Poverty incidence in the country is officially measured by a headcount ratio.

The poverty threshold is the food threshold adjusted for non-food expenditure. The food threshold is computed as the expenditure of a typical and modest menu of food that satisfies 100% sufficiency in the required dietary allowance (2,000 kcal) for energy and protein and 80% sufficiency in vitamins, mineral and other nutrients. A different menu is determined for each region. This poverty line is considered too liberal compared to other countries (World Bank (1995)). The decline in the overall poverty incidence is considered gradual. From 45% in 1985 the incidence declined to 36% in 1994 or an average annual decline of less that 1 percent (Table 6). The neighboring countries of Indonesia, Malaysia and Thailand, on the other hand, posted an average annual decline of 2.0, 1.6 and 1.4, respectively. As in many developing countries, the decline of poverty incidence in urban areas is much faster compared to rural areas. The national capital region exhibited the fastest decline and the lowest poverty incidence. While poverty incidence is declining in many regions, the stark reality of an increasing number of households that are poor remains. Table 7 confirms a well-known hypothesis that large families are more prone to be poor. Poverty incidence of families beyond five exceeds the national proportion. It is not surprising to find that majority of the poor are dependent on agriculture for livelihood. Within the agricultural sector, rice farmers, rice and corn farm workers, foresters and deep-sea fishermen have very high incidence of poverty. In terms of numbers, however, the rice farmers dominate. D. Causes of Poverty The Philippine Institute for Development Studies in cooperation with IDRC published a volume that summarizes the reasons for poverty in the Philippines (De Dios, et al. (1993)). Philippine analysts are in a consensus that the reasons for poverty in the country are: (1) the failure of growth and the lack of employment opportunities; (2) the inequality of income; (3) high population growth; (4) declining productivity; and (5) inadequate provision of social services. They claim that

although respectable growth rates in the 1970s were achieved, these did not benefit the poor owing to the structure of the economy. The failure of growth and the lack of employment opportunities in the 1980s have been explained above. The extent of inequality of income is indicated by the fact that for the past ten years the share of the bottom 30 percent has never gone beyond 10 percent while the share of the top 10 percent for the same period has never gone below 36 percent. The prospects for asset redistribution through land reform have diminished. It has become clear that what political consensus will allow is not sufficient to alleviate the poverty situation. It is also well known that the decline in fertility rates is not as impressive as either Thailand or Indonesia. As of the last census the population growth rate in the Philippines is still about 2.4 percent. Table 7 clearly demonstrates that poverty incidence is high among large families. Finally, there is also a continuous decline in total factor productivity. This is situation is even more pronounced in the agricultural sector where a large majority of the poor are dependent for livelihood (Table 7). With the failure of growth and the rapid population growth, it is not surprising that the provision of social services also deteriorates. E. Evidences Income-based measures of poverty In 1985, 44.2 percent of the total number of families can be considered poor. Since then, poverty incidence has declined to 31.8 percent in 1997. However, the Asian financial crisis coupled with the El Nino in 1997-1998 has reversed the downward trend and has caused poverty incidence to increase to 33.7 percent in 2000 as shown in Table 1. It also shows that among region, poverty incidence is highest in the Autonomous Region of Muslim Mindanao where almost 66 out of every 100 families can be considered poor. The Bicol Region comes second where 55 out of every 100 families can be considered poor. In contrast, only 9 out of every 100 families in the National Capital Region can be considered poor. While ARMM has the highest poverty incidence, its contribution to total poverty is only 5.5% owing to the small population in this region. The Bicol Region has the largest contribution at 11.8 percent.

However, while the proportion of poor families has declined between 1985 and 2000, the actual number of poor families has gone up from 4.36 million in 1985 to 5.14 million in 2000 (Table 2). ----- AGRARIAN REFORM -----reduces the rate of poverty What' s Up In The Philippines CHRONICLING THE CHALLENGES AND HOPES OF 7,107 ISLANDS Philippines President: Poverty alleviation is over-arching goal of her administration TUESDAY, APRIL 21, 2009 | GOVERNMENT MANAGEMENT http://www.gov.ph/news/default.asp?i=24252 Naga City (PIA)-- President Gloria MacapagalArroyo stressed anew yesterday that poverty alleviation is her administration's over-arching goal. In a one-on-one interview with Ms. Sonia Osorio Leano of DWOS Naga, DWML Legaspi and DZSL Daet at the Nueva Caceres University here, the President also expressed her gratitude upon being informed that the Bicolanos in the barangays now feel that indeed the government is determined to uplift the people's lives through the various antipoverty programs already in place. "I am very thankful that the people are directly benefiting from these government programs," the President said. "Poverty alleviation is the over-arching framework for all government initiatives; and, in fact, the key focus of my economic reform program in the last few years has been to translate the economic gains from our reforms into real benefits for the people, most especially the poor and this remains our focus until the day I leave office," she said. These poverty-alleviation programs include better access to healthcare for the poor, more jobs, livelihood programs, and education. The President also said that due to the global economic crisis, many Filipino overseas

workers (OFWs) have lost their jobs, thus the government came up with the Comprehensive Livelihood and Emergency Program (CLEEP). Likewise, she has directed all government agencies to allot 1.5 percent of their budget for programs that will cushion the impact of the global economic crisis, especially on the poor. Other anti-poverty initiatives of the government include the Food for School Program, cheaper medicines through the Botika ng Barangay, microfinance, the Pantawid Pamilyang Pilipino Program or Conditional Cash Transfer (CCT), and the Tindahan ng Bayan programs/projects. The President attributed the success of these programs to the availability of additional resources generated by the expanded value added tax (EVAT). "Without revenue to invest in people, there is no progress. With this revenue, we have been able to invest in physical and human infrastructure - roads, bridges, ports. We have been able to expand access to healthcare, improve education and expand social services. And believe me, raising the EVAT taxes was no picnic. It cost me politically - no one likes to raise taxes. But it was worth every point I lost in popularity to see the nation finally get moving," the President said. The President added that new revenue was only part of the equation in balancing the budget. Building up new industries such as the business process outsourcing (BPO) sector and expanding trade relations to diversify economic bridges were equally important. These economic reforms shielded the country from the harsh impact of the present global crisis, she said, adding: "All of these actions were taken before there was a hint of a global crisis. And thanks to the bitter pill of fiscal reform under EVAT, we have been spared the harsher backlash of the current global financial crisis." The President further said that the government has put in place a cushion to help the poor with the establishment of new industries like BPO that will continue to boom. She pointed out that a P330-billion Economic Resiliency Plan was put in place to ensure

sustainable growth, create and save jobs, and protect the most vulnerable sectors against the harsh effects of the global crisis. The Plan includes accelerated spending for infrastructure, granting additional personal tax exemptions and reducing corporate taxes, expansion of social protection programs such as conditional transfers, National Health Insurance, Pantawid Pamilyang Pilipino Program (4Ps), and Hunger Mitigation Program. It also includes the creation of new employment opportunities through the Comprehensive Livelihood and Emergency Employment Program (CLEEP) and through a range of other livelihood programs. "We will continue on a path of fiscal discipline, targeted investment and targeted relief to our poor as we weather this global storm," the President said, even as she stressed the need for volunteerism for the Filipinos to weather the global economic crisis. "Volunteerism is important, I hope all of us will join hands in facing this present global economic challenge and emerge a winner," she said. (PIA) POVERTY ALLEVIATION JURISDICTION: All matters directly and principally relating to policies and programs to address the poverty situation in the country and other actions to alleviate the plight of the poor and promote their right to equal access to opportunities for a better quality of life. MEMBERSHIP: 25 Members HOUSE MEASURES REFERRED TO THE COMMITTEE MAIN REFERRAL (27) | SECONDARY REFERRAL

MARGUERITE BORROMEO Status: Substituted by HB04484

Status: Recommendations submitted by the TWG on 2010-12-07

HB00081 [History] [Text As Filed , 538k] AN ACT TO REDUCE POVERTY AND PROMOTE HUMAN CAPITAL DEVELOPMENT THROUGH THE CREATION OF A NATIONAL CONDITIONAL FUND TRANSFER PROGRAM Principal Author: YAP, SUSAN A. Status: Referred to Stakeholders on 201009-13

HB00148 [History] [Text As Filed , 884k] AN ACT PROVIDING FOR A MAGNA CARTA OF THE POOR Principal Author: EVARDONE, BEN PAGARAN Status: Substituted by HB04484

HB01333 [History] [Text As Filed , 355k] AN ACT REQUIRING PRIVATE CONTRACTORS DOING PUBLIC WORK PROJECTS TO EMPLOY SKILLED AND UNSKILLED WORKERS WHO ARE CONSIDERED INDIGENTS BY THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT (DSWD), AMENDING FOR THE PURPOSE REPUBLIC ACT NUMBERED SIXTY-SIX HUNDRED AND EIGHTY-FIVE Principal Author: MARCOLETA, RODANTE D. Status: Substituted by HB04484

SUBSIDY FOR POOR HOUSEHOLD CONSUMERS Principal Author: Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-01-17

HB03920 [History] AN ACT PROVIDING FREE FUNERAL SERVICES TO THE INDIGENT MEMBERS OF THE SOCIETY Principal Author: Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-01-17

HB00848 (Journal #43) [History] [Text As Filed , 999k] AN ACT TO INSTITUTIONALIZE THE CONDITIONAL CASH SUBSIDY PROGRAM OF THE GOVERNMENT AND PROVIDING FUNDS THEREFOR Principal Author: CALIMBAS-VILLAROSA, MA. AMELITA A. Status: Referred to Stakeholders on 201009-13

HB01500 [History] [Text As Filed , 887k] AN ACT TO REDUCE POVERTY AND PROMOTE HUMAN CAPITAL DEVELOPMENT THROUGH THE INSTITUTIONALIZATION OF THE CONDITIONAL CASH TRANSFER PROGRAM OF THE GOVERNMENT AND PROVIDING FUNDS THEREFOR Principal Author: ANGARA, JUAN EDGARDO MANALANG Status: Referred to Stakeholders on 201009-13

HB04002 [History] AN ACT GRANTING FIFTY PERCENT (50%) DISCOUNTS FROM FUNERAL SERVICES TO INDIGENT FAMILIES NATIONWIDE, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES Principal Author: COLMENARES, NERI Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-01-31

HB01195 [History] [Text As Filed , 761k] AN ACT PROVIDING A MAGNA CARTA FOR THE POOR Principal Author: TEODORO, MARCELINO REYES Status: Substituted by HB04484

HB02689 [History] [Text As Filed , 1074k] AN ACT PROVIDING FOR A MAGNA CARTA FOR ALLEVIATING MASS POVERTY Principal Author: Status: Substituted by HB04484

HB00023 [History] [Text As Filed , 1035k] AN ACT PROVIDING FOR A MAGNA CARTA OF THE POOR Principal Author: DEL MAR, RACHEL MARGUERITE BORROMEO Status: Substituted by HB04484

HB01320 [History] [Text As Filed , 871k] AN ACT PROVIDING FOR THE MAGNA CARTA OF THE POOR Principal Author: MARCOLETA, RODANTE D. Status: Substituted by HB04484

HB00024 [History] [Text As Filed , 582k] AN ACT ESTABLISHING A FOOD SUBSIDY FOR THE POOR PROGRAM, APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES Principal Author: DEL MAR, RACHEL

HB01326 [History] [Text As Filed , 479k] AN ACT INSTITUTIONALIZING FOOD SUBSIDY PROGRAM AND APPROPRIATING FUNDS THEREFOR Principal Author: MARCOLETA, RODANTE D. Status: Substituted by HB04484

HB03486 (Journal #43) [History] AN ACT PROVIDING FOR THE CONDITIONS TO BE COMPLIED WITH BY BENEFICIARIES OF THE PANTAWID PAMILYANG PILIPINO PROGRAM Principal Author: RODRIGUEZ, RUFUS BAUTISTA Status: Referred to Stakeholders on 201009-13

HB04721 [History] AN ACT MANDATING THE DEPARTMENT OF SOCIAL WELFARE AND DEVELOPMENT, DEPARTMENT OF AGRICULTURE, AND DEPARTMENT OF HEALTH, TO COORDINATE WITH EACH OTHER AND ASSIST IDENTIFIED INCOME COMMUNITIES AND DEPRESSED URBAN AREAS TO PROMOTE INCREASED ACCESS TO AND CONSUMPTION OF FRESH FRUITS, VEGETABLES, AND OTHER HEALTHY FOODS AMONG CHILDREN AND PREGNANT WOMEN THEREIN AND FOR OTHER PURPOSES Principal Author: BONOAN-DAVID, MA. THERESA BRONDIAL Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-05-31

HR00170 [History]

HB01328 [History] [Text As Filed , 482k] AN ACT ESTABLISHING THE LIVELIHOOD ENHANCEMENT ASSISTANCE PROGRAM (LEAP) AND APPROPRIATING FUNDS THEREFOR Principal Author: MARCOLETA, RODANTE D.

HB03715 [History] AN ACT PROHIBITING THE DETENTION OF BODIES IN FUNERAL HOMES AND MORGUES ON GROUNDS OF NON PAYMENT OF EMBALMENT OR ANY OTHER FUNERAL SERVICES Principal Author: BINAY, MAR-LEN ABIGAIL S. Status: Referred to Stakeholders on 201101-12

Principal Author: RODRIGUEZ, RUFUS BAUTISTA Status: Scheduled for first meeting/hearing on 2011-01-18

HB03915 [History] AN ACT PROVIDING ELECTRICITY BILL

HR00472 (Journal #37) [History] RESOLUTION DIRECTING THE APPROPRIATE HOUSE COMMITTEES TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, ON THE UTILIZATION AND DISPOSITION OF FUNDS FOR POVERTY ALLEVIATION Principal Author: BIAZON, RODOLFO GASPAR Status: Adopted Resolution (Pending with

the committee on POVERTY ALLEVIATION since 2010-11-23)

HR00960 (Journal #64) [History] A RESOLUTION DIRECTING THE HOUSE COMMITTEE ON POVERTY ALLEVIATION TO CONDUCT AN INQUIRY, IN AID OF LEGISLATION, ON THE NEW POVERTY MEASUREMENT SCHEME APPROVED BY THE NATIONAL STATISTICAL COORDINATION BOARD WHICH SUBSTANTIALLY LOWERS THE OFFICIAL AVERAGE POVERTY THRESHOLD Principal Author: PALATINO, RAYMUND V. Status: Adopted Resolution (Pending with the committee on POVERTY ALLEVIATION since 2011-03-15)

IN MINDANAO Principal Author: RODRIGUEZ, MAXIMO JR. B. Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-03-23

of Economics and the Southeast Asian Regional Center for Graduate Study and Research in Agriculture.

although it tended to rise in recent years.

PS00093 [History] Poverty alleviation policies of the Aquino administration Principal Author: BELLO, WALDEN Status: Referred to Stakeholders on 201012-07

*** ADDRESSING widespread poverty is the single most important policy challenge facing the Philippines. Not only is poverty high compared with other countries in East and Southeast Asia, but also its reduction is so slow that the country has become the basket case in the region. Although poverty is recognized to be a multidimensional concept, income poverty in the Philippines is pervasive. Thus, the bulk of the income poor is likely to be also deprived in other dimensions such as educational achievement and good health. Hence, we define the poor as those whose incomes fall below a predetermined income threshold. In comparing poverty across countries, it is common to use a fixed norm or poverty line (for example, the $1 a day per person, in purchasing power parity, employed by the World Bank). Our estimates of poverty based on official poverty linesreveal that, in 2006, the latest year when nationally representative data on household incomes are available, 32 percent of our population were poor. Given the total population of 84 million Filipinos that year, there were 27 million deemed poor, or one of every three Filipinos failed to meet the official poverty line. Owing to comparability problems, the official poverty estimates could not be used to assess the countrys performance in poverty reduction over time and across space. We have employed a consistent procedure to quantify the magnitude of absolute poverty over time and across geographic areas or population groups. The resulting estimates for the years with available comparable household survey data (1985-2006) reveal a number of striking observations: As a proportion of the population, poverty decreased during the period,

The number of poor people rose to its highest level in 2006. Poverty increased between 2003 and 2006 despite the quite respectable economic performance (by the countrys historical standard), as reflected in growth domestic product (GDP) growth during this period. This observation generally holds true for other income measures of poverty, such as those that are sensitive to the depth and severity of poverty, as well as for other equally plausible poverty lines. It thus appears that the economic growth in recent years has bypassed the poor! Poverty reduction in the Philippines has lagged far behind those of its East and Southeast Asian neighbors, particularly Indonesia, Thailand, Vietnam and China. Both China and Vietnam started with higher levels of poverty incidence than did the Philippines during the mid-1980s, but their absolute poverty soon dwindled and became much lower than the Philippines during the early 2000s. Both Malaysia and Thailand also had virtually eliminated absolute poverty in just 20 years. Interestingly, while the Philippines had a much higher average income ($1,129, in 2000 prices) in the mid-2000s than Vietnam ($538) and Indonesia ($942), its absolute poverty was actually much higher than either of the latter countries. Much of what the public sees in media on the state of social development in the Philippines is the poverty in Metro Manilas slums. Yet, the poor in Metro Manila account for only four percent of the countrys total poor population. Metro Manilas poverty incidence is also the lowest among the regions. The four regions with the highest incidence are Autonomous Region in Muslim Mindanao (ARMM), Western Mindanao, Bicol and Eastern Visayas. Their poverty incidence figures in 2006 were roughly four times that of Metro Manilas. These poorest regions

HR01037 [History] A RESOLUTION CONGRATULATING THE PHILIPPINE BUSINESS FOR SOCIAL PROGRESS ON ITS 40TH YEAR OF ACCOMPLISHING ITS GOALS OF HELPING THE FILIPINO PEOPLE FIGHT POVERTY AND PROVIDING AN AVENUE FOR CORPORATIONS TO EXPRESS THEIR SOCIAL RESPONSIBILITY IN A STRATEGIC WAY Principal Author: RODRIGUEZ, RUFUS BAUTISTA Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-03-08

PS00214 (Journal #72) [History] ON WOMEN IN SOCIAL SERVICES Principal Author: DE JESUS, EMMI A. Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-05-24

PS00231 [History] RIGHTS OF THE URBAN POOR Principal Author: COLMENARES, NERI Status: Pending with the Committee on POVERTY ALLEVIATION since 2011-05-17

Poverty reduction: What we know and dont know By Arsenio M. Balisacan Philippine Daily Inquirer First Posted 19:36:00 02/16/2008 Filed Under: Poverty

HR01112 (Journal #72) [History] A RESOLUTION REQUESTING THE COMMITTEE ON POVERTY ALLEVIATION TO RECOMMEND TO THE DEPARTMENT OF SOCIAL WELFARE AND SERVICES (DSWD) TO ENLIST THE ACTIVE PARTICIPATION OF PEOPLE'S HEALTH ORGANIZATIONS, I.E. BARANGAY HEALTH WORKERS (BHW), BARANGAY NUTRITION SCHOLARS (BNS) AND MIDWIVES ASSOCIATIONS IN THE IMPLEMENTATION OF THE CONDITIONAL CASH TRANSFER (CCT) ALSO KNOWN AS PANTAWID PAMILYANG PILIPINO PROGRAM (4Ps) Principal Author: PALMONES, ANGELO B. Status: Adopted Resolution (Pending with the committee on POVERTY ALLEVIATION since 2011-05-25)

WHAT EXACTLY IS THE NATURE OF OUR POVERTY PROBLEM? WHAT DO we know and dont know about effective strategies and measures to win this protracted war against poverty? Given that the world has become increasingly globalized and competitive, what policy levers can be expected to generate high returns in terms of poverty reduction? Can the countrys governance deliver highly pro-poor development agenda? What are facts? What are fancies? These were some of the questions that three economists attempted to answer at the University of the Philippines (UP) Centennial Lecture Series on Jan. 31 at UP Diliman. We are featuring Arsenio Balisacans lecture, which provides an overview of the poverty problem and key policy issues and lessons from the ongoing study titled Causes of Poverty in the Philippines. The study is jointly undertaken by the UP School

HR01121 [History] A RESOLUTION URGING THE AQUINO ADMINISTRATION TO REDIRECT THE P7 BILLION SUBSIDY FOR THE METRO RAIL TRANSIT TO PRO-POOR PROGRAMS SPECIALLY IN THE IMPOVERISHED AREAS

account for about one-third of the countrys total number of the poor.

What is quite remarkable is the very high spatial diversity of poverty and poverty reduction in the Philippines. In recent years, some regions have done quite well in attaining high per capita income growth and reducing poverty, but disturbingly others have experienced declines in per capita income and increases in poverty. Note, for example, the alarmingly substantial increase in poverty in ARMM between 1988 and 2006. During this period, poverty also increased in Central Mindanao and Caraga provinces. Viewed from an international perspective, such disparities could breed regional unrest, armed conflicts and political upheavals, thereby undermining the progress in securing sustained economic growth and national development. The Philippine Human Development Report 2005 shows that measures of deprivationsuch as disparities in access to reliable water supply, electricity and especially education predict well the occurrence of armed conflicts. As in most of Asias developing countries and despite rapid urbanization in the past 20 years, poverty in the Philippines is still largely a rural phenomenon. Two of every three poor persons in the country are in rural areas and are dependent predominantly on agricultural employment and incomes. Poverty incidence among agricultural households is roughly three times that in the rest of the population. While the share of agriculture in the total labor force has gone down from about one-half in the late 1980s to only a little more than just one-third by the mid-2000s, the sector continues to account for about 60 percent of total poverty. Sustained increases in national incomethat is, economic growth are required for poverty reduction. Recent developments present clear evidence that every country that has chalked up significant achievements

in poverty reduction and human development has also done quite well in securing long-term economic growth. Indeed, viewed from a medium- to long-term perspective, there is an almost one-to-one correspondence between growth in the incomes of the poor and the countrys average income growth.

controlling for differences in income growth rates.

This correlation is not unexpected: economic growth is an essential condition for the generation of resources needed to sustain investments in health, education, infrastructure and good governance (law enforcement, regulation), among others. Viewed from a long-term perspective, the countrys economic growth has been quite anemic, barely exceeding the population growth rate, which has continued to expand rapidly at 2.3 percent a year for most of the past two decades. Economic growth has quickened in the past three years, but questions linger on its sustainability. Even at the present pace (per capita GDP growth of 4 percent per year in 2004-2007), it can hardly be argued that the Philippines has come close to the growth trajectories of its dynamic neighbors. It is thus not surprising that serious students of Philippine development contend that shifting the economy to a higher growth path and keeping it there for the long termshould be first and foremost on the development agenda. The obvious question is: How? What reforms in policies and institutions can bring about an economic climate conducive to high growth and sustained development? That achieving economic growth should be at the forefront of policy agenda does not at all imply that there is nothing else apart from growth that can be done to lick the poverty problem. On the contrary, developments abroad indicate that much can be done to enhance the poverty-reducing effects of growth. For example, some countries have been more successful than others in reducing poverty, even after

Studies indicate that the response of poverty to economic growth in the Philippines, especially in recent years, is greatly muted in relation to Indonesia, Thailand and Vietnam. Partly explaining this is the comparatively high inequality in incomes and productive assets, including agricultural lands, in the Philippines. Key to achieving pro-poor growth, or what operationally amounts to the same thinginclusive growth, is expansion in access to economic opportunities, human development, social services and productive assets, particularly by the poor. The underlying weakness of the Philippine economy lies in its inability to create productive employment opportunities for its fast-growing labor force. Even among those who are employed, productivity is low compared with the countrys neighbors. Furthermore, access to available, productive employment opportunities favors the rich (typically skilled) more than the poor (typically unskilled). In recent decades, the experience of other countries suggests a strong connection between agricultural and rural development, on the one hand, and poverty reduction, on the other. Fostering productivity growth in agriculture is thus key to lifting rural inhabitants out of poverty. However, for many of todays rural poor, the route out of poverty often leads out of agriculture altogether. Rural income diversification and migration to productive nonfarm sectors, including overseas migration, offer important pathways out of poverty. Enhancing the efficiency of the labor market is thus essential to ensuring that migration is a boon rather than a bane to the poor. Inadequate human capabilities have often been the underlying cause of poverty and inequality. In recent years, economic growth has favored the highly skilled and educated. Even in agriculture, which has been the

reservoir of low-skilled labor, growth is increasingly anchored on higher levels of human capabilities.

Yet, the countrys public spending in basic infrastructure, education and health, whether in terms of its share in GDP or in expenditure per person, has been lagging well behind those of its East Asian neighbors. To catch up with these countries in terms of poverty reduction and human development outcomes, the government has to simply prioritize spending on infrastructure and the social sector, especially in basic education, health and family planning services and environment. The reform effort has to go beyond simply raising the level of public investment in basic infrastructure and social services, particularly education and health. It has to be made pro-poor as well. The data indicate that the poorest groups in society have the least access to health, education and family planning services. Targeting of public spending must be improved so that poorer individuals would receive proportionately more opportunities for publicly funded social services and infrastructure. Reforms have to likewise include deepening of our participation in the global marketplace. Contrary to fears expressed in various circles, globalization, defined broadly to mean interconnectedness of markets and communities across national borders, has been beneficial to the poor. Evidence indicates that in cases where globalization (in the more limited sense of openness to international trade) has hurt the poor, the culprit is often not globalization per se but the failure of domestic governance to secure policy and institutional reforms needed to enhance the efficiency of domestic markets and ensure a more inclusive access to technology, infrastructure and human development. The big challenge for the Philippines, therefore, is to pursue a strongly propoor development agenda in a

regime in which institutions are initially weak and governance is fragile. Many past, costly programs (e.g. credit programs, food subsidy programs, etc.) were christened in the name of the poor and equity, but in practice, these benefited disproportionately the nonpoor, including politicians, bureaucrats and the elites. It cannot be overemphasized that the quality of our institutions has to be upgraded so that they become more responsive to the needs and aspirations of those in the lowest rung of the social ladder.

to meet its minimum basic needs of health, food and nutrition, water and environmental sanitation, income security, shelter and decent housing, peace and order, education and functional literacy, participation in governance, and family care and psycho-social integrity; (2) Actively pursue asset reform or redistribution of productive economic resources to the basic sectors including the adoption of a system of public spending which is targeted towards the poor; (3) Institutionalize and enhance the Social Reform Agenda, hereinafter known as the SRA, which embodies the results of the series of consultations and summits on poverty alleviation; (4) Adopt and operationalize the following principles and strategies as constituting the national framework integrating various structural reforms and anti-poverty initiatives: (a) Social reform shall be a continuing process that addresses the basic inequities in Philippine society through a systematic package of social interventions; (b) The SRA shall be enhanced by government in equal partnership with the different basic sectors through appropriate and meaningful consultations and participation in governance; (c) Policy, programs and resource commitments from both government and the basic sectors shall be clearly defined to ensure accountability and transparency in the implementation of the Social Reform Agenda; (d) A policy environment conducive to sustainable social reform shall be pursued; (e) The SRA shall address the fight against poverty through a multi-dimensional and cross-sectoral approach which recognizes and respects the core values, cultural integrity, and spiritual diversity of target sectors and communities; (f) The SRA shall pursue a gender-responsive approach to fight poverty; (g) The SRA shall promote ecological balance in the different ecosystems, in a way that gives the basic sectors a major stake in the

use, management, conservation and protection of productive resources; (h) The SRA shall take into account the principle and interrelationship of population and development in the planning and implementation of social reform programs thereby promoting self-help and self-reliance; and (i) The SRA implementation shall be focused on specific target areas and basic sectors. SECTION 3. Definition of terms. As used in this Act, the following terms shall mean: (a) "Artisanal fisherfolk" Refers to municipal, small scale or subsistence fishermen who use fishing gear which do not require boats or which only require boats below three (3) tons; (b) "Basic sectors" Refer to the disadvantaged sectors of Philippine society, namely: farmer-peasant, artisanal fisherfolk, workers in the formal sector and migrant workers, workers in the informal sector, indigenous peoples and cultural communities, women, differently-abled persons, senior citizens, victims of calamities and disasters, youth and students, children, and urban poor; (c) "Cooperative" Refers to a duly registered association of at least fifteen (15) persons, majority of which are poor, having a common bond of interest, who voluntarily join together to achieve a lawful common social and economic end. It is organized by the members who equitably contribute the required share capital and accept a fair share of the risks and benefits of their undertaking in accordance with the universally accepted corporate principles and practices; (d) "Capability building" Refers to the process of enhancing the viability and sustainability of microfinance institutions through activities that include training in microfinance technologies, upgrading of accounting and auditing systems, technical assistance for the installation or improvement of management information systems, monitoring of loans and other related activities. The term capability building shall in no way refer to the provision of equity investments, seed funding, partnership's seed funds, equity participation, start-up funds or any such activity that connotes the infusion of

capital or funds from the government or from the people's development trust fund to microfinance institution as defined in this Act. Capability building precludes the grant of any loan or equity funds to the microfinance institution; (e) "Collateral-free arrangement" A financial arrangement wherein a loan is contracted by the debtor without the conventional loan security of a real estate or chattel mortgage in favor of the creditor. In lieu of these conventional securities, alternative arrangements to secure the loans and ensure repayment are offered and accepted; (f) "Group character loan" A loan contracted by a member and guaranteed by a group of persons for its repayment. The creditor can collect from any of the members of the group which guaranteed the said loan, without prejudice to the right of reimbursement of the member or members of the group who had advanced the payment in favor of the actual debtor; (g) "Indigenous cultural communities/ indigenous peoples" As defined in Republic Act No. 8371, otherwise known as "The Indigenous Peoples Rights Act of 1997"; (h) "Migrant workers" As defined in Republic Act No. 8042, otherwise known as the "Migrant Workers and Overseas Filipino Act of 1995"; (i) "Micro-enterprise" Any economic enterprise with a capital of One hundred fifty thousand pesos (P150,000.00) and below. This amount is subject to periodic determination of the Department of Trade and Industry to reflect economic changes; (j) "Microfinance" A credit and savings mobilization program exclusively for the poor to improve the asset base of households and expand the access to savings of the poor. It involves the use of viable alternative credit schemes and savings programs including the extension of small loans, simplified loan application procedures, group character loans, collateral-free arrangements, alternative loan repayments, minimum requirements for savings, and small denominated savers' instruments; (k) "Minimum basic needs" Refers to the

Researchers and policy reform advocates need to identify win-win solutions to the inequity problem, clearly specifying the winners and losers as well as the means or options to pacifying or compensating the losers, or designing social contracts that enable actors in society to make credible commitments. Do those aspiring to be national leaders in 2010 have what it takes to meet this challenge? *** (Balisacan is the executive director of Southeast Asian Regional Center for Graduate Study and Research in Agriculture. He delivered this paper on Jan. 31 at the Centennial Lecture Series at University of the Philippines in Diliman, Quezon City.)

Poverty Alleviation Act REPUBLIC ACT NO. 8425 AN ACT INSTITUTIONALIZING THE SOCIAL REFORM AND POVERTY ALLEVIATION PROGRAM, CREATING FOR THE PURPOSE THE NATIONAL ANTI-POVERTY COMMISSION, DEFINING ITS POWERS AND FUNCTIONS, AND FOR OTHER PURPOSES SECTION 1. Title. This Act shall be known as the "Social Reform and Poverty Alleviation Act." SECTION 2. Declaration of policy. It is the policy of the State to: (1) Adopt an area-based, sectoral and focused intervention to poverty alleviation wherein every poor Filipino family shall be empowered

needs of a Filipino family pertaining to survival (food and nutrition; health; water and sanitation; clothing), security (shelter; peace and order; public safety; income and livelihood) and enabling (basic education and literacy; participation in community development; family and psycho-social care); (l) "Human development index" Refers to the measure of how well a country has performed, based on social indicators of people's ability to lead a long and healthy life, to acquire knowledge and skills, and to have access to the resources needed to afford a decent standard of living. This index looks at a minimum of three outcomes of development: the state of health (measured by life expectancy at birth), the level of knowledge and skill (measured by a weighted average of adult literacy and enrollment rates), and the level of real income per capita, adjusted for poverty considerations; (m) "Non-government organizations" Refers to duly registered non-stock, non-profit organizations focusing on the upliftment of the basic or disadvantaged sectors of society by providing advocacy, training, community organizing, research, access to resources, and other similar activities; (n) "People's organization" Refers to a selfhelp group belonging to the basic sectors and/or disadvantaged groups composed of members having a common bond of interest who voluntarily join together to achieve a lawful common social or economic end; (o) "Poor" Refers to individuals and families whose income fall below the poverty threshold as defined by the National Economic and Development Authority and/or cannot afford in a sustained manner to provide their minimum basic needs of food, health, education, housing and other essential amenities of life; (p) "Poverty alleviation" Refers to the reduction of absolute poverty and relative poverty; (q) "Absolute poverty" Refers to the condition of the household below the food threshold level; (r) "Relative poverty" Refers to the gap between the rich and the poor;

(s) "Social reform" Refers to the continuing process of addressing the basic inequities in Filipino society through a systematic, unified and coordinated delivery of socioeconomic programs or packages; (t) "Small Savers Instrument (SSI)" Refers to an evidence of indebtedness of the Government of the Republic of the Philippines which shall be in small denominations and sold at a discount from its redemption value, payable to bearer and redeemable on demand according to a schedule printed on the instrument, with a discount lower than the full stated rate if not held to maturity. The resources generated under this scheme shall be used primarily for micro-credit for the poor. SSIs are not eligible as legal reserve of banks and legal reserves prescribed of insurance companies operating in the Philippines; (u) "Urban poor" Refers to individuals or families residing in urban centers and urbanizing areas whose income or combined household income falls below the poverty threshold as defined by the National Economic and Development Authority and/or cannot afford in a sustained manner to provide their minimum basic needs of food, health, education, housing and other essential amenities of life; (v) "Workers in the formal sector" Refers to workers in registered business enterprises who sell their services in exchange for wages and other forms of compensation; (w) "Workers in the informal sector" Refers to poor individuals who operate businesses that are very small in scale and are not registered with any national government agency, and to the workers in such enterprises who sell their services in exchange for subsistence level wages or other forms of compensation; and (x) "Youth" Refers to persons fifteen (15) to thirty (30) years old. SECTION 4. Adoption and integration of Social Reform Agenda (SRA) in the National AntiPoverty Action Agenda. The National AntiPoverty Action Agenda shall principally include the core principles and programs of the Social Reform Agenda (SRA). The SRA shall have a multi-dimensional approach to poverty

consisting of the following reforms: (1) Social dimension access to quality basic services. These are reforms which refer to equitable control and access to social services and facilities such as education, health, housing, and other basic services which enable the citizens to meet their basic human needs and to live decent lives; (2) Economic dimension asset reform and access to economic opportunities. Reforms which address the existing inequities in the ownership, distribution, management and control over natural and man-made resources from which they earn a living or increase the fruits of their labor; (3) Ecological dimension sustainable development of productive resources. Reforms which ensure the effective and sustainable utilization of the natural and ecological resource base, thus assuring greater social acceptability and increased participation of the basic sectors in environmental and natural resources conservation, management and development; (4) Governance dimension democratizing the decision-making and management processes. Reforms which enable the basic sectors to effectively participate in decision-making and management processes that affect their rights, interests and welfare. The SRA shall focus on the following sectorspecific flagship programs: (1) For farmers and landless rural workers agricultural development; (2) For the fisherfolk fisheries and aquatic resources conservation, management and development; (3) For the indigenous peoples and indigenous communities respect, protection and management of the ancestral domains; (4) For workers in the informal sector workers' welfare and protection; (5) For the urban poor socialized housing; and (6) For members of other disadvantaged groups such as the women, children, youth, persons with disabilities, the elderly, and victims of natural and man-made calamities

the Comprehensive Integrated Delivery of Social Services (CIDSS). Additionally, to support the sectoral flagship programs, the following cross-sectoral flagships shall likewise be instituted: (1) Institution-building and effective participation in governance; (2) Livelihood programs; (3) Expansion of micro-credit/microfinance services and capability building; and (4) Infrastructure buildup and development. TITLE I NATIONAL ANTI-POVERTY COMMISSION SECTION 5. The National Anti-Poverty Commission. To support the above-stated policy, the National Anti-Poverty Commission, hereinafter referred to as the NAPC, is hereby created under the Office of the President, which shall serve as the coordinating and advisory body for the implementation of the SRA. The Presidential Commission to Fight Poverty (PCFP), the Social Reform Council (SRC), and the Presidential Council for Countryside Development (PCCD) are hereby abolished and the NAPC shall exercise the powers and functions of these agencies. The NAPC shall be the successor-in-interest of the three (3) abolished commissions and councils. The creation and operationalization of the NAPC shall be guided by the following principles: (1) Incorporation of the Social Reform Agenda into the formulation of development plans at the national, regional, sub-regional and local levels; (2) Efficiency in the implementation of the anti-poverty programs by strengthening and/or streamlining present poverty alleviation processes and mechanisms, and reducing the duplication of functions and activities among various government agencies; (3) Coordination and synchronization of social reform and poverty alleviation programs of national government agencies; (4) Exercise of policy oversight responsibilities to ensure the attainment of social reform and poverty alleviation goals;

(5) Strengthening of local government units to more effectively operationalize the SRA in local development efforts; (6) Institutionalization of basic sectoral and NGO participation in effective planning, decision-making, implementation, monitoring and evaluation of the SRA at all levels; (7) Ensuring adequate, efficient and prompt delivery of basic services to the poor; and (8) Enjoining government financial institutions to open credit and savings windows for the poor, and advocating the creation of such windows for the poor among private banking institutions. SECTION 6. Composition of the NAPC. The President of the Republic of the Philippines shall serve as Chairperson of the NAPC. The President shall appoint the Lead Convenor of the NAPC, either from the government or private sector, who shall likewise serve as the head of the National Anti-Poverty Commission Secretariat, and shall have the rank of a Cabinet Secretary. There shall be a vicechairperson for the government sector and a vice-chairperson for the basic sectors; the former to be designated by the President, and the latter to be elected among the basic sector representatives of the NAPC as vicechairperson for the basic sector; and the following as members: (1) Heads of the following government bodies: (a) Department of Agrarian Reform (DAR); (b) Department of Agriculture (DA); (c) Department of Labor and Employment (DOLE); (d) Department of Budget and Management (DBM); (e) Department of Social Welfare and Development (DSWD); (f) Department of Health (DOH); (g) Department of Education, Culture and Sports (DECS); (h) Department of the Interior and Local Government (DILG); (i) Department of Environment and Natural Resources (DENR); (j) Department of Finance (DOF); (k) National Economic and Development Authority (NEDA); (l) People's Credit and Finance Corporation (PCFC), subject to Section 17 of this Act; and (m) Presidential Commission on Urban Poor

(PCUP). (2) Presidents of the Leagues of Local Government Units: (a) League of Provinces; (b) League of Cities; (c) League of Municipalities; (d) Liga ng mga Barangay. (3) Representatives from each of the following basic sectors: (a) Farmers and landless rural workers; (b) Artisanal fisherfolk; (c) Urban poor; (d) Indigenous cultural communities/indigenous peoples; (e) Workers in the formal sector and migrant workers; (f) Workers in the informal sector; (g) Women; (h) Youth and students; (i) Persons with disabilities; (j) Victims of disasters and calamities; (k) Senior citizens; (l) Nongovernment organizations (NGOs); (m) Children; and (n) Cooperatives. Sectoral councils formed by and among the members of each sector shall respectively nominate three (3) nominees from each sector within six (6) months after the effectivity of the implementing rules and regulations of this Act, and every three (3) years thereafter and in case of vacancy. The President of the Republic of the Philippines shall, within (30) days after the submission of the list of nominees, appoint the representatives from the submitted list. Sectoral representatives shall serve for a term of three (3) years without reappointment. Appointment to any vacancy for basic sector representatives shall be only for the unexpired term of the predecessor. The implementing rules and regulations (IRR) of this Act shall contain the guidelines for the formation of sectoral councils, the nomination process, recall procedures and such other mechanisms to ensure accountability of the sectoral representatives. SECTION 7. Powers and functions. The NAPC shall exercise the following powers and functions: (1) Coordinate with different national and local

government agencies and the private sector to assure full implementation of all social reform and poverty alleviation programs; (2) Coordinate with local government units in the formulation of social reform and poverty alleviation programs for their respective areas in conformity with the National Anti-Poverty Action Agenda; (3) Recommend policy and other measures to ensure the responsive implementation of the commitments under the SRA; (4) Ensure meaningful representation and active participation of the basic sectors; (5) Oversee, monitor and recommend measures to ensure the effective formulation, implementation and evaluation of policies, programs and resource allocation and management of social reform and poverty alleviation programs; (6) Advocate for the mobilization of funds by the national and local governments to finance social reform and poverty alleviation programs and capability building activities of people's organizations; (7) Provide financial and non-financial incentives to local government units with counterpart resources for the implementation of social reform and poverty alleviation programs; and (8) Submit an annual report to Congress including, but not limited to, all aspects of its operations and programs and project implementation, financial status and other relevant data as reflected by the basic reform indicator. SECTION 8. Principal office. The NAPC shall establish its principal office in Metro Manila and may establish such branches within the Philippines as may be deemed necessary by the President of the Philippines to carry out the powers and functions of the NAPC. SECTION 9. The NAPC secretariat. The NAPC shall be supported by a Secretariat, which shall be headed by the Lead Convenor referred to under Section 6 hereof. The Secretariat shall provide technical and administrative support to the NAPC. It shall be formed from the unification of the secretariats

of the following bodies: (1) Presidential Commission to Fight Poverty (PCFP); (2) Social Reform Council (SRC); and (3) Presidential Council for Countryside Development (PCCD). Within three (3) months from the effectivity of this Act, the Office of the President shall finalize the organizational plan for the NAPC. To provide the continuity of existing social reform and poverty alleviation related programs, all accredited organizations under the three (3) unified councils and commissions shall be automatically accredited under the NAPC until such time that additional accreditation requirements may be provided by the NAPC. SECTION 10. The People's Development Trust Fund. The People's Development Trust Fund (PDTF) is hereby established, which shall be monitored by the NAPC. The Trust Fund in the amount of Four billion and five hundred million pesos (P4,500,000,000.00) shall be funded from the earnings of the PAGCOR in addition to appropriations by Congress, voluntary contributions, grants, gifts from both local and foreign sources as may be accepted or decided on by the NAPC. Any additional amount to the Trust Fund shall form part of the corpus of the Trust Fund, unless the donor, contributor or grantor expressly provides as a condition that the amount be included in the disbursible portion of the Trust Fund. The President of the Philippines shall assign to any existing government department or agency the administration of the Trust Fund, based on the expertise, organizational capability, and orientation or focus of the department or agency. The NAPC shall be limited to the function of monitoring the utilization of the PDTF, while the government departments or agencies designated by the President shall directly administer the utilization of the earnings of the PDTF. Only the fruits of the PDTF shall be used for the purposes provided in this Act. Any undisbursed fruits for the preceding year shall form part of the disbursible portion of the

PDTF in the following year. For the purpose of monitoring the earnings of the PDTF, the NAPC shall: (1) Source funds for the establishment of and augmentation to the Trust Fund; (2) Recommend to the appropriate government department or agency the accreditation of organizations and institutions that shall act as resource partners in conducting institutional development and capability building activities for accredited organizations and beneficiaries of microfinance and micro-enterprise programs; (3) Ensure that validation and monitoring activities are conducted for funded institutional development and capability building projects/programs/beneficiaries; and (4) Promote research and development work on livelihood and microfinance technology and publications/communications programs that assist the poor beneficiaries. SECTION 11. Purposes of the People's Development Trust Fund (PDTF). The earnings of the PDTF shall be utilized for the following purposes: (1) Consultancy and training services for microfinance institutions and their beneficiaries on the establishment of the necessary support services, social and financial preparation of beneficiaries, preparation of plans and programs including fund sourcing and assistance, establishment of credit and savings monitoring and evaluation mechanisms; (2) Scholarships or training grants for microfinance staff and officers, and selected beneficiaries; (3) Community organizing for microfinance, livelihood and micro-enterprises training services; (4) Livelihood/micro-enterprise project/program feasibility studies and researches; (5) Savings mobilization and incentive programs, and other similar facilities; (6) Information and communication systems such as baseline surveys, development

monitoring systems, socioeconomic mapping surveys, organizational assessments, and other similar activities; (7) Legal and other management support services such as registration, documentation, contract review and enforcement, financial audit and operational assessment; (8) Information dissemination of microfinance technology; and (9) Other activities to support microfinance as approved by the designated agency administering the PDTF. The PDTF may be accessed by the following: (a) Registered microfinance organizations engaged in providing micro-enterprise services for the poor to enable them to become viable and sustainable; (b) Local government units providing microfinance and micro-enterprise programs to their constituents: Provided, That the PDTF shall not be used by the LGUs for personal services and maintenance and other operating expenses; and (c) Local government units undertaking selfhelp projects where at least twenty-five percent (25%) of the total earnings of the PDTF shall be used exclusively for the provision of materials and technical services. SECTION 12. The role of Local Government Units (LGUs). The local government units, through the local development councils of the province, city, municipality, or barangay shall be responsible for the formulation, implementation, monitoring and evaluation of the National Anti-Poverty Action Agenda in their respective jurisdictions. The LGUs shall: (a) Identify the poor in their respective areas based on indicators such as the minimum basic needs approach and the human development index, their location, occupation, nature of employment, and their primary resource base and formulate a provincial/city/municipality anti-poverty action agenda; (b) Identify and source funding for specific social reform and poverty alleviation projects; (c) Coordinate, monitor and evaluate the efforts of local government units with the private sector on planning and implementation

of the local action program for social reform and poverty alleviation; and (d) Coordinate and submit progress reports to the National Anti-Poverty Commission regarding their local action programs. Nothing in this Act shall be construed as diminishing the powers granted to the local government units under the Local Government Code. TITLE II MICROFINANCE SERVICES FOR THE POOR SECTION 13. Microfinance program. The programs and implementing mechanisms of the Social Reform Agenda's Flagship Program on Credit shall be integrated, adopted and further enhanced to effectively support the objectives of this Act along the following thrusts: (1) Development of a policy environment, especially in the area of savings generation, supportive of basic sector initiatives dedicated to serving the needs of the poor in terms of microfinance services; (2) Rationalization of existing government programs for credit and guarantee; (3) Utilization of existing government financial entities for the provision of microfinance products and services for the poor; and (4) Promotion of mechanisms necessary for the implementation of microfinance services, including indigenous microfinance practices. SECTION 14. People's Credit and Finance Corporation (PCFC). The People's Credit and Finance Corporation (PCFC), a governmentcontrolled corporation registered with the Securities and Exchange Commission and created in accordance with Administrative Order No. 148 and Memorandum Order No. 261, shall be the vehicle for the delivery of microfinance services for the exclusive use of the poor. As a government-owned and -controlled corporation, it shall be the lead government entity specifically tasked to mobilize financial resources from both local and international funding sources for microfinance services for the exclusive use of the poor. SECTION 15. Increase in the Capitalization of PCFC. To facilitate the increase in the

capitalization of the PCFC, the President of the Republic of the Philippines shall take measures to enable the amendment of the Articles of Incorporation of the PCFC such that: (a) The authorized capital stock of the PCFC may be increased from One hundred million pesos (P100,000,000.00) to Two billion pesos (P2,000,000,000.00) divided into twenty million common shares with a par value of One hundred pesos (P100.00) per share; (b) The subscribed capital stock may be increased from One hundred million pesos (P100,000,000.00) to Six hundred million pesos (P600,000,000.00) and the national government may subscribe the difference of Five hundred million pesos (P500,000,000.00); (c) The initial paid-up capital may be increased from One hundred million pesos (P100,000,000.00) to Two hundred fifty million pesos (P250,000,000.00), to be increased subsequently to a total of Six hundred million pesos (P600,000,000.00), such that at the end of a period of four (4) years the subscribed capital shall be fully paid-up, in the following manner: For the initial increase in paid-up capital during the first year, the difference of One hundred fifty million pesos (P150,000,000.00) shall be paid and appropriated for by government; for the second year, One hundred fifty million pesos (P150,000,000.00); for the third year, One hundred million pesos (P100,000,000.00); and for the fourth year, One hundred million pesos (P100,000,000.00). The appropriations for the additional paid-up capital shall be sourced from the share of the national government in the earnings of the PAGCOR, in the manner provided for under Section 18, which provides for the appropriations under this Act. SECTION 16. Special credit windows in existing Government Financing Institutions (GFIs). The existing government financial institutions shall provide for the savings and credit needs of the poor. The GFIs such as the Land Bank of the Philippines, Philippine Postal Bank, Al Amanah Bank, and the Development Bank of the Philippines are hereby mandated to coordinate with NAPC and PCFC in setting up

special credit windows and other arrangements, such as the servicing of Small Savers Instruments (SSIs), that will promote the microfinance program of this Act. The private financing institutions may also provide the savings and credit requirements of the poor by setting up similar credit windows and other arrangements to promote the savings component of the microfinance program of this Act. Special credit windows for the poor shall, as far as practicable, include an allocation for the basic sectors, as defined in this Act, particularly those living in the rural areas, agrarian reform communities, and women in the countryside. SECTION 17. PCFC privatization. In the event that the ownership of the majority of the issued voting stocks of PCFC shall have passed to private investors (exclusively qualified nongovernment organizations, people's organizations and cooperatives), the stockholders shall cause the registration with the Securities and Exchange Commission (SEC) of the revised Articles of Incorporation and By-laws. The PCFC shall thereafter be considered as a privately organized entity subject to the laws and regulations generally applied to private corporations. The chairman of the PCFC may still be a member of the National Anti-Poverty Commission (NAPC) upon the privatization of the PCFC: Provided, That the PCFC will continue its main purpose of providing for the savings and credit needs of the poor. TITLE III APPROPRIATIONS FOR THE NATIONAL ANTI-POVERTY COMMISSION (NAPC) AND THE PEOPLE'S DEVELOPMENT TRUST FUND (PDTF) SECTION 18. Appropriations. To carry out the provisions of this Act, the following amounts are appropriated as follows: (1) The sum of One hundred million pesos (P100,000,000.00) is hereby appropriated as the initial operating fund in addition to the unutilized funds of the rationalized commission and councils. The sum shall be sourced from the President's Contingent Fund.

In subsequent years, the amount necessary to implement this Act shall be included in the annual appropriations. The said amounts shall be under the management of the NAPC. (2) The aggregate sum of Four billion and five hundred million pesos (P4,500,000,000.00) for ten (10) years is hereby appropriated for the establishment of the People's Development Trust Fund (PDTF) from the share of the national government in the earnings of the Philippine Amusement and Gaming Corporation (PAGCOR), in the following manner: on the first year, Three hundred fifty million pesos (P350,000,000.00); on the second year, Three hundred fifty million pesos (P350,000,000.00); on the third year, Four hundred million pesos (P400,000,000.00); on the fourth year, Four hundred million pesos (P400,000,000.00); on the fifth year and every year thereafter until the tenth year, Five hundred million pesos (P500,000,000.00) annually. (3) The aggregate sum of Five hundred million pesos (P500,000,000) for four years shall be appropriated for the increase in the capitalization of the PCFC, from the share of the national government in the earnings of the PAGCOR, at such time that the increase in the capitalization of the PCFC, in the manner provided for under Section 15 of this Act, shall have been effected. The appropriation shall be made in the following manner: on the first year, One hundred fifty million pesos (P150,000,000.00); on the second year, One hundred fifty million pesos (P150,000,000.00); on the third year, One hundred million pesos (P100,000,000.00); and on the fourth year, One hundred million pesos (P100,000,000.00). SECTION 19. Transitory provision. The Social Reform Council (SRC) and the representatives therein shall, in temporary capacity, exercise the powers and assume the duties of the NAPC until such time that the members of NAPC shall have been duly appointed or designated. The Office of the President shall formulate the implementing rules and regulations (IRR) of this Act within six (6) months after its effectivity. The assets, liabilities and personnel of PCFP, SRC and PCCD are hereby transferred to the NAPC. Personnel who cannot be absorbed by

NAPC shall be entitled to a separation pay of one-and-a-half (1 1/2) months for every year of service and other benefits under existing retirement laws, at the option of the personnel concerned. SECTION 20. Repealing clause. All laws, executive orders, rules and regulations, or parts thereof, inconsistent with this Act are hereby repealed, amended or modified accordingly. The provisions of this Act shall not be repealed, amended or modified unless expressly provided in subsequent general or special laws. SECTION 21. Separability clause. If any provision of this Act shall be held invalid or unconstitutional, the remaining provisions thereof not affected thereby shall remain in full force and effect. SECTION 22. Effectivity clause. This Act shall be effective on June 30, 1998. Approved: December 11, 1997