning geared to Strengthening

Agriculture






y Equitable, just, culturally-sensitive1

y In line an environmentally sustainable national development strategy,2

environmental mapping, and renewable energy sources mapping3

2.B.2. More stringent Land Market Regulation that is based on the Land Use Plan and more4

stringent regulation on all extractive industries (e.g. mining, quarrying)5

y Pricing regulation on land and land-based assets 6

2.B.3. Encouraging agriculture as primary economic activity in rural areas in order to make full7use of the lands potential and siphon unemployment in accordance to a public8

employment program [see 5.D]9

y Institutional support and massive agricultural subsidies, especially those focused on10

calibrated modernization 11

12

13

2.C. Strategic and Intelligent Urban Development Planning14

15

Apply the Principles of Intelligent Urbanism (PIU) as a framework in reengineering key services and16

commercial hubs like Metro Manila, Metro Cebu, Metro Davao, and Subic-Clark. This means17engineering cities with the following considerations: balance with ecology, balance with cultural18

tradition, the use of appropriate technology, ensuring conviviality, social interaction, and human-19

scale design, efficiency, opportunity, ease in regional integration, balanced movement, and20

institutional integrity.21

22

2.C.1. Ensure safe, healthy, and economical human settlements for all city residents which the23

residents will gradually own and maintain, and that which is proximate to workplaces,24

schools, and places for social functions25

2.C.2. Decongest megacities like Metro Manila by facilitating development in the rural areas26

and in other cities and regulating in-migration27

2.C.3. Integrate demand management and efficient technologies in provision of essential28

services like water and power in cities29

2.C.4. Implement a Long-term Strategic Framework for the Transportation Industry30

y Streamlining and regulation of the road-based transportation industry in order to31

manage petroleum consumption32

y Ensuring of a Modernized and Efficient Centralized Intra-urban and Rural-to-Urban33

Mass Transit Systems 34

2.C.5. Implement climate-adaptation and disaster risk reduction (DRR) plans [see 6.D]35

36

37

2.D. Using the Bioregion-approach in Creating and Maintaining Communities3839

Communities must be redesigned so as to re-embed human activity into region-scale ecosystems,40

according to the principles of sustainable development.41

42






2.D.1. Reorganization of political boundaries in order to match them with ecological1

boundaries, create bio-districts and assure rational stewardship of ecological and2

biological resources3

y Tap watershed districts that highlight the unique ecology of bioregions.4

y Design local economies that encourage consumption of local foods and use of local 5

materials where possible.6

y Encourage the cultivation of native plants of the region.72.D.2. Replicate sustainable system practices, e.g. Maximo T. Kalaws Institute for Sustainable8

Developments Ecosystem-based Community-centered Sustainable Development9

Organization and Management (ECSOM) approach10






3. Domestic Capital-driven Development 1

2

Alternative to: Foreign Capital-dominated Open Economy 3

4

Accelerate the shift from a foreign capital-led industry to a domestic-driven one by 5

instituting capital management instruments, s domestic financial base by socially re-6embedding the central bank and monetary policy, and ending the resource gap problem7

of public finance by resolving the debt problem.8

9

10

3.A. Strategically-managed Capital Structure and Flows11

12

Private investments and its instrumentalities must be strongly regulated and coordinated for13

desired developmental objectives specifically, the strengthening rather than the weakening, of 14

domestic industry, agriculture, and capital base.15

16

3.A.1. Setting up an effective Capital Flows Management System17

y Graduated, Transparent, and Vulnerability-activated system18

y Discouraging Foreign Loans as source of Finance and Portfolio Investments (PI)19

Regulation20

3.A.2. Tying up Foreign Direct Investments (FDI) Planning with an Agricultural and Industrial21

Development Plan that facilitates long-term advantages22

y Similar to Singapores Local Industries U pgrading Program that encourage MNCs to23

source from domestic firms24

3.A.3. Regulation of importation of consumer goods, with saved foreign currency channeled to25

import capital goods for industry [see 4.B.1. ]26

27

28

3.B. Development-oriented and Socially-embedded Central Bank, Banking Sector, and 29

Monetary Policy 30

31

Central bank and monetary policy must be shifted from mere inflation-targeting to one that links32

the domestic financial sector with the agriculture and industries. Capital investments should be33

seen as instruments for job creation. 34

35

3.B.1. Shift Philippine Central Bank and Monetary Policy to promote Agricultural and Industrial36

Development and to create a Industrially-oriented Financial Sector37y Shift away from Inflation-targeting as Central Bank Objective38

y Capitalization must be biased to labor-intensive and labor-enhancing industries.39

3.B.2. Implementing foreign currency exchange regulation in order to maximize benefits of the40

inflow of foreign exchange from OFWs41

y Similar to Malaysia and Chinas crawling peg to a basket of currencies42






3.B.3. Creation of a Sovereign Wealth Fund (SWF) to manage the foreign exchange sterilized by1

the central bank and direct foreign exchange to growth areas2

y Singapores Temasek can serve as a good model of an SWF 3

3.B.4. Central bank must facilitate the formation of dedicated linkages between financial4

institutions and agriculture and industrial clusters [the formation of which is according to5

an industrial plan discussed in 4.A.1. ]6

y Similar to Japans post-WWII keiretsu policy of having a bank or a chain of banks7support vertically and horizontally integrated firms8

3.B.5. Create financial instruments that is accessible and profitable for the labor sector9

[empowered by 5.A.1. ] and households [capacitated by 7.A.1. ]10

y Should ensure gender-responsive provision of credit, which means income11

requirements should be relaxed for those who belong in the unpaid reproductive12

economic sphere [see 7.A.2. ]13

14

15

3.C. Policies towards Fiscal Freedom16

17The government must finally free public finance from constraints and fiscal hemorrhage by18

strategically resolving the debt and debt service problem, and by accelerating the shift to a19

treasury policy that is biased on domestic savings rather than the global credit market.20

21

3.C.1. Accelerate Shift to Peso Borrowings, National Treasury Policy that is biased on Domestic22

Financing, Savings23

y The treasury can tap the huge dollar reserves managed in a proposed Migrants24

Bank [see 3.D.4. ]25

3.C.2. Establish a Government Expenditure Program that is biased on tapping Domestic Capital26

3.C.3. Resolution of the Public Sector Debt Problem and the consequent Resource-Gap by27

conducting a comprehensive audit of foreign debts and subsequent repudiation of 28

illegitimate ones29

3.C.4. Adopt for the purposes of evaluating existing and future loans, and register international30

support for, the sovereign, democratic and responsible (SDR) financing framework31

32

33

3.D. Public Grassroots Savings Program34

35

Savings provide the vehicle with which 1) the consumers can access goods and services they36

cannot afford due to lack of purchasing power [see 5.A], and 2) domestic firms can gain capital by37

borrowing from banks [see 4.B.2. ]. Thus, the state should be able to mobilize grassroots capital38towards developmental needs by providing the avenue for savings.39

40

3.D.1. Set up a Progressive Tax Regime that encourages Savings41

3.D.2. Strengthening the Postal Savings Bank (PSB) to encourage savings among the workers42






y Conditional Cash Transfers (CCT) for wages [ 5.A.1. ] or unemployment subsidy 1

[ 5.D.2. , second bullet] can instead be deposited in a PSB rather than handed out 2

3.D.3. Bring back the Small Investors Program (SIP) initiated by Former National Treasurer and3

FDC President Leonor Briones4

3.D.4. Provide migrant workers a savings venue by creating a Migrants Workers Bank managed5

by their families in a cooperative modality.6

3.D.5. Encourage self-organized savings and loans cooperatives 7






4. Integrated, Modernized, and Ecologically-sound1

Industry focused on developing Sustainable Local2

Economies and DomesticMarkets3

4

Alternative to: Fragmented Industry designed for Low Value Added Exports 5

6

Pursue an industrialization strategy that synergistically links an integrated domestic 7

industry that scales the entire value chain with a strengthened domestic market for 8

demand and sustainable local economies for supply, and one that facilitates9

technological leapfrogging and creates uncontested market spaces.10

11

12

4.A. Strategic, Coherent and Activist Trade and Industrial Policy 13

14

The government must establish an industrial development blueprint that vertically integrates15

industries engaged in raw material extraction with those engaged in the production of finished16

consumer goods in order to scale the entire value chain, that horizontally integrates firms into17

strong industrial clusters, and that pragmatically maximizes trade opportunities. This is vis-à-vis a18

trade policy that serves as an instrument to promote more markets, strengthen national19

industries, and create more jobs and welfare.20

21

4.A.1. State-implemented Selective Industrial Policy and Strategic Development Vision22

y Overall strategic development vision, in consideration of what the nation has23

(supply/resources), and what the people need (demand/market)24

y Labor restructuring and support plan for phase-out industries (retooling, re-skilling,25

adequate compensation)26y Facilitate industrial evolution from Original Equipment Manufacturing (OEM) to27

Original Design Manufacturing (ODM) to Original Brand Manufacturing (OBM) 28

4.A.2. State-driven Vertical and Horizontal Integration of Industries via SOEs or supported29

Industry Players30

y Scaling the entire value chain31

y Assisted by a Keiretsu policy in capital financing [see 3.B.4. ]32

4.A.3. Trade as Industrialization Instrument . Protection for Industrialization, Selective33

Liberalization towards Modernization34

y Protective trade barriers35

y Selective liberalization of industries controlled by rent-seeking and incompetent 36entrepreneurs (excluding essential services and strategic resources/industries)37

38






4.B. Tapping the Domestic Market Supply of Capital and Demand for Goods and 1

Services2

3

With a capacitated domestic market in a high-wage labor regime [see 5.A.1], industry must begin4

to tap into 1) the burgeoning capital base due to increased workers savings and increased capacity5

to invest by workers, 2) the growing consumption by workers themselves6

7

4.B.1. Tapping the Domestic Market for commodities by state support on industries which cater8

to local demand9

4.B.2. Facilitate the utilization of domestic assets base (grassroots savings and investments)10

[see 3.D.5. ] as primary investments and capital for local firms11

4.B.3. Instill a sense of industrial values of public- and, ecology-centeredness and rejecting12

profit-centeredness, with firms willing to internalize cost13

14

15

4.C. Facilitating Leapfrogging towards a Modernized and Sustainable Industry that is16

able to create uncontested market spaces1718

As traditional smokestack industrialization strategy may be inadequate in an era of stiff global19

competition, climate crises, and declining hydrocarbon supply, the government must resort to a20

flanking strategy that facilitates technological leapfrogging and creates uncontested market21

spaces, or blue oceans, in the global economy.22

23

4.C.1. State-facilitated Knowledge Management (KM) systems and accelerated technological24

transfers to boost Total Factor Productivity (TFP)25

y State-supported Research and Development (R&D)26

y Knowledge-transfer Conditions for Liberalized Industries [see 3.A.2. ]27

y Strong public technical and scientific education system for knowledge reproduction28

4.C.2. Relaxing recognition of Intellectual Property Rights (IPR) for foreign technology, but29

ensuring maximum protection for domestic innovators30

4.C.3. Increase competitiveness by setting up clear but realistic performance targets for31

supported industries and even SOEs and the accompanying incentives system.32

4.C.4. Establishment and maintenance of cost-effective value engineering procedures and33

processes in SOEs engaged in industry34

4.C.5. Creation of a niche export industries, composed of globally-competitive homegrown35

firms, that will also serve domestic need36

y Blue ocean strategy making competition irrelevant by creating uncontested 37

market spaces38

y Specialize in the Renewable Energy (RE) technology industry and eco-industries as39

comparative advantage.40

y Focus on light-manufacturing and consumer goods manufacturing, industrial rather 41

than agricultural exports42

43






1

4.D. Empowering Local Enterprises through institutional support and creation of 2

community and national trade linkages3

4

Strengthen capacity of local economies to produce industrial inputs while connecting them to the5

community market and the national industrial champions. Ensure that the educational system is6

geared for the purpose of modernizing local enterprises.7

8

4.D.1. Investing on the development of Micro, Small and Medium Enterprises (MSMEs) by9

providing institutional support10

y Research and development subsidies [see 4.C.1. ] for small agricultural enterprises11

y Support in obtaining resource and capital inputs (e.g. fertilizers, equipments)12

y Connecting grassroots savings bank [see 3.D.5. ] to local enterprises13

4.D.2. Facilitate direct trade between the community market and the local enterprises14

y Dismantling big-time traders through creation of grassroots markets15

y Government-facilitated Fair Trade mechanisms in the rural areas16

4.D.3. Link up local, social cooperative enterprises, and MSMEs which focus on tapping17community resources and labor, to national industrial champions18

y Integrate domestic MSMEs which are more labor-intensive than large firms to19

growth areas (South Korea)20

y Engage domestic MSMEs for support production services (Japan)21

y Establish strong linkage between the agricultural sector and labor-intensive22

industries, for example, in food production (India)23

4.D.4. Strengthening Regional Return-of-Service Programs for Public Higher Education24

Institutions (HEIs) (includes SUCs and LUCs)25






5. Empowered Labor Sector1

2

Alternative to: Repressive Labor Environment 3

4

Empower the workers economically and politically to ensure that that the sector that 5

primarily creates (through production) and determines (through consumption) value6

remain to be dynamic, productive, and capable. Increase and improve the existing labor 7

force by continuous search for tasks that contribute to national development and 8

continuous training and capacitating new sets of workers.9

10

11

5.A. Economically-capacitated Workforce towards a Strong Consumption, Savings,12

Investments, and Tax Base13

14

The government must facilitate the creation of a strong domestic market and savings base by15

ensuring that workers are paid well, free to spend on non-basic commodities, and save for their16future. Public goods for human development should thus be provided.17

18

5.A.1. High wage Labor Regime to induce demand and increase marginal labor productivity19

y High Wage (beyond the living wage), Benefits and Wage Extenders, and Social 20

Security [see 7.A.1. ]21

y Conditional Cash Transfers (CCT) for MSME workers to fill the gap between actual 22

wage and living wage23

y Ending the contractualization and flexi-work schemes24

25

26

5.B. Political Empowerment of the Labor Sector to prevent Labor Income Distortion27

28

The cheap labor policy of the government is further enforced by high demand for work,29

particularly because of the relatively high unemployment rate in the Philippines. This incentivizes30

corporate impunity on violating a high-wage labor policy regime [see 5.A.1. ]. In order to prevent31

this, side by side with the policy to mandate increase in income must be a program towards the32

political empowerment of the labor sector.33

34

5.B.1. Enact a progressive labor code and standard that provides for:35

y Meaningful Representation and Participation in Government [see 1.E.2. ] and 36

Management [see 1.E.6. ]37y Proactive State protection of Labor Rights and Regulation of Corporate Activity 38

5.B.2. Instituting state-enforced mechanisms for Workplace Democracy39

5.B.3. Strengthening corporate democracy via mandated regular transfer of shares to qualified40

employees, on top of wage and wage extenders41

y Building and democratizing capital base [see 3.B.5. ]42






1

2

5.C. Transition Program for the Marginally Employed 3

4

Facilitate the transition of the informally employed sector via provision of universal social5

protection, reconstituting them as local cooperative enterprises, and supporting the transition of 6

MSMEs to reach core labor standards.78

5.C.1. Tracking down labor abuse in the informal labor sector, facilitating transition of MSMEs9

to reach international core labor standards through government support10

5.C.2. Formalization of informally-employed workers and granting them universal social11

protection and insurance12

5.C.3. Increasing available institutional, financial, and educational support to create13

cooperative-mode MSMEs amongst informal workers14

15

16

5.D.

Employment Program according to the agro-industrial development plan1718

The countrys huge population has at least one advantage a huge potential supply of labor force.19

The government must intervene in order to tap this labor force, directly create employment or20

facilitate the creation and growth of labor-intensive industries, and reduce the burden of the21

existing labor force. However, employment policy should not just be for job creation, but should22

serve national development ends.23

24

5.D.1. Public Employment Program towards Maximum Local-level Employment25

y Small-scale, Labor-based, equipment supported ( LBES) Public Employment Program26

according to a social-needs analysis and to boost infrastructure projects in the27

communities28

y For rural areas, implement a National Rural Employment Guarantee Program29

(similar to Indias MGNRE G A) with unemployment subsidy 30

5.D.2. Spurring job-creation through facilitating the growth of labor-intensive agricultural31

industries in the rural areas32






6. Ecologically Sustainable and Climate-adaptive1

Economy2

3

Alternative to: Externalities-intensive and Ecologically Destructive Production and Reproduction.4

5

Adopt an economic program that is geared towards a sustainable and ecologically-sound 6development. Ownership instruments and demand-supply circuits should operate on the7

framework of conservation, rather than maximum utilization, of natural resources.8

Knowledge on biological and ecological systems should be protected and enhanced, not 9

commercialized.10

11

12

6.A. Pass Comprehensive Environment Code13

14

The government needs a coherent and comprehensive environmental legislation so that it can15

substantively responds to the climate crisis and it can effectively link its development model to16environmental considerations. Such legislation should set principles and guidelines for17

implementing sectoral laws together, and for rationally and consistently determination of how18

laws might be jointly applied.19

20

6.A.1. Rationalization of Mixed Resource Uses: (e.g., determination of Best Resource Uses in21

areas of multiple and exclusionary land uses; need for comparative valuation system)22

6.A.2. Principle of universal accountability: (e.g., of multi-sector bodies, investors and the23

government)24

6.A.3. Principle of equity among stakeholders of different and mutually exclusionary resource25

users (e.g. cross-subsidies among competing resource users)26

6.A.4. Rationalization of Conflict Resolution among competing & mutually exclusionary resource27

users especially in complex resource regimes like uplands, foreshores, coastal waters,28

watersheds, lakes29

6.A.5. Standardization of good environmental governance by NGAs, LGUs, regulated industries,30

SMEs31

32

33

6.B. Rebuilding Terrestrial Carbon Sinks to increase GHG Sequestration34

35

While the Philippines reserve for itself development space which it needs to industrialize, climate36

change requires the need for mitigation measures around the world. The government, through37financing and support secured from reparations from developed countries, must embark on38

rebuilding our carbon sinks through reforestation in order to better sequester Greenhouse Gases39

(GHG).40

41

6.B.1. Forest restoration through total log ban42






6.B.2. Selective and partial moratorium and/or extractive and forest-destructive industries such1

as mining and quarrying2

6.B.3. Delineation of lands (coherent with a land use plan [see 2.B.1. ])3

4

5

6.C. Low-emission and Sustainable Provision of Essential Services6

7The provisioning essential services should be regulated and managed by the state as these are the8

services which should be the most massively produced and provisioned by society for itself, and9

thus potentially the most ecologically destabilizing and unsustainable among the socio-economic10

activities. Low-emission and sustainability standards should be incorporated in the management of 11

these essential services as our contribution to global emissions reduction effort.12

13

6.C.1. Reversal of privatization in essential services, and regulation of further private sector14

initiatives such as those in the form of Build-Operate-Transfers (BOT) and Joint Venture15

Agreements (JVA)16

6.C.2. Democratize power generation sector that can provide us with an affordable, clean,17sustainable and renewable energy.18

y Minimum-emissions, which means the conversion of existing coal and diesel-fired 19

power plants to renewable energy plants such as geothermal and hydropower 20

y Moratorium in indigenous coal-for-power mining 21

6.C.3. Decentralized and scattered small-scale water sources development22

y Micro-dam system incorporating efficient rainwater catchment technology 23

6.C.4. Reducing food transportation costs by closing production-consumption circuits [see 8.E.1. 24

]25

26

27

6.D. Climate Adaptation measures to ameliorate socio-economic effects of extreme28

weather events29

30

Global warming is leading to extreme weather patterns which our current economic design (or31

lack thereof) is unprepared for. The state should thus facilitate the reengineering of the economy32

through integrating elements of climate adaptation in order to prevent loss of lives and properties33

associated with climate disasters.34

35

6.D.1. Disaster Risk Reduction (DRR) should be integrated in local development planning and36

national economic strategy37

6.D.2. Economic strategy should assume the existence of climate disasters and should be able38to minimize dangers and maximize opportunities they bring creating industries along39

the way40

y Agriculture sector should assume extreme weather conditions of longer droughts41

and heavier rains42






y Services sector must cater to climate disaster demands, especially on emergency 1

healthcare and grassroots telecommunications2

y Manufacturing should be able to produce goods needed by communities for 3

preparation and survival 4

5

6

6.E. Demand management in all aspects of consumption and production7

8

Citizens and firms must now take responsibility for and limit what they consume and produce,9

understanding that current modern life is intrinsically ecologically destabilizing. Thus, demand10

management must be put in all aspects of modern life.11

12

6.E.1. Implementing Multi-sector Participatory Water and Energy Planning and Conservation13

6.E.2. Regulation of importation of Petroleum and other high-emission products14

6.E.3. Regulation of foodstuffs bought by Transnational and Multinational Corporations15

engaged in food services16

6.E.4. Regulation of the importation, production, and use of polymer and other plastic products17in consumer goods packaging18

19

20

6.F. Protecting Ecologically Sustainable Practices of Indigenous Communities21

22

Local governments should empower members of indigenous communities to practice, replicate,23

and propagate use of sustainable technology and lifestyle. The state should protect this24

technology from being commercially utilized for profit by transnational and multinational25

corporations.26

27 6.F.1. Protecting indigenous groups and supporting/replicating their practices and technology28

in preserving the environment29

6.F.2. Facilitating not just technology transfer, but also financial support for further developing30

and replicating eco-friendly indigenous climate adaptive techniques31

y R&D on ethno-ecological refuge and indigenous settlements32

y Learning from sustainable community models of IPs33

6.F.3. Exclusion of indigenous knowledge from TRIPS or copyright laws34






7. Strong Social Support and Safety Net System for1

Households and the Reproductive Economy2

3

Alternative to: Marginalized and Neglected Non-market Sector 4

5

Establish components of strong social welfare and social security, take back privatized 6 public goods and essential services, and transfer components of unpaid care economy to7

the community domain in order to relieve households and women of undue burden.8

9

10

7.A. Social Compensation System for all Citizens, Valuation of Unpaid Reproductive11

Labor 12

13

The state must recognize the intrinsic contribution of each member of society, even if only for the14

function of consumption, through the provision of a social wage even for the unemployed. This15

has an added benefit of ensuring that women in households, which have no formal market work,16will have purchasing power the absence of which perpetuates imbalanced relations in the17

household level.18

19

7.A.1. Guaranteed minimum income (GMI) system 20

y The government fills up the difference between minimum/actual wage and living21

wage via Conditional Cash Transfer (CCT) mechanisms22

y GMI must be deposited in a strengthened postal savings bank [see 3.D.2. ] under the23

beneficiaries name24

y Primarily sources funds from strengthened corporate income tax, progressive25

consumption, and property taxes26

7.A.2. Conducting a thorough valuation of and accounting for reproductive work in the27

assessment of the general economy28

y Gender-disaggregated data is compiled for all economic activity 29

y Setting out a Social Accounting Matrix 30

y Comprehensive review of institutional frameworks and policies related to care31

services32

33

34

7.B. State Reclamation of Public Goods and Essential Services externalized to35

H ouseholds36

37

Essential services externalized to household translate to further exploitation of women, which, in38

traditional societies, have to discharge these services. The government must take back these39

services in order to eliminate this form of exploitation.40

41






7.B.1. Complete and Free Provision of Public Goods that will result to Net Savings/Income for1

Households and/or less burden to women2

y Universal Healthcare Insurance Coverage (insures all Filipinos expanded coverage3

under PhilHealth)4

y Completion of Education for All (EFA) Targets (6% of GNP allocation to education)5

7.B.2. Subsidized Provision of Essential Services (e.g. Water and Power) for Households via6

Public Utilities [see 1.A.2. , 1.B.1. ]77.B.3. Socialized housing and settlement programs8

y With climate-adaptive features [see 6.D ], and in line with industrial [see 4.B ],9

employment [see 5.D.1. ], and urban [see 2.C ] and rural [see 2.B ] development plan10

11

12

7.C. Effective implementation of an institutional reproductive healthcare program.13

14

Households shall have access to reproductive healthcare and family planning information and15

services. These services should be subsidized and implemented by the government.16

177.C.1. Setting up of reproductive healthcare systems that would provide services such as:18

y Maternal and infant care19

y Family planning reproductive health information dissemination20

7.C.2. Prevention and treatment of diseases and complications related to reproduction which21

includes breast cancer, sexually transmitted diseases and birth complications22

23

24

7.D. Integrating components of the H ousehold and Care Economy into the Public and 25

Community Domain26

27 Domestic duties like ensuring food and water supply, subsistence farming (rural areas), and other28

household work must be collectively discharged and not relegated to households, where gender-29

exploitation is present. Thus, the state must facilitate the transferring of these components of 30

unpaid reproductive labor from domestic to public-economic sphere.31

32

7.D.1. Setting-up Public and Community Enterprises or LGU-level Services to provide for33

previously family-level domestic work in a more efficient manner and with economies of 34

scale:35

y Public/Community laundry 36

y Community-level Early Childhood Care and Development (ECCD) services,37

y Public restaurants/eateries38

7.D.2. Subsistence agricultural work that is usually relegated to households must be converted39

into collective work by rural communities under a food sovereignty model [see 8]40






8. Food Sovereignty1

2

Alternative to: Crops and Fishes for Global Market 3

4

Shift from an export-oriented Food Security model to Food Sovereignty approach.5

Production-consumption circuits must be as close to the community as possible.6

Agriculture must be based on principles of inclusive decision-making, participatory 7

central planning, sound demand-management, cultural integrity, and environmental 8

stewardship, in consideration of a national economic plan for land use, agriculture, and 9

food.10

11

12

8.A. Recognition and Realization of Food Producer and Consumer Rights13

14

The assurance that food production an essential human endeavor will not compromise the15

rights of both the producers and the consumers, is the greatest assurance that food will be16

produced at adequate levels.17

18

8.A.1. Recognizing the Right of Individuals, Communities, Peoples, and Nations to Adequate,19

Nutritious, and Culturally-appropriate Food, and creating a national food system which20

provides it21

8.A.2. Realizing the right of farmers to own the land they till via a land reform which has strong22

land stewardship character, adequate government subsidies23

y Intensive financing for agricultural inputs (e.g. fertilizers, etc.)24

8.A.3. Production and consumption of food should be guided by the welfare of farmers and25

consumers, not the needs of transnational agribusiness26

2728

8.B. Government-led, Community-facilitated Food Self-Sufficiency and Agricultural 29

Modernization Program30

31

The government should begin a programme towards food self-sufficiency by raising agricultural32

activity and productivity, attracting labor and capital towards the sector, and facilitating the33

development of agricultural technology. This programme should be facilitated and implemented34

by the rural and urban communities. The long-term objective would be to develop a capital-35

intensive modern but sustainable rural agricultural sector while decreasing urban dependence on36

food trade.3738

8.B.1. Heavily investing in Agricultural Research and Development in order to optimize limited39

agricultural inputs40

y Increase support to Philippine Rice Research Institute (PhilRice)41






8.B.2. Agricultural modernization through government procurement and distribution (to LGUs)1

of capital-saving and labor-saving equipments2

8.B.3. Facilitating urban-to-rural migration by increasing agricultural income3

y Elimination of price distortions by discouraging food trading and facilitating direct 4

trade between farmers and food consumers5

y Focusing at first on labor-intensive processes to6

y Rural Employment Guarantee [see 5.C , 5.D.1. ] and rural social welfare [see 7 ]78.B.4. Facilitating urban agriculture/horticulture to stem food shortages in urban communities8

y Possible Models: Organopónicos system of urban organic gardens in Havana, Cuba,9

Periurban Agriculture Development in China (Modern Agricultural Science10

Demonstration Park in Xiaotangshan)11

12

13

8.C. Supporting and Practicing Sustainable and Ecologically-friendly Agriculture14

15

The states support to agricultural development [see 2.B.3. , 8.B] must be framed towards the16

facilitation and adoption of agricultural practices that protects the ecological balance, conserves17natural resources, and ensures the production of safe and nutritious food for the health and18

productivity of its citizens.19

20

8.C.1. Gearing Rural development support towards the promotion of organic farming21

8.C.2. Regulating the use of Genetically Modified Organisms and other genetic technology in22

farming23

24

25

8.D. Increasing Livability and Democracy in Communities26

27

With the view that agricultural abundance is impossible if the security and democratic rights28

farmland communities are compromised, the state should ensure peace, order, and participation29

in agricultural areas.30

31

8.D.1. Social peace and resolution of armed conflicts in peasant lands32

8.D.2. Prevention of trade agreements-driven land lease which violates the spirit of land reform33

8.D.3. Provide democratic space for economic decision making in agrarian reform communities34

(ARCs)35

36

37

8.E. Reorganizing Food Trade based on citizens need and not corporate dictates3839

Food trade should serve the purpose of mitigating hunger in society, and not ensuring the profits40

of those which engage in the business of providing food. For this purpose, food trade must be41

reorganized, with sustainability and sovereignty considered.42

43






8.E.1. Closing Food Production and Consumption Circuits1

y Maximum food self-sufficiency at the local/regional level taking into consideration2

rural and productive diversity in order to reduce carbon footprint [see 6.C.4. ] of 3

food transportation4

8.E.2. Ending unregulated international agricultural trade via trade protection instruments, and5

pulling out of trade agreements such as the WTO AoA (agreement on agriculture)6






9. Active State Participation towards an Integrated,1

Sustainable and Humane Management and2

Development of the Water Sector3

4

Alternative to: Grossly Neglected, Fragmented and Ill-governed Water Sector 5

6Water is essential to life. While water is a finite resource and surely has an economic 7

value, the human right to water must be made the cornerstone of a national water 8

policy. The human right to water calls for prioritization of the right of the people to a9

continued supply of clean, safe, adequate and affordable water. This necessarily involves10

a comprehensive, holistic and integrated approach to water resources protection,11

management and development. It also entails the effective supervision, regulation and 12

control of water provision service.13

14

15

9.A. State recognition and full implementation of the human right to water 16

17

Considering that water is one of the most basic human necessities for existence and survival, the18

State should ensure that everyone has continued access to clean, safe and affordable water. The19

State should recognize the human right to water to finally clarify the existence of the right in the20

countrys legal system. Legal recognition should be backed up by a strong political will to21

implement the right, which entails public expenditure on water-related infrastructure and22

establishment of a mechanism to enforce the human right to water23

24

9.A.1. Enactment of a new Water Code that will comprehensively deal with the various aspects25

of the water sector (i.e., use, conservation, protection, management, development,26regulation and control of water resources and water supply services) with a right-based27

approach28

9.A.2. Declare as a positive right everyones daily access to at least 20 liters of clean and safe29

water at no cost30

9.A.3. Make the non-provision of at least 20 liters of clean, safe and free water a quasi-delict on31

the part of the LGUs, making the latter responsible for compensation32

9.A.4. Institutionalize the enforceability of the right through the first level courts33

9.A.5. Assist the LGUs in localizing the full implementation of the human right to water34

35

36

9.B. Effective regulation of water resources towards security in water supply and 37

quality 38

39

The State should actively protect and manage the water resources in order to secure not only40

dependable and adequate supply of water but, more importantly, clean and safe water. Protection41






and management of the resources will dramatically decrease the cost of water treatment and1

hospitalization due to waterborne diseases, thereby freeing public funds which can be used for2

expansion of water provision service. The State should likewise mainstream water resources3

protection and management in its climate-adaptation plan considering that the water sector4

stands to be one of the most gravely affected by climate change5

6

9.B.1. Strict implementation of the Clean Water Act of 2004, seeing to it that water polluters7are prosecuted and convicted8

9.B.2. Establishment of a yearly performance target for each water-related institution, with9

non-performance resulting in automatic removal of the head of office10

9.B.3. Immediate reforestation to rehabilitate the watersheds11

9.B.4. Comprehensive review and evaluation of existing water permits, suspending and12

revoking the permits of those who violate its terms and conditions13

9.B.5. Apprehension of those who appropriate water without the corresponding water permit14

9.B.6. Establish a national agency that will provide sewerage services, given that it is very clear15

that the private sector is not interested in venturing into sewerage business.16

17

18

9.C. Rationalization and integration of water-related institutions within a participatory 19

framework 20

21

Instead of mandating various agencies to deal with the different aspects of the water sector, the22

State should rather strengthen the National Water Resources Board (NWRB) as the lead agency in23

the formation, integration and implementation of all water-related policies. Water-related24

institutions whose mandates duplicate or conflict with another should be abolished. Water-related25

institutions attached to other agencies should be made directly responsible to the NWRB as well.26

Moreover, stakeholders, especially domestic water users, must be represented in all levels of 27

policy and decision-making processes in the water sector28

29

9.C.1. Further strengthen the mandate of the NWRB as the national agency primarily30

responsible for the management, development and regulation of the water sector31

y Establish regional, provincial and municipal NWRB offices32

y Other water-related institutions should either be transferred to the NWRB as an33

attached bureau or, in case of impracticality, at least made directly responsible to34

NWRB as well 35

y Competence and integrity must be the main criteria for the selection of the36

members of the NWRB37

y Professionalize the NWRB through continuing education, training and capacity-38building of NWRB officers and employees39

9.C.2. Establish clear lines of responsibilities and mechanisms of exacting accountability in the40

water sector and its sub-sectors41

9.C.3. Remove the mandate of NAPOCOR and other power generation entities in managing42

water resources within sites of operation43






9.C.4. Ensure multi-stakeholder representation in the NWRB and other water-related1

institutions2

3

4

9.D. Public-Public Partnerships in small-scale water systems to ensure equity and 5

responsiveness6

7

The State, with the framework of fulfilling the human right to water, should reverse the policy of 8

privatization and instead seek to transfer to local organizations and cooperatives the ownership9

and management of small-scale water services and resources. Where they are not yet capable, the10

State must make itself competent in the efficient operation of water provision with the end view11

of capacitating communities in integrated water resources management.12

13

9.D.1. Terminate the concessions contract with Maynilad and Manila Water on account of grave14

and blatant violations of the performance targets spelled out in the agreement and make15

them judicially liable16

9.D.2. Review all Public-Private partnership ventures in the water supply sector, terminate17partnerships that violate their own terms, and penalize those accountable for non-18

performance19

9.D.3. Strong and active regulation of water districts by Local Water Utilities Administration20

(LWUA), establish water systems in partnership with the LGUs21

9.D.4. Capacitate communities in protecting water resources from which they source their22

domestic water23

9.D.5. Ensure that all stakeholders, especially domestic water users, are represented in the24

governing bodies of water provision service providers25






10. Strong State Participation towards a Rational and1

Participatory Power System2

3

Alternative to: Abandoned Power Sector and Industry 4

5

The backbone of economic development has always been the power sector as such, its6development as a sector is indispensable to economic and social success. Since much of 7

the energy industry can be classified as natural monopolies, the state should intervene so8

as to remove inefficiencies and corruption, mitigate market failures, ensure accessible9

and inexpensive energy to households and businesses, manage electricity demand, and 10

facilitate citizens participation in energy supply and demand planning.11

12

13

10.A. Regaining strong state presence in the power industry towards reliability of access14

and sustainability 15

16The state should be a strong player in the energy sector in order to set the pace and direction of 17

private sector initiatives [see 1.A.2. , 1.A.3. ]. It should heavily invest in the power sector, especially18

in renewable energy, to ensure reliable and inexpensive access to electricity and sustainability.19

20

10.A.1. Rebuilding the State Energy Complex to ensure reliable and inexpensive access to power21

of households and industry22

y Renationalization of key Generation Companies ( GE NCOs) and power generations23

assets they control towards a mixed ownership energy regime24

y Reversing the privatization of Philippine National Oil Company (PNOC) subsidiaries25

such as PN

OC-Exploration Corporation, PN

OC-Energy Development Corporation,26 Petron, among others; strategic vertical integration, of the domesticU pstream,27

midstream, and downstream fuel industries28

10.A.2. Reversal of the TransCo (Transmission Corporation) privatization to ensure an intelligent29

grid system [see 10.B]30

10.A.3. Allowing for SOE participation and cross-ownership in multiple power subsectors in order31

to ensure reliability in electricity supply to households and industries32

10.A.4. Facilitating a transition plan to move away from emission-intensive power generation33

systems by investing heavily in Renewable Energy (RE), preferably through climate34

reparation negotiations [see 6.D]35

36

37

10.B. Regulation and Redesigning an Appropriate, Efficient, and Sustainable Power 38

System that utilizes intelligent technologies39

40

Liberalization should be reversed and the state should intervene [see 10.A] in order to develop an41

appropriate power system conducive to economic and social development. The new power system42






should be able to align sustainable and ecologically sound power supply with the needs of the1

industry, households, and agriculture. To better facilitate management, the government must2

utilize existing intelligent technologies.3

4

10.B.1. Redesigning the National Grid and Power Generation System (requires 10.A.1 and 10.A.2)5

to ensure optimal generation mix and optimal levels of interconnectedness6

y Includes enabling the expansion in the amount of offshore wind and marine power 7through construction of new networks of submarine cables8

10.B.2. Stopping the operation of Wholesale Electricity Spot Market (WESM) and re-orienting9

Philippine Electricity Market Corporation (PEMC) WESM which disconnects the10

consumers from the producers of electricity11

10.B.3. Removal of direct transmission access for Distribution Utilities (DU) and transfer all12

existing Power Supply Contracts to a Single Buyer (SB), which will:13

y Optimize the schedule of power plant to achieve the least cost/economic dispatch14

y Prepare a least cost capacity development plan (for future requirements to avoid 15

deficiency)16

y Pursue competitive bidding process for new capacity 1710.B.4. Incorporating a system of feed in tariffs for electricity generation to multiply electricity18

production from micro-generation from small-scale low carbon energy production or19

micro-generation20

10.B.5. Voluntary participation in an interactive, intelligent management of load via the smart21

grid, electricity networks that uses smart meter technology so that electricity demand22

can be tailored automatically to match the supply of electricity23

24

25

10.C. Competent, Independent, and Multi-sector Regulatory Bodies Re-embedded to26

Socioeconomic and Development Goals27

28

The regulatory bodies, while part of the government, should be immune from political and29

economic pressure from the power sector capitalists. To be able to exercise their respective30

mandates, the regulatory body should be technically competent and composed of members from31

different sectors, including the consumers themselves.32

33

10.C.1. Depoliticizing the ERC . Competence and integrity must be the main criteria for the34

selection of ERC commissioners, most especially its Chairperson.35

10.C.2. Democratizing the ERC . ERC as an institution, while retaining its quasi-judicial nature,36

should proactively re-focus itself from merely answering legal questions of rate increases37

towards meeting more substantive public concerns, such as the question of consumers38capacity-to-pay.39

10.C.3. Broadening the ERC . Ensure multi-stakeholder representation in the energy sectors main40

regulatory agency [see 1.E]. In the immediate, the ERC must accord full representation41

for consumers by giving them at least one seat.42






10.C.4. Re-embedding Regulation to Society. Regulation must be pegged on a social and1

economic plan that ensures socialized forms of pricing that at the same encourages2

demand management.3

4

5

10.D. Facilitation of community modes of power utilities ownership, Participatory 6

planning and Demand-side management 7

8

The state must facilitate the transition of privatized energy subsectors, particularly as those in9

generation and distribution, to public modes of ownership [see 1.C.1. ] such as cooperatives. The10

consumers in communities themselves must be able to guide the energy planning and11

management process, including managing its own demand.12

13

10.D.1. Strong State Support on Rural Electric Cooperatives (REC), facilitation of increasing14

democratic participation and dispersal of ownership of RECs, enable RECs to own power15

plants and engage effectively in the generation sector16

10.D.2. Replicating the processes and methods of Panay Multi-Sectoral Development Planning17(MSPDP) in all major regions with Regional Development Councils (RDC)18

10.D.3. Promotion of community-based power systems which focuses on off-grid (stand-alone),19

renewable energy sources20

10.D.4. Transfer the assets of Small Power Utility Group (SPUG) to the community members21

organized as cooperatives22

10.D.5. Equitable consumer ownership of Manila Electric Company (MERALCO) 23






Chapter 2:

Why are we Poor?

A Comprehensive Critique of

Economic Policy in the Philippines

HA NEP2020 Holistic Alternative

National Economic Platform

A Project of the Freedom from Debt Coalition

11 Matimpiin St. Barangay Pinyahan Quezon City. 1100.

Telephone (02) 9211985. Telefax (02) 9246399.

[email protected]. www.fdc.ph.

1






Why are we poor? G oing Beyond the Corruption Discourse1

Data on poverty remains to be distressing. According to the monitoring of the National Statistical2

Coordination Board (NSCB), poverty incidence among families rose from 24.4% in 2003 to 26.9% in 2006,3

which means that the number of poor families rose by as much as 654,610. This is while subsistence4

incidence among families rose from 10.2% to 11%. Ironically, 2006 is a period in which the average5

economic growth was 5.4%.6

That Filipinos are poor are felt by Filipinos themselves. The SWS March 2010 Pre-Election Survey,7

conducted from March 19-22, 2010, showed that 43% (est. 8.1 million) of the families rate themselves as8

Mahirap or Poor. Ironically, this matches the record-low Self-Rated Poverty set in March 1987, which was9

short-lived. The proportion of families experiencing involuntary hunger at least once in the past three10

months went to 21.2%, or an estimated 4.0 million households.11

The huge discrepancy between those who were reportedly poor12

and those who perceive themselves as poor only demonstrates13

that some sectors are indeed invisible from the government14

eye, which makes the poverty reality much more disturbing. To15 quote Sabino G. Padilla, Jr. President of AnthroWatch, an16

organization working with indigenous peoples and a member of 17

the GCAP-Philippines Coordinating Committee, poverty may be18

far worse than what the government wants us to believe since19

there are Filipinos who are not included in the surveys, such as20

the ambulant and transient poor, as well as the Indigenous21

People.22

Is the Philippines Poor?23

The question we should first ask ourselves is, is our country24

poor? Cant the Philippines provide wealth and prosperity for25Filipinos?26

The answer to this is, no. The Philippines as a habitat is27

actually rich richness that can be transformed to wealth for28

peoples wellbeing. The countrys land is known to be29

fertile, with arable lands, diverse flora and fauna,30

extensive coastlines, and rich mineral deposits. The31

Philippines is known to engage in major crop32

production of rice, corn, sugarcane, coconut,33

abaca and tobacco. Our metal and non-metal34

deposits are estimated at 21.5 and 19.3 billion35

metric tons respectively. We are also known36

to be rich in copper, nickel, iron, cobalt,37

silver, and gold. Covering as much as 1.6738

million square kilometers of territorial39

waters the Philippines is home to 2,400 fish40

species of marine life, 65 of which have41 good41






commercial value. If these resources are utilized (not necessarily monetized) properly, we simply are far1

ahead of countries which denied of such endowments, in opportunity and in potential.2

But despite this, we are known to lag behind our Southeast Asian neighbors, most of which started way3

worse than we are. Singapore's Gross Domestic Product (GDP) per capita (in PPP, international dollars) is4

$51,142, while Malaysia's is at $14,072 and Thailands is at $8,225. Our GDP per capita, on the other hand,5

is pegged at meager $3,546. The human development index (HDI) of Singapore, Malaysia and Thailand is6

0.918, 0.823, and 0.786 respectively, while ours is at 0.745.7

The paradox of why such naturally endowed country as the Philippines is known to lag behind its neighbors8

in Southeast Asia was a long subject of academic and practical discourses which results had already been9

incorporated into various theories and applied policies. Yet, even after decades of number and variable-10

crunching, and countless sessions and regimes of economic planning, prosperity and development remains11

to be evasive.12

Economic development is indeed important to discuss when we talk about poverty because indeed, a13

countrys prosperity is an indicator of how much resources a country has at its disposal to improve the lives14

and wellbeing of its citizens, with the end goal of mitigating or even eradicating poverty. Thus poorer15

countries have fewer resources to provide for social services aimed for welfare. Economist like Michael16

Alba of the De La Salle University, believes that the living standard of the Philippines relative to that of the17U.S. not risen unlike its Asian neighbors because the country has been stuck in a low-growth trajectory.18

But of course, that a country is developed or prosperous doesnt translate that majority are indeed19

prosperous and their communities are really developed. This brings us to the issue of equality.20

Are all Filipinos poor?21

We presented Philippine poverty in the last section a report from the Forbes magazine may give us a look22

at the other side of the coin. Forbes reported that as of 2010, the Philippines, incidentally, is also home of 23

some of the world's billionaires. The Forbes 2010 survey specifically mentioned Henry The Retail King Sy,24

with networth of $5 billion from $3.8 billion a year earlier as the richest man in the Philippines, ranking25

201st in the 2010 list of 1,011 billionaires of the world, that according to Forbes dropped from 1,125 in26

2008. Lucio Tan, owner of Philippine National Bank, Asia Brewery, Tanduay Holdings, Fortune Tobacco and27

Philippine Airlines Inc. ranked second with a net worth of $4 million. Tan was followed by first-time28

billionaire John Gokongwei Jr. with $1.5billion, Jaime Zobel de Ayala29

with $1.4 billion [Gavin & Faustino, 2010].30

So clearly, while the Philippines is home of the poor, it is also the31

home of the super-rich. The combined wealth of the top 40 Filipinos32

amounts to $22.4 billion or P1.008 trillion, representing 13.13% of the33

Gross Domestic Product (pegged at P7.68 trillion, end-2009).34

The NSCB said the governments latest Family Income and35Expenditure Survey (FIES) showed that income inequality, as36

measured by the Gini coefficient1, was at 0.46. Comparing this with37

1The Gini coefficient is basically a measure of inequality of income distribution starting from zero, the closer to one the

coefficient is, the more unequal distribution. Technically, the ratio of the area between the Lorenz curve (graphical representation

The Philippines as a

habitat is actually

rich richness that

can be transformed

to wealth for

peoples wellbeing.






other countries, the Gini coefficient in Thailand was at 0.43, while in Indonesia, it is 0.34. For richer1

countries such as Japan, the Gini coefficient is pegged at 0.31, while the United States has a Gini of 0.36.2

This means that the rich are much richer than the poor in the Philippines compared to all the countries3

mentioned NSCB Secretary-General Dr. Virola said [Virola for NSCB, 2005]. 4

According to 2006 Family Income and Expenditure Survey (FIES), the income of richest 10% is 20 times the5

income of the poorest 10%. The net worth of the countrys 10 richest individuals and families in 2006 was6

equivalent to the combined income of the countrys poorest 9.8 million households, or 49 million Filipinos.7

According to an ADB study conducted by Ernesto Pernia and Arsenio Balisacan [2002], despite economic8

growth from 1985 to 1997, the poorest 20% of the population only improved their income 0.5% for every9

1% growth in average income. 10

Poverty and Inequality11

Qualitatively, much of the link between inequality and poverty can be explained by what can be called as12

the property regime of an economy and its13

effect on economic rationality. According to14

the mainstream economic thought, resources15

should go where they will be optimally used 16and, according to the same theory, only17

through an economic regime of private18

property can such optimality be achieved2.19

As the theory goes, redistribution mechanisms20

to reduce inequality but violate private21

property are thus inefficient and un-optimal.22

What the mainstream thus forward is an23

economic and regulatory regime that protects24

private property, even at the expense of 25

equity or justice.26

This is crucial because inevitably, the27

economic decision-making process in our28

current society is a function of property.29

Those who own a particular asset or income30

streams are given the decision-making on how31

to utilize those assets and income and who32

benefits from such use. The private property33

regime assumes that individuals are rational,34

of the cumulative distribution function of the empirical probability distribution of wealth, often used to represent income

distribution, where it shows for the bottom x% of households, what percentage y% of the total income they have) and the diagonal

(the line of perfect equality) to the area below.

2Some economists even posit that high inequality is a necessary conditions for generating rapid growth. Examples include Walter

Galenson and Harvey Leibenstein (Investment criteria, productivity, and economic development, August 1955) and Gustav Ranis

(Development and the distribution of income: Some counter-evidence, September-October 1977). Development economists

Michael Todaro proceeded to debunk the claims of these economists [Todaro, 1997].






and the aggregated decisions of individuals (not necessarily made collectively) result in economic rationality1

one of the primary factors in development.2

The importance of the property regime for development cannot be more emphasized, because in the3

end, only three prevailing questions remain: Who decides who gets what? By what means and goals are4

such decisions made? Do the decisions induce progress and ensure decent life for all or not? These5

questions bring home the point: Inequality, being inseparable from poverty, is also inseparable from the6

question of property.7

8

KungWalang Korap, Walang Mahirap?9

Philippine poverty and inequality was explained as an effect of many things, including the unabated10

population growth, colonial mentality, and lack of labor total factor productivity, among a plethora of 11

others. These items are more commonly presented in their forms of vicious cycles: population growth for12

example, strains limited resources such as those which can be channeled for reproductive education,13

which is a factor in unmitigated population increase. Productivity is low, translating to low national output14

and thus, low public and private expenditure for human capital formation. And a host of other15explanations.16

But the most common explanation invoked, especially the politicians themselves, is corruption. Corruption,17

as it is popularly defined, is simply the use of official power for the benefit of oneself, regardless of whether18

it is beneficial or detrimental to the rest of the populace. As the corruption discourse goes, it is this capture19

of our government institution by corrupt elements that is the reason why the Philippines is poor compared20

to its neighbors, and why many Filipinos are poor despite a number of Filipinos being super-rich.21

This explanation is very sensible. Public sector corruption indeed takes away resources which would have22

been used for developmental purposes. In November 1998, Philippine Ombudsman Aniano Desierto23

claimed the government lost P1.4 trillion (estimated at US$100 billion, varying exchange rate over 11 years)24

since 1988 when the Office began investigating government25corruption, and continues to lose P100 million daily, or P36.526

billion (roughly US$940 million) annually.27

Private sector corruption further erodes public funds.28

According to the National Tax Research Center (NTRC), tax29

evasion among corporations is estimated at 38% (P142 billion30

collectible as against P88 million collected). It is biggest31

among professionals and individual business at 69% (P3932

billion as against P12 billion).33

But if we are to look at what drains the Philippine resources,34

we might as well look at all its manifestations, illegal or legal.35For example, the billions of pesos wasted in corruption pales36

in comparison to what is lost because of our automatic debt37

service policy. In 2008 alone, out of the P1.227-trillion38

proposed budget program, P295.75-billion is earmarked for39

Interest Payments of National Government (NG) Debts.40

Inequality and poverty, for

example, may be an effect, by

design or by consequence, of

corrupt governance. Then again,

the systematic and systemic

denial of opportunities and

upward mobility for the poor

because of the way our

economy itself is structured is,

in itself, a potent explanation.






Meanwhile, the government will be incurring P328.34-billion off-budget expense for Principal Amortization1

of these NG debts.2

And that is official government policy, same as the official government liberalization policy which could cost3

us as much as P600 million annually in foregone revenues if tariffs on dairy products are removed under the4

Association of Southeast Asian Nations-Australia-New Zealand Free Trade Agreement (AANZFTA). Billions of 5

foregone revenues are also caused by huge tax exemptions offered to corporations, just so to induce6

investments. This proves that the lack of development can be explained as a result of wrong policies as7much as it can be explained to be a result of intended corruption.8

Inequality and poverty, for example, may be an effect, by design or by consequence, of corrupt governance.9

Then again, the systematic and systemic denial of opportunities and upward mobility for the poor because10

of the way our economy itself is structured is, in itself, a potent explanation. While such denial may still be11

in the realm of the corrupt, or the concept of corruption, we can say that it is a corruption of another type,12

a corruption not of any individual predisposition induced by a national lack of moral cogency (as corruption13

is usually defined in the mainstream), but an economic structure that induces relationships between14

economic and social actors that are fundamentally corrupt, if only for their consequences.15

Let us take a look, for example, at the policy of privatization of public utilities. The mainstream belief was16

that since government is intrinsically inefficient (because of lack of competition) and corrupt (because it is17also the regulator) in handling the public utilities, it should transfer the control of these utilities to the18

private sector. A particular example for this, the privatization of the countrys power system, only facilitated19

a transfer of ownership from a corrupt government to a corrupt oligopoly of a few families, leading to20

private control over prices and skyrocketing power prices, now the second in Asia. Clearly, while the intent21

on privatization may be moral for some, the consequences are criminally corrupt.22

In the end, the inequality induced by economic governance failure is one of the primary hindrances to23

development. Attesting to this is the fact that, while almost three-fourths of our economy is Public24

Consumption, we have maintained a low-wage, cheap labor policy a policy which will surely keep at the25

minimum peoples purchasing power. While our greatest asset is our arable land, we refuse to conduct a26

comprehensive agrarian reform which would have raised income of farmers and encouraged agriculture.27 Such a policy- induced inequality is not only because of elite capture by the government, but the stern28

belief that cheap labor would induce investments and private ownership of land optimizes asset utilization.29

The battle against corruption launched by well-meaning politicians and public crusaders may be the first30

step towards resolving the question of poverty, but we must elevate from there into more substantial and31

fundamental arguments that tackle the government policies. This, if we are resolve the problem of poverty32

and inequality. 33






Why are many Filipinos poor really: A Different Story1

We in Freedom from Debt Coalition (FDC) believe that the problem of poverty and inequality is intricately2

linked to how the components of the economy, specifically the state and the market, failed to realize their3

social functions. The state failed to provide the public goods necessary for social welfare and to ensure4

social and economic justice, while the market failed to induce development and ensure the optimum5

distribution and utilization of assets and income. Both have been captured by individual interests, and were6

transformed from instruments of collective progress to engines of continuing undue profit by a small group7

of people.8

Thus, corruption, beyond its moral ramifications, must be explained as a system question. What forces in9

the current system that induced the state and the market into failing and predisposed them into being10

what they are right now? What government policies and institutions contributed to determining the11

relationships between societal and economic actors?12

We take a look into ten of such policies, which FDC believes to be the primary causes of our mal-13

development. These ten policies describe the fundamental relationship between the government, the14

public, the global market for capital and goods, the land ownership regime and agriculture, and the15

industrial structure. In the end, the objective would be to understand, with the end goal of redefining, the16

relationships between societal and economic actors in order to induce development and ensure justice.17

18

Sources19

Balisacan, Arsenio M. and Ernesto M. Pernia (2002, February). What Else Besides Growth Matters to Poverty 20Reduction? - Philippines. ERD Policy Brief Series. Number 5. Economics and Research Department, Asian Development21Bank (ADB). Accessed: http://www.adb.org/Documents/EDRC/Policy_Briefs/PB005.pdf .22

Gavin MR, Pia Faustino et al. (2010, July 7). Forbes Magazine names 40 richest Filipinos. GMANews.TV. Accessed:23http://www.gmanews.tv/story/195437/forbes-magazine-names-40-richest-filipinos.24

Jimeno, Jaileen F. (2007, December 10). Uncounted and underserved. The Daily PCIJ. Philippine Center for25Investigative Journalism. Accessed: http://www.pcij.org/blog/?p=2079.26

Social Weather Stations (2010, 19 April). SWS March 2010 Pre-Election Survey: Hunger drops slightly to 21.2% of 27families; Self-rated poverty matches record-low 43%. Accessed: http://www.sws.org.ph/pr20100419.htm.28

Todaro, Michael P. (1997). Economic Development. New York University. Addison-Wesley Reading, Massachusetts.29

United Nations Development Programme. (2009). TableG: Human development and index trends, Table I1: Human30and income poverty . Human Development Report 2009 - Overcoming barriers: Human mobility and development31(Palgrave MacMillan).32

Virola, Romulo A. (2005, December 12). The FIES of the Rich: Truth or Consequence? National Statistical Coordination33Board (NSCB). Accessed: http://www.nscb.gov.ph/headlines/StatsSpeak/121205_rav_fies.asp. 34






1. Weak, Elite-Captured State1

2

The current Philippine State, because of its weakness, is captured by the interests of a3

cynical and opportunistic elite class. This results to the incapacity of the state to act 4

objectively for economic development and risk redistribution. Instead, the state becomes5

the primary conduit for translating private interests of elite class into binding public 6

policies.7

8

1.A. Pro-market Economic Management, Limited Government Role in Development and 9

Welfare10

11

The government, which is ideologically captured by a market fundamentalist framework and12

biased to providing opportunities for private-sector profit-making, refuses to take part and13

responsibility in ensuring welfare and national development.14

151.A.1. Privatization of Essential Services and Strategic Industries16

1.A.2. Development via Private Sector means, e.g. Build Operate Transfer (BOT), Other Public-17

Private-Partnerships (PPP)18

1.A.3. Market-oriented Economic Development Planning by the National Economic19

Development Authority (NEDA)20

Consequences 21

The purpose of government is transformed from generating public goods into to producing private22

goods for officials, their families, and their cronies. This leads to:23

y Inaccessible essential services, decline in welfare.24

y From public monopoly to enhanced elite monopoly and/or oligarchy25

y Upholding the interests of entrenched rent-seekers26

y National vulnerability from foreign entities seeking capture of strategic industries and services27

Palliatives 28

y Private sector initiatives. Market (Corporate Social Responsibility) and non-market (CSO-29

initiated, or charity-based) initiatives like Gawad Kalinga, Caritas Manila, initiatives by the30

Corporate Media, and others compensate for compromised state role.31

y Devolution. Services that cannot be privatized due to intense opposition are devolved to local32

governments.33

y Patronage. Services that cannot be provided for are extended via patron-client linkages34

between traditional politicians and their constituencies. 35






1.B. MalfunctioningRegulation1

2

The government fails to exercise its duty to protect the citizens from, and to correct, market3

failures. In fact, market failures that are profitable for a select few are sometimes encouraged in4

patron-client modalities.5

6

1.B.1. Deregulation71.B.2. Regulatory Failure8

1.B.3. Regulatory Capture9

1.B.4. Abusive and corrupt government agencies10

Consequences 11

Regulation is now for the purpose of resolving intra-elite intramurals and scrambling on meager12

national resources, excluding the rest of the people. Thus, people are no longer protected from:13

14

y Decline in welfare to due citizens absorption of externalized costs [see 7.B]15

y Economic dynamism is dampened and siphoned by the costs of market failures16

Palliatives 17

y Citizens Vigilance. Citizens would have to continuously keep watch on costs externalized to18

them, from added costs to products they buy, to the noise at smoke created from nearby19

factories, to undue profiteering by companies.20

y Corporate Media as Fiscalizers. Citizens have become dependent on the corporate media in21

order to fiscalize the abusive22

23

1.C. Unmitigated widening of Income and Asset Distribution Gap24

25

With state policies focusing on distribution of assets to assure more profitability, the state fails to26

arrest the widening of income and asset distribution gap. With the ownership of assets and27

resources being limited to an elite few, the much poorer majority is excluded from meaningful28

economic decision-making. It is because of this marginalization that the majority is excluded also29

from reaping the benefits of societal development.30

31

1.C.1. Lack of asset reform32

1.C.2. Cheap labor policy [see 5.A], lax government regulation on wages and benefits33

1.C.3. Focus on growth- rather than equity-based economic measurements34






Consequences 1

The fact that a small segment of the population in control of economic resources combines with2

the fact that this small segment is motivated mostly by greed and desire for more accumulation.3

This leads to:4

y Wide income disparity (High Gini index)5

y Stratification of consumption and skewed investment structure6

y Un-optimal use of resources and labor, as the concentration of resources leads to the creation7

of a leisure class8

y Growth of the services and leisure sector despite the need of labor and resources to more9

productive endeavors10

Palliatives 11

y Ensuring accessibility of cheap microcredit for consumption and small businesses.12

y Sin Taxation and other Consumption Taxation to discourage conspicuous luxury.13

y Encouraging investments to productive sectors through government-induced market signals.14y Shift to consumption taxes as a way to mitigate loss due to tax evasion and tax concessions for15

corporations16

17

1.D. Political Patronage, Rent-Seeking, in the Public Sector 18

19

With the capture of public institutions by corrupt parties, the purpose of government has become20

not to generate public goods, but to produce private goods for officials, their families, and their21

cronies. The elite-capture of government leads to corruption, patronage, and poor government22

service.23

24

1.D.1. Bloated, redundant bureaucracy, leading to demoralization of government workers25

1.D.2. Poor quality and inefficient civil service, leading to distrust of citizens to the26

government27

1.D.3. Elite capture of government departments and offices28

1.D.4. High-level corruption29

Consequences 30

y Wastage in national resources, leakages in public programs31

y Ineffectiveness of economic and welfare programs, distortion of impacts32

y Increasing inequality, especially between government officials (and their private-sector33

networks) and the public34

y Failed regulation, regulatory capture [see 1.B]35

y Distrust and cynicism of people of the government, leading some to engage in patron-client36

relationship with corrupt officials 37






Palliatives 1

y Existence of Anti-corruption and transparency measures and accountability institutions and2

such as the Ombudsman, Sandiganbayan, and other anti-graft and corruption bodies in order3

to prevent government abuse4

y Checks and balance and oversight among government offices, dispersing power and utilizing5

antagonism among government employees and elected officials as guard against abuse. This6fails, however, if a particular interest is able to penetrate multiple levels and sections of the7

government.8

y Performance Evaluations and Civil Service Exams that ascertain capacity and performance9

y Automated government transactions to minimize possibilities of discretion, and thus,10

corruption11

12

1.E. Technocracy-dominated, Manila-centric Economic Management 13

14

The people who have the most stake in policies are excluded from the decision-making, which is15

mostly centered on Metro Manila-based offices excluding effective participation from the other16

regions. Thus, there is a lack of economic democracy and widespread public apathy.17

18

1.E.1. Centralized economic decision-making and development planning19

1.E.2. Lack of genuine participation and consultation processes leading to constituency-blind20

economic decisions21

Consequences 22

Because decision-making is concentrated, it is natural for the following to occur:23

y Unexpected social ramifications24y Failed appointments, leading to incompetent governance and thus, lack of development and25

failure of regulation [see 1.B]26

y Elite capture of public offices, leading to predatory corruption and abuse [see 1.D]27

Palliatives 28

y Token multi-sector consultations for development projects29

y Formation of City and Provincial Leagues to provide interaction between LGU units in Metro30

Manila and the provinces31






2. Inequitable Land Ownership and Lack of Social and1

Strategic Outlook on Land Use and Management 2

3

Because our land is under the private property regime, land use is oriented towards4

private profit, not public gain. This promotes non-agricultural land use conversion and 5inhibits land reform, leading to poorly planned and vulnerable societies and unstable6

food production. For the land converted to urban areas, there is lack of deliberate design7

leading to increased risk for residences and businesses.8

9

2.A. Land under the Private Property-Regime10

11

Land is seen not as a social good that can and must be used for collective development, but as a12

private property the individual ownership of which should be protected or attained. This is13

supposedly because the private sector is more efficient user of assets like land than the14 government, which represents society.15

16

2.A.1. Monopolistic Land Ownership17

2.A.2. Unequal Land distribution18

2.A.3. Land Valuation biased on commercial functions, primarily services19

Consequences 20

Since land is under a private property complex, land is fought over by individuals in a market, with21

its use determined not by intrinsic value of the land (for production, agriculture, etc.) but its22

market valuation which is biased to commercial activities.2324

y Lack of Land Reform leading to Inequality (due to lack of democratized control over the income25

of land and land-based assets)26

y Rampant Land Use Conversion biased on commercial use of land [see 2.B.1. ]27

y Development aggression leading to community destruction28

Palliatives 29

y Market-Assisted Land Reform (MALR). Characterized by a willing seller - willing buyer30

framework, it encourages land transfer through manipulating the supply-demand on the rural31

land market, reducing landowner opposition through negotiated land transfer.32

y Corporate Redistribution of Land like the Stock Distribution Option (SDO) and Joint-Venture33

Agreement (JVA) model which seeks to corporatize agrarian reform by vertically integrating34

management of the lands through converting land ownership into shares of stock.35

36

37






2.B. Lack of Rational Planning on Regional Zoning, Land Use and Management 1

2

The private sector-led land development (which is a consequent of 2.A) resulted to the apparent3

absence of state intervention in land use determination, including use and management. No4

national-level regional zoning plan which would have determined land should go to agricultural5

production, manufacturing industries, and services [given a lack of industrial planning, 4.A].6

72.B.1. Commercial and Urban land use bias (biased to services industry, not to manufacturing8

and agriculture, due to 4.A)9

2.B.2. Local Government Unit-determined economic strategy and land use10

2.B.3. Lack of Land and Water Use Act11

2.B.4. Lack of Financial and Institutional Support for Agriculture12

Consequences 13

Regional planning and zoning would have prevented the growth of urban areas and the retreat of 14

agro-rural areas. This leads to:15

16

y Ineffective land reform program, as distributed land revert back to the original landlords which17

engage in land use conversion18

y Collapsing Agricultural Sector [see 8.B] due to lack of agricultural lands19

y Degradation of Forest Areas and Carbon Sinks [see 6.B.2. ] as they are converted to farmlands20

(through the usual slash-and-burn)21

Palliatives 22

y Increasing importation of food and agricultural products for domestic consumption23

y Corrective actions on forest areas such as tree planting, forest area protection, selective log24ban, and those actions as mandated by NIPAS25

26

2.C. Lack of Effective Development Planning on Urban Land Use and Management 27

28

Because urban areas had largely sprouted from land use conversion at the initiative of the private29

land owners (caused by the lack of regional zoning [see 2.B]), there was no deliberate plan on how30

the urban areas are to be designed and for what purpose.31

32

2.C.1. Ad hoc Horizontal Urbanization33

2.C.2. Land Use Conversion in Peri-urban and Rural areas at the metropolitan fringes34

2.C.3. Lack of Universal Settlement Plans35

2.C.4. Local Government-based Initiatives for Commercial Development36






Consequences 1

Poor Urban Planning, which goes hand-in-hand with lack of industrial [see 4.A] and employment2

[see 5.B.1. ] planning, leads to:3

4

y Congested roads due to lack of analysis of common areas of destination5

y Gap between settlement and employment areas6y Health risk in residential areas near industrial and commercial areas (factories, airports,7

commercial centers, etc.)8

y Lack of disaster preparedness due to lack of disaster risk reduction (DRR) planning which9

should have been embedded in urban design10

Palliatives 11

y Displacements of either residences or businesses when palliative and corrective solutions are12

sought to chronic urban problems (e.g. displacement order vs. Pandacan Depot, informal13

settlers in Manggahan floodway)14

y Palliatives like flood control, waste management, etc. in a time of climate crises or health15

problems16

17

2.D. Development strategy centered on growth-oriented Super-regions18

19

Former President Arroyo unveiled in her 6th

SONA a new development planning strategy in20

partnership with LGUs to divide the country and pour resources into super-regions to spur21

economic growth and create markets for investments in the countryside, in order to eventually22

lead the Philippines to achieving First World status in the next two decades.23

242.D.1. Creation of a North Luzon Agribusiness Quadrangle25

2.D.2. Creation of a Metro Luzon Urban Beltway26

2.D.3. Central Philippines Tourism Super Region27

2.D.4. Creation of an Agribusiness Mindanao Super Region28

2.D.5. Creation of a Philippine Cyberservices Corridor that transverses the four Super-regions29

Consequences 30

The promotion of a homogeneous economy and consumer culture with its lack of stewardship31

towards the environment led to:32

33y For Central Philippines, land-use conversion of previously agricultural lands for tourism or34

services use made have converted several regions net food importers35

y The Cyberservices Corridor plan may have pushed for the creation of a redundant and36

anomaly-ridden National Broadband Network (NBN) deal with Zhong Xing37

Telecommunications, Inc.38

39






3. Foreign Capital-dominated Open Economy1

2

Our economy is rendered open to foreign capital competition, leading to the destruction3

of our productivity and inevitably, dependence and foreign capital domination.4

5

3.A. Current Accounts (Financial) Liberalization6

7

Controls on the ingress and egress of capital and currency are consciously weakened towards the8

direction of total dismantling, as the government adopts a policy of openness.9

10

3.A.1. Foreign exchange liberalization11

3.A.2. Sustained Interest Differentials when foreign credit is relatively cheaper to siphon12

foreign currency13

Consequences 14

Massive but volatile inflow of short-term investments compromise the stability of the countrys15

financial system and national security:16

y Portfolio investment-driven stock market, dependence on hot money17

y Financial instability, vulnerability to exogenous currency and other financial shocks18

y Compromised national security consequent on foreign investments on privatized strategic19

industries20

Palliatives 21

y High foreign reserves. This policy, fueled mainly by OFW remittances, is maintained to protect22

the country from sudden reversal of capital flows.23

y This is usually accomplished through the strategy of monetary sterilization in which the central24

bank attempts to counteract the effects of a changing monetary base through via open market25

operations in the forex market.26

27

3.B. Weak Banking and Financial Sector detached from the Industrial Base28

29

The banking and financial sector, already weak due to a small savings base [see 5.A.2. ], is30

detached from the industry and agriculture by a profitable services sector.31

32

3.B.1. Inflation-targeting as primary Central Bank preoccupation33

3.B.2. Interest Rate Liberalization34

3.B.3. Bank Liberalization35






Consequences 1

Domestic industry and finance both went down in a downward spiral as the vicious cycle of weak2

industry not being attractive to private investments causes the decline of private investments,3

weakening the industry further compromising employment, and thus, domestic savings base.4

5

y Weak industry [see 4.C] due to weak Capital Formation6y National treasury biased to low-interest rate foreign bonds7

y Lack of access to credit of Small and Medium Enterprises (SMEs), especially those engaged in8

agricultural activity9

Palliatives 10

y Low Interest Rates, Credit Creation. In order to compensate to lack of targeted financing,11

central bank resorts to low interest rates in order to provide general support to enterprises12

especially in times of crises (contradicting 3.A.2. ).13

y Micro-financing as a way to mitigate capital scarcity in the rural, peri-urban, and sub-urban14

areas is becoming popular among cooperatives, small and medium enterprises, etc.15

16

3.C. Foreign-financing Dependence17

18

Due to lack of mobilizable domestic savings (due in turn to a policy of low-interest rates, and small19

savings base [see 5.A.2. ]), and poor revenue-generation (due in turn to small industry [see 4] and20

consumption-income base [see 5.A.1. ]), the government is dependent on foreign financing and21

debt.22

23

3.C.1. Credit-rating consciousness243.C.2. Supply-driven and development plan and initiates25

Consequences 26

The need to secure foreign financing for public sector activities compels the government to pay27

the debt unequivocally, eventually resulting to lack of resources from the public sector, and thus,28

the need to secure financing for these services. This results though to:29

30

y Debt-dependence, lender-driven public sector activities and development program leading to31

ineffective, market-biased development strategies [see 1.A.3. ]32

y Lack of social spending and institutional support leading to compromised households [see33gender-differentiated effects of this in 7.B]34

y Lack of spending on economic services leading to weak industries [see 4.C.1. ] and collapsing35

agricultural base [see 2.B.4. ]36

37






Palliatives 1

y Fiscal austerity, Spending compression. Debt sustainability, which necessitates the cutting back2

on spending in order to pay debt, is maintained in order to protect credit rating.3

y Foreign-Assisted Projects Programming. The government attempts to coordinate Foreign4

Assisted Projects (FAPs) through Official Development Assistance (ODA) programming, like5

FOURmula One of the Department of Health. In most cases, however, the plan was also6according to a policy compelled by earlier loan conditionalities.7

8

3.D. Lack of capacity and propensity to save in the grassroots9

10

The cheap labor regime [see 5.A] limits the capacity of the worker to save part of his and her11

income for future use. This had the effect of weakening grassroots capital base which would have12

been mobilized by domestic industries and community enterprises.13

14

3.D.1. Weak provincial and rural banks that cant compete with large banking conglomerates15

3.D.2. Dependence on Government Financial Institutions (GFI) for credit in the agricultural16

sector and rural areas17

Consequences 18

Lack of savings lead to:19

20

y Due to lack of social welfare [see 7.B], the inaccessibility of abrupt health and education (which21

requires huge affront payments)22

y Weak domestic capital formation due to weak financial system [see 3.B] caused by low savings23

rate24

Palliatives 25

y Forced savings on employees that is blind on current household expenditure realities.26

y Growth in private banking sector of banks with direct links to particular domestic firms and27

capitalists (mostly in services [see 4.A palliatives]) in order to compensate for the lack of large28

industrial banks29






4. Fragmented Industry designed for Low Value Added1

Exports2

3

Our industries are integrated individually to foreign markets, not to each other,4

relegating us to low-value added production (i.e. low-end products/services, extracted 5raw materials) and export-dependence. This is due to the lack of a trade-industrial 6

strategy, neglect of domestic market and local economies, and lack of state support for 7

increasing competitiveness.8

9

4.A. Incoherent Trade-Industrial Policy due to lack of Industrial Strategy 10

11

Trade policy in place has been successful in wiping out many industries and jobs, in eroding12

nations industrial base, agricultural base, and in setting back economic growth.13

144.A.1. Unilateral and Advanced Tariff Reduction15

4.A.2. Proactive negotiation for Bilateral and Multilateral Free Trade Agreements16

4.A.3. Unregulated importation, and thus, unregulated egress of foreign currency available for17

industry18

Consequences 19

Liberalizations primary goal is to destroy uncompetitive firms, and given the countrys weak20

industries [see 4.C] liberalization ate away our industrial base as consumers find cheaper products.21

This resulted to:22

23y Internal industrial disintegration as manufacturing and agriculture sectors are decimated24

y Widespread unemployment leading to small savings base [5.A.1. ] and low purchasing power25

[5.A.2. ] of citizens26

y Lack of foreign currency which would have been used to purchase capital goods for industrial27

development28

y Weak revenue performance due to low tariff rates29

Palliatives 30

y Services-oriented growth. Instead of the usual industrial and agricultural bases, the31

government encouraged foreign capital to go where it is already going the service industries.32

This serves as the primary buffer of the unemployed sector. This is especially through for33

Business Process Outsourcing (BPO) firms, most of which are contact centers.34

y Lack of revenues earned from trade leads the government to rely on consumption taxes, given35

importation-driven consumption due to lack of indigenous capacity to produce consumer36

goods [see 4.B.2. ] and availability of foreign currency due to remittances [see 5.A.3. ]37






1

4.B. Neglect of the Domestic Market 2

3

The export-orientation of our domestic industry compelled it to compete against the tight and4

cutthroat global market, without having the vision to develop a strong domestic market that will5

assure sustainable returns.6

7

4.B.1. Lack of policy addressing the markets lack of purchasing power [see 5.A.1. ] (e.g. low8

wages policy, high prices)9

4.B.2. No state support for the development of the consumer goods industry10

Consequences 11

The lack of incentive and capacity to locally produce consumer goods for the domestic market12

leads to domestic producers constant search for global markets with relatively higher purchasing13

power, even if there is potential domestic demand14

Palliatives 15

y Importation of industrial consumer goods. A large part of the consumer goods the countrys16

consumer procures are manufactured abroad. This necessitates liberalization of ingress and17

egress of these goods to lift the burden of tariff from the consumers, but this cause18

unregulated egress of foreign currency [see 3.A.1. ]19

y Retail-driven Services Sector as local consumers cannot afford to buy wholesale services.20

21

4.C. Weak and Uncompetitive Domestic Firms22

23Our industry itself is incapable of producing goods which can serve as adequate and cheap24

substitutes to those which are produced abroad, and this is because our industries operate at25

more costs.26

27

4.C.1. Weak institutional and financial support for agriculture and industry modernization,28

expansion, and development29

4.C.2. Decreasing state protection of industries against globalization forces (e.g. Unilateral30

Tariff Reduction)31

4.C.3. High Cost of Entrepreneurship (e.g. Fees, Electricity costs)32

Consequences.33

In a liberalized industrial regime [see 4.A], a weak industrial sector is likely to vanish leading to:34

35

y Premature Deindustrialization resulting to:36

o High unemployment rate and/or lack of quality employment37






o Lack of job security1

o Lack of domestic production for consumer goods/services, making us dependent on the2

global market for access3

4

y Trade and Balance of Payments deficit (excluding net factor income from abroad which is5

high due to OFW remittances)6

Palliatives 7

y Dependence on extractive industries like mining and forestry in order to augment foreign8

currency reserves used to purchase industrial inputs.9

y Labor-exportation. The lack of labor-intensiveness of the existing industrial structure forces our10

economic managers to find external sources of employment for the growing working class11

population and obtain foreign currency reserves.12

13

4.D. Underdeveloped Community Industries and Sources of Local Employment 14

15

Because of lack of institutional support, local (especially agricultural) enterprises failed to16

modernize and be competitive. Thus, community markets tend to source out its commodities from17

foreign markets, and national industries tend to source out its inputs from foreign suppliers.18

19

4.D.1. Lack of state, institutional and financial support to develop local enterprises and20

increase their competitiveness21

4.D.2. Communities patronize cheaper imported commodities22

4.D.3. Local enterprises tend to disintegrate with the presence of larger firms23

4.D.4. Lack of highly skilled personnel necessary in the modernization of local economies24

Consequences 25

Lack of incentives and capacity to source inputs and commodities from local enterprises leads to:26

27

y Dominance of retail and wholesale traders and middle-mans over direct producers28

y Domestic producers dependence on foreign sources for manufacturing inputs, because29

existing small suppliers are expensive30

y Widespread unemployment in the local [see 0], leading to exportation of skilled and educated31

labor from the communities32

Palliatives 33

y Smuggling, Intensive importation for industrial inputs especially from large manufacturing34

countries like China or Vietnam.35

y Rural to Urban migration of workers because of stagnating incomes [see 5.D.1. ]36






5. Repressive Labor Environment 1

2

Societys creator and determinant of values, the labor sector, have been relegated to low 3

competency and low purchasing power due to the politically and economically repressive4

cheap labor policy. The lack of regulation, political agency in the status quo, and 5

recognition of the large part of the labor sector leads to further repression. 6

7

5.A. Low-wage, Low-benefits Labor Policy 8

9

Because of our cheap labor policy, we tend to end up with poverty, low savings rate, and a10

remittance-driven consumption economy. This leads to undesirable labor developments such as11

contractualization, unjust retrenchment, etc. due to an industry which needs to be competitive12

[see 4.C] despite lack of government support [see 4.A].13

14

5.A.1. Low, or at times, relative absent, purchasing power of citizens155.A.2. Low capacity to save16

Consequences 17

Since much of the physical and social needs of Filipinos are provided via the market, low18

purchasing power generally results to:19

y Poverty and social misery due to inability to afford basic commodities and needs20

y Stratification of consumption, as lower-end consumers cannot afford the new products21

enjoyed by the high-end consumers22

y Dependence on credit by small consumers, leading to personal indebtedness and further23

incapacity to consume24

Palliatives 25

y Targeted and Conditional Cash Transfers are welfare programs, in the form of cash subsidies,26

conditional upon the receivers actions. Implemented successfully by Brazil.27

y Growth in informal economy. Lack of purchasing power leads the consuming populace to rely28

on the underground market actors for commodities, maintaining the nations high29

consumption rate despite lacking the middle class that serves consumption base in most30

countries.31

325.A.3. Remittance-fueled Consumption33

Consequences 34

A remittance-based economy requires that much of the potential manpower should be converted35

into Overseas Contract Workers (OCW). This leads to:36






y Small base of skilled domestic labor necessary for development,1

y Compromising reproductive work2

y Stagnation of hometown municipalities3

y Dehumanization and alienation of Overseas Filipino Workers (OFWs)4

Palliatives 5

y Return of service (ROS) projects to address The dissonance between the policy of producing6

too many healthcare workers for abroad and the apparent lack of health personnel for7

domestic needs8

y Glorification of labor migrancy or the intense government appreciation of, and support for9

(although support seems lacking still) OFWs10

y Encouraging the formation of Filipino communities abroad, and providing assistance as a11

social and psychological safety net for the migrant workers abroad12

13

5.B. Lack state protection for workers amid repression of democratic space14

15

Despite the existence of a labor code with progressive provisions, and the adequate protection16

stipulated in the constitution, there exists lack of mechanisms for the comprehensive protection of 17

the worker and malfunctioning regulation, resulting in labor abuse. Worse, the workers are18

removed of their political capacities to fight these abuses.19

20

5.B.1. Poor and indecent working conditions21

5.B.2. Lack of protection in bilateral agreements22

5.B.3. Lack of social security23

5.B.4. Gender and age discrimination24

5.B.5. Violation of right to organize, union-busting255.B.6. No Collective bargaining26

Consequences 27

Lack of regulation, worsened by political repression, dismantles all the safety nets the labor sector28

would have had under an industrial setup which is focused on productivity (due to the need to be29

competitive [see 4.C]). This leads to:30

31

y Decline in labor productivity32

y Erosion of workers purchasing power leading to depressed consumption, savings, and33

government revenue generation34

y Distorted labor pricing, resulting to less than optimal personal consumption 35






Palliatives 1

y Arbitration mechanisms such as the National Labor Relations Commission (NLRC) which is2

supposed to receive the grievances of workers3

y Reliance on corporate media to expose labor abuses4

y Productivity-based approach to management such as government-sponsored Total Quality5

Management (TQM) in the shop level (DOLE)6y Conciliation and Mediation Mechanisms for Resolving Labor Disputes7

8

5.C. Marginalized Informal Employment Sector 9

10

There is a continuing lack of social support for the informal, labor sector. This includes vendors,11

home-based workers, piece-rate etc.), women workers, and those which are inadequately12

supported by existing labor regulation structures.13

14

5.C.1. Lack of recognition of the informal sector, resulting to depressed income, lack of rights15

protection and social security16

5.C.2. Lack of access to credit facility17

Consequences 18

The informally employed represents one of the largest sub-sector in the labor sector. Thus, the19

further growth of the informal employment leads to:20

21

y Depressed revenue collection on consumption22

y Breeds underground and corrupt practices, putting stress on government regulation23

(prevalence of child labor despite existing laws, human trafficking, etc.)24y Induced labor migration25

Palliatives 26

y Making micro-credit facilities available for the poorest workers, especially those engaged in27

agricultural work.28

y Providing temporary and seasonal employment to absorb section of the informal sector like29

various ad hoc programs.30

y Redefinition of labor categories (employed, unemployed, underemployed) and manipulation of 31

labor statistics.32

y Relaxation of labor and labor migration policies and regulation resulting to labor abuse33

34

35

36






5.D. Widespread Unemployment and Underemployment in Agrarian Communities and 1

Urban Areas2

3

The classic theory of development says that labor would transfer from the agricultural sector,4

which is transitioning from a labor- to capital-intensive sector, to the bourgeoning urban growth5

areas. In the Philippines, agricultural workers suffering from stagnating income due to lack of 6

agricultural productivity migrate to urban centers which cannot and refuse to accommodate new7

labor entrants.8

9

5.D.1. Rural-to-Urban migration due to stagnating income, unemployment in agricultural10

sectors11

5.D.2. Lack of employment opportunities in the urban areas due to lack of jobs available, or12

job mismatch13

5.D.3. Industries in the urban areas concentrate on labor-saving processes, equipments14

Consequences 15

y Urban congestion, as new entrants strain government welfare and resources in the cities16

y Decreasing agricultural production [see 8.B]17

y Land use conversion [see 2.B] due to agricultural sectors lack of profitability18

Palliatives 19

y Commercialization of agricultural land in order to create jobs in the rural centers, mostly in the20

services sector21

y Emergency employment programs, and other low-paying public sector jobs22






6. Ecologically destructive Economy vulnerable to1

Climate Disasters2

3

The environment is seen more not as an endowment to be conserved, but a resource that 4

can and must be inexhaustibly exploited. The absorptive capacity and recuperating5mechanism of the environment vis-à-vis the externalities of our economic activities are6

also overestimated, resulting to destabilization of ecology and decreased livability of 7

communities.8

9

6.A. Incoherent, Incomprehensive and Fragmented Environmental Paradigm10

11

The governments incoherent, incomprehensive and fragmented environmental policies are12

impotent in substantively responding to the climate crisis and in linking development and the13

environment.1415

6.A.1. Higly sectoralized development and environmental legislation:16

17

y on forests [PD705], fisheries [RA8550], minerals [RA7942; PD1899; RA7976], biodiversity18

[RA7586, RA9147 (wildlife), RA9072 (caves)]; solid wastes [RA9003], & air & water quality19

[RA8749 & RA9275, respectively]; EIA [PD1586]20

21

6.A.2. Highly differentiated social policies on people and environment:22

23

y eg., IPRA [RA8371]; kaingineros [PD705]; fisherfolk [RA8550]; farmers [RA8435]; small miners24

[RA7076]25

Consequences 26

The governments incoherent, incomprehensive and fragmented environmental policies are27

impotent in substantively responding to the climate crisis and in linking development and the28

environment.29

30

6.B. Environmentally-destructive Economic Sectors31

32

Protection of the natural resources and sustainability in not part of the overarching economic33

development strategy, thus the destructive nature of economic activities.34

35

6.B.1. Promotion of extractive industries36

6.B.2. Large-scale and massive forest degradation37

6.B.3. Ecologically unsound agricultural practices38






6.B.4. Export-oriented Industrial Fishing1

Consequences 2

Protection of the natural resources and sustainability in not part of the overarching economic3

development strategy, thus the destructive nature of economic activities. 4

5

6.C. Ecologically-destabilizing Provision of Public Services6

7

While provisioning of essential services like water and power is important, the privatized nature8

[see 1.A.2. ] with which they are being provisioned resulted it being delivered in an unsustainable9

and ecologically-destabilizing manner, lacking as they are of environmental considerations and10

demand management.11

12

6.C.1. Climate change inducing energy production and industries (coal, diesel) as a13

consequence of privatized and liberalized power sector [see 10]14

6.C.2. Large dam systems for water supply (e.g. San Roque, Angat, Casecnan, Pantabangan15and Laiban)16

Consequences 17

While provisioning of essential services like water and power is important, the privatized nature18

[see 1.A.2. ] with which they are being provisioned resulted it being delivered in an unsustainable19

and ecologically-destabilizing manner, lacking as they are of environmental considerations and20

demand management.21

22

6.D. Waste-intensive production-consumption system 23

24

The absorptive capacity and recuperating mechanism of the environment vis-à-vis the externalities25

of our economic activities are also overestimated. This is demonstrated by the lack of demand and26

emissions management in industries and services.27

28

6.D.1. Services sectors are not designed based on a demand-management plan29

6.D.2. Manufacturing industries do not consider use of eco-friendly packaging technology30

6.D.3. Continuous importation (because we lack the industrial base for producing consumer31

goods [see 4.B.2. ]) of waste-intensive consumer products32

Consequences 33

The absorptive capacity and recuperating mechanism of the environment vis-à-vis the externalities34

of our economic activities are also overestimated. This is demonstrated by the lack of demand and35

emissions management in industries and services. 36






1

6.E. Prioritized mitigation actions despite the high vulnerability of the country to2

climate change3

4

This is despite perennial climate disasters and worsening climate conditions and extreme weather5

patterns due to climate change, the government has prioritized mitigation regardless of the6

countries miniscule contribution to climate change.7

8

6.E.1. National Climate change policies are focused on mitigation9

6.E.2. Substantial allocation of funds to mitigation by the government through domestic and10

international sources.11

6.E.3. Influx of investment for mitigating climate change12

Consequences 13

This is despite perennial climate disasters and worsening climate conditions and extreme weather14

patterns due to climate change, the government has prioritized mitigation regardless of the15countries miniscule contribution to climate change.16

17

6.F. Economic development biased against indigenous communities and environmental 18

preservation19

20

The economic model dictates a development strategy that is naturally biased for urban21

communities and commercial activities, sidelining cultures and communities which was able to22

develop environmentally sound lifestyles.23

24

6.F.1. Unsustainable communities due to unequal distribution of essential resources25

6.F.2. Encroachment in ancestral lands and property26

6.F.3. Development aggression against IPs27

6.F.4. Commercialization of indigenous knowledge and Biopiracy (e.g. TRIPS)28

Consequences 29

The removal of IPs in a particular biodiversity area may lead to lost of a constituency which roots30

its cultural meaning and livelihood in environment protection31






7. Unrecognized and Neglected Reproductive and Care1

Economy2

3

The household is only seen as a consumer of goods and public services rather than a4

producer of valuable inputs and resources. Thus, with women being the primary 5dispenser of domestic work, womens contribution to the economy is largely in this6

hidden area of production that includes care work, voluntary or civil society activity,7

subsistence production and work in the informal sector.8

9

7.A. Non-compensation of Non-market or Domestic Labor 10

11

Since there is a lack of recognition of the reproductive economy and its contribution to society,12

there is no adjusted compensation for domestic labor, leading to marginalization of women in the13

households.1415

7.A.1. Lack of purchasing power of women and the unemployed16

Consequences 17

As most of the social goods and services can only be availed in the market, lack of purchasing18

power of the unemployed and household members engaged in domestic work generally leads to19

their:20

21

y Dependence on breadwinners for sustenance22

y Marginalization and disempowerment, since who produces have the most decision-making23powers in the household or the community24

Palliatives 25

y Health benefits of women as dependents of their husbands.26

27

7.B. Externalization of Public Good Costs to Families through Commodification28

29

The government, because of fiscal austerity measures, slowly delegates to the households the30

provision of public goods and services, putting further pressure to women which are unjustly31assumed by society to deliver those.32

33

7.B.1. Privatization of water [see 9.D.1. , 9.D.3. ] and power [see 10.A] services.34

7.B.2. Deteriorating public healthcare and under-budgeted education sector35






Consequences 1

The delegation to the households of goods and services that are previously subsidized by the state2

adds pressure for the household to earn additional income. This leads to:3

4

y Women having to take on extra work if expenses go beyond their budget.5

y Household members refraining from seeking medical care.6y Increase of drop-out rates in the education sector.7

Palliatives 8

y Programs that ease some households of education expenses, such as the Socialized Tuition and9

Financial Assistance Program (STFAP) of the University of the Philippines and the Government10

Assistance to Students and Teachers in Private Education (GASTPE).11

y Medical Insurance like PhilHealth as an attempt to establish universal healthcare12

y Lifeline Rate for electricity consumers.13

147.C. Absence of an institutional reproductive healthcare program15

16

Misconceptions on reproductive health derail the passage of the reproductive health bill in17

Congress which consequences are suffered by the mothers, the infants and the society in general.18

19

7.C.1. Lack of information regarding family planning and reproductive health20

7.C.2. Lack of reproductive healthcare services especially among the poor21

Consequences. The absence of an institutional reproductive healthcare program results to:22

y High maternal and infant mortality rates23

y High healthcare costs related to unwanted pregnancies24

Palliatives 25

y Limited reproductive healthcare programs by the Department of Health.26

27

7.D. Unfair distribution of work among genders in households28

29

The privatization of social services and the rising cost of living increase the pressure for more30 household income which increases the pressure for women to work but the expectation for them31

to perform their domestic duties does not change.32

33

7.D.1. Multiple burden for working women34

7.D.2. Lack of community/public services for needs such as child-rearing35






Consequences 1

The need to work in the productive sector to augment household income and the need to deliver2

unpaid reproductive labor results to:3

4

y Work status inequality among genders5

y Undue social, psychological, and professional stress on women6

Palliatives 7

y Rise of paid domestic work (kasambahay ) sector in well-to-do households in order to free8

some women individuals of domestic tasks. Then again, many of these workers are women,9

which are forced to be dislocated from their families.10

y Few mandated benefits for the employed women such as maternity leave.11






8. Crops and Fishes for the Global Supermarket 1

2

The focus of our crop production is the global market, not domestic need, thus causing3

hunger and environmental destruction. Agricultural activities are also not in line with4

sustainability principles, particularly because it interferes with the profit motive of 5

corporate and industrial agriculture.6

7

8.A. Corporate-driven Agriculture and Food consumption 8

9

Huge corporations dictate the price and quality of food to be produced, and also the price of 10

agricultural foodstuffs they buy from small farmers.11

12

8.A.1. Lack of land reform, and institutional support of agricultural reform communities13

8.A.2. Transnational and Multinational corporation-controlled food services sector14

Consequences 15

The lack of control of both producers and consumers on the production and distribution of food16

leads to:17

18

y Agrarian unrest and disincentives to agricultural production19

y Land use conversion since valuation of land is biased against agriculture [see 2.B.1. ]20

y Proliferation of standardized, globalized junk food21

Palliatives 22

Limited support on Organic Farming. The government, through the Department of Agricultural, is23

providing token support for the development of sustainable farming techniques.24

25

8.B. Stagnating Agricultural Sector due to low social priority, lack of government 26

support 27

28

Agricultural activity is not a socially valued activity, as reflected by low rural incomes and low29

government priority. This leads to an exodus of rural citizens to the cities, causing agricultural30

stagnation and overpopulation in the cities.3132

8.B.1. Low productivity in the agricultural sector33

8.B.2. Low income of agricultural workers and peasants leading to rural-to-urban migration34

8.B.3. Complete dependence of urban areas to food stuff overseas or domestic importation35






Consequences 1

y Domestic agro-industry, forcibly made to compete in the global market [see 8.E] fail to match2

food imports due to high-cost of production3

y Migration to the cities cause congestion and widespread urban unemployment as businesses4

fail to absorb increasing labor supply5

y High food prices afflict urban citizens, vulnerable as they are from radical price changes in the6global food market [see 8.E]7

Palliatives 8

y Programs to respond to widespread hunger such as the Accelerated Hunger Mitigation9

program in cooperation of DA and NFA are in place.10

y The existence of National Food Authority sells agricultural products at a lost in order to11

counter-act the market, but at the cost of indebtedness as it continuously conducts bond12

flotation for this.13

148.C. Ecologically-unsound Agricultural and Food Production System 15

16

Primarily because of corporate agriculture [see 8.A], agricultural practices run counter to17

sustainable ends, particularly as forest lands are converted to agricultural lands as urban areas18

grow [see 2.B.1. ].19

20

8.C.1. Monoculture21

8.C.2. Use of Genetic and Hybrid Technologies to produce crops for profit22

Consequences 23

y Environmental and ecological destruction in agricultural areas, including those which are24

responsible of giving farmers sources of income and livelihood25

Palliatives 26

y Support to Sustainable Development. Philippine Agenda 21 states policies to counteract27

environmental degradation, not just from agricultural practices.28

29

8.D. Conflict-ridden and Contested Agricultural Lands 30

31

Because of agricultural lands potential for profit-making in the global food supermarket, conflicts32

on land ownership remain prevalent. This is worsened by the fact that feudal social relations33

largely remain intact even with the conversion of landlords to capitalist land owners. This causes34

conflict and agrarian unrest on the one hand, and warlordism on the other.35






1

8.D.1. Unresolved insurgency and separatist problems in agricultural areas2

8.D.2. Landlordism and Warlordism endemic in rural areas3

Consequences 4

y Disincentivization of agricultural production as security issues are not yet resolved5

y Out-migration to safer areas, even those which are non-agricultural, leaving agricultural lands6

either untended or free to be converted to commercial lands by land-grabbers7

Palliatives 8

y Peace negotiations with armed insurgents and separatists. Limited concessions to economic9

and political demands.10

y Land reform-related land ownership settlements [see 2.A, palliatives]11

12

8.E. Liberalized and Deregulated, Food Security-based National Food System 1314

Food security paradigm argues that it is more fruitful for a country to engage in the exportation of 15

food that is demanded by the global market and to use the foreign currency exchange gained by16

buying cheaper food stuff sold by rich industrial nations. This leads to the decimation of the17

agricultural base and widespread hunger.18

19

8.E.1. Increased exportation20

8.E.2. Import-dependent commodities policy21

8.E.3. Agricultural liberalization22

Consequences 23

The liberalized setup at food leads to the exposure of small farmers, which is the main producer of 24

food in the country, to foreign competition. This leads to:25

26

y Agriculture trade decline as domestic agricultural base is decimated by foreign competition27

[see 4.A], relatively more profit due to higher price valuation on non-agricultural activities [see28

2.B.1. ]29

y Food insecurity, widespread and chronic hunger30






9. Grossly Neglected, Fragmented, and Ill-Governed1

Water Sector2

3

National policies on water were introduced on piecemeal basis as a response to peculiar 4

challenges of the times. This resulted in numerous government authorities being5mandated to deal with various aspects of water management, regulation and 6

development. The complex web of water-related institutions, coupled with an economic 7

policy of privatization, created a fragmented water sector that is both unresponsive to8

the needs of the people and not cognizant of their human right to water. The resultant 9

effect: water resource mismanagement, water quality crisis, and seasonal water quantity 10

crisis.11

12

9.A. Treatment of water as primarily an economic good 13

14While the Constitution declares all waters as part of the national patrimony and, as such,15

necessarily public good in nature, the government treats it as any other private economic good16

that must be subjected to the dictates of market forces. This implicit attitude towards water is17

betrayed by the governments long-standing neglect of the immediate concerns of the water18

sector while it relies on the entry private investment to solve the sectors problems. Water is19

allowed to be used on more productive activities at the expense of the basic human needs of 20

millions of people21

22

9.A.1. Lack of public investment in the protection and development of water resources23

9.A.2. Steady decline in overall support for public water provision service system24

9.A.3. Proliferation of small-scale independent providers of water25

Consequences 26

y Water systems are not geared towards meeting basic human needs, especially of the poor27

y Water is made available to recreational purposes such as swimming pools, golf courses and28

other leisure and amusement uses while there are still many in the nearby areas who lack29

access to water30

y Water provision is made a business more than a service31

Palliatives 32

y About 32 agencies are mandated to regulate water sector but they remain largely ineffective33

in carrying their mandates out34

y Enactment of the Clean Water Act of 2004 ( R.A. 9275) which signals a reaffirmation that35

water is a public good, but the law is yet to be strictly implemented36






1

9.B. Non-commitment to actual protection, management and development water 2

resources3

4

The government pays but lip-service to protection, management and development of water5

resources. The government is not even aware of the grave effects of climate change on water6 resources and supply. Accordingly, it does not have a comprehensive adaptation plan and program7

addressing climate change-related water problems8

9

9.B.1. Unabated de-forestation resulting in the diminishing holding capacity of watersheds10

9.B.2. Existing Framework and Plans on water resources protection, management and11

development are not implemented12

Consequences 13

y 90% of the official watersheds of the country are considered hydrologically critical14

y Only one-third of the countrys river systems are fit for water supply provision15y 58% of groundwater resources are found to be contaminated by untreated domestic and16

industrial wastewater17

y Waterborne diseases continue to be one of the main causes of death in the country, causing18

billions of pesos in lost income opportunity and hospitalization expenses19

Palliatives 20

y The NEDA came up with The Water Sector Roadmap in 2008 but there are now talks of 21

revising the Roadmap even before it is actually implemented22

y Enactment of the Indigenous Peoples Rights Act which, however, is more honored in its23

violation than its observance24

25

9.C. Numerous yet ineffective and uncoordinated water authorities resulting in a weak 26

institutional framework 27

28

There are at least 32 water-related agencies that have overlapping and sometimes conflicting29

functions. The sheer number makes it difficult to have a comprehensive, coordinated and30

integrated approach to the water sector. It also makes for a breeding ground for red tape and31

corruption.32

339.C.1. Difficulty in establishing an updated and accurate baseline of the water sector34

9.C.2. Lack of monitoring capacity of the National Water Resources Board (NWRB) and the35

Local water Utilities Administration (LWUA)36

37






Consequences 1

y Highly fragmented institutional framework2

y Difficulty in exacting accountability3

Palliatives 4

y NWRBs mandate is broadened to include formation, coordination and integration of all sub-5

sectoral water policies, but the agency remains incapacitated to perform its enlarged functions6

7

9.D. Increasing privatization of water provision service focused on bulk water supply 8

9

Privatization is viewed as the primary solution to the concerns of the water sector. The policy of 10

privatization is pushed by international financial institutions such as the World Bank and the Asian11

Development Bank and made a condition for the approval and release of loans. However, it seems12

that many of the technocrats are no longer just acceding to such imposed conditions, but have13

already bought the idea that privatization actually leads to greater efficiency, improved14management, and private investment expansion.15

16

9.D.1. Privatization of the MWSS through concessions with Manila Water and Maynilad17

9.D.2. Large-scale public-private partnerships in Tagbilaran City, Bohol and in Subic, Zambales18

9.D.3. NEDA Resolution No. 4 series of 1994 and its IRR urging the LGUs to adopt varying19

degrees of privatization of LGU-controlled water utilities20

9.D.4. Encouraging private sector participation (PSP) in bulk water supply and local water21

utilities, through BOT, JVA modalities22

Consequences 23

y Continued increase in rates contrary to the promise of privatization will necessarily lead to24

decrease in rates25

y The poorer sectors of the communities are not provided with water service simply because26

they cannot afford its price27

y Those who are not serviced either dig wells to tap groundwater (which most of the time leads28

to depletion, saltwater intrusion and ground sinking) or make illegal connections to the private29

providers pipelines (which are largely pointed as the cause of leak and wastage or non-30

revenue water)31

Palliatives 32

y Regulatory bodies are established to control private providers but these are either captured by33

the private interests or simply incapable performing their functions34

35






10. Abandoned Power Sector and Industry1

2

As mandated by the Electric Power Industry Reform Act (EPI R A), the power sector is3

thoroughly abandoned to the private sector, with generation and transmission firms4

privatized, the industry liberalized and opened up to foreign competition, and pricing5

deregulated. Demand-management is also lacking.6

7

10.A. Privatized and Private Sector-driven Power Industry 8

9

From the power crisis of the 90s forcing the government to give concessions to the new private10

sector players Independent Power Producers (IPP), after EPIRA, even the plants owned by the11

National Power Corporation (NPC) are now being privatized. This is with the view that the private12

sector knows better where and when to supply electricity [see 1.A.2. ].13

14

10.A.1. Privatization of NPC Plants to Generation Companies (GENCOs), IPP contracts to IPP15Administrators (IPPA)16

10.A.2. Sale of Transmission Corporation (TRANSCO) to State Grid of China and Monte Oro17

10.A.3. Oligarchic control of Manila Electricity Corporation (MERALCO)18

Consequences 19

Since the private sector is operating on the basis of profit, and because of the huge influence20

business titans have on government policy, a private sector-led power sector leads to:21

22

y Conversion of state monopoly in power to oligarchic control of few family-owned companies23

[see 1.A.2. consequences].24

y Private sector-led, foreign capital-driven financing [see 3.C] leads to debt accumulation. This is25

not mentioning the ballooning contingent liabilities by the national government due to26

sovereign guarantees.27

y Capital-intensiveness and huge affront costs of Renewable Energy (RE) preventing its28

development despite Philippine governments responsibility as a signatory to the Kyoto29

protocol to fight against climate crisis [see 6.E.1. ]30

Palliatives 31

y Attempts at energy planning through the Philippine Energy Plan as drafted and implemented32 by the Energy Family (DoE, NPC, PNOC, ERC, NEA, PSALM, TRANSCO, WESM), but this can only33

be implemented via an investment-attraction strategy34

y Performance Rate Based (PBR) replaces Return on Rate Based (RORB) Pricing Methodology35

supposedly to discourage inefficiency even in a lack of competition, but this has mostly been36






an excuse to recover investments because it allows full cost recovery plus an allowable return1

of investment of up to 12%2

3

10.B. Liberalized Ownership, Investments, and Management in the Power Sector 4

5

The power crisis of the 90s forced the government to liberalized investments in the power sector.6This policy is completed by EPIRA, which mandates the complete liberalization of industry, leading7

to the creation of new markets for each of the unbundled power subsector. This led to ineffective8

energy projections and management, with power supply swinging wildly from oversupply to9

under-capacity and vice versa. The state then fails to provide adequate, reliable, and cheap energy10

supply to industry [see 4.C.1. ], households [see 7.B.1. ], agriculture [see 8.A.1. and 2.B.4. ], etc.11

12

10.B.1. Unbundling of Generation with Distribution, Transmission, and Supply and dispersal of 13

ownership among the subsectors14

10.B.2. Granting Distribution Utilities (DU) direct transmission access to IPPs, some of which15

are crossly-owned16

10.B.3. Lack of regulation on bilateral contracts between GENCOs and DUs17

10.B.4. Lack of demand-side management due to growth-based economic models18

Consequences 19

The erosion of state capacity for central and coordination planning on power with liberalization led20

to:21

22

y Due to the absence of state participation in the power sector despite lackluster private23

investments, the power sector has been characterized by failed power supply and demand24

projection:25o Overpriced excess capacity from the contracts with IPPs that the Ramos administration26

entered into during the energy crisis in the early 199027

o Under-capacity in a period of climate crisis, with El Niño compromising our hydroelectric28

and hydropower multi-purpose dams [see also 6.C.2. ]29

y Lack of economies of scale which is a barrier to entry due to the erosion of NPCs vertical30

and horizontal integration31

Palliatives 32

y Huge private sector concessions to promote a risk-free investment climate, like sovereign33

guarantees and take-or-pay provisions, in order to attract energy investors (Ramos period)34y Cross-ownership of generation and distribution, which is a form of vertical integration, but it is35

for profit instead of welfare maximization.36

y Creation of a Supply Market, or the Wholesale Electricity Spot Market (WESM), which is to act37

as a balancing system between the excess capacity not contracted by GENCOs to DUs in order38






to ensure efficient linking of demand supply. This may have been the reason why WESM is not1

encouraged to replace bilateral contracts under EPIRA2

3

10.C. Politically-compromised, Incompetent, and Socioeconomically-detached Regulation 4

5

The Energy Regulatory Commission (ERC) is supposed to be the primary check against corporate6pricing abuses in a privatized power industry, but because it is politically appointed, its capacity to7

do so is compromised. Moreover, those who are appointed lack the competence to do their job.8

But even its very mandate is detached to social and economic goals, which are absent to begin9

with.10

11

10.C.1. Regulators are appointed by the President irrespective of regulation experience [1.D]12

10.C.2. Lack of stated social and economic development goals [see 1.A.1. ] with which13

regulation is supposed to be anchored on and biased to14

Consequences 15

y Regulatory capture, as regulators are usually political appointees of elected officials vulnerable16

to pressure from power capitalists [see 1.B]17

y Erosion of social welfare, as regulation does not consider consumers general capacity to18

purchase electricity [5.A.1. ]19

y Electricity pricing is biased against households (and thus against women, because the role is20

ensuring essential services devolves to them [see 7.B]), because they are the ones which21

cannot pass the cost to other social entities, unlike firms which can pass the cost to consumers22

Palliatives 23

y The granting of fiscal autonomy to the ERC ensures that it is not that politically dependent on24

the Department of Budget and Management (DBM) and the House of Representatives (HoR)25

for its operational budget26

y IFI-financed Capacity Building and training for the ERC, especially ones financed by the Asian27

Development Bank (ADB)28

29

10.D. Undemocratic and private sector-centric/ -dependent power sector in the LGUs30

31

Power services in the grassroots are delivered undemocratically, are heavily influenced by, and are32

heavily dependent to, private sector activities. This provides opportunities for rent-seeking33

opportunities, while increasing prices and costs of electrification.34

35

10.D.1. Privatization of Rural Electric Cooperatives (REC) through Investment Management36

Contracts (IMC)37




10.D.2. Undemocratic management of existing RECs1

10.D.3. Slow pace of National Electricity Administration (NEA) in rural and barangay2

electrification3

10.D.4. Allowing Third Parties, instead of DUs/RECs to provide missionary electrification4

10.D.5. Private distribution utility for Metro Manila (MERALCO)5

Consequences 6

y Low rural productivity due to lack of electrification [see 8.B.1. ]7

y High electricity prices in the rural areas due to lack of regulation8

y Costly and profit-oriented missionary electrification9

y Presence of rent-seeking activities in the rural electric public utilities, even those controlled by10

cooperatives and the local government 11