REVIEW OF RELATED LITERATURE AND STUDIES

LOCAL LITERATURE

FIRST moves and first impressions count big. In a new administration, they

lay groundwork for overarching goals and strategies. They also set the tone

that tells the government and the nation at large how the new leadership

really operates. Get the first 100 days wrong, and it could mess up the next

six years.

So in drawing up initiatives for his first 100 days in office, President

Rodrigo Duterte would do well to learn from his predecessor’s opening

moves—and how they led to big failings in the six years of the Aquino

presidency.

Aquino’s original sins

President Benigno Aquino 3rd burdened his rule right from the start with

several unforced errors right in his first few months:

• Aquino constantly defended and refused to sanction cronies, starting with

shooting buddy Interior Undersecretary Rico Puno for the Aug. 2010 Luneta

hostage crisis.
• Aquino openly flaunted the law and disdained judicial restraints, starting

with his first Executive Order and leading to the illegal Disbursement

Acceleration Program.

• Aquino let jueteng and smuggling flourish, fueling graft and lawlessness,

by restraining gaming nemesis Secretary Jesse Robredo and Customs

reformer Guillermo Parayno.

• Aquino refused to implement the June 2010 Disaster Risk Reduction Act’s

mandate to create a billion-peso calamity response and preparedness agency.

• Aquino was averse to regular Cabinet meetings, leading to slow

infrastructure implementation and chronic underspending.

Let’s look at these boondoggles one by one.

Double-standard Daang Matuwid

Aquino put politics above all, so even Daang Matuwid was skewed. Under

his anti-graft policy, adversaries were excoriated, prosecuted and punished.

But his classmates, allies, and shooting buddies (KKK by their Filipino

initials) were spared investigations and sanctions.

Result: presidential associates could be caught in sensitive or even illegal

situations without fear of presidential censure. Thus, gaming czar Cristino

Naguiat, Jr. wasn’t even investigated for a Macau family junket illicitly
funded by a casino magnate, and Liberal Party stalwarts even got Aquino

bail money in their graft cases.

The double-standard Daang Matuwid extended to matters of law, which

could be flouted for presidential ends. Aquino’s first EO was voided for

targeting the previous administration. The Supreme Court suggested making

the EO applicable to all past regimes, to comply with equal protection under

the law.

Aquino dismissed the High Court’s advice, and that arrogant disdain for

legal strictures marked his presidency. His legal excesses reached their

height with the Disbursement Acceleration Program usurping Congress’s

power of the purse. Yet despite the Supreme Court itself noting that DAP

funds “were allocated to [programs and projects] not covered by any

appropriations” in the budget, Aquino insisted he was right.

Unleashing the lawlessness scourge

If those first two failings did not directly harm many Filipinos, the next two

did: Aquino’s willful abetting of jueteng and smuggling, and his refusal to

create and fund a billion-peso calamity agency as provided by the National

Disaster Risk Reduction and Management Law.

The flourishing of illicit gambling and contraband spurred the explosive

growth of lawless groups and their cohorts in government and police. Thus,

crime incidents tripled from 324,083 in 2010 to more than a million a year
since 2013—spawning the nationwide fear of lawlessness, even among the

affluent and educated, which propelled Duterte to his landslide victory.

Aquino himself triggered the jueteng and smuggling surge by shielding

these illicit activities from two proven nemeses: then-Local Government

Secretary Robredo, who wiped out the numbers game in Naga City; and

former customs and revenue chief Guillermo Parayno, hired by the

International Monetary Fund as customs reform consultant for his success at

the ports.

Aquino took the Philippine National Police away from Robredo’s

supervision and placed the PNP under Undersecretary Puno, named by

Archbishop Oscar Cruz as “ultimate recipient” of jueteng payoffs. And after

interviewing Parayno for Customs, Aquino gave it to others, then looked

away as contraband trebled to $26.6 billion in 2014. Plus: 2,000 uninspected

containers vanished in 2011, many probably with guns and drugs.

The do-nothing President

If letting jueteng and smuggling flourish inflicted crime and drugs on

Filipinos, Aquino’s refusal to create a national disaster agency exacerbated

calamity.

The NDRRM Act, crafted with input from leading disaster experts here and

abroad, envisioned a billion-peso entity similar to America’s formidable

Federal Emergency Management Agency.

Aquino never implemented this provision of the law, which would have

greatly enhanced disaster preparedness, response and recovery at both

national and local levels. Also unfunded was the billion-peso People’s

Protection Fund, legislated under Aquino for projects safeguarding

communities threatened by disasters triggered by climate change.

Also affected by Aquino’s so-called “Noynoying” style were infrastructure

projects marked by long delays, even his pet public-private partnership

initiatives. And these hold-ups began with Aquino’s lack of enthusiasm for

Cabinet meetings.

With little presidential follow-up, public works spending halved for the first

time in 2011. Even the vaunted PPP, which Aquino played up in his first

State of the Nation Address in 2010, suffered interminable delays. Thus, for

all our growth, the country remains an infrastructure laggard.

Five moves for Duterte’s first 100

So what should the next Malacañang man do to correct the incumbent’s

failings?

First, draw up a code of conduct for presidential appointees, drawn from

similar norms and standards set by Transparency International, the World

Bank, and similar high-integrity entities. Then create a Presidential

Transparency Commission with both Palace and non-government members,

to monitor compliance with the code.

Second, convene the Judicial-Executive-Legislative Advisory Council,

created during the Arroyo administration, to restore mutual respect among

the co-equal branches of government and affirm the Duterte administration’s

commitment to the rule of law.

Third, implement the NDRRM Act’s mandate for a billion-peso disaster

agency and the People’s Protection Fund projects, with a supplemental

budget for 2016, if necessary.

Fourth, revive the Palace body monitoring major projects during the Estrada

and Arroyo administrations, with regular reports at frequent Cabinet

meetings.

Fifth, include jueteng and smuggling in the war against lawlessness, for

those illicit activities corrupt law enforcers and border authorities and fund

crime groups. (Saludo,R. (2016, May 18) First 100 days: Correcting

Aquino’s mistakes, The Manila Times)

In the Social Weather Stations (SWS) survey released on Wednesday,

October 5, 2016 President Rodrigo Duterte  garnered a “very good”

satisfaction rating for his first three months of service as the country’s

president.

The survey, which was first published in BusinessWorld, showed that the

president gained a +64 net satisfaction or “very good” rating in the first

quarter.
Meanwhile, Communications Secretary Martin Andanar said Duterte’s high

satisfaction rating was not surprising since he was overwhelmingly elected

in the May 9 polls “on the strength of his platform of tunay na pagbabago

(real change) anchored on a strong anti-drugs, anti-crime and anti-corruption

agenda.”

With a net rating of +64, it showed that 76 percent of Filipinos were

satisfied with Duterte’s performance so far, while 11 percent were

dissatisfied. The remaining 13 percent marked that they were undecided.

Compared to former President Benigno Aquino III’s +60 net rating,

Duterte’s ranking was higher during the same period of his administration.

According to Presidential spokesman Ernesto Abella, this just showed that

Filipinos trust what the president is doing.

A former national security adviser went on to describe Duterte’s first 100

days in the office as ‘exceptional.’

Former National Security Adviser Jose Almonte recognized the president’s

achievements in solving the country’s “internal war, broken politics and the

business which is monopolized by few.”

However, he suggested that Duterte should tone down his verbal attacks and

insults, which may distract the public from the real problems of the country.
“The other concentration which distracts the nation is the colorful language

of the president. To me, these are, trivial things; we can correct this,”

Almonte said.

Crime operations

In his public speeches, Duterte has continuously lambasted the United

States, the United Nations, the European Union, and international human

rights groups who have criticized him for the alleged spate of summary

killings in relation to his war against illegal drugs.

“Even the president may not realize that is not good. I am hopeful he will

change when the time comes,” Almonte said, adding that toning down the

colorful statements would be a “big change.”

Since taking office at the end of June, 1,390 drug suspects were killed,

22,791 arrested and 734,231 surrenderers, according to the Philippine

National Police (PNP)’s official record as of 6 a.m. on October 6.

The deaths have garnered criticism from human rights groups and

international community, including the U.S., EU and UN.

Asked for an assessment regarding the government’s campaign against

illegal drugs, PNP Chief Director General Ronald “Bato” dela Rosa said the

administration is winning the battle so far.

“One sentence. We are winning the war on drugs. We are winning,” he

noted on Monday, October 3.

The economy

“We just like to say that the president is off to a very good start.

Piggybacking on that is the World Bank report that Philippine economic

growth is expected to accelerate to 6.4 percent (this year),” Abella said.

He also mentioned that the investment commitment in the country this year

has so far soared 200 percent to P51 billion from P17 billion last year, citing

a Board of Investments report.

Within Duterte’s first 100 days of service, the Philippines Stock Exchange

(PSE) index reached its second-highest close but eventually trimmed down

as foreign investors sold some of their holdings in the stock market for 24

consecutive sessions starting August 23.

At the same time, the Philippine peso has declined P1.225 from its 47.06

finish in 2015. Budget Secretary Benjamin Diokno, however,  said the

peso’s decline should not cause any alarm as it would boost the value of

dollar remittances instead.

“The present government actually had a short honeymoon period with

reference to the market,” Justino B. Calaycay, Jr., head of marketing and

research at A&A Securities, Inc., told BusinessWorld through e-mail.

Some economic analysts said that the decline was attributed to Duterte’s

threat to cut ties with the America.

“From an investor’s point of view, there was only one clear message from

the new administration and that was Mr. Duterte will be swift in making the

Philippines globally competitiveness.”  said Cristina S. Ulang, research head

at First Metro Investment Corp., according to a BusinessWorld report.

Meanwhile, amid Duterte’s verbal attacks, European Union ambassador to

the Philippines Franz Jessen said European businessmen remain keen on

investing in the Philippines, particularly in the area of energy.

Jessen said part of his task “ is to understand changes, new ideas and views”

of the Philippines as the host country.

Transportation affairs

Adding to the list of Duterte’s achievements, the Department of

Transportation said there were lesser flight delays now.

Bobby Lim, the undersecretary for aviation, noted that the general aviation

from the Ninoy Aquino Aquino International Airport helped the increase of

on-time arrivals from 47 percent to 71 percent. No more incidents of the

bullet-planting scheme have been recorded as well.

Meanwhile, Undersecretary for Train Noel Kintanar said the waiting time

between trains at the Metro Rail Transit was reduced to from five minutes to
four-and-a-half minutes. The number of breakdowns was also lessened,

according to him.

The Manila traffic jam, however, was difficult to fix in 100 days,

Transportation Secretary Arthur Tugade said.

Currently, Duterte is seeking emergency powers from Congress to ease the

heavy traffic that results in an estimated P2.4 billion in economic losses

daily.

One-stop service center for OFWs

Duterte, who said he “hated to see Filipinos lining up and waiting,” made

several changes and new policies the affairs of overseas Filipino workers

(OFWs).

One of his promises during the election campaign was streamlining

government processes,  which he started to fulfill through the establishment

of one-stop service centers.

“I asked [Labor Secretary Sylvestre] Secretary Bello to rent a building that’s

for overseas concerns only. Put everything there: BIR, police clearances…in

the building with booths. The Filipino will only be going around that one

building,” Duterte said during his first State of the Nation Address (SONA).

In its accomplishment report on the first 100 days, the Philippines Overseas

Employment Agency said the centers have so far served a total of 88,351
OFWs, with the help of the Department of Labor and Employment (DOLE),

since its opening.

By August 15, 2016 the government started issuing new passports with

added security features, as announced by Presidential Communications

Office (PCO) head Martin Andanar, which was also  initiated by the

previous administration, led by former President Benigno Aquino III.

The issuance of these new passports will be faster by 35 percent will allow

the delivery and printing of a passport within only five days.

“While the Duterte administration’s performance in the past three months is

exemplary, this is not the time for complacency. There is much work to be

done not only in eliminating the scourge of illegal drugs and crime, but also

in fighting poverty and improving the lives of the underprivileged and the

powerless,” Andanar said in a statement.

“More than ever, we ask for the full support of all Filipinos behind the

president’s reform agenda so that we can achieve lasting peace and

prosperity in the years ahead,” he added. (Sioson, D. (2016, October 8),

Duterte’s first 100 days: a progress report on the economy, war on drugs,

Asian Journal)

President Rodrigo Duterte has constantly reassured the public of his promise

to sustain the previous administration’s momentum for social development

as well as to confront the challenges it failed to address by introducing

radical changes. Although the first few months of his term was spent on

making true his campaign promise on a war on drugs, Duterte, in his first

State of the Nation Address in 2016 articulated the broad strokes of his

administration’s social development agenda: to improve the people’s

welfare in the areas of health, education, adequate food and housing, among

others.

The 2017-2022 Philippine Development Plan (PDP) fleshed out Duterte’s

pronouncements into actual strategies and programs the government intends

to pursue in the next five years. Banking on people’s aspirations, it intends

to establish a distinct national vision/framework for development, setting it

above the inclusive growth model promoted by the last administration.

Highlighting the human development approach, the PDP aims to implement

government “policies, plans and programs anchored on the people’s

collective vision” to uplift the living conditions of every individual, induce

the expansion of the middle class and achieve a society “where no one is

poor.”

The growth objectives presented in the PDP however are not entirely as

people-centered as they appear. Similar to its predecessor, there are clear

manifestations towards broadening private sector involvement, as well as

facilitating connection to local and global value chains. While this is not

entirely wrong in the economic/growth discourse, private investments

particularly in the delivery of essential social services often lead to

privatization and has not exactly worked for the poor in terms of

accessibility. These contradictory goals put into question how Duterte

intends to confront social development challenges. Will the public still see

the radical changes he promised?

Distinct or Similar?

Development is not only measured through economic gains but also through

improvements in well-being and living conditions. Enhancing capabilites (or

what a person can be or can do in life such as being healthy or owning a

home), provide individuals better opportunities to transcend poverty. The

other view is that it is important to develop a person’s capability because it

has economic value4 and interventions are seen as capital to fuel economic

growth.

The AmBisyon 2040 is supposed to sum up the living aspirations of most

Filipinos. Based on a survey conducted by the National Economic and

Development Authority (NEDA) before crafting the PDP, four out of five

Filipinos want a simple and comfortable life, which means enjoying a

middle class lifestyle such as owning a house (and a car) and having enough

savings to afford education, health and other leisures such as travelling for

vacations abroad. Also, three out of eight priority agenda in the AmBisyon

2040 pertain to social development and the extension of government

services5 for housing, education, and health to every individual. Thus,

enhancing the potentials of Filipinos is at the very core of the PDP’s 10th
chapter on “Human Capital Development” which also interprets human

development not just a means to an end, i.e. for capitalist production, but as

an end goal itself. But does this distinction signal a complete departure from

the old strategies and thrusts for social services delivery?

Financing, accessibility, and delivery networks are key factors in the

delivery of public health service. Same with education which should also

focus on access and relevance to industry growth. The housing sector also

defined outcomes related to accessibility, but with the added feature of

integrating the anti-drug campaign in communities. Based on NEDA’s

assessment in the PDP, there are milestones in terms of achieving targets

based on the indicators posted by the Millennium Development Goals, but

several gaps in terms of accessibility and the quality of services delivered

still have to be met. For health, the increase in the number of health facilities

have resulted in the lack of health professionals deployed in communities

and budget to sustain medical equipment and supplies. For education, net

enrollment rates increased under the Aquino government, but the quality of

education suffered due to imbalances in student-learner ratios as well as

insufficient learning facilities. For housing, the direct housing assistance

increased outputs, but were dampened due to the lack of social impact

assessments, leaving thousands of houses in several resettlement areas

unoccupied.
Continuity is essential to progress. But does the need to address persistent

social problems equate with the adoption of past development models?

Looking closer at several key interventions in social development presented

in the current PDP such as the expansion of service delivery networks and

health financing, improvements in the quality of technical and higher

education for global competitiveness and the increase of direct housing

assistances, one could find resemblances in strategies and programs with

those of the PNoy government’s. But the radical changes Duterte has

promised in terms of health, education, and housing are somewhat missing,

if we compare to the amount of rigor that went into framing other “priority”

programs such as infrastructure and the war on drugs. While others may find

fault there, 52 percent of Filipinos, according to a recent Social Weather

Station survey7, still believe that Duterte will honor his pronouncements,

such as the universal access to quality tertiary education or a universal

‘Cuban Style’ health care system. Based on these observations on the PDP,

we can can take the view that the Duterte administration might not radically

differ from past governments’ social development agenda. Whether or not

government targets will be met or again missed depends on how bottlenecks

in implementation as well as policy and budget gaps are addressed.

What the Budget Says

Having a vision is one thing, and providing the necessary budget towards

realizing it is another. And from what the 2017 General Appropriations Act

reveals, there is a gap between the promise of social development in the

PDP and what we can expect. For education, a six percent8 automatic
appropriation of the country’s gross domestic product (GDP) is needed to

realize the promise of free tertiary level education. Although both the Senate

and the House of Representatives has passed the bill granting full tuition

subsidy for students in state universities and colleges, the budget for

operationalizing this has not been reflected in the 2017 budget. For public

health services, an additional 57 billion is needed to bring the doctor to

patient ratios9 near the Cuban Health System or even the World Health

Organization standards, according to former appointee Health Secretary

Paulyn Ubial10. For housing, Vice President and former Housing and Urban

Development Coordinating Council Chief Leni Robredo said the “gold

standard” target is two to five percent of the GDP in order to close the gap

of 5.5 million housing units the previous administration left in socialized

housing, or to build some 2,600 units per day.

Based on the 2017 GAA, what the government has allocated is a far cry

from reaching the promises/ambitions of the Duterte government for health,

education, and housing. The education budget is at 637 billion, with the

Department of Education receiving the highest among all government

agencies at 544 billion, registering a 32 percent growth increase from the

previous year. The Commission on Higher Education budget also increased

by 237 percent at 18 billion. But the total budget for public education is still

only two percent of the GDP and is almost equal to the combined budget for

the military and police, though lower than the budget for infrastructure

development. In addition, both NEDA director general Ernesto Pernia and

budget secretary Benjamin Diokno admitted that the government cannot

afford the 100 million budget streamlined for the free college education

bill11.

Although the health budget increased by 19 percent at 149 billion compared

to the previous year’s, more than 50 billion was allocated to expand health

financing under Philhealth. While the government aims to improve health

access of the poor, the budget for service delivery networks was cut by 10

percent, and only 7 billion is alloted each for Health Human Resource

Development and the Doctors to the Barrio Program, which would not meet

the amount needed to close the doctor-patient ratio gaps.

The housing sector suffered deep budget cuts as well, down by 54 percent to

15 billion, which will be shared by the National Housing Authority, Social

Housing Finance Corporation, and the National Home Mortgage Finance

Corporation, and the Housing and Urban Development Coordinating

Council which is now under the Office of the Cabinet Secretary. This is

despite the huge housing backlog of 5.5 million units12, plus the 1.5 million

target for direct housing assistance under the 2017 PDP.

While Duterte has set the bar high through these promises, how they will

become reality is not very clear when the budget is used as indicator, even if

only for this year. The 2017 budget’s priorities are: peace and security,

infrastructure development, and the war on drugs.

Legislative Support

The legislative agenda presented for social reforms under the present PDP

seems to lack the radical shifts towards attaining the promises pronounced

by Duterte for health, education, and housing. Even notable policies such as

the passage of the National Land Use Act, the Idle Land Tax Bill, the

Philippine Qualifications Framework Bill, and the National Mental Health

Care Delivery System have been inherited from past Congresses.

This does not mean, however, that the government will not pursue future

policy reforms. But in terms of numbers, the government must have been

either selective or realistic on what policies they want the PDP to endorse.

Given that the PDP presents a space to put forward the policy foundations

needed to reinforce government goals and ambitions, it only endorses 14

new policies for three sectors compared to the 13 policies endorsed only for

infrastructure development. These policies also appear to be less exhaustive

compared to those proposed under infrastructure development.

For education, priorities have transcended basic education to include

improving the quality of mid-level to higher education, as highlighted by the

Philippine Qualifications bill and Apprenticeship bill. For health, the

government seems to lean towards population services, highlighted by the

Local Population Development Act and the Prevention of Adolescent

Pregnancy Act. It is also important to note that the only policy agenda

endorsed by the plan for expanding health human resources are

Amendments on the Barangay Nutrition Scholar program. For housing, the

legislative agenda remains addressing the structural/systemic discord in

housing services through the creation of the Department of Housing and

Urban Development and the Socialized Housing Development Finance

Corporation, and the passage of the Comprehensive Shelter Finance Act—

all of which have already been filed and refiled numerous times.

Creeping Privatization

In Aquino’s PDP and economic policies, we have witnessed the expansion

of private sector collaboration through the promotion of Private-Public

Partnership (PPP) agreements. The same could be expected in the current

PDP assuming that it remains “cognizant of the private sector’s efficiency

and innovativeness,” further stimulating private sector participation in

improving the quality and sustainability of its projects.

For education, private sector involvement is apparent on “updating course

programs and the alignment of domestic regulations for the ASEAN

Qualifications Reference Framework (AQRF), as well as in scaling up

technical and vocational training programs.” For health, private provider

participation will be “harnessed and coordinated when planning Service

Delivery Networks, implementing interventions, and securing supply-side

investments.” For housing, key shelter agencies are prompted to involve

private stakeholders in crafting the National Resettlement Plan and to secure

additional financing from the private sector to attain the expanded targets for

socialized housing services.

In the current PDP, too, there are clear linkages between the government’s

strategy in enhancing the quality of education to be more responsive to

industry needs and private sector involvement in developing curriculums in

the name of pursuing “leading-edge, commercial-ready innovations.” The

PDP also states that the government also devise performance measures,

incentives, and rewards for universities who collaborate with industry

partners. While the number of Higher Education Institutions (HEIs) in the

Philippines is 10 times more than in its neighboring countries, it falls short

in producing innovators with a ranking of 74 out of 128 in the Global

Innovations Index.13 According to the PDP itself, this is caused by the

increasing number of commercialized HEIs that use curricula that are

misaligned with the Commission on Higher Education’s standards and

policies as well as privileging of business interests over quality

considerations. On the other hand, with 4,486 private schools offering senior

high school, compared to 220 non-DepEd public schools, private education

subsidies have already reached P23 billion in 201714, to accommodate K to

12 spillovers. The Voucher Program however has been mired in controversy

due to the lack of accountability15, especially from private institutions that

receive subsidy.
Private hospitals greatly outnumber government hospitals, particularly those

with higher service capabilities.16 This basis alone, interventions therefore,

to reduce “out-of-pocket” sources which highlight the thrusts of the 2017-

2022 Philippine Health Agenda can be seen as a profitable arrangement for

corporations engaged in the health sector. In addition, the incumbent health

secretary also declared that at least 33 of the 72 public hospitals will be

privatized to gain financial autonomy17. This strategy would further deprive

the poor of health care services since, in the name of financial viability,

corporations will still require patients to pay on top of government

subsidies. In 2016, the Philippine Institute for Development Studies

observed lower health service utilization in areas where the private sector

had increasing role. In that same year, the Commission on Audit found that

the Health Facilities Enhancement Program had roughly 1.1 billion due to

“idle and/or unutilized hospital buildings, facilities, and equipment, among

others.” Given the strategy to tap private investments for improving service

delivery networks outlined in the PDP, the HFEP is in danger of being a

vehicle for privatization by entering into public-private partnerships to

improve facilities and equipment.18

In 2012, the Subdivision and Housing Developers Association presented to

the Board of Investors their 2012-2030 Philippine Housing Industry

Roadmap with calculations of the economic impact of private business

investments for socialized housing; with 2.3 jobs created for every million

invested, and for every peso invested, a 3.32 value multiplier for local
businesses as well as a .047 income multiplier and 3.90 pesos tax

multiplier for each household. While this only expounds the rationale behind

private investments on socialized housing, the Ibon Foundation has warned

that private developers will continue to amass profits from socialized

housing through guaranteed payments from the government and that these

socialized housing units will remain unaffordable and unattainable for many

despite government-private sector collaboration to lower amortization costs.

Whose Development?

Kayong mga Pilipino nakikinig sa akin ngayon. Magpa-hospital kayo, ako

ang magbayad, tutal hindi man nila ako mademanda. [To all Filipinos

listening to me now. Go to hospitals, I will pay for it. Anyway, they won’t

be able to sue me.] – said President Duterte in his 2017 State of the Nation

Address.

Duterte is ambitious in envisioning the delivery of a holistic social

development package, responsive to the aspirations of every Filipino and

founded on improving the living conditions of the poor. Fleshing out these

ambitions, however, remains a challenge especially when the 2017-2022

PDP merely escalates the strategies and programs of the previous

administration for social development.

The human development approach in the delivery of education, health, and

housing services is a welcome change, along with the emphasis of

increasing quality, accessibility, sustainability, and innovativeness. The

litmus test for this is addressing budgetary and operational impediments,

which the government plans to do through private sector involvement,

which is nothing new, much less radical.

Human capital development, although government has explicitly defined it

as improvement of individual capacities as an end in itself, will inevitably be

more targetted based on the economic value an individual could possibly

generate. Human as Capital, in sum, is wealth viewed not as an end in itself

but as a means to more wealth, something which the PDP embodies as it

factors in industry participation, private sector investments and

collaboration, and competitiveness as part of intended interventions and

outcomes. By deliberatelty continuing the same strategies and programs

found in the previous PDP, public investments made by the government will

always be weighed by the economic outcomes.

There are both gains and losses in engaging in PPP, but the government

should veer away from inviting business interests and profiteering in key

programs that uplift the dignities of its citizens. Instead, it should focus

more on effective and responsive program implementation as well as the

timely and proper allocation, disbursement, and utilization of public funds.

Baladad, R. (2017, September 6) Duterte’s Social Development Agenda:

Radical Change or Business as Usual?, Focus on the Global Sout )

In the Philippines, a deeply rooted and pervasive culture of migration has

made moving abroad common, acceptable—even desirable—as an option or

strategy for a better life. For decades, sizeable numbers of Filipinos have left

home in search of permanent settlement or temporary work overseas, trends

long attributed to the fragile economy (and exacerbated by frequent natural

disasters). Today, more than 10 million Filipinos—or about 10 percent of

the population—are working and/or living abroad. While a markedly

improved economic situation in recent years has not diminished the

outflows, it has allowed the country to move beyond its longstanding labor

migration policy to incorporate migration into long-term development

planning and strengthen the return and reintegration of overseas Filipino

workers (OFWs).

When the Philippines launched an overseas employment program in the

1970s, the thrust was finding labor markets: The state not only promoted

Filipino workers to the oil-rich but labor-short Gulf Cooperation Council

(GCC) countries, it also sold these uncharted Middle East destinations to

Filipinos. By the latter half of the 1970s, as deployment and competition

with other origin countries increased, surfacing labor migration problems

(including poor working conditions and abuse by employers) prompted the

government to address migrant welfare and protection. As destinations

diversified and women joined the labor migration flows, the protection

aspect assumed more importance.

The government subsequently developed a number of institutions, laws, and

policies aimed at enhancing the protection of OFWs and their families,

spurred on by civil-society advocacy. This dual approach of facilitation and

protection contributed to making the Philippines a major source country of

workers and talent for the global labor market, while also providing

protection to OFWs. The “success” of this approach, however, may have

trapped the Philippines into complacency: Large, steady flows of

remittances have become the country’s lifeline. The Philippines ranks third

after India and China as major recipients of remittances. In 2016, the

country received US $26.9 billion in money transfers, according to the

Central Bank of the Philippines. There are concerns that reliance on

remittances may have delayed the implementation of needed reforms.

Recent attempts to link migration policies with development policies

demonstrate a remarkable shift in governance in the Philippines, earning

positive reviews from the international community. After several boom-and-

bust decades, in the 2000s the Philippine economy entered a period of

impressive growth: Between 2011 and 2016, gross domestic product (GDP)

grew by an average of approximately 6 percent yearly, and the economy

proved resilient through political crises and transitions. Nonetheless, the

positive economic news has not slowed or halted emigration. This is likely

because Filipinos have more resources to migrate, and though the economy

has grown, unemployment has yet to be tempered. Thus, sustainable

development that provides decent work opportunities continues to elude the

Philippines. This country profile examines the evolution of migration

policymaking and trends over the past several decades and through the

present administration of President Rodrigo Duterte.

Background: The Centrality of the United States in Early Filipino

Migration

After more than three centuries of Spanish colonial rule, the Philippines

became a U.S. territory as a result of the Spanish-American War in 1898.

For much of the 20th century, "international migration" for Filipinos meant

moving to the United States and its Pacific territories.

The first batch of Filipino workers arrived in Hawaii on December 20, 1906

to work on sugarcane and pineapple plantations. More workers, mostly

single men, followed; others left Hawaii to work in agriculture in California,

Oregon, and Washington, or the salmon canneries of Alaska. On the

mainland, low-wage service work in the cities provided income between

agricultural seasons or when other jobs were not available. Some 4,000

Filipinos were employed in the merchant marine, but this employment

possibility ceased with the Merchant Marine Act of 1936 requiring the crew

of U.S. flag vessels to be at least 90 percent American citizens.

Box 1. Definitions

Overseas Filipinos is the term encompassing all Filipino migrants, whether

permanent or temporary, legal or unauthorized.

Overseas Filipino Workers, or OFWs, represent a subset of Overseas

Filipinos, and are temporary migrants. The OFW term is commonly used, a

further sign of the pervasive role that labor migration occupies in Philippine

society.

The Commission on Filipinos Overseas includes the following categories of

migrants in its stock estimates:

 Permanent Migrants - Filipino immigrants and legal permanent

residents abroad, Filipino spouses of foreign nationals, Filipinos

naturalized in their host country, Filipino dual citizens, and their

descendants.

 Temporary Migrants – Filipinos whose stay overseas, while

regular and properly documented, is temporary, owing to the

employment-related nature of their status in their host country.

Include land-based and sea-based Filipino workers, intracompany

transferees, students, trainees, entrepreneurs, businessmen, traders,

and others whose stay abroad is six month or more, and their

accompanying dependents.

 Irregular Migrants - Filipinos who are not properly documented or

without valid residence or work permits, or who may be overstaying

their visa.

Estimates place the number of Filipino workers coming to the United States,

chiefly to Hawaii, between 1906 and 1934 at 120,000 to 150,000. A small

number of scholars, known as pensionados, also migrated to the United

States before the 1920s. They were typically either sponsored by the U.S.

government or by missionary-related programs. Some returned and assumed

important positions in Filipino society, while others remained in the United

States.

Because the Philippines was a U.S. colony, the movement of Filipinos to the

United States was considered internal migration. As U.S. nationals, Filipinos

could enter and leave the country freely, but could not access citizenship. It

was not until the passage of the 1934 Tydings-McDuffie Law, which

provided for the granting of Philippine independence within ten years, that

the Philippines became subject to immigration quotas, and Filipinos in the

United States became aliens. The law limited the Philippines to 50 visas per

year, and migration dropped off dramatically. But even so, there was an

exception clause: In case of a labor shortage, the governor of Hawaii was

authorized to hire Filipino workers. World War II intervened and further

migration to the United States stalled, until the Philippines became

independent in July 1946.

Following passage of the 1965 Immigration and Nationality Act, which

struck down nationality-based restrictions, Filipino immigration grew and

diversified. Other countries of settlement also dismantled their pro-European

immigration policies in the 1970s, paving the way for Filipinos to enter

Canada, Australia, and New Zealand under family- or skills-based

provisions. The Philippines eventually became one of the top ten origin

countries in these traditional immigration destinations.

This permanent migration, however, was overshadowed by the larger and

thornier temporary labor migration that started in the 1970s. Although the

Commission on Filipinos Overseas (CFO) estimates the stock of permanent

migrants (which includes Filipinos born overseas; see Box 1) is larger than

that of temporary migrants, the country’s migration policies have focused on

the significant annual outflows of temporary workers, their distribution

throughout the world, and the myriad related issues.

Becoming a Source Country of Workers

A number of factors led to the ascent of the Philippines as a major labor

exporter in Asia and worldwide. When large-scale labor emigration began in

the 1970s, the push factors—already quite strong—were worsened by the

1973 oil crisis. Economic gains could not keep pace with population growth,

and the country was hard pressed to provide jobs and decent wages while

grappling with severe balance of payment problems.

At the same time, the GCC countries needed workers to realize their

ambitious infrastructure projects. With supply and demand converging, the

Philippines was ripe for large-scale labor migration, an opportunity the

government of Ferdinand Marcos recognized. In 1974, the Labor Code of

the Philippines established the framework for what became the

government's overseas employment program.

The Philippines' foray into organized international labor migration was

supposed to be temporary, lasting only until the country recovered from its

economic problems. However, the ongoing demand for workers in the GCC

countries and the opening of new labor markets in other regions, especially

in East and Southeast Asia, fueled further migration. On the supply side, the

push factors did not abate. Lack of sustained economic development,

political instability, unabated population growth, persistent unemployment,

and low wages continued to compel people to head abroad.

The flow of OFWs, numbering a few thousand per year in the early 1970s,

surged past 1 million beginning in 2006 (see Figure 1). In 2015 alone, more

than 1,844,000 Filipinos worked abroad. The data on deployed workers

include seafarers, who account for 20 to22 percent of all OFWs every year.

Filipinos dominate the global seafaring industry, accounting for 25 to 30

percent of the world's seafarers.

Figure 1. Annual Deployment of Overseas Filipino Workers (OFWs),

1975-2015
Source: Philippine Overseas Employment Administration (POEA),

“Compendium of OFW Statistics,” accessed July 6, 2017,

As of December 2013, the stock of overseas Filipinos totaled slightly more

than 10 million, including some 4.9 million permanent settlers (64 percent

of whom are in the United States), about 4.2 million temporary migrants

(mostly labor migrants, or OFWs, with Saudi Arabia hosting close to 1

million), and an estimated 1.2 million unauthorized migrants worldwide

(primarily in Malaysia and the United States).

Filipinos are present in the far reaches of the globe, mostly because of work.

Although the destinations of OFWs have diversified, to this day, the Middle
East still receives the largest share, with 64 percent heading to the region in

2015, followed by Asia with 28 percent (see Figure 2). In 2015, six of the

top ten destinations for both new hires and rehires were in the Middle East

(Saudi Arabia, United Arab Emirates, Qatar, Kuwait, Oman, and Bahrain),

and the remainder were in Asia (Singapore, Hong Kong, Taiwan, and

Malaysia).

Figure 2. Deployment of Land-Based OFWs by Region, 2015

Source: POEA, “Compendium of OFW Statistics.”

Filipino women are very visible in international migration. They not only

compose the majority of permanent settlers, i.e., as part of family migration,

but are as prominent as men in labor migration. In fact, since 1992, females

have generally outnumbered men among the newly hired land-based

workers legally deployed every year. In 2015, domestic work was the top

occupation for new hires, at 38 percent.

While the demand for domestic workers has long been the main driver of

female migration from the Philippines and Asia in general, until 2005, the

demand for entertainers, mostly in Japan, also fueled this migration. With

work in the domestic and entertainment sectors unprotected and prone to

abuse, the safety and well-being of women migrants became a significant

concern. Entertainer migration was particularly controversial and

stigmatized because of perceptions that women ended up in the sex industry.

From a deployment to Japan of tens of thousands of Filipino entertainers

annually, the numbers dropped sharply in 2005 following Japan’s decision

to adopt more stringent requirements for foreign entertainers. Likewise, the

significance of domestic worker migration was a major push for the

Philippines to ratify the 2011 Convention on Domestic Workers, which

recognizes domestic work as labor that must be protected.

Beyond Labor Migration

The growing volume of labor migration from the Philippines has increased

the incidence of problems and challenges faced by migrants and their

families. The participation of private recruitment agencies in matching

workers with employers abroad has contributed to the challenges. The

problems that emerged in the 1970s remain the same today: illegal
recruitment, contract substitution, illegal placement fees, long working

hours, and no days off (in the case of domestic workers), among others.

Over the years, institutional and policy development in the Philippines was

geared toward worker protection. The 1995 Migrant Workers and Overseas

Filipinos Act, a landmark law, aimed to provide protection to OFWs from

predeparture through arrival and return. The focus on protection shifted

during the presidency of Gloria Macapagal-Arroyo (2001-10), when the

government for the only time to date set a target for the deployment of

workers. The Medium-Term Philippine Development Plan 2004-2010 set a

goal of sending 1 million workers overseas every year.

This thrust was reversed by the subsequent administration of Benigno

Aquino III (2010-16). His social contract with the Filipino people included

the goal of moving “from a government that treats its people as an export

commodity and as a means to foreign exchange, disregarding the social cost

to Filipino families, to a government that creates jobs at home, so that

working abroad will be a choice rather than a necessity; and when its

citizens do choose to become OFWs, their welfare and protection will still

be the government’s priority.”

This stated desire to a return to welfare and protection was accompanied by

legislative and executive actions to further regulate labor migration and

expand services for OFWs. Soon after Aquino took office, he signed

Republic Act (RA) 10022 into law, aiming to further strengthen measures to
protect migrant workers, their families, and other overseas Filipinos in

distress. Among the law’s key provisions is the restriction of deployment

only to countries that have been certified as safe and offering protection.

Implementation-wise, certifying a country as safe or unsafe can be

politically and diplomatically sensitive, and deployment bans (even for good

reasons) have not proven effective in stopping migration. The law also

mandates recruitment agencies or employers to provide OFWs with

compulsory insurance to cover accidental death or disability, among other

protections.

The Philippines Overseas Employment Administration (POEA) also

amended recruitment industry regulations, resulting in the 2016 Revised

POEA Rules and Regulations Governing the Recruitment and Employment

of Seafarers, and a separate set of rules and regulations applying to land-

based workers. These measures were aimed at curbing the illegal practices

of recruitment agencies, such as exorbitant placement fees and contract

substitution, which negatively impact migrants.

The welfare and protection of OFWs received another boost in 2016 with

RA 10801, which launched a new charter bolstering the Overseas Workers

Welfare Administration (OWWA). This agency’s mandate is to provide

programs and services for the welfare of OFWs and their families, and to

manage the funds from member contributions and interest from investments.

The contributions come from the OWWA membership fee of US $25 per
contract (which employers or recruitment agencies are supposed to cover

but instead pass on to OFWs). A number of nongovernmental organizations

had criticized the government for not financially contributing to OWWA

operations. The 2016 OWWA charter changed this, stating that the national

government would allocate a regular budget for the operations and

personnel expenses of the agency, which would free up more funds for

programs and services. The law also identified the reintegration program as

a core function for OWWA, shifting responsibility from the Department of

Labor and Employment.

The government’s antitrafficking measures also strengthen the protection

environment (although trafficking can also occur internally). The Expanded

Anti-Trafficking in Persons Act of 2012 (RA 10364) amended the 2003

Anti-Trafficking in Persons Act to enhance concerted efforts to combat

trafficking and increase penalties for violators. Those who are identified as

victims of trafficking can access support and assistance.

Growing marriage migration also has caused anxieties about the welfare of

women who marry foreign nationals. A new law (RA 10906) strengthening

the Anti-Mail Order Bride Act of 1990 was enacted in 2016. Unlike the

earlier law, the amended version applies to Filipino men as well as women

(though marriage migrants are overwhelmingly female), and takes into

account trafficking and new developments, such as online transactions. The

law mainly prohibits commercial or for-profit matching or offering of

Filipinos to foreign nationals through the mail, in person, or over the

Internet, for the purpose of marriage or common law partnership.

Linking Migration and Development

Beyond the now-traditional facilitate-and-protect policy framework,

migration governance in recent years has also started to make inroads on

migration and development. The global discussion on the migration and

development nexus may have influenced reflections in the Philippine

context. A 2007 conference and a 2010 comprehensive study on migration

and development in the Philippines brought to the fore five key

observations:

1. Migration policies in the Philippines were primarily focused on

temporary labor migration.

2. The development impact of migration was mostly discussed in terms

of economic benefits, particularly remittances.

3. The social costs of migration to families were often mentioned.

4. National, regional, and local development plans did not take

international migration into consideration.

5. At the regional and local levels, there were few migration

institutions.

In other words, the migration and development nexus was more of a

disconnect: Except in the case of remittances, policies in these areas were

not linked, and the national framework was out of sync with local

frameworks. The Central Bank of the Philippines had taken the lead on

improving the remittance environment, likely driven in part by the enormous

importance of these money transfers as well as the relative ease of

monitoring formal remittances, compared to other impacts such as social

costs. However, other migration and development initiatives were not as

persistently pursued, implemented, or monitored.

Despite this implementation gap at home, the Philippines has become a

global leader in discussions on migration and development. It has actively

participated in the Global Forum on Migration and Development, and hosted

the second such forum in 2008.

These development-related discussions have also expanded the domestic

migration conversation to encompass the broader population of overseas

Filipinos, not just OFWs. At the start of the Aquino administration in 2010,

the CFO, created in 1980 to look after the concerns of permanent migrants

and nurture their links to the Philippines, embraced the task of “Responding

to the Challenges of Migration and Development.” The commission began

more actively reaching out to the Filipino diaspora through global and

regional summits and developed a one-stop online portal for diaspora

engagement, BaLinkBayan.

CFO also lobbied and cooperated with the National Economic Development

Authority (NEDA), the key government agency responsible for development

planning and policy, to integrate international migration issues into the

Philippine Development Plan 2011-16. Sixty provisions on migration and

development appeared in seven out of nine chapters of the plan. Further, in

2014, NEDA created an interagency structure to promote attention to

migration and development and improve coordination among migration-

related agencies and other government agencies.

There has also been movement toward involving local governments in

developing institutions, policies, and programs on migration and

development, including under Phase II of the Joint Migration and

Development Initiative (JMDI). In the past, local officials tended to think of

overseas employment as a national government concern and responsibility.

While few local governments have established migration centers, the POEA

and OWWA have forged partnerships with local governments to enhance

the reach of their programs and services.

Migration Governance under Duterte: Is Change Coming?

After campaigning on the promise of “change is coming,” Rodrigo Duterte

became the 16th president of the Philippines on June 30, 2016, succeeding

Aquino. Like Filipinos at home, those overseas largely voted for Duterte.

A year into the Duterte presidency, his administration has sent mixed signals

on how it will handle international migration. In his first State of the Nation

Address in July 2016, Duterte rattled off a list of migration-related goals,

namely to combat human trafficking and illegal recruiting, provide

mandatory financial education to migrants, and consolidate offices and

agencies dealing with overseas Filipinos to more efficiently respond to their

concerns.

The first—waging “war against traffickers and illegal recruiters”—basically

continues predecessors’ protection thrust. Similarly, the nod to financial

education for migrants and their communities was part of the package of

migration and development initiatives in the 2000s.

In its first 100 days, the Duterte administration introduced some immediate

moves to hasten government processes affecting OFWs, including setting up

one-stop shop service centers at the POEA. These centers gather in one

location the government agencies where applicants or overseas workers

secure documents needed to process their papers. Other changes, such as

dropping the requirement for vacationing OFWs to secure an overseas

employment certificate and the introduction of an online seafarer registry,

were hailed by OFWs. Discussions are underway to cut through more red

tape, such as extending the validity of Philippine passports from five years

to ten years.

However, Duterte’s proposal to create a single department to effectively

address various OFW concerns would be a departure from the multiagency

approach that the Philippines has fashioned over the years.

To Consolidate, or Not To Consolidate?

Duterte’s allies in Congress lost no time in proposing versions of the bill to

create a single migration department. Proponents argue that the proposal is

intended to fulfill Duterte’s campaign promise to better serve OFWs,

suggesting a single department would be more efficient. Civil-society

organizations are divided on this proposal. Opponents argue that the various

agencies that cater to different types of overseas Filipinos and/or have

different mandates have already developed competencies to perform their

functions. Rather than create another bureaucracy whose components will

be carved out from existing departments or divisions, opponents argue it

would be more constructive to improve coordination among agencies.

Interestingly, Labor Secretary Silvestre Bello III has a different idea. He

sees a department devoted to OFWs as further institutionalizing overseas

employment, which he claims is the very opposite of what this

administration wants. He said, "Our final goal is to bring them back to the

country and we can only do that if we give them decent jobs, decent pay."

However, while the goal of bringing OFWs home one day has been

expressed by all presidents, it has largely been unrealistic.

Duterte Finds Approval Among OFWs

The response of OFWs to President Duterte is one of overwhelming support

. In his first year as president, he made 21 overseas trips, visiting 18

countries and touching base with Filipinos abroad, who greeted him

enthusiastically.

In his visit to Saudi Arabia, Bahrain, and Qatar in April 2017, Duterte stated

he was ready to kneel before OFWs to show his appreciation for their

sacrifices in sending remittances home. Appearing before Filipino

communities in these GCC countries, he repeated his promise to deliver

better services through the proposed Department of Overseas Filipino

Workers.

When he met with Filipinos in Japan, the crowd applauded his promise to

end the Filipinos’ search for opportunities outside the country: “I work hard

that we will earn more so that by the time, this is my promise to you and

God and to those working abroad, this will be the last. The next generation

of Filipinos will work in the Philippines. So we will do away with so many

things. Corruption, then drugs.”

Indeed, in his visits abroad, Duterte never fails to discuss the central

program of his administration: the war on drugs. His overseas audience sees

his hardline stance, which has received international condemnation, as

decisive and the war on drugs as necessary to rid the country of drug

addicts. Since he took office, more than 7,000 alleged drug users and dealers

have died in extrajudicial killings carried out by police or vigilantes,

according to Human Rights Watch. The reactions of Filipinos abroad to the

killings, mostly of poor Filipinos, as well as the disregard for human rights

and the culture of violence that the war on drugs has bred have been muted.

Long-Term Development

Offering another glimpse into how the new administration will address

migration, in February 2017 it approved the Philippine Development Plan

2012-22. The new PDP builds on the previous development plan, but also

situates the development agenda within the longer-term AmBisyon Natin

2040 (Our Vision 2040; literally, ambition), which reflects the aspirations of

Filipinos for themselves and their country.

This long-term view in the new PDP is novel, as development plans are

typically anchored on the six-year cycle of each administration. The new

PDP explains, “As one of Asia’s better-performing economies today, the

Philippines is in a more favorable position than it has ever been in the last

four decades. No longer weighed down by an unmanageable fiscal deficit

and more secure in its political legitimacy, the government can now afford

to think about national goals based on a longer time horizon.” The Duterte

administration’s target is to achieve annual GDP growth of 7-8 percent in

the medium term, and the PDP aims to cut the poverty rate from 21.6

percent to 14 percent overall, and from 30 percent to 20 percent in rural

areas. It also seeks to reduce the unemployment rate of 5.5 percent by 3-5

percentage points by 2022.

The new PDP gives special attention to overseas Filipinos by incorporating

international migration issues, often referencing migrants directly,

throughout. It gives attention to the special circumstances of migrants and

their families, and aims to protect their rights and improve their well-being,

strengthen their engagement in governance, facilitate their participation in

the country’s development, and ensure their smooth reintegration upon

return.

In its chapter on human-capital development, the PDP acknowledges the

push factor in labor migration, noting that “Limited employment

opportunities force Filipinos to migrate by necessity and not by choice.” It

points to regional integration initiatives such as the Association of Southeast

Asian Nations (ASEAN) and efforts to strengthen ties with China and

Russia as opportunities to diversify destinations. ASEAN Member States,

notably Singapore and Malaysia, have long been OFW destinations. In the

case of China and Russia, Duterte overtures to these two countries may have

played a hand in identifying them as potential future destinations. For now,

these two receive a small number of Filipino workers, although reports

indicate some 200,000 unauthorized Filipino domestic workers live in

China, where they earn a higher income than in Hong Kong.

Limited employment opportunities also affect higher skilled Filipinos. A

study assessing the country’s innovation found that the supply of STEM

(science, technology, engineering, and mathematics) workers outpaces local

demand, which leads to emigration and underemployment of skilled

scientists and engineers. And their emigration results in brain drain, which

deprives the country of human capital important for development. The PDP

calls for strengthening the long-running Balik Scientist (Return Scientist)

Program and similar schemes, and is open to the idea of tapping foreign

experts, including overseas Filipinos, for institutional capacity building and

development expertise.

Since 2016, the National Reintegration Center for OFWs has been

conducting consultations with stakeholders nationwide in preparation for the

reintegration summit that will be held in August 2017. The summit aims to

produce thoughtful reflections and action plans that will respond to the

opportunities and challenges that return migrants carry with them.

Looking Ahead

In the past decade, migration governance in the Philippines has gone beyond

labor migration policies and remittances, making strides toward linking

migration policies to broader development goals. The last two Philippine

Development Plans have integrated migration into national development

planning; the government’s key planning agency, NEDA, has come to

appreciate the importance of migration; and a mechanism, the

Subcommittee on Migration and Development, has been established within

NEDA to improve coordination among government agencies and devote

more attention to migration and development.

These are important milestones that need to be fleshed out and sustained

over time. At the local level, mainstreaming and upscaling projects for local

institution capacity building, the setting up of Migration Resource Centers

and similar structures in local government units and integrating migration in

local development plans, among others, have been implemented in selected

regional and local governments. In other words, the groundwork for the

expansion of migration policies in the Philippines has been started; the next

task is to keep up the momentum to maximize the development potentials of

migration, while continuing to look out for the well-being of migrants.

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LOCAL STUDIES

The Duterte administration heralds the next five years as the “Golden Age

of Infrastructure.” Infrastructure development is envisaged to support the

three pillars of the 2017-2022 Philippine Development Plan (PDP), namely

malasakit (enhancing social fabric), pagbabago (inequality-reducing

transformation), and patuloy na pag-unlad (ensuring growth potential). The

country lags behind in Southeast Asia in terms of infrastructure quality and

spending. As a bold move, the Duterte administration commits to boost

public spending for infrastructure from the current 5.1 percent to 7.4 percent

of gross domestic product by end of his term.[1] Further strengthening the

commitment is the creation of an infrastructure cluster headed by Secretary

Carlos Dominguez III of the Department of Finance to lead this initiative.

During the first quarter of 2017, Duterte’s economic managers unveiled the

$160 billion or 8.2 trillion infrastructure plan before foreign investors and

the Filipino business community. Build, Build, Build[2] (BBB) is

coordinated by the country’s major infrastructure agencies, namely the

Department of Transportation (DoTr), Department of Public Works and

Highway (DPWH), Bases Conversion Development Agency (BCDA), and

the National Economic and Development Agency (NEDA). The

administration claims that having these agencies coordinate is to be a

historical first. Based on government’s data, about 61 projects[3] worth 1.7

trillion[4], which are in various stages of project development and

implementation, are included in the initial list.

The government sees infrastructure development as the solution to job

generation, transportation and traffic woes, and high prices of goods and

services. According to the International Labor Organization’s estimate for

developing countries, for every $1 billion spent on infrastructure, about

200,000 direct jobs are created, which certainly forms part of the

government’s strategy for unemployment rate reduction of 3-5 percent or six

million new jobs by 2022.[5]

Three Components

The Duterte administration hopes to attract more investments into the

country by focusing on three components: (1) building more railways, urban

mass transport, airports and seaports, (2) more bridges and roads, and (3)

new and better cities. These components underpin the PDP’s National

Spatial Strategy (NSS), which recognizes the role and comparative

advantages of cities as engines of economic growth, poverty reduction, and

infrastructure development “to provide efficient connective networks of

sustainable urban and rural communities.”[6] The NSS is a strategy discussed

and adopted among the country’s technocrats during the tail end of former

President Benigno Aquino III’s government and has found its way as a key

framework under the President Duterte’s PDP.

Under BBB, DoTr will implement more than half of the infrastructure

projects worth 1.17 billion. DPWH will handle 15 projects with an estimated

cost of over 276 billion, while BCDA will implement 11 projects, which are

new cities or special economic zones (SEZs) which would cost 317 billion.

Figure 1 shows that 29.5 percent or 18 projects have been earmarked for

improvement or building of new airports. This will be followed by building

of roads and bridges, almost 20 percent or 12 projects in total. About 11 new

railway projects will be constructed that are mostly carry-over from the

previous government of Benigno Aquino III. The top five most expensive

infrastructure projects are all railways; the Mega Manila Subway estimated

at 227 billion would be the top project. The subway will be a 25-kilometer

underground mass transportation system that will connect major business

districts and government centers in the capital and is expected to serve about

370,000 passengers per day.

Addressing the infrastructure deficit of the country has been a major demand

of different sections of Philippine society. Almost every Filipino has argued

for more quality roads and bridges, improved airport facilities, and mass

transport systems for everyday mobility and to ease people’s lives.

Memories of ‘carmaggedon’ along EDSA linger and decongesting major

cities is one of the campaign promises of President Duterte. Common sense

and economic expertise also dictate that infrastructure have “a multiplier

effect to existing industries as well as linkage effect, in the sense that it can

spur new enterprises.”[7]

But has President Duterte delivered on his promise? Has the first year laid

the foundation to support his PDP’s three pillars of malasakit, pagbabago,

and patuloy na pag-unlad?

Figure 1: Distribution of Build, Build, Build Projects by Sector

Lion’s Share for ‘Imperial Luzon’

President Duterte promised to expand to the periphery. This would mean

focusing on the neglected regions of the Visayas and Mindanao via more

public spending and ending the domination of ‘Imperial Manila’ through a

shift to federalism. Coupled with his plans to build new SEZs in every nook
and cranny of the country, BBB is peddled as a tool to facilitate not only the

flow of trades, goods, people, and investments but also spur economic

activities and consequently reduce poverty in the periphery.

However, the Duterte administration will follow the same pattern of skewed

distribution of public infrastructure projects of the past. Government’s data

reveal that ‘Imperial Luzon’, which covers the regions of Metro Manila,

Central Luzon, and CALABARZON, where less than 40 percent of the total

national population lives, would still be the geographic priority of the

infrastructure projects, both in terms of total number and total

value/estimated costs. In terms of number, the map below illustrates how

Luzon will get a total of 27 projects, while the regions in the Visayas and

Mindanao combined will only get 18 projects. Even for projects that will

cover inter-regional/multiple regions, majority of them will be in Luzon.

In terms of combined value/costs, Central Luzon leads with 564.45 billion

worth of projects, followed by interregional/multi-regional (mostly located

in Luzon) for 533.18 billion and Metro Manila accounting for almost 366

billion. Altogether, they comprise 82.9 percent of all infrastructure projects’

costs, which is similar to the previous administration’s infrastructure

spending.8 These two regions plus CALABARZON accounted for almost

two-thirds of the GDP from 2014-2016, and hence, the historical/current

focus (see Table 1). The projects in Central Luzon will involve three

railways, six components of Clark Green City, an airport and a road/bridge.

Metro Manila gets five mass transit, two railways, four roads and bridges,

and two flood control projects. Compared to other infrastructure, railways

are most expensive.

Unfortunately, projects for the Visayas and Mindanao will account for only

12.9 percent of combined costs or 227.644 billion, more than half are to be

allocated for airport development, operations, and maintenance. The

remaining projects involve mass transit, flood control, road/bridge, and

railway (see Table 2).

Government Takeover and ‘Hybrid PPP’

What is qualitatively different from the past administrations is the shift from

Public-Private Partnerships (PPP) to government spending as the main

financing mode. Figure 2 shows that more than half of the projects will be

sourced from the General Appropriations Act (GAA) and official

development assistance (ODA) including Chinese ODA. The combined

value is estimated at 1.1 trillion, 90 percent of which are ODA.

Duterte’s economic managers have criticized PPP as slow in terms of taking

off ground. Government has taken over the operation and modernization of

five regional airports in Davao, Bacolod, Iloilo, Laguindingan, and Bohol as

well as the improvement of Clark International Airport, all of which were

included in the PPP list during Aquino’s erm.9 As mentioned above, the

current government prefers to source financing from taxes and ODA,

especially Chinese ODA. On May 2017, President Duterte made a pitch of

the BBB program before global leaders present at the Belt and Road Forum

in Beijing, China. He explained that the country’s program can

“complement regional and international connectivity mechanisms, such as

China’s One Belt One Road (OBOR) initiative and the ASEAN Master Plan

on Connectivity.”[10] The Philippines however is not included in OBOR, a

multi-trillion-dollar, massive undertaking to build infrastructure networks to

connect Asia and Europe, involving around 60 countries. As part of its pivot

to China, the government hopes to be part of this initiative.

This policy shift has hit the pause button on the battle of Filipino

billionaires, particularly on who will bag the $1.5 billion new international

airport construction, the subject of unsolicited proposals from the private

sector. San Miguel Corporation, Ayala, Metro Pacific Investments

Corporation, Aboitiz Equity Ventures, Inc. and Henry Sy’s SM group have

all tendered their proposals to the Duterte government. But the government

has yet to issue a decision.[11]

The private sector has expressed their concern over what they deem as

government takeover, citing that the government is not the best stakeholder

to handle infrastructure projects. Based on the PPP Center’s data, 20

projects in the pipeline (MRT Line 6, NAIA PPP Project, North-South

Railway Project - South Line - Operations and Maintenance Component,

etc.) would be affected by this policy shift.[12] However, Secretary

Dominguez has allayed their fears by explaining that a hybrid PPP is

underway, which means that government will take the initial steps to

jumpstart the construction and “the PPP component will come later when

the operations and maintenance of the project are bid out to the private

sector”.[13] This is somewhat a reverse Build-Operate-Transfer (BOT), a

scheme commonly adopted in infrastructure projects in the country by

governments after Marcos, in which the private sector receives a concession

or contract from the state or public sector to fund, design, and construct

infrastructure projects and then transfers the operation and maintenance

back to the state/public entity.

Concerns About BBB

Infrastructure, especially those that promote universal public provision of

goods and services, people’s mobility, and a life with dignity are necessary.

Government/public spending under BBB is crucial as past experiences have

exposed the weaknesses and contract anomalies as well as demystified the

non-transparent PPP processes and false promises, all designed to protect

corporate profits (e.g. Laguna Lake dredging, NorthRail and Roll-on, Roll-

off). These are fundamentally incompatible with ensuring universal access

to quality public services (see Duterte’s Social Development Agenda:

Radical Change or Business as Usual? on page 37) and protecting the

environment.

However, there are concerns about the current state of BBB. One, as

mentioned above, Luzon still gets the bigger share of the pie. Second, some

of the projects did not follow the usual project cycle and are now ongoing

construction, even without accomplishing specific tasks under project

procurement or the endorsement of the NEDA Investment Coordinating

Committee, the body that reviews all investment projects in the country.

Only 25 out of the 61 projects have completed an Environmental Impact

Assessment (EIA) and four of them are already being implemented without

one. Bypassing processes can generate social and environmental problems.

The proclivity for fast-tracking projects is exemplified by the road

heightening and tide embankment project in typhoon Yolanda (Haiyan)-

affected communities in Leyte province. The Community of Yolanda

Survivors and Partners (CYSP), a consortium of affected communities and

NGOs monitoring the government’s recovery and rehabilitation efforts in

the Yolanda corridor, has pointed out the project’s threats to the livelihood

and survival of the coastal communities, with potential displacement that

can exacerbate their existing vulnerabilities. A 2016 study conducted by the

Center for Environmental Concerns stated that the said project can lead to

the loss of 97 hectares of mangrove forest and wetlands, citing the project’s

own EIA.[14] Still, despite these warnings, the project went ahead, with
DPWH Region 8 admitting in a public consultation that they had been

pressured to produce results by the national government.

Third, the initial projects intend to facilitate the activities of the middle

class, more than the poorer sections of Philippine society. This is consistent

with AmBisyon 2040, the country’s new long-term vision to become an

upper middle-class country. Many of Duterte’s infrastructure projects

involve right-of-way, possible displacement of urban poor communities,

clearing of lands, and cutting of trees. Infrastructure costs are much higher if

socio-environmental impacts are considered.

Finally, the involvement of Chinese ODA and investments raises a red flag.

Experiences of Africa, neighboring Southeast Asian countries, and the

Philippines have demonstrated the bad practices in terms of corruption (e.g.

NBN-ZTE deal), labor rights violation, environmental degradation, and land

grabbing by Chinese companies. Therefore, it may not be a surprise if

struggles and conflicts around infrastructure projects escalate and intensify

in the next five years.

Given these concerns, one could not help but anticipate that the socio-

economic and environmental costs of BBB will be borne by those already

marginalized and vulnerable, negating Duterte’s promise of malasakit and

pagbabago.
Sources:

1 NEDA (2017), Philippine Development Plan 2017-2022, NEDA, Ortigas

Center.

2 BBB’s website does not include 33 projects from NEDA’s database,

which totals 248.05 billion. NEDA’s database also contains the complete

Consolidated Infrastructure Investment Program, which details

infrastructure projects by other government agencies.

3 The budget for four projects are yet to be determined. These are BCDA

Smart City Solutions, Central Spine RORO Alignment Project, New Clark

City-Mixed Use Industrial Real Estate Developments, and New Clark City-

Agro-Industrial Park. The last two are part of the Clark Green City initiative

which started during Benigno Aquino III’s government.

4 Based on the datasets of PPP and BBB, there is a variance of 7.8 billion in

budget estimation, mainly from the PPP projects of DoT and DPWH.

5 NEDA (2017), Philippine Development Plan 2017-2022, NEDA, Ortigas

Center.

6 Ibid., p. 36.

7 Comment by James Matthew Milaflor of the Institute of Popular

Democracy, posted on the author’s Facebook page. This is response to a

crowd sourcing question: “is an aggressive government spending a sound

policy as long as it’s done for better infrastructure, job generation and

poverty reduction/ public goods objectives, even if it will lead to a fiscal

deficit? What’s your take?”

8 Forbes Philippines (2016) “Leader Board: Public Infrastructure, Imperial

Regions”, Philippines.

9 Philippine Daily Inquirer (2017), “Unexpected policy shift”, PDI,

Editorial.

10 Corrales, N. (2017), “Duterte pushes Build, Build, Build program at

Beijing Forum, Philippine Daily Inquirer.

11 Mukharjee, A. (2017), Frustrated in the Philippines, Bloomberg Gadfly,

March 28, 2017.

12 “Unexpected policy shift”.

13 Ibid.

14 Center for Environmental Concerns (2016), “Dinhi kami nabubuhi” (We

live here), unpublished manuscript, Development and Peace Caritas Canada,

Quezon City.