2009 Alternative Budget Initiative

ALTERNATIVE BUDGET

2009200920092009

Securing Financing for MDGs Amidst Economic Challenges

List of Tables and Figures

Introduction

List of Tables and Figures

Introduction i

PART ONE

Chapter 1: Analysis of the FY 2009 Executive Budget 1

Chapter 2: Executive Summaries: FY 2009 Alternative Budget Proposals for Sectors 14

1. Basic Education 14

2. Higher Education 21

3. Health 25

4. Agriculture 29

5. Environment 36

6. Summary of Alternative Budget Proposals 39

Chapter 3: Sources of Financing 40

PART TWO

Chapter 4: Technical Paper on Basic Education 44

Chapter 5: Technical Paper on Higher Education 56

Chapter 6: Technical Paper on Health 72

Chapter 7: Technical Paper on Agriculture 94

Chapter 8: Technical Paper on Environment 107

LIST OF TABLES

Table 1 Macroeconomic Assumptions for 2009 Budget 2

Table 2 First Semester Economic Performance, 2007 and 2008 2

Table 3 Government’s Growth Targets by Industrial Origin, 2008 and 2009 3

Table 4 Revenue Projections, Budget Call and BESF, 2008 and 2009 5

Table 5 Primary Surplus/Deficit 6

Table 6 National Government Financing 6

Table 7 Total Debt Service 6

Table 8 Recommendations on CCT Programs 9

Table 9 Public Debt Statistics, 1981-2007 10

Table 10 ABI proposed budget increase for Basic Education 18

Table 11 Consolidated Alternative Budget for SUCs 22

Table 12 Proposed Debt Service Cuts on Anomalous Loans 24

Table 13 Alternative Budget Proposal for DOH 25

Table 14 Alternative Budget for DA 32

Table 15 Alternative Budget Proposal for NFA 33

Table 16 Alternative Budget for BFAR 34

Table 17 Details of Alternative Budget Proposal for BFAR 34

Table 18 Summary of Alternative Budget Environment Sustainability 37

Table 19 Summary of Alternative Budget Proposals 39

Table 20 Summary of Proposed Sources of Financing 40

Table 21 Proposed Sources of Financing 41

Table 22 Net Enrolment Ratio (NER) by Region for SY 2006-2007 45

Table 23 Percentage Distribution of Out of School Children by Age Group 47

and Economic Status

Table 24 Achievement Test Results 48

Table 25 ABI proposed budget increase for Basic Education 52

Table 26 Education Spending vis-à-vis GNP, 1996-2007 62

Table 27 Details of Proposed Increase in Capital Outlay of SUCs for 2009 63

Table 28 Details of Proposed Increase for Student Subsidy 64

Table 29 Consolidated Alternative Budget for SUCs 66

Table 30 GNP per Capita and Education Spending, 2004 68

Table 31 FY 2009 Budget for Health 74

Table 32 Number of Enrollees and Graduates in Health Programs, Philippines 76

(2001-2006)

Table 33 Number of Doctors, Nurses and Midwives from 1998 – 2005 77

Table 34 Entry Point Salaries (Php) of Selected Health Professionals, 78

Philippines, 2004

Table 35 Average Monthly Wage Rates of Selected Professions, Philippines, 78

2002 and 2006

Table 36 Alternative Budget Proposal for DOH 83

Table 37 Overall Agriculture Budget By Fields Components 94

Table 38 Comparative DA Osec, BFAR, AFMA Budget, 2007 and 2008 100

Table 39 Details of 2009 Agriculture-related Budget 100

Table 40 Alternative Budget for DA/ AFMA Component 101

Table 41 Alternative Budget for NFA 103

Table 42 Alternative Budget for BFAR 104

Table 43 Details of Proposed Budget Increase of BFAR 104

Table 44 Asia and the Pacific MDGs Profile 108

Table 45 Fisheries Production: 1997 – 2004 111

Table 46 Expenditures due to Air Pollution-related Diseases 113

Table 47 Reported Losses in Philippine Fisheries due to El Nino in 1997-98. 113

Table 48 Core Functions of DENR Attached Agencies 116

Table 49 Distribution of DENR Budget Allocation by Agency / Office 117

Table 50 Revenue Loss of DENR in 2006 118

Table 51 Ensuring Sustainable Management of Forest through CBFM 118

Table 52 Ensuring Sustainable Management of Coastal and Marine Resource 119

through Modeling of Converging Efforts of DENR, DA-BFAR,

LGUs, and People’s Organizations

Table 53 Trash to Treasure: Transforming Solid Waste Problems 119

to Sustainable Solutions to the Food and Fuel Crises

Table 54 Ensuring Environmental Health for Filipinos 120

Table 55 Ensuring Environmental Justice 121

Table 56 Building Capacities for Environmental Sustainability 121

Table 57 Localizing Sustainable Development or Philippine Agenda 21 (PA 21) 122

Table 58 Enhancing Environmental Partnerships between Government 122

and the People

Table 59 Summary of Alternative Budget for Environmental Sustainability 122

LIST OF FIGURES

Figure 1 Real GDP Shares by Industrial Origin 3

Figure 2 Comparative Real GDP Growth Rate Forecasts for 2008 4

Figure 3 Comparative Real GDP Growth Rate Forecasts for 2009 4

Figure 4 Breakdown of 2009 Proposed Budget 7

Figure 5 Net Enrolment Rate, SY 1999-00 to SY 2006-07 44

Figure 6 Elementary and High School Dropout Rates, 46

SY 1999-00 to SY 2006-07

Figure 7 Distribution of 2008 National Budget 50

Figure 8 Average Net Increases of Students per HEI 57

Figure 9 SUC Budget per College Entrant 58

Figure 10 Historical Enrolment Levels 59

Figure 11 Public Expenditure on Education as % of GNP, various countries, 2002 68

Figure 12 Delors Gap per Administration 69

Figure 13 Delors Gap vs. Interest Payments 70

Figure 14 Causes of Deaths and the Environment 112

Figure 15 Cause of Diseases and the Environment 112

Figure 16 Integrated Adaptation-Mitigation Framework on Climate Change 115

i

he ALTERNATIVE BUDGET INITIATIVE (ABI) is a pioneering campaign on people’s

participation in the budget process in the Philippines. It was spearheaded by Social Watch

Philippines in 2006 when it convened non-government organizations (NGOs) of different

technical expertise and people’s organizations (POs) representing various sectors.

Working in partnership with legislators in the House of Representatives and the Senate, the ABI crafts

alternative budget proposals to ensure greater budgetary allocations for critical social and economic

services, specifically for education, health, environment and agriculture. The ABI also engages the

macroeconomic assumptions used in the preparation of the national budget and examines the expenditure

program, being critical of budget items which are wasteful and/or prone to unbridled discretion and abuse.

The ABI lobbies for the realignment of these contentious as sources of financing its proposals.

The budget is an important development instrument of government and reflects the administration’s

economic and political priorities as well as its political will to achieve socioeconomic development. It is

connected to every aspect of governance – reforms, policies, anti-corruption efforts, delivery of social

services and others. Hence, the ABI strives to realize effective people’s participation in government

budgeting process so that the public spending can be responsive to the needs of the vulnerable sectors and

ensure judicious resource utilization.

More funding for social development

With 22 civil society organizations, ABI successfully campaigned for the inclusion of additional P5.2

billion allocation in the General Appropriations Act (GAA) for 2007. This included budget for the

construction of more than 17,000 classrooms; funding for food supplements such as milk, coco-pandesal

and vegetable-based noodles, and rice under the Department of Education nutrition feeding program;

hiring of new teachers; and additional scholarship fund for tertiary education.

In the second year of the campaign, participation of NGOs and POs grew to 48. ABI successfully secured

additional allocation of P6.3 billion in line with its alternative budget proposals in the 2008 GAA.

Towards participatory budgeting

For the first time in Philippine history, the Committee on Appropriations of the House of Representatives

sought the formal participation of civil society in Congressional budget deliberations for the 2008 budget

T

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when it conducted a budget hearing specifically to discuss the proposals of ABI. This was initiated by

then Committee on Appropriations Chair Rep. Edcel Lagman and which was later continued by current

Chair Rep. Junie Cua for the 2009 budget deliberations.

The trailblazing efforts of the ABI in Congressional budget deliberations have resulted in several policy

proposals that have been filed in Congress towards participatory budgeting. Congress approved

Resolution No. 120, “Urgent Resolution Allowing the Active Participation of Bona Fide People’s

Organizations in Public Hearings in Congress’ Annual Budget Deliberations” in 2007 authored by Rep.

Lorenzo Tanada III and Teofisto Guingona III. Currently, a bill in Congress seeking the

institutionalization of people’s participation in the national and local budget process is being deliberated.

The Philippines’ Alternative Budget Initiative is recognized worldwide as one of the best practices in

budget advocacy. It is only in the Philippines where civil society and legislators work together for

alternative budget proposal that is people oriented and puts social development at top priority.

FY 2009 Budget Initiatives

Around the world, bottom-up initiatives proved that citizens’ involvement in the budget process leads to

improved delivery of social services and increased investment for the marginalized or most vulnerable

sectors. This is most needed in the Philippines where millions of the people are poor and in desperate

need of shelter from the economic crises. And this is the central theme of ABI’s campaign for the 2009

budget.

The alternative budget proposal for the fiscal year 2009 is an urgent response to the call for shelter,

protection, security and dignity of Filipinos amidst the global and national economic crises. This orange

book contains the details of ABI’s analysis of the FY 2009 and alternative budget proposals. This is

published in the hope of aiding legislators in their constitutional mandate in approving a national budget

that will effectively serve the country’s development objectives.

2009 Alternative Budget Initiative 1

ANALYSIS OF THE FY 2009 EXECUTIVE BUDGET1

ast August 26, 2008, President Arroyo submitted the proposed national budget for Fiscal Year (FY) 2009 for deliberation and approval of Congress. The proposed budget, sometimes called the President’s or the Executive budget, was prepared and now being deliberated by Congress

against the backdrop of a slackening economy, a people desperately trying to cope with rapidly increasing cost of living and a burgeoning global financial crisis. These trying times is aptly recognized in the budget theme Standing Firm in the Midst of Economic Challenges. The budget message presented the budget as something short of a panacea for the nation’s development challenges, saying that it “holds our hopes of tiding our people over the difficulties and emerging as a nation capable of attaining sustainable growth.” A budget to the tune of P1.415 trillion is indeed one potentially powerful instrument at government’s disposal that can be used to pursue growth, equity, stability and development if indeed it will be utilized for the urgent needs of the country particularly the growing number of poor Filipinos. These objectives can be realized 1) if the assumption used to project the levels of revenues, expenditures and financing are viable; and 2) by employing the appropriate expenditure policies and strategies in resource allocation, operational management and effective control mechanisms. However, the political nature of the budget process including the massive leakage in public spending compromises the realization of such ideal expenditure strategies. The ABI conducted a critical analysis of the President’s budget as this is instructive to determine whether it is primarily designed to be an instrument to further development goals and not to fortify the political partisan interests and influence of its proponents. A. Macroeconomic Assumptions

The FY 2009 budget season kicked off when the Department of Budget and Management (DBM) released the Budget Call in May 2008. The budget call contains the guidelines to be followed by the agencies in budget preparation. Among others, the budget call contains the macroeconomic assumptions, deficit targets, revenue projections and budget ceilings. The macroeconomic assumptions are crucial as they provide an indication of the expected revenues of government, the

1 Prepared by Prof. Leonor Magtolis Briones and Alvic Padilla for Social Watch Philippines, convenor of the Alternative Budget Initiative.

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appropriate level of spending and the borrowing requirements. The FY 2009 Budget Call reiterated the Executive’s intent to balance the budget in FY 2008, and projected the same for FY 2009. ABI has stated early on that the macro-economic assumptions contained in the budget call were overly optimistic and that the thrust towards a balanced budget for FY 2009 is unattainable. In less than two months after its release, ABI already noted that many of these assumptions have been rendered unsound in the midst of accelerated increases in the food, fuel and other basic commodities and other domestic and international trends. The initial assumptions were revised just before the submission of the proposed budget to Congress. Table 1 shows the difference between the original and revised assumptions as contained in the Budget Call and the 2009 Budget of Expenditures and Sources of Financing (BESF). Overall growth assumptions have been scaled down for FYs 2008 and 2009. But are the adjusted macroeconomic assumptions realistic this time around? ABI believes that the growth projections were too optimistic considering the recent trends in the local and international economy. The latest statistics only confirmed what the people already feel and perceive all along—general economic performance has been worse than last year’s as higher food and fuel prices and general decline in the world economy takes its toll. Table 2 shows that for the first half of 2008, GDP and GNP are still below the adjusted year-long growth targets. The slower growth in the service sector is worth noting since this has been a major contributor to total GDP over recent years. Figure 1 shows the shares in agriculture, industry and services to GDP for the past five years. In 2003, the

Table 2. First Semester Economic Performance, 2007 and 2008 (% growth rates)

Details First Half 2007 First Half 2008

Agri, Fishery, Forestry 4.1 3.7

Industry 8.6 3.9

Of which:

Manufacturing 3.7 4.3

Construction 30.4 3.7

Services 8.4 5.4

Of which:

TCS 10.0 4.4

Trade 7.4 5.0

Finance 15.2 7.2

O. Dwellings and R.Estate 5.8 7.3

Private Services 8.8 6.0

Government Services 2.0 3.2

GDP 7.6 4.6

NFIA 18.7 15.9

GNP 8.6 5.7 Source: NSCB, NEDA Presentation to Congress, September 03, 2008

Table 1. Macroeconomic Assumptions for 2009 Budget

2009 Budget Call 2009 BESF PARTICULARS

2008* 2009* 2008** 2009**

GNP Real Growth (%) 6.6 – 7.3 7.5 – 8.2 5.9-6.7 6.9-7.8

GDP Real Growth (%) 6.0 – 6.7 6.5 – 7.3 5.5-6.4 6.1-7.1

Inflation Rate (%) 4.0 – 5.0 2.5 – 4.5 9.0-11.0 6.0-8.0

91-day T-bill rate (%) 3.5 – 5.5 3.5 – 5.5 6.0-8.0 5.0-6.0

Foreign Exchange Rate (P/$)

40 - 43 40 - 43 42-45 42-45

Sources: 2009 Budget Call (DBM) and 2009 Budget of Expenditures and Sources of

Financing (DBM)


service sector contributed 46.66 percent of total GDP. Its share has steadily increased over the years and accounted for 49.09 percent of GDP by 2007. Finance, private services and transportation, communication and storage (TCS) posted the highest declines for the first half of 2008. According to Dr. Benjamin Diokno,2 to achieve a 5.7 percent growth, the economy has to grow by 6.8 percent for the rest of the year, and that it is unimaginable where such robust growth will come from. Table 3 shows expected growth rates by industrial origin which served as basis for its year-long growth projections for FYs 2008 and 2009. Compared with the sectors’ performances in the first half of the year, agriculture, industry and services has a lot of catching up to do if the year-end targets are to be met.

To achieve the year-long minimum average growth targets for each sector, agriculture sector needs to post 4.9 percent, industry 6.1 percent and services 7.2 percent. NEDA admitted that the government’s economic growth target was difficult to achieve and that a 5 percent growth “would still be respectable”.3 Even the forecasts of other international institutions on the country’s economy gravitate below or at the lower range of government’s official projections. Figure 2 compares the FY 2008 real GDP growth forecast of the government with those of multilateral financial institutions, selected large international banks and other forecasting institutions.

2 Benjamin Diokno, “Wishful Thinking”, in his column Core, Business World, September 4, 2008 3 “5% GDP growth seen”, Philippine Daily Inquirer, September 4, 2008

Figure 1. Real GDP shares by Industrial Origin

19.84

19.62

19.06

18.76

18.36

33.50

33.13

32.76

32.58

32.55

46.66

47.25

48.17

48.66

49.09

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2003

2004

2005

2006

2007

AFF Industry Services

Source of data: NSCB

Table 3. Government’s Growth Targets by Industrial

Origin, 2008 and 2009 (% growth rates)

INDICATORS 2007 Actual 2008 Target 2009 Target

Agriculture 4.9 4.3-5.3 5.1-6.2

Industry 7.1 5.0-6.4 6.2-7.1

Services 8.1 6.3-6.9 6.5-7.4

GDP 7.2 5.5-6.4 6.1-7.1

GNP 8.0 5.9-6.7 6.9-7.8 Source: NSCB, NEDA Presentation to Congress, September 03, 2008



For FY 2009, the outlook of government is also more optimistic than those of other rating agencies and financial institutions. The comparative growth rate forecasts for FY 2009 are shown in Figure 3.

US Financial Meltdown

The recent meltdown in the US financial market adds a grimmer scenario on our economy’s growth projections for the year. The extent of the impact of the financial crisis in the US is yet to be fully determined but the prospects are not good. The ABI has earlier asserted that the potential impact to the Philippine economy and, consequently, the country’s fiscal position for the coming year will be adverse. It’s not enough to say that the exposure of domestic financial institutions in the US market is minimal. It will affect investment flows in the Philippines and will most likely increase the cost of

Source of data: Prof. Diokno’s presentation in the Budget Forum, September 09, 2008, UP NCPAG

Figure 3. Comparative Real GDP Growth Rate Forecasts for 2009

5.8

5.6

5.8

6.1

4.8

5.6

4.4

4.5

5.5

5.7

6.1

4.8

5.5

6.6

0 1 2 3 4 5 6 7

A. Multilateral Financial Institutions (Ave)

Asian Development Bank

International Monetary Fund

World Bank

B. Large international banks and financial instis (Ave)

Citi

HSBC

UBS

C. Other forecasting/rating agencies (ave)

Economist Intelligence Unit

Moody’s

Nomura Investments

Reuters IFR

Government forecast (ave)

Source of data: Prof. Diokno’s presentation in the Budget Forum, September 09, 2008, UP NCPAG


borrowings. A US economic slowdown will dampen demand for Philippine exports, affect tourism and its impact on US unemployment will affect our OFWs. How these recent trends will affect the remittance of OFWs is crucial to our economy. OFW remittance has been the lifeblood and the major source of income which drives domestic consumer spending. From January to July 2008, the Bangko Sentral ng Pilipinas’ (BSP) data show that remittance from OFWs amounted to $9.608 billion.4 Out of this total, $4.728 billion came from OFWs working in the US. This represents 49 percent of total remittances. Most recently, the executive has formally recognized these implications as it downscaled, yet again, the growth projections for FYs 2008 and 2009. Socioeconomic Planning Secretary Ralph Recto lowered growth targets for this year to 4.4 percent to 4.9 percent and for next year to 4.1 percent to 5.1 percent.5

Revenues

Economic growth is a main indicator of government revenues. A robust economy tends to expand the tax base and potential revenues. Just like the macroeconomic assumptions, the revenue projections in the Budget Call as been revised. Table 4 shows the adjustments in the target revenues. The revised revenue projection for FY 2009 increased by P56.2 billion even though growth projections have been scaled down. In the budget message, the President has proudly stated that tax effort is projected to increase by 14.7 percent. Historically, annual revenue projections of government tend to be higher than actual collections. For 2009, government will be hard-pressed to meet its target considering that foregone revenues will be realized with the implementation of RA 9540 giving exemptions to minimum wage earners and the absence of new legislative tax measures next year.

Table 4. Revenue Projections, Budget Call and BESF, 2008 and 2009 (In billion pesos)

Budget Call BESF PARTICULARS

2008 2009 2008 2009

Revenues 1,236.2 1,337.1 1,250.9 1,393.3

Disbursements 1,236.2 1,337.1 1,325.9 1,433.3

Surplus/ (Deficit) 0 0 (75.0) (40.0) Sources: Budget Call 2009 and BESF 2009

There are also the systemic weaknesses in the tax system that is improbable to address in the short-run. Some of these weaknesses resulted in huge revenue losses such as P60 to P65 billion due to VAT inefficiency, P280 billion lost from fiscal incentives and P60 to P65 billion from technical smuggling.6 The financial crisis in the US, as discussed above, will have implications on the country’s revenue efforts in the near future and the executive will be hard pressed to achieve the revenue targets it has set out for the current and next year.

4 BSP Website: http://www.bsp.gov.ph/statistics/keystat/ofw.htm 5 “Officials cut GDP targets for 2008, 2009”, Manila Times, October 2, 2008, http://www.manilatimes.net/national/2008/oct/02/yehey/top_stories/20081002top2.html 6 Based on DOF Sec. Teves’ estimates during 2008 budget deliberations of the Senate Committee on Finance, September 2007



Sources of Financing

The initial target of the government is to have a balanced budget for FY 2009. With the revised macroeconomic assumptions and revenue targets, the balanced budget objective was abandoned and the government now targets a P40 billion deficit for next year, from a P75 billion deficit target this year. But what accounts for these deficits? Table 5 shows the primary surplus which is the difference between national government revenues and expenditures excluding interest payments. It shows that spending for productive items of the budget actually accounts for less than expected revenues for both years, yielding primary surpluses of more than P200 billion for both years. The data reveal the impact of debt service in the government’s fiscal position. In her budget message, the President said that the “… need … for borrowings to finance the deficit has been reduced from P75 billion this year to only P40 billion in 2009.” She added that, “Borrowings from the domestic and international markets will finance only three percent of our budget”. With these statements, the President makes it appear as though debt is getting less significant in our budget and fiscal position. Government data show otherwise.

Table 6 shows the national government borrowings for FYs 2008 and 2009. It reveals that government will be borrowing a total of P437.086 billion to be able to finance a P40-billion budget deficit. Why the huge amount? The answer is in the same table labeled “Amortization”.

A whooping 86.68 percent of gross borrowings for FY 2009 will go for payments of amortization. The P378.866 billion amortization next year represents an increase by P32.895 billion from FY 2008. The P40-billion deficit will only account for 9.15 percent of its total gross borrowings. Table 7 shows the total debt service for FYs 2008 and 2009. Despite the President’s pronouncement that “Next year’s budget shows the same growth orientation with more

Table 5. Primary Surplus/Deficit (In billion pesos)

Particulars 2008 2009

Revenues 1,250.90 1,393.30

Expenditures net of interest payments 956.85 1,112.35

Primary Surplus/Deficit 294.05 280.95

Source: BESF 2009

Table 6. National Government Financing

(In million pesos)

2008 2009

Gross Foreign Borrowings 105,943 115,585

Gross Domestic Borrowings 332,724 321,501

TOTAL GROSS BORROWINGS 438,667 437,086

Amortization (foreign) 81,304 88,835

Amortization (domestic) 264,667 290,031

TOTAL AMORTIZATION 345,971 378,866

Net Financing 92,696 58,220

Change in Cash 4,274 4,860

Budgetary Accounts 17,696 18,220

Non-budgetary accounts (13,422) (13,360)

GROSS FOREIGN BORROWINGS 105,943 115,585 Source: BESF 2009

Table 7. Total Debt Service (In million pesos)

2008 2009

Amortization 345,972 378,866

Interest Payment 290,103 302,650

TOTAL DEBT SERVICE 636,075 682,516 Source: BESF 2009


funds going towards capital outlay and less for debt service”, it is evident that debt service still corners the biggest share of available public financial resources.

Implications

The analysis of the macroeconomic assumptions reveals that these are not attainable given the performance of the economy this year and considering the recent meltdown of the US financial market and its impending effect on the US and global economy. The unlikely attainment of growth projections also makes revenue projections unlikely. Major adjustments in the proposed expenditure program is in order to ensure that the budget will serve its development objectives and avoid incurring unmanageable budget deficit and a fiscal crisis. The implications that can be gleamed from the analysis are:

1. The projected deficits will most likely be much bigger. The Department of Finance Secretary Teves has made pronouncements that the deficit for FY 2008 will be P100 billion and P60 billion for FY 2009.7 These may still be conservative estimates considering the huge drop in growth projections and without drastic adjustments of the proposed expenditure program.

2. Financing the budget will be more difficult. Accessing foreign credit will be more costly while depending on domestic borrowings should be done with caution as the public sector can only assumed so much debt to avoid creating the conditions for a fiscal crisis.

3. The challenge to Congress is to scrutinize the executive budget and adjust it to account for the emerging worse scenarios for the rest of the year and for FY 2009. This should entail short-listing the essential programs that will protect the poor and spur the domestic economy.

4. The economic challenges pose threats, as mentioned above, but also creates an opportunity for Congress to make the budget an instrument for development but this is only possible through prudent spending. Congress should step up to identify and unabashedly cut unnecessary, wasteful and frivolous spending.

B. Fiscal Discipline and the FY 2009 Executive Budget

The need to strengthen mechanisms to ensure judicious use of public resources is acknowledged by the President when she proclaimed in the budget message that “to manifest our serious intent to deliver performance, we shall be submitting to Congress a book containing the output targets of each government agency and department.” Further, the budget message states that “with performance-based budgeting put in place, the public is assured that frivolous spending has no place in this Administration.”

7 “Officials cut GDP targets for 2008, 2009”, Manila Times, October 2, 2008, http://www.manilatimes.net/national/2008/oct/02/yehey/top_stories/20081002top2.html

Figure 4. Breakdown of 2009 Proposed Budget

44%

56%

Departments/Agencies Special Purpose Funds

Source of basic data: NEP 2009



Special Purpose Funds

Congress, rightfully so, tends to focus on the budgets of departments and agencies. However, a breakdown of the FY 2009 Executive budget reveals that out of the P1.415 trillion, P624.355 billion goes to departments and agencies. The remaining P790.644 billion is for Special Purpose Funds (SPF) which accounts for 56 percent of the proposed budget. The FY 2009 SPF increased by P96 billion from FY 2008 while budget for departments/agencies increased by P92 billion from last year. The SPF contains some lump-sum appropriations which are highly discretionary, often within the direct control of the President, with either vague or no special provisions making it prone to frivolous utilization. Considering the huge amount of SPF and its discretionary nature, the Executive can effectively use the SPF to distort sectoral and regional budget priorities approved by Congress. It also weakens the ability of departments and agencies to strategically program spending for the public goods and services that they are mandated to provide. How can performance-based budgeting help curb frivolous spending if more than half of the budget is under SPF? Direct/Cash Transfers The FY 2009 Executive budget provides billions of allocations for monetary support (ex. cash assistance, power subsidies) to purportedly mitigate the impact of rising costs of food and fuel to indigents. Studies on conditional cash transfer (CCT) programs in other countries have emphasized that simply handing money to the poor does not address the problem of poverty in the long run. For FY 2008, the issue of direct transfers has been highlighted when the executive gave P500 power subsidy. ABI has contended that the power subsidy, which according to the President’s SONA cost government P2 billion, does not have legal cover as it is not authorized under the GAA of 2008. The budget message recognizes the limitation of direct transfers when it stated, “Give a man a fish, and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” The conditionality aspect of CCT programs in other countries sought to tie the behavior of target beneficiaries towards investing more in human capital development, especially education and health, which is the more sustainable way of addressing poverty. A study by the Asian Development Bank (ADB)8 identified several factors that have to be taken into consideration to enable a successful CCT program which is enumerated in Table 8. These considerations are useful in assessing the capacity of the Philippine bureaucracy in administering an effective CCT program and setting the clear implementation guidelines and to ensure that such programs will not compromise sustainable poverty reduction programs in the long run.

8 Son, Hyun. “Conditional Cash Transfer Programs: An Effective Tool for Poverty Alleviation?”, ADB ERD Policy Brief No. 51, July 2008


At the onset, there are existing issues that have to be addressed in order to devise and implement an effective CCT program in the Philippines. First, the conditionality aspect presupposes that quality and accessible education and health services are available but underutilized. This is not necessarily the case of the Philippines where there are shortages in classrooms, teachers, health centers, health facilities and health workers. Second, the capacity of implementing agencies to absorb the huge organizational and technical requirements to ensure effective monitoring of the program, including proper targeting of the poor, monitoring compliance of target beneficiaries to conditions, etc. Third, the prevalence of corruption in the Philippines is one of the highest in the region and thus raises considerable issues on the integrity and ability of the institutions to implement a program with billions of funding allocation. These issues have to be considered by Congress before approving the Executive’s proposed appropriations for cash transfers to ensure that billions of public funds are not left to the discretion of politicians who can use these for personal and political gains.

Overall Savings The practice of reallocation of funds by the Executive which have already been appropriated by Congress should be looked into. The section “Overall Savings” of the proposed FY 2009 budget reveals transfers from departments/agencies and special purpose funds in the form of savings which are then transferred to other departments/agencies. In FY 2007, a total of P117.548 billion was accumulated as savings by the departments and agencies. Out of these amounts, P11.44 billion was transferred to other agencies, leaving a balance of P106.108 billion. While the President may have the prerogative to realign funds, there are several issues that would have to be raised in this regard. First, with the transfer of more than ten billion pesos to other agencies and another hundred billion more at the President’s disposal, the amounts involved are enough to significantly alter budget priorities set by Congress. Second, are savings generated by the agencies due to their low absorptive capacity? It should be noted that some programs are overwhelmingly under-funded in the first place and it is particularly interesting to know why these would generate savings. The alternative scenario is that savings may have been generated not by choice of some agencies but by circumstance as there have been reports that some agencies did not even realize they have savings. This would have to be checked to ensure that funds are released and properly utilized to implement programs with existing appropriations.

Table 8. Recommendations on CCT Programs 1. Conditionality plays an important role in CCT programs. Cash transfer, by itself, will not Suffice to

increase school attendance significantly, which means that conditionality would have to be introduced, and possibly also, the quality of schooling improved when administering any cash transfer programs aimed at a sustained reduction in poverty.

2. Second, it is also imperative to ensure ongoing monitoring of operations and rigorous evaluation of effectiveness of CCT programs.

3. Third, good governance is an important component of a CCT program. As is the case for all effective social safety nets, a CCT program should be transparent in operation to encourage learning, minimize corruption, and ensure that beneficiaries and the wider population understand how the program functions.

4. Fourth, political support at high levels for the program is one of the main issues to be considered in implementing a CCT program. Such political supports are critical as a CCT program requires coordination across different sectors in the government, particularly education, health, and social welfare.

Source: Son, Hyun. “Conditional Cash Transfer Programs: An Effective Tool for Poverty Alleviation?”, ADB ERD

Policy Brief No. 51, July 2008



Debt Service

Debt burden constricts financing for development Debt service payments for FY 2009 continue to put a strain on public financing for social and economic services. The programmed principal amortization and interest payments for FY 2009 amount to P636.075 billion which represents 45 percent of the projected government revenues for the same year. Table 9 is culled from a recent study by Prof. Benjamin Diokno9 which succinctly illustrates the deteriorating trend in the country’s debt situation. Table 10 provides data on debt indicators spanning five administrations from 1981 to 2007.

Table 9. Public Debt Statistics, 1981-2007

9 Dr. Benjamin Diokno, “The Philippines: Fiscal Behavior in Recent history”, July 2008, http://www.econ.upd.edu.ph/respub/dp/display.php?id=624


The debt statistics reveals that:

� The level of outstanding debts during President Arroyo’s term has more than doubled from the previous administration and has breached P3 trillion. Outstanding debt as percent of GDP has also been increasing with the present administration posting debts by as much as 69 percent of GDP. From this trend, it can be inferred that the rate at which the government accumulates debts outpaces the rate of growth of the economy. This is indicative of how (in)effectively these borrowings are utilized for growth and development.

� Total debt service under President Arroyo has doubled from previous administration posting

as much as 10 percent of GDP, the highest since 1981. This represents as much as 59 percent of total national government expenditures and 82.5 percent of tax revenues. What is disturbing in this trend is that the magnitude of debt service represents foregone resources for productive purposes. Little is left for social and economic expenditures. The fact that billions of pesos are earned through regressive taxes such as the VAT means that the poor cannot expect more public services from the taxes they shoulder from their meager incomes.

Debt-to-MDG Conversions A strategic approach should be considered by government to stem the hemorrhage caused by debt servicing. Such an approach should address not only the outflow of resources due to debt service but should also consider innovative interventions towards reduction of the debt stock. A study conducted by Dr. Joseph Lim10 explored the possibilities of debt reduction and debt-to-MDG conversions that the Philippines can consider. He noted that the Philippines had prior experiences in debt conversions such as several debt-for-nature swaps, debt-for-Mt. Pinatubo Victims, and the debt reduction which created the endowment of the Foundation for Sustainable Society, Inc. (FSSI) to implement development projects. The study discussed the possibility of promoting debt-to-MDG swap which entails reduction in the debt stock and re-channel resources to projects that are intended to contribute in the attainment of MDGs.

The study enumerates the following debt conversion schemes that can be offered:

i) Debt-to-MDG, debt-to-development or debt-to-nature swaps where a third part (international NGO, a UN agency) buys a sovereign debt and the Philippine puts peso counterpart (whether at a discount or not) on a priority MDG project,

ii) conditional bilateral debt cancellation wherein a sovereign creditor agrees to write-off sovereign debts in exchange for the government putting a peso counterpart (whether at a discount or not) on a priority MDG

Lim also suggested countries which can be targeted for such schemes, namely:

i) Germany, Italy, Switzerland (for debt-to-education and debt-to-nature schemes):

these are the most open to debt conversions based on their actions in Indonesia and the Philippines;

ii) USA (for debt-to-nature schemes especially protection of tropical forests);

10 Towards Financing the Millennium Development Goals of the Philippines, Joseph Lim, PIDS Discussion Paper Series No. 2006-23, December 2006



iii) Finland, Spain, France, Canada, United Kingdom, Denmark, Belgium, Netherlands, Sweden: Countries somewhat open to debt conversions, especially for MDG financing;

iv) Non-Paris Club members: 1. Muslim countries (for Mindanao development and Madrasah education:

Malaysia, Brunei, Kuwait, Libya, Saudi Arabia); 2. ASEAN and other Asian countries (China, Taiwan, Singapore, Korea, Hong

Kong, India). v) Countries with political and economic interests in the region (Australia is keen to

fund Mindanao development, social accountability and good governance, prevention of communicable diseases like HIV/AIDS – although Australia prefers to give grants rather than debt conversions).

The study gives full discussion on the issues related to negotiating for such debt-to-MDG conversions and other debt reduction schemes as well as recommendations for promoting such initiatives. ABI believes that government should seriously consider and work towards maximizing the opportunities for reducing the strain imposed by the country’s debt burden in financing social and economic development.

C. Conclusion and Recommendations

The arguments as discussed in the analysis of the macroeconomic assumptions do not present a rosy picture. Macroeconomic assumptions of the budget would have to be reviewed and a more realistic scenario would have to be determined. Overestimating our capacity will only lead to disastrous fiscal conditions. The need for a more prudent public spending is all the more urgent. Uncertainty over the prospects of our economy requires that scarce public resources would have to be rationalized and prioritized around the critical requirements of sustainable development, social services, poverty alleviation and social safety nets. In this light, the ABI presents alternative budget for key social and economic sectors for FY 2009. ABI believes that in light of the economic challenges the country is facing and the grim prospects in the near future, it is essential that funding for these key social and economic services be secured. These proposals are necessary to fortify our country’s capacity in the medium and long turn and must therefore not be compromised. The following succeeding chapters of this orange book provide details of these alternative budget proposals. Chapter 3 contains the proposed sources of financing for these proposals. Equally important is the need to institute mechanisms that will facilitate strict adherence to budget rules the full participation of institutions to ensure judicious monitoring in budget execution and strengthen accountability. Budget authorization is the stage in the budget process where Congress takes a central role. The ABI actively engages in this stage following the principle that Congress represents the people. For the past years of ABI’s budget engagement, we have been pleased with the partnership formed with reform-oriented legislators and the gains that have been achieved towards greater investments for MDG-related programs and social development in general. However, we recognize that there are limitations in such gains as the budget goes through three other stages, the budget implementation, budget accountability, and budget preparation stages. Unfortunately, the processes within these three other stages in the budget process are not as inclusive to civil society participation. Even Congress is left with minimal participation in the execution of the budget which it has approved.


In this regard, the ABI proposes the continuation of the partnership of Congress and civil society in closely monitoring budget implementation. For FY 2009, civil society is proposing that the partnership with the legislature be expanded to include monitoring of the budget for the MDGs and other social development expenditures. The monitoring unit will report to Congress through the appropriate House and Senate Committees. ABI proposes that an additional budget of P20 million for strengthening congressional oversight for activities including operating cost of research, data management, meetings and congressional hearings.



his chapter contains the executive summaries of the FY 2009 alternative budget proposals by

the ABI for the education, health, agriculture and environment clusters. Each sector’s

proposal contains a discussion of the urgent problems, issues and concerns in the attainment

of social development goals and in protecting the poor from the impending economic challenges.

Detailed technical papers, which includes pertinent data and in-depth analyses, for each of these

proposals are contained in Chapters 4 to 8.

1. BASIC EDUCATION8

A few days before the President delivered her SONA last July, a study by the National Statistical

Coordination Board (NSCB) revealed that one in six school-aged children is being deprived of

education and the number is rising steadily. The study noted that given the millions of children who

are out of school, the country is still far from achieving the goal of providing basic education to all as

committed in the World Education Conference (Dakar, April 2000) and the Millennium Summit

(September 2000).

This admission captures in large part the true state of Philippine education today. While the

Department of Education (DepEd) reported certain gains, these are too marginal to gloss over the

huge shortfall in performance and outcomes.

Official statistics on key indicators are clear enough to illustrate the continuing decline of education

in the Philippines. Midway through 2015, the deadline for meeting the Millennium Development

Goals (MDGs), access is still a big problem while education quality has remained poor. Resources are

far too limited to ensure quality education for all. The public sector confronts tremendous pressure in

improving spending level because of backlogs in key input and the continuing exodus of students

from private to public schools due to financial constraints.

There is a need to address strategic issues that impact on education, instead of relying on quick-fix

and expedient solutions to solve critical problems confronting the education sector.

Declining Net Enrolment Ratio

Elementary NER for SY 2006-2007 declined further to 83.2% from 84.4% during the previous school

year. The same trend is evident at the secondary level, with net enrolment ratio remaining low at

58% to 60% in the last five years. It managed a slight increase of 0.1 percentage point in SY 2006-

2007 compared to the previous year.

The education watch survey conducted by E-Net Philippines revealed that a significant number of

children were enrolled in grade/year levels which do not correspond to their ages. The study found

8 Prepared by the ABI Education Cluster TWG coordinated by the E-net and the Action for Economic Reforms.

T



that some 60% of students lagged by one to two years while another 12% were behind their school

levels by at least three years. The dropout rate among late entrants tends to be higher than among

children who started schooling on time. The pressure for a child to be involved in the economic

activity of the family, directly or indirectly, comes at the age of about 12 or 13 years old. At this age,

children are tasked with more economic responsibilities.

Drop out rates at record level

The number of children who drop out and stay out of school remain alarmingly high. For SY2006-

2007 elementary dropout rate averaged 6.37% while dropout rate at the secondary level was higher at

8.55%. Roughly, these figures translate to a staggering 1.4 million students falling out of the school

system every year. Dropout rates remain high in the last seven years since SY 2000-2001. It recorded

a double-digit figure in SY2005-06 at the secondary level. With the current food and economic crisis,

a further increase in dropout rates may be expected, affecting most especially the poor and

disadvantaged children.

Out-of-School Children and Youth remain high

The incidences of school dropout in both primary and secondary levels have remained alarmingly

high. This explains the low survival in school and accounts for the increasing number of the out-of-

school children. It highlights the deteriorating situation of basic education in the Philippines.

The Bureau of Alternative Learning System (BALS) placed the number of those not attending school

at 1.84 million for the 6-11 age group and another 3.94 million for the 12-15 age group.9 The BALS

figures are closer to the estimates of the UNESCO Institute for Statistics (UIS) in their global

monitoring of the out-of-school children at 2.072 million out-of-school among children of primary

school age. Given this figure, the Philippines has one of the biggest number of out of school children

in Southeast Asia - higher even than Vietnam and Indonesia in both absolute number and percentage.

Numerous studies and surveys consistently point to poverty as the single biggest factor that accounts

for the high drop out and the increasing number of the out-of-school children and youth. The

Functional Literacy, Education, Mass Media Survey (FLEMMS) 2003 data reveal that primary school

age children coming from poor families are nearly three times more likely to be out of school

compared to the non-poor children. A similar situation is also observed among children 12-15 years

old. Children of poor background from this age group are twice more likely to be out of school

compared to the non-poor children.

On Deteriorating Education Quality

The poor and declining quality of education is clearly shown by the erratic and consistently low

scores obtained by pupils in achievement tests administered by the Department of Education over the

years. The Elementary achievement rate was at 59.94 while the Secondary achievement rate was at

46.64 in SY 2006-2007. The increments in test scores show only marginal improvement and the

rating fell far short of the desirable level.

UNESCO’s Global Monitoring Report for 2007 generated the EFA Development Index or EDI for

125 countries. The index is used to gauge the overall accomplishment of countries in terms of

meeting the EFA goals. The Philippines ranked 75th, falling behind most Asian countries such as

9 Bureau of Alternative Learning System (BALS), Department of Education, 2007



China, Malaysia, Indonesia and Vietnam. In terms of education quality, using survival rate as proxy

indicator, the Philippines ranked 101st of 125 countries. At this level, it fared no better than some of

the poorest countries in Asia and Africa such as Burkina Faso, Ethiopia and Myanmar.10

A study on achievement test scores and school characteristics done by the Philippine Institute for

Development Studies (PIDS, Orbeta, Aniceto Jr., May 2008)11 noted that teacher quality is a

consistent positive determinant of test scores at the elementary level. The implication of this study is

clear and simple: let us invest in more and quality teachers to make an impact on education quality.

School Costs and Family Spending Level

On school fees and other costs. National Economic and Development Authority (NEDA) Director

General Augusto Santos cited the rising cost of education as one reason that account for the

increasing number of out-of-school children. Although public schools offer free tuition, some families

still could no longer afford other school-related fees including transportation, food, uniform and

books.

The Education Watch12 study done by E-Net Philippines noted that education remains to be a major

expense item for Filipino families. Apart from tuition fees, families also spend for textbooks, school

supplies, uniforms and school clothes, sports fees and other school-related fees/expenses. In addition,

parents have to shoulder the cost of transportation, school meals and snacks, room rental and other

incidental costs of schooling. While technically no tuition fee is collected, payment comes in various

forms and pass off as voluntary contributions for varied activities and projects including contributions

for school repairs, furniture and equipment purchase and sports activities. Parents are confused

whether payments they made were for specific projects or for tuition fees.

Declining education spending of the poor. The Family Income and Expenditure Survey of 2006

reported a drop in real income and decrease spending on education and health care among poor

families compared to three years ago. The data show a decrease in the spending share of education

among poor families (those belonging to the bottom 30% income group) – from 2.9% of total family

expenditure in 2003 to only 1.3% in 2006. This means that in 2006, the poor spent just half of what

they spent for education in 2003. The same trend was observed for medical care, with poor families

spending only 1.7% for health in 2006 compared to 2.1% in 2003. This pattern of expenditure will

have long-term implications on human capital and poverty reduction in the country.

What accounted for this fall in education spending? NSO data show that the poor had to spend more

on food, fuel and utilities in 2006, which took away 66.4% of the family budget. Given the worsening

food and energy crisis in the last two years, expect the poor to dig deeper into their pockets to cover

food essentials and energy, leaving very little for education and health.

President Arroyo’s Proposed Budget for Education in FY2009

For FY2009, the proposed total budget for the education sector amounts to P204.9 billion, higher by

9.8 percent than its 2008 level of P186.6 billion. Of this amount, the Department of Education

10 UNESCO. Strong Foundations: Early Childhood Care and Education (Global Monitoring Report 2007).

Paris: UNESCO Publishing, 2007. 11 Presented during the 6th National Social Science Congress, PSSC, 7-9 May 2008.

12 Civil Society Network for Education Reforms (E-Net, Philippines). Children Missing an Education (An

Education Watch Initiative in cooperation with the Asian South Pacific Bureau of Adult Education). September

2007.



(DepEd), including the School Building Program, is allocated some P167.9 billion, an increase of

12.6 percent from DepEd’s allocation for 2008.

The President’s budget message highlights the proposed allocation for basic education in 2009 which

includes the following:

� P2.5 billion for the creation of 19,553 new teaching and non-teaching positions;

� P7.5 billion for the construction of new classrooms to achieve a 45:1 elementary student per

classroom ratio;

� P2.3 billion for the procurement of 37.1 million textbooks to ensure a 1:1 textbook to pupil

ratio;

� P3.4 billion for the expansion of the pre-school program covering 680,855 five-year old

children;

� P1.7 billion for the purchase of 1.4 million desks/tables/chairs;

� P3.7 billion for (Government Assistance to Students and Teachers in Private Education)

GASTPE for 665,975 grantees

While the proposed 2009 budget for basic education increased by almost P20 billion compared to the

current year, its share of the national budget has actually shrank further to just 11.87% compared to

this year’s share of 12.2%. Factoring inflation rate and projected increment in student enrolment, per

pupil expenditure is expected to decline further as it did in the last years since 1998. Finally, the

proposed budget for the entire education sector dropped further to just 2.36% of GDP (from 2.5% for

2008). A study done by the Philippine Institute of Development Studies commissioned by NEDA and

UNDP estimated that additional funds of P44.2 billion is needed for 2009 to meet the Education for

All (EFA) goals.

These realities are not consistent with the declared commitment of the President and her

administration of giving funding priority to education.

Earlier, the DepEd proposed a larger budget of P240 billion to confront key issues that retard the

country’s education sector. This move certainly deserves commendation. Unfortunately, the proposal

did not find sympathies from the budget department and Malacañang. What was approved was a

much scaled down figure of only P167.9 billion. The proposed budget speaks very little about

addressing problems related to education access, efficiency and quality.

ABI Budget Proposal for Basic Education for FY2009

The ABI Education Cluster, after reviewing the proposed budget for FY2009 as submitted by PGMA

to Congress, proposes for additional funding basically to address two major concerns. The first

concern is how to address children and youth who are missing an education, specifically the

increasing number of dropouts and out-of-school children and youth. Particular attention must be

given on how to reach the unreached, the poor who drop out of school due to poverty and

disadvantaged children which confronts a variety of barriers to education.

The second concern is how to ensure quality education for all Filipino students. This is about ensuring

effective teaching and quality teachers, and a conducive, child-friendly and inclusive school

environment.

To address these urgent concerns, ABI Education Cluster proposes the following additional budget

amounting to a total increase of 18.697 billion pesos in the budget for Basic Education.



Table 10. ABI proposed budget increase for Basic Education

Budget Item NEP 2009

Proposed

Increase

(Decrease)

Alternative

Budget

for 2009

Department of Education

Office of the Secretary

1. Funding requirement for the creation of new

teaching positions in 2009 (III. e. 17.a.2) 1,596,642,000 4,850,000,000 6,446,642,000

2. Human Resources Training and

Development including teacher's training,

scholarship and fellowship grants (III. e.17.o)

1,040,000,000

500,000,000 1,540,000,000

3. Medical/dental and optical health and

nursing services (III.c) 40,952,000 1,120,000,000 1,160,952,000

4. Provision for accumulated benefits for

teachers under the Magna Carta 8,000,000,000 8,000,000,000

5. Additional School’s Maintenance and Other

Operating Expenses (MOOE) for elementary

and secondary schools

2,800,000,000 2,800,000,000

6. National EFA Committee fund for EFA

monitoring and mobilization 16,000,000 16,000,000

7. Alternative Learning Programs - Field

operations of Alternative Learning Systems

including implementation of accreditation and

equivalency system (III.a.1)

240,420,000 1,411,000,000 1,651,420,000

DEPED OSEC TOTAL 18,697,000,000

Explanatory Notes

1) P4.85 billion for the hiring of additional teachers on top of DepEd’s proposal. Based on the

Department of Education’s (DepEd) estimates of schools without teachers and/or are in need of

additional teachers totaling 33,629 schools, 8,740 is funded under the National Expenditure Program

(NEP) 2009, thus the remaining unfunded teachers total 24,889 representing the backlog of teachers

for the country.

ABI Education cluster proposes a compensation and benefit package for these 24,889 teachers

amounting to P4.85 billion at P194,689 per teacher based on DepEd's computation for salary and

benefits of Teacher I in 2008. In hiring these teachers, priority should be given to existing locally

hired teachers in view of their length of service as teachers in their community.

2) Additional P500 million for teachers’ training to cover an additional one thousand pesos per

teacher per year for teacher training and scholarship..

3) Additional P1,120 million for the annual x-ray and laboratory tests required of teachers and

medicines for those afflicted with tuberculosis and other respiratory diseases at two thousand pesos

for each teacher for 560,000 teachers, including the proposed additional teachers for 2009.

4) P8 billion for partial payment of accumulated benefits for teachers under Magna Carta.

ABI education cluster calls the attention of the Government to pay what is due teachers under the

Magna Carta for Teachers. The unpaid benefits of teachers as computed by DepEd amounts to P40



billion covering the following: 1) Overtime pay – P29,098,371,814; 2) Equality in Scales –

P4,082,589.251; 3) Medical and Treatment (Medical & Denta,l Psychological Test) - P525,316; and

4) Medical Treatment (Health card/insurance) – P6,303,792,000.

ABI education cluster proposes the payment for said unpaid benefits to be done in a spread of five

years at eight billion pesos for each year.

5) P2.8 billion additional MOOE to contribute to enhancing education quality To cover the

costs of running the schools, school materials and other expenses in maintaining a conducive learning

environment, based on DepEd Order 61 Series of 2007, DepEd spends P207 per student in the

elementary and P507 per student in high school. This amount is very minimal, so much so that

principals and teachers are pressured to generate funds. In turn, parents are at times forced to shell out

money for these expenses. To ensure quality education and to ease the burden on poor parents to

contribute, ABI believes that government should target at least one thousand pesos per student in the

elementary and P1,500 per student in high school until 2015 with consideration for inflation.

For 2009, ABI proposes an additional P2.8 billion for MOOE. This figure is based on a target of at

least P339 per student in elementary school and P672.50 per student for high school or an estimated

total of P8.5 billion for MOOE which is spread over three years at P2.8 billion per year.

Priority should be given to the 30% poorest and low performing areas.

6) Allocation of P16 million as National EFA Committee fund for EFA monitoring and

mobilization. The Philippine Education for All (EFA) Plan 2015 has committed “functional literacy

for all Filipinos”. The National EFA Committee oversees and monitors EFA implementation at the

national level. The EFA Mobilization Fund of P16 million will cover budgetary requirements to set

up the local EFA committees and conduct corresponding activities.

7) P 1.41 billion for expanded coverage of the Alternative Learning System to reach out to at

least 600,000 learners or 10% of the out-of-school children and youth

Strengthen and expand the Alternative learning system through the following specific allocations:

a) P900 million for additional 300,000 learners from among the out-of-school youth at P3

thousand per learner (as computed by DepEd) out of the 5.8 million out of school and 5.2 million

illiterates.

b) P300 million for learning modules computed at one thousand pesos per set of

modules/learner/year for 300,000 learners. The complete ALS learning materials consists of

more than 280 modules. Currently not all learners have a complete set of module. The proposed

budget will allow printing of selected parts/modules covering a third of the total ALS modules.

c) P150 million to cover additional number of mobile teachers so that there will be one mobile

teacher looking for the out of school in each DepEd district.

d) P26 million to cover 40 Learning Centers for indigenous people (IPs) at P650 thousand for

each learning center.

In the indigenous communities in Davao Oriental, Agusan and South Cotabato there is high

concentration of indigenous communities who are not able to finish high school or even

elementary education. To meet the learning needs of these learners in remote and poor areas,



learning centers must be conceptualized and constructed in partnership with local communities to

cater to children, youth and adults who need functional literacy programs and continuing basic

education.

The learning center can be a venue where education is closely linked to livelihoods, culture,

identity-self development and community empowerment. The proposed CLC in the community

will make available education for children, youth and adults. Its curriculum and learning

strategies are mostly learner and community-centered, with deliberate efforts to integrate local

knowledge into the curriculum, include local elders/volunteers as teachers and develop learning

materials in the local language.

The proposed budget of P650 thousand for each CLC will cover the construction of CLCs for IPs,

production of learning materials, allowances for CLC teachers and volunteers and supplies and

materials. Thirty-two CLCs for IPs need to be strategically located at indigenous areas, initially at

the following:

4 – Kankana-ey and Ibaloi in Benguet 6 – B’laan, T’boli in South Cotabato

4 – Ayta in Pampanga and Zambales 6 – Sama and other lumad in Zamboanga

8 – Mandaya, Mansaka and other Lumad in Davao

del Norte

4– Manobo, Higaonon and other Lumad in

Caraga

e) P10 million for an ALS summit

f) P15 million for expanded monitoring and evaluation of ALS

g) P10 million for a national literacy campaign to generate support for the six million Filipino

illiterates. This will consist of forums with LGU, National awareness campaign on literacy using

media, leaflets, IEC materials, Round Table Discussions (RTDs) to discuss literacy challenge and

literacy benchmark.



2. HIGHER EDUCATION13

The share of national government in financing state universities and colleges (SUCs) has been

steadily declining from 85 percent in 2001 to 77 percent in 2005. Contrast this to the steadily

increasing cost of private higher education causing a mass departure of students from private higher

educational institutions (HEIs). As a result, some have chosen to move in to public colleges and

universities to pursue their studies. Proof of this fact, during the formal opening of classes last June of

this year, Divina Pasumbal, public information chief of Polytechnic University of the Philippines’

(PUP) public said more and more students from private schools were transferring to PUP because of

its low tuition. However, PUP could only accommodate 8,000 students per year. Consequently, SUC

spending per student had declined by 23 percent from P17,000 in 2004 to P12,930 in 2006.

From having 10 percent of all college students enrolled in SUCs as of 1980, it increased to 21 percent

in 1994. And as of school year 2002-2003, the figure was pegged at 34 percent. Enrollment in public

higher education institutions grew by an average of 9.62 percent from 1997 to 2003.

While there is nothing wrong with students preferring state schools from private educational

institutions offering expensive tuition, the almost stagnant budget of SUCs coupled with a steadily

increasing student population resulted to a decreasing per capita budget allocation in SUCs. In short,

the SUCs cannot simply accommodate the students thus, creating a common trade-off between

absorption of students and the quality of education offered.

This prompts the existing SUCs to conduct cost-recovery and cost-sharing as a survival strategy (e.g.

user fees, community financing, etc.). It is compelled to devolve to the students an increasing part of

its financial and operational burdens in the form of increases in tuition, miscellaneous and other

school fees.

The immediate consequence of devolving costs to the students constitutes to a staggering decline in

the enrollment growth rate of SUCs, as students cannot afford to shoulder additional costs. And since

students cannot afford private higher education either, the overall annual percentage growth in

enrollment drastically slows down.

The International Commission on Education for the Twenty-first Century, better known as the

UNESCO Delors Commission, suggested that every country should allocate at least 6% of the GNP

for education (Delors et al, 1996).

However, for 2009, the executive budget proposes an education budget representing 2.14 percent of

GNP – a far cry from the 6 percent international benchmark. In fact, this is much lower than this

year’s 2.19 percent of the total national income.

To contribute in addressing these concerns, we are proposing an alternative budget for public higher

education.

Our alternative budget for higher education must be taken by the 14th Congress as their firm

commitment not only in simply giving more to education but essentially a clear legislative step

towards fulfilling a widely-accepted international standard on education spending pegging education

expenditure of developing nations 6 percent of their Gross National Product (GNP).

13 Prepared by the ABI Education Cluster, higher education TWG coordinated by the Youth Against Debt

(YAD)



Our corresponding equivalent (ABI Basic Education Cluster14) in the basic and secondary education

are also making similar demands of providing more allocation to education programs specifically

geared towards meeting international standards such as the Millennium Development Goals (MDGs)

as well as the aforementioned education spending vis-à-vis a country’s total national income. The said

standards were developed not only as mere barometers, more importantly, it clearly establishes the

minimum level below which state subsidy on education cannot dip or be neglected without causing

serious amplification of poverty and lack of social opportunities.

Proposal No. 1

We are proposing an additional budget allocation to public higher education amounting to a total of

P536.72 million. This is comprised of a P 47.829 million increase in the capital outlay (CO) and

P488.898 million worth of tuition subsidy to 29 SUCs deemed as centers of excellence and

development.

Table 11. Consolidated Alternative Budget for SUCs

NEP 2009

Proposed

CO

Increase

Proposed

Student

Subsidy

Total

Proposed

Increase Region Institution

(In '000 pesos)

I Mariano Marcos State

University

400,507 482

14,240

14,723

I Pangasinan State University

220,079

1,008

9,642

10,650

II Cagayan State University

285,236

1,965

15,800

17,765

II Isabela State University -

Cabagan

360,057

3,533

15,537

19,070

III Bulacan State University

175,101

3,612

37,000

40,612

III Central Luzon State University

257,171 59

13,000

13,059

III Tarlac State University

121,444

1,189

23,620

24,809

IVA Cavite State University

187,824

1,592

27,936

29,528

IVB Palawan State University

145,494

2,995

22,585

25,580

IVB Western Philippines University

96,587 -

6,223

6,223

V Bicol University

369,044

1,510

21,903

23,413

VI Capiz State University

210,145 432

16,526

16,958

14 Alternative Budget Initiative. YAD is a member of its education budget cluster with the primordial task of

formulating alternative budget proposals for public tertiary education.



NEP 2009

Proposed

CO

Increase

Proposed

Student

Subsidy

Total

Proposed

Increase

VI West Visayas State University

330,604

2,471

21,823

24,294

VIII Eastern Visayas State

University

173,345 -

10,492

10,492

VIII Leyte Normal University

92,119 -

4,327

4,327

VIII Samar State University

100,186 -

6,415

6,415

VIII Southern Leyte State University

117,647 -

8,008

8,008

IX Western Mindanao State

University

253,227 372

33,470

33,842

IX Zamboanga State College of

Marine Science and Tech.

74,072 -

1,050

1,050

X Central Mindanao University

236,471 -

8,083

8,083

X Mindanao Polytechnic State

College

99,587 -

25,037

25,037

X Mindanao State University -

Iligan Institute of Tech.

379,713 951

11,130

12,081

XI University of Southeastern

Philippines

168,579 879

15,362

16,242

XII Mindanao State University

1,282,234 182

9,313

9,496

XII University of Southern

Mindanao

237,638

1,653

36,000

37,653

NCR Philippine Normal University

282,318

2,012

10,917

12,929

NCR Polytechnic University of the

Philippines

663,637

15,919

18,855

34,775

NCR Technological University of the

Philippines

393,214

3,835

30,191

34,027

CAR Benguet State University

237,383

1,175

14,413

15,588

TOTAL 536,728

We believe that an increase in the capital outlay of the SUCs recognized as centers of excellence is a

progressive commitment from Congress in recognizing that there is lack of quality educational

resources and that there is a great need for the budget of SUCs to be pegged closer to what is actually

needed or what was actually taken away due to years of negligence in adequate financing.



The mere fact that these schools are recognized for their excellent service in providing quality public

college education despite diminishing state support is enough reason to reward them with additional

monetary allotment to augment their need to increase expenditure in education infrastructure.

On the other hand, the tuition subsidy is a strong political statement from Congress that public tertiary

education must become more accessible to the increasing number of tertiary education students

entering the said schools especially in a time of a grueling economic crisis.

Proposal No. 2

Strike out the proposed budgets to loan agreements challenged as fraudulent, anomalous and/or

wasteful pending an investigation of the following cases:

Table 12. Proposed Debt Service Cuts on Anomalous Loans

Creditor Loan ID Project/Purpose 2009 Debt Service

(In '000 US$)

IBRD 22186000 2nd Social expenditure

Mgt. 5,516

JBIC 23430000 Secondary Educ

Dev/Imprv Proj 2,298

German Loan (KFW) 27159001 Phil Merchant Marine

Acd (PMMA) 1,221

German Loan (KFW) 27159000 Phil Merchant Marine

Acd (PMMA) 86

TOTAL 9,121

Total in pesos, at P45=$1* P 410,445,000 Source: BESF 2009

*BESF 2009 exchange rate assumption

Payments for these debts should form part of an alternative source of financing to realize proposal

No. 1.

Proposal No. 3

We propose the introduction of meaningful reforms in the budget. Thus, we fully support the call of

the Freedom from Debt Coalition (FDC) to:

1. Regulate presidential powers by amending the Revised Administrative Code of 1987 as instituted

by Executive Order 292. We call for the removal of the automatic appropriations for debt service

(Section 31-B) and the presidential powers of impoundment (Section 38) and realignment of

savings (Section 39).

2. Put limits and parameters on the unilateral contracting of loans by amending the Foreign

Borrowings Act of 1966 and the Official Development Assistance Act of 1996.

3. Institutionalize grassroots people’s participation and involvement in all stages (proposal,

legislation, authorization, evaluation) and levels (agency-level, region-level, etc.) of budget

development by decentralizing budget decision-making using LGU-level mechanisms.



3. HEALTH

Research suggests that increased spending on health, when coupled with good policies and good

governance can promote growth, reduce poverty and trigger decline in infant, child, and maternal

mortality.

The Philippines is admittedly off-track in achieving the Millennium Development Goals on health-

reduce child mortality (Goal No.4 – high infant mortality); improve maternal health (Goal No.5); and

combat HIV-AIDS, malaria and other diseases (Goal No.6). Seventy infants die and ten Filipinas are

lost each day due to pregnancy and childbirth complications. Tuberculosis (TB) ranks as the sixth

leading cause of mortality and morbidity with approximately 107 people dying because of it each day,

while malaria ranks ninth in terms of morbidity (DOH, 2006). There has also been a steady increase

in HIV/AIDS registered cases from January 1984 to January 2008 (NEC, 2008).

Government health spending remains far from the Health Sector Reform Agenda (HSRA) target. The

share of government on health expenditure declined to 29 percent which is below the HSRA target of

40 percent. Also, the government’s target to depend less on out-of-pocket payments and provide more

social health insurance is still far from being realized as the share of out-of-pocket payments even

increased to 49 percent while the share of social insurance payments increased slightly to 11 percent

in 2005. Based on the HSRA, the target for out-of-pocket is 20 percent while the target for social

insurance is 30 percent.

In light of the current health situation and the limitations of the Philippine health delivery system to

service the increasing health needs of the population, the ABI proposes the following alternative

budget that seeks to better equip the public health system to the people’s needs.

Table 13. Alternative Budget Proposal for DOH

Budget item GAA 2008 NEP 2009 ABI Proposal 2009

Variance

(ABI

Proposal less

NEP) 1. Implementation of Magna

Carta Benefits New line item

1,011, 534,996 1,011,534,996

2. Implementation of the

Doctors to the Barrios and

Rural Health Practice

Program 42,284,000 28,031,000 42,284,000

14,253,000

3. Rural Health Midwife

Placement Program New line item

31,555,563

31,555,563

4. Provision for a pool of

resident physicians 10,862,000 10,862,000 21, 724,000 10,862,000


Philippine Nurses Act New line item

586,438,132 586,438,132

6. Health Information

Systems & Technology

Development 145,671,000 162,460,000 300,000,000 137,540,000

7. Health Promotion 133,441,000 152,800,000 171,161,000 18,361,000

8. Family Health 3,019,111,000 1,229,281,000

3,959,281,000

including 2,730,000,000

26 2009 Alternative Budget Initiative

Explanatory Notes

The budget proposals for items 1 to 5 are geared towards strengthening the health human resource

sector. This is in response to the low number of health workers, including doctors, nurses, and

midwives, in proportion to total population. The mass exodus of Filipino health professionals to other

countries does not bode well to the need of our growing population for greater access to health

services.

We have to prioritize such allocation if we are to maintain and motivate our pool of health human

resource. Skilled and well-motivated workforce towards quality of health services cannot be

emphasized enough. Reforms to a large extent have been geared towards upgrading of infrastructures

but very minimal towards the development of a strong health human resource pool.

To improve the quality of our health system, we need to equally provide attention to our health

human resource pool, as they are our frontline service providers and the main machinery in running

our health system. Our lack of regard in providing proper valuation and compensation to the

knowledge, skills, and expertise of our health professionals left our health system with countless

loopholes. Among the most prominent problems with health workers are dissatisfaction; lack of or no

motivation; and low productivity due to low salaries, limited career progression, poor working

conditions, and the non-provision of health worker benefits such as those legislated in the Magna

Carta for Public Health Workers 1992 and the Nursing Act of 2002.

The Alternative Budget Initiative Health Cluster propose the following:

1. P1,011,534,996 additional funding for a new item that is intended to fund benefits under the

Magna Carta for Health Workers. This will stem the dwindling health human resources in the

country amidst rapid population growth.

1,430,000,000 for

commodity-based

methods and

sterilization in public

health facilities and

P1.3 B for vaccines

9. Rabies Control Program 80,000,000 80,000,000 296,922,560 216,922,560

10. Purchase of mercury-free

thermometers for 66 DOH

hospitals (under Health

Facilities Enhancement

Program)

New Line item

13,200,000 13,200,000

11. Formulation of policies,

standards and plans for

hospital and other health

facilities

237,451,000

(including the

purchase of

autoclaves for

waste

management

239,831,000 (Is

the 100,000,000

for capital

outlay intended

for the purchase

of autoclaves

under GAA

2008)

241,131,000 (including

1,300,000 for waste

management training to

support the purchase of

autoclaves for health

care waste disposal) 1,300,000

Total ABI Proposed Additional allocation 4,771,967,251



The implementation of Magna Carta Benefits will cover for the subsistence allowance

(P523,746,00 for the P1,500/month) and hazard pay (P487,788,996 – computed at 25/% of the

basic pay) of the 29,087 health personnel under the DOH based on Republic Act No. 7305, or the

Magna Carta of Public Health Workers, which, since its passage in 1992 has not yet been

implemented.

The passage of the Magna Carta is a victory but these legislations remain meaningless without the

financial resources needed for its implementation.

2. P14,253,000 increase for the implementation of the Doctors to the Barrios and Rural Health

Practice Program to maintain the amount of funding for the same program from the 2008 GAA

level.

3. P31,555,563 additional funding for a new line item that is intended to fund a Rural Health

Midwife Placement Program (RHMPP) to enable a greater number of the population to gain

access to basic health care services. Rural Health Midwife Placement Program aims to deploy

competent midwives to improve facility-based deliveries and fully-immunize children indices of

needed areas.

4. P10,862,000 additional funding for the provision for a pool of resident physicians to double the

budget proposed in the NEP.

5. P586,438,132 allocation to fund a new item for the implementation of the Philippine Nurses Act.

Items 6 to 11 are budget proposals for non-health human resource sector and are intended to

strengthen key health programs and public health functions.

6. P50,000,000 increase in the budget for Health Information Systems and Technology

Development to support the thrust for the DOH to develop a strategic health information system

plan that would address the need for integration and harmonization of the different components of

the health information system as well as the development of clear policies on production,

acquisition, and use of health statistics for better targeting, health surveillance, etc.

7. Additional P18,361,000 for Health Promotion to advance the DOH’s health promotion efforts

beyond health communication and move towards a holistic approach by going beyond providing

clinical and curative services such as proactive involvement of members of the communities

through the health promotion process. 8. Additional funding of P2,730,000,000 for Family Health. A P1.7 billion cut was done on the

Family Health Program. The ABI Health Cluster recommends that this be restored to its 2008

allocation plus additional 1.3 billion for support on fully immunized children’s program. This

increase will fund commodity-based methods and sterilization in public health facilities (P2.659

billion) and vaccines (P1.3 billion).

9. An increase of P216,922,560 for Rabies Control Program. The 2009 budget will only provide 19% percent and 16 % of the projected total anti rabies vaccine and RIG requirement

respectively, of the country in 2009. These vaccines and immunoglobulins are given to animal

bite victims as prophylaxis against rabies and not as treatment to rabies.

As of today, no treatment has been proven effective against rabies. Once signs of symptoms of

rabies appear among animal bite victims, who were not given rabies vaccine and

immunoglobulins (when indicated) at the soonest possible time, no amount of medical

intervention can save the lives of these rabies patient. Fortunately, despite being fatal, rabies is


preventable by providing immediate post- exposure prophylaxis (PEP) to all animal bite patients.

Our objective therefore is to provide vaccines and immunoglobulins at the soonest possible time

to kill the rabies virus and prevent the development of the disease. Delay in treatment

(prophylaxis) will lead to fatal consequences if the animal is indeed rabid. Hence, rabies vaccine

and immunoglobulins must be readily available at all times the animal bite treatment centers.

10. A new item is proposed for the purchase of mercury-free thermometers for 66 DOH hospitals to

be funded in the amount of P13,200,000.

On July 30, 2008, the Department of Health (DOH) released Administrative Order (AO) No.

2008-0021 on the "Gradual Phase-out of Mercury in all Philippine Health Care Facilities and

Institutions." The AO sets the policies and guidelines for all health care facilities in the country to

switch to mercury-free alternative products, including mercury-free thermometers.

The administrative order promulgated by the DOH is a response to the growing global concern

regarding the use of mercury and its environmental health impacts. The United Nations

Environment Programme (UNEP) has identified health-care related activities as an important

source of anthropogenic release of mercury into the environment. The heavy metal is found in a

variety of products used in health care facilities, including thermometers, laboratory chemicals,

blood pressure monitors, and dental fillings.

Because of the prevalence of mercury products in health care facilities and the frequency with

which these devices break and are not properly cleaned up, it is not uncommon for health care

facilities to exceed permissible levels of mercury in the ambient air.

As a potent neurotoxin, mercury attacks the body's central nervous system. The metal has been

linked to many neurological problems, causing symptoms such as trembling, loss of muscle

control, headaches, mental confusion, nausea, and hair loss. It can affect the brain, kidneys and

lungs, and is particularly harmful to children. In addition, mercury, which has an estimated half-

life in mammals of about 70 days, can alter the immune system.

Since mercury spills are expensive to properly clean up (for instance, the DOH had to seek help

from the UE Environmental Protection Agency to clean up the mercury spill in St. Andrew's

School in 2006), it is more prudent for Philippine hospitals to simply switch to mercury-free

alternative devices

To help implement the administrative order, a seed money of P13.2 M for the 66 DOH-

controlled hospitals (P200,000 for each hospital) is proposed to jump-start the hospitals' switch to

mercury-free thermometers, which have presently higher prices than the mercury thermometers.

As a benchmark, ABI takes the Philippine Heart Center's purchase of 10,000 mercury-free

thermometers last year when it made the switch to mercury-free alternative devices. Since the

current prevailing price of a non-mercury thermometer is P20.00, it would take about P200,000

for a hospital to switch to mercury-free thermometers.

11. An additional budget of P1.3 million is proposed under "Formulation of policies, standards and

plans for hospital and other health facilities" to be specifically used for waste management

training to support the purchase of autoclaves for health care waste disposal.



4. AGRICULTURE

The alternative budget of agriculture cluster of the Alternative Budget Initiative (ABI) is focusing on two major commodities: rice and fish. Rice is highlighted because it is our staple food. On top of that, we have witnessed the gravity of not having enough access to affordable rice. In the case of fisheries, it hosts a big portion of the country’s poorest population. It is no wonder that the poor converge in coastal communities. The de facto “open access” nature of our fisheries resources makes it a preferred livelihood option for our assetless and cash strapped citizens. But the growing number of coastal dwellers also puts so much pressure on the resource to the point of fisheries reaching its maximum sustainable yield. The agriculture and fisheries cluster believes that investments in agriculture and fisheries could have huge impacts on poverty alleviation and —the number one responsibility of the government under the Millennium Development Goals. The proposals presented here are anchored on sustainable rice farming and sustainable fisheries. Aside from MDG Goal 1, the cluster’s proposal is very much hinged on contributing to MDG’s target of ensuring environmental sustainability. The proposals seek to address the challenges faced by the agricultural sector as discussed below.

Strengthen Regulatory and Monitoring Functions of DA

The numerous corruption allegations hounding the Department of Agriculture’s (DA) programs present cause for alarm. The DA cannot easily wash its hands off and claim that only the local government officials are to blame. These are operational problems cited in the COA findings. Without politics into play and only if the DA has monitored, regulated and provided concrete guidelines in program implementation, this could have been avoided. We believe that the regulatory and monitoring functions of DA need to be strengthened in order to improve the absorptive capacity of the agricultural sector. A World Bank study has concluded that increasing the budget, without adequate investments in capacity and improvement of coordination mechanisms, including across the layers of government bureaucracy regardless of the levels of the decentralizations process, may hamper the productive absorption of funds in agriculture. The Commission on Audit (COA) reports have specified many possible strategies to make sure that the DA’s programs and resources are effectively used and carried out. Adopting these recommendations should be foremost in the agenda of the DA.

Phase out of Hybrid Seeds Subsidies

Doubts on the cost-effectiveness of hybrid rice subsidies lead us to propose for the review of hybrid rice subsidies in areas where these are found to be ineffective. We move that democratization of subsidies be implemented with the hybrid subsidies shifted to more bags of inbred certified seeds and other farmers’ varieties that are found to produce as much yield. Other fund allocation of the hybrid subsidy can be redirected to extension and education for farmers. Hybrid rice distributed by DA is actually overpriced by 100 percent as the farmers testified in their interviews with COA. The 2006 COA report found that some farmers did not get their total seed requirements from the Municipal Agriculture Office and bought hybrid seeds from private suppliers and stores in their localities at the same price as their share in each bag.



Stronger Education and Extension

Extension and education are crucial. We are proposing realignment of more funds to this sector. In these times of greater need to lessen production costs and enhance programs through various innovative means, we propose that successful sustainable farming approaches are taught and shared with the farmers. The proposal is to add P300 million to the existing budget allocated to education and extension specifically for sustainable farming approaches such as organic farming, system of rice intensification (SRI) and other sustainable farming methods.

Greater Emphasis on Organic Fertilizers

The business-as-usual attitude towards rice farming can no longer continue because rice farms are facing greater threats from climate change on top of the already nutrition-deficient rice farms due to over-use of chemicals and fertilizers. No amount of synthetic or chemical fertilizers can increase yield if the soils are virtually dead. We agree with the Department of Agriculture in giving specific allocation of Ph500M to the production of organic fertilizers. We suggest, however, that this program not simply rely on procuring organic fertilizers from private dealers. More importantly, we want to promote self-reliance in organic fertilizer production at the farm or community level. We propose that the DA tie up with local governments who have efficient waste management programs to secure source of materials for organic fertilizer production. This particular activity can be done in tandem with the Department of Environment and Natural Resources’ (DENR) Zero Basura Campaign. It aims to facilitate the implementation of RA 9003 or Ecological Solid Waste Management Act targeting the closure of dumpsites within the next 300 days.

Additional Post Harvest Budget for Small Organic Producers

Post-harvest budget for organic rice is necessary because this cannot be mixed with regular rice in the milling and drying processes.

Prudence in Selection of New Irrigation Areas

The challenges brought about by climate change provide greater need for honest-to-goodness rehabilitation of existing irrigation facilities and build new irrigation facilities with assured source of water. Studies on the effects of climate change found increasing temperature in major rice producing areas and where the existing irrigation projects are located. These areas are bound to experience scarcity in water supply as temperatures continue to soar leaving these irrigation projects useless. One solution is to shelve irrigation projects in areas and redirect to irrigation in areas not vulnerable to the rise in temperatures. The savings can be realigned to other components of the alternative proposals of the agriculture cluster (see proposal).



Greater Local Palay Procurement

The increase in palay prices at the height of the crisis provided the farmers the biggest incentive to keep on producing rice and encourage them to continue nurturing their rice farms. But now that the harvest season is about to come, farmers are suffering from another blow from the traders as they are buying palay at very low prices of Ph9 to Ph12 per kilo. We believe that assuring the farmers with a profitable market for their produce will effectively lead them to invest and improve their production because of assured return on investment. Achieving rice self-sufficiency is not always caused by direct government dole out in the form of subsidy and cash transfer that is vulnerable to corruption.

Greater Focus on Municipal Fisheries

We propose that the government invests in the municipal capture fisheries sector as the cornerstone of its strategy on poverty alleviation and fisheries’ resource sustainability. This proposed investment should provide for the municipal fisheries sector the opportunity to become more productive members of the fisheries industry. The municipal capture fisheries sector provides half of the fish needs of the country. The Asian Development Bank noted that the fisheries sector is a high risk entity and credit unworthy. In this light, the government should all the more invest in this sector which is under the jurisdiction of the Local Government Units. Fiscal incentives should be provided and effective measures implemented to allow productivity and eventually contribute to the economic well-being of the fisherfolk dependent on capture fisheries.

Alternative Budget for DA The ABI proposes realignments in the DA’s budget to focus on more essential programs to address the pressing problems confronted by the agriculture sector. Table 11 shows the details of these proposed realignments. Special provisions are also proposed in certain budget items.



Table 14. Alternative Budget for DA

Major Final

Output NEP 2009 ABI Proposal

Proposed

Increase /

(Decrease)

Remarks

DA

OSEC Promotion and development of organic fertilizers

500,000,000

0

0

Special provision to ensure that funds should be used to promote farm-based organic fertilizer production and not solely for procurement from commercial suppliers.

AFMA

Irrigation services

13,240,177,000 12,740,177,000 (300,000,000) *Special Provision: Prioritize repair and rehabilitation of existing irrigation services rather than building new one. Thus, re-allocate budget for new irrigation constructions that are located in high temperature zones where water supply will likely be a problem.

Post Harvest Facilities and Other Infrastructure

6,695,778,000 6,745,778,000 50,000,000 Thresher, mobile mills for organic rice producers

Extension support, education and training services

1,844,583,000 2,144,583,000 300,000,000 Additional P 300 Mil budget for education and extension work for sustainable farm approaches



Production Support

9,670,337,000 9,320,337,000 (350,000,000) Removal of P1 Bil in hybrid seeds subsidies and realigning these for the following:

- 500,000,000- for additional certified inbred seeds to further democratize seeds support to more farmers and more hectarage

- 150,000,000 -production support for organic producers

Regulatory Services

677,932,000 827,932,000 150,000,000

Policy and Planning

1,090,072,000 1,240,072,000 150,000,000

Joint government and civil society monitoring of projects

TOTAL -0-

Alternative Budget for the National Food Authority

Up to the early ‘90s, NFA has been getting money for palay procurement but since they were making money from importation, the earnings can be used to procure palay at the farm gate. It is impossible to expect NFA to make money from importation these days. Government must therefore provide additional appropriation so the agency can buy additional volume that can help the rice farmers significantly. The targeted local procurement of NFA for 2009 is 925,000 metric tons. This is about 5 percent of the projected palay harvest of the year. At P17/kilo, it would cost the government around P15.725 billion. We propose that the government increase its target procurement to 10 percent of the projected palay production next year. Doubling the target to 10 percent would cost Ph31.45B. This is almost half of the government’s spending of Ph70 billion for importation this year. Table 15. Alternative Budget Proposal for NFA

NFA Corporate

Budget for Palay

Procurement

2009 ABI Proposal Proposed Increase /

(Decrease)

Amount Volume

P15.725 billion 925,000 MT

P31.45 billion 1,850,000 MT

P15.725 Billion



Alternative Budget for BFAR

For the fisheries sector, the ABI proposes an increase in the NEP budget of the BFAR by P680 million. This proposed budget is based on the Comprehensive National Fisheries Industry Development Plan (CNFIDP) which was formulated by the stakeholders of the fisheries sector. However, no fund source has yet been identified to finance this comprehensive plan. The alternative budget will focus on the municipal fisheries—where most of the poor are from. The group’s proposal is to lodge P680 million in the Office of the BFAR National Director for easier monitoring purposes as well as for ease of implementation.

Table 16. Alternative Budget for BFAR

Budget Item NEP 2009 ABI Proposal

Proposed

Increase /

(Decrease)

BFAR GMA-Fisheries Office of the BFAR National Director

1,872,495,544

2,975,544,000

680,000,000

The components of the proposed program and the breakdown of the proposed budget detailed in Table 17 below. Table 17. Details of Alternative Budget Proposal for BFAR

Program Objectives Proposed

Budget

Comprehensive Education Program for Fisheries and Aquatic Resource Management Councils (FARMCS) and Fisherfolk Organizations

To develop the capacity of Fisheries Aquatic Resource Management Councils (FARMCS) and fisherfolk organizations on sustainable fisheries management, establishment of cooperatives, enterprise development and sustainable livelihoods.

42,000,000

Validation of Priority Use Rights through Municipal Registration and Licensing

To develop the capability of LGUs and FARMCs for effective and efficient implementation of the municipal registration and licensing system

60,000,000

Enhancement of Locally Managed Marine Areas

To enhance understanding of the roles of locally managed marine areas in fisheries conservation and implement locally managed marine areas at specific demonstration sites.

24,000,000

Rehabilitation and Regeneration of Coastal and Inland Ecosystems

To rehabilitate selected degraded coral reefs, mangroves, seagrass and inland areas that are critical areas for the fisheries.

36,000,000




Budget

Sustainable Fisheries Livelihood Support

To increase the income of small fisherfolk families and organizations through engagement in resource and non-resource based livelihood initiatives.

110,000,000

Infrastructure and Post-harvest Facilities Development for Municipal Fisheries

To establish village-level cold storage facilities, small-scale fish landing centers, and to set up the appropriate organization that will operate/maintain the infrastructure facilities.

16,000,000

Enhancement of Fishery Law Enforcement

To organize community-based and Fishery Law Enforcement Task Force (FLET), improve the scheme of deputization of fish wardens; and provide support for Bantay Dagat/FLET.

38,000,000

Rationalization of Municipal Fishing Effort

To promote the sustainable utilization of municipal fishery resources and rationalize the fishing activities to ensure that these are within the productive capacity of the fishery resources.

154,000,000

Crop insurance To ensure fisherfolk of adequate financial assistance for seaweeds, etc. in times of calamity and weather disturbances

100,000,000

Credit guarantee fund To secure adequate and favorable access to credit for fishfarmers and fisherfolk.

100,000,000

TOTAL 680,000,000



5. ENVIRONMENT

Background

The 2007 MDG progress report on Asia and the Pacific underscores the close link between environmental deterioration and poverty in such a manner that the “increasing proportion of poor in the Asia-Pacific region are poor because they are living in areas where the environment is under stress.” The region exhibits a trend of increasing number of people living on less than $1 per day found in areas that are under environmental stress. Early estimates also project that environment-related poverty is likely to increase by two-thirds come 2020 as areas under environmental stress are likely to increase due to impacts from natural disasters and climate change. The Philippine performance does not deviate from the Southeast Asian average. In fact, it was only in the establishment of protected areas where the country’s performance is above the sub-regional average. It has performed below average on areas such as reducing extreme poverty, number of students who reach grade 5, primary education completion rate, infant mortality, HIV prevalence, and improving supply of water in rural areas. While, together with Cambodia, Indonesia and Myanmar, the Philippines was especially noted wherein economic growth has been pursued at the cost of rapid deforestation. The cost of poor environmental condition, both in economic and social terms, was quantified in recent reports by the World Bank. The Philippine Environment Monitor 2005, which focused on the state of the country’s coastal and marine resources, estimated an annual average of PhP 2.0 billion lost due to the depletion of the fish stocks brought about by unsustainable fishing methods. The Bureau of Fisheries and Aquatic Resources (BFAR) further estimated that another PhP 2.0 billion worth of fish catch, on the average per year, is lost due to siltation and sedimentation. The Philippine Environment 2006, which dealt on environmental health, estimated an annual expenditure amounting to PhP 14.3 billion each year in terms of treatment and lost income alone. The report urgently draws attention to the need for effective intervention to environmental management problems. Moreover, the United Nations Environmental Programme (UNEP) estimates that 80 percent of all natural disasters worldwide occur within Asia and the Pacific. In terms of disaster damage, the region accounted for more than 50 percent of the total global amount of damage from 1990 to 2004, with an estimated total economic losses amounting to US$73 billion. The Philippines, where global warming is largely attributed to the destruction of forests rather than carbon dioxide emissions, has been experiencing big economic losses. Loss to fisheries due to the El Niño phenomenon in 1997-1998 was estimated at PhP 7.3 billion, while loss due the typhoons in 2006 was PhP 20 billion. Finally, the global food and fuel crises which impacted the country in crisis proportions prompted government to channel billions of pesos worth of subsidies as stop-gap measures to ensure the poor’s access to the country’s staple and electricity. It is saddening to note that the Philippines environmental condition continues to deteriorate in spite of having an active role in global initiatives along sustainable development. This can be attributed to two major factors: (1) prevalence of institutional problems that lead to ambiguities in roles and functions, and unclear responsibilities among the various agencies with environment-related functions, and (2) many environmental laws have been rendered useless due to lack of /inadequate financial resources for its implementation.



The time calls for urgent and sustainable responsible responses. It requires no less than a proactive, integrated and well-harmonized intervention, as well as sound and effective public administration and governance. Summary of Alternative Budget for Environmental Sustainability

The ABI proposes a total augmentation amounting to PhP 2,586,427,110.00 for environmental sustainability. The amount of PhP 100,000,000.00 will be an augmentation to the budget of the National Economic Development Agency (NEDA) for the purpose of reviewing and revitalizing the Philippine Council on Sustainable Development or PCSD. The rest of the proposed augmentation will be towards increasing the budget of the Department of Environment and Natural Resources (DENR) towards enhancing its role in conservation and protection of the environment.

Table 18. Summary of Alternative Budget Environment Sustainability

Budget Item

GAA 2008

NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC– Operations/ Community-based

Forestry Program (NEP p. 112)

218,450,000 100,900,000 218,450,000 117,550,000

OSEC-Operations

*Special Advocacy on

CRM

0 0 30,000,000 30,000,000

EMB-Operations/

Toxic Substances and

Waste Management

(NEP p. 121) *Construction of five (5) waste to organic fertilizer/ bio-diesel facilities

47,760,000 59,750,000 559,750,000 500,000,000

EMB – Operations/

Environmental

Management &

Pollution Control

(NEP p. 121) *Water Quality Monitoring for critical bodies of waters in Visayas & Mindanao *Construction of three (3) regional Industrial Pollution Laboratories

252,600,000 339,770,000 1,879,770,000 1,540,000,000

OSEC-Support to

Operations/ Legal

Services

(NEP p. 109) *forest, land and mining

85,980,000 94,990,000 129,990,000 35,000,000



Budget Item

GAA 2008

NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

EMB-Support to

Operations/Legal

Services

*pollution-related (NEP p. 9)

7,400,000 7,850,000 22,850,000 15,000,000

OSEC-Gen. Admin &

Support/ Human

Resource

Development

69,480,000 77,530,000 97,530,000 20,000,000

NEDA-Operations

*PCSD: localization of PA 21

No specific item for PCSD operations


100,000,000 100,000,000

OSEC-Support to

Operations/ Planning,

Monitoring of ENR

Policies

202,641,000 226,611,000 228,877,110 2,266,110

TOTAL PROPOSED ADDITIONAL ALLOCATIONS 2,586,427,110



6. SUMMARY OF ALTERNATIVE BUDGET PROPOSALS The Alternative Budget Initiative proposes a total of P43 billion increase in the budget of critical social and economic services for FY2009. This alternative budget proposal includes P18 billion for basic education to help the country attain its education targets; P536 million for higher education to help achieve quality, accessible and relevant public higher education system; P4 billion for health to ensure more accessible and affordable health care and strengthen the Philippine health work force; P16 billion for agriculture, particularly for rice and fish, to help attain food security; and P2 billion to help ensure a sustainable response to global challenges for environmental sustainability. The ABI also proposes P20 million budget to sustain the partnership of Congress and civil society in closely monitoring budget implementation. For FY 2009, civil society is proposing that the partnership with the legislature be expanded to include monitoring of the budget for the MDGs and other social development expenditures. The monitoring unit will report to Congress through the appropriate House and Senate Committees. An additional budget of P20 million will help strengthen congressional oversight for activities including operating cost of research, data management, meetings and congressional hearings.

Table 19. Summary of Alternative Budget Proposals

Particulars ABI Proposed Increases

Education Basic Education Higher Education (SUCs)

P 18,697,000,000 536,728,270

Health

4,771,967,251

Agriculture Rice Fisheries

15,725,000,000 680,000,000

Environment

2,586,427,110

Civil Society-Legislature Monitoring of the MDGs and other Social Development Projects

20,000,0000

TOTAL

P 43,017,122,631



t has been ABI’s trademark to conduct its budget advocacy by identifying possible sources of financing for the additional allocation to priority social and economic sectors which it proposes. For the FY 2009 budget, ABI conducted an analysis of the National

Expenditure Program and identified possible sources of financing through reallocation of proposed appropriations for budget items which are deemed unnecessary, highly discretionary, with vague or no special provisions that will make it prone to frivolous spending.

Table 20. Summary of Proposed Sources of Financing

From Special Purpose Funds 65,700,000

From Departments/Agencies 17,152,713

TOTAL 82,852,713

I

Table 21. Proposed Sources of Financing

2008 GAA 2009 NEP Amount for

ABI

Kalayaan Barangay Program 1,000,000 1,000,000 Subject to the discretion of the President; the use of

fund for "approved infrastructure projects" overlap

with functions of other agencies; Concerned

government agencies should instead prioritize the

conflit-affected areas in the provision of services.

Page 679,

Item A.1

Kilos Asesnso Support Fund 2,000,000 1,000,000 1,000,000 Duplicates functions with several government

agencies; highly discretionary and prone to inefficient

use of resources.

Page 680,

Item A.1

Contingent Fund 800,000 800,000 200,000 Subject to the sole discretion of the President. Special

provision states that the use of funds include the cost

of local and foreign travels of the President which is

already has appropriation under Office of the

President Budget (Item II.c.2)

Page 690,

Item A.1

General Fund Adjustments 1,000,000

Unprogrammed Fund: Purpose 4: General

Adjustments Fund

3,500,000 6,500,000

Miscellaneous Personnel Benefits Fund 41,003,698 31,030,330 20,000,000 Subject to discretion of President for any salary

increase or benefits provided by law. A special

provision is proposed to allocate P20 B for benefits of

teachers and health workers provided by existing laws

but without appropriations.

Page 713,

Item A.1

Unprogrammed Fund: Purpose 5: Support for

Infrastructure Projects and Social Programs

30,500,000 30,500,000 30,500,000 No special provision on the use and administration of

the fund.

Page 742,

Item A.5

Unprogrammed Funds

GFA has two appropriations, as a stand alone (page

695) and as an item under Unprogrammed Fund

(page 742. Item A.4)

4,000,000 Pages 695

and 742

Remarks

Allocations to LGUs

General Fund Adjustments

Source NEP Ref.

SPECIAL PURPOSE FUNDS

(In '000 pesos)


ABI RemarksSource NEP Ref.

(In '000 pesos)

Unprogrammed Fund: Purpose 2: Strategic

Government Reforms

2,000,000 2,000,000 2,000,000 No clear cut mechanism on he use of the fund and

thus subject to discretion by the President. Some of

the the intended purposes of the fund as provided

under the special provision such as improvement of

operational, training and logistics capacity and staff

development programs, are already incorporated

under the Departments' budgets.

Page 742,

Item A.2

Unprogrammed Fund: Purpose 3: Support to

Foreign-Assisted Projects

16,421,409 7,133,401 7,000,000 Unlike GAA 2008, there is no special provision

detailing the specific projects to be funded out of this

appropriation.

Page 742,

Item A.3

Under the Office of the President

Item B.I.g.1. Presidential Anti-Organized Crime

Commission Proper, including P500,000,000

for confidential and intelligence expenses to be

released upon approval of the President

536,625 519,882

Item I.a.1 General management and

supervision, including P150,000,000 for

confidential and intelligence expenses to be

released upon approval of the President

1,227,981 1,233,352

Under the Office of the Vice-President

Item II.a.1. Ceremonial functions and technical

services, including P6,000,000 for confidential

and intelligence expenses to be released upon

approval of the President

140,295 144,519

Item III.a.1 Operation and maintenance of

combat units, including P24,000,000 for

confidential and intelligence expenses

19,732,786 22,961,709 2,000,000 Under Internal Security Operations, Personnel

Service (PS) increased by P2.844 B despite the

decrease of 19 personnel from 2008 to 2009 based

on staffing summary. What accounts for such

increase when MOOE increased only by P300

million?

Page X

DEPARTMENTS / AGENCIES

Confidential and Intelligence Expenses

Pages 10,

11 and 15

The combined confidential and intelligence expenses

subject to discretion by the President provided in

these three items amount to P656 M.

300,000

Department of National Defense (AFP-Land Forces)


ABI RemarksSource NEP Ref.

(In '000 pesos)

Item B.1.d Pantawid Pamilyang Pilipino Program

(P4)

5,000,000 5,000,000 No special provision specifying the mechanics for

utilization. A conditional cash transfer (CCT) program

without "conditions" makes it merely a pork barrel

subject to unbridled discretion. Proposal for special

provision to 1.) set up inter-government agency to

target poor beneficiaries with NAPC, DOH and

DepEd; 2.) tie with conditions related to the

attainment of basic health and education investments;

3.) reporting requirements to Congress.

Page X

Item B.I Locally-funded Projects 10,964,321 11,295,774

Item B.II Foreign-Assisted Projects 3,452,455 3,556,939

No listing of projects to be funded out of the proposed

appropriations

Page X

Department of Social Welfare and Devevelopment

Department of Transportation and Communication

14,852,713



MISSING THE COUNTRY’S EDUCATION TARGETS 1

The State-of-the-Nation Address (SONA) delivered by President GMA on July 28,2008 cited the

achievement of her administration in providing more classrooms, textbooks, scholarship, food in

school and jobs for the out-of-school. The speech, however, was conspicuously silent on the overall

performance of the education sector.

A few days before the President’s SONA, the National Statistical Coordination Board (NSCB) study

revealed that one in six school-aged children is being deprived of education and the number is rising

steadily. The study noted that given the millions of children who are out of school, the country is still

far from achieving the goal of providing basic education to all as committed in the World Education

Conference (Dakar, April 2000) and the Millennium Summit (September 2000).

This admission captures in large part the true state of Philippine education today. While the

Department of Education (DepEd) reported certain gains, these are too marginal to gloss over the

huge shortfall in performance and outcome. The key indicators are clear enough to illustrate the

continuing decline of education in the Philippines. Midway through 2015, access is still a big problem

while education quality has remained poor. Resources are far too limited to ensure quality education

for all.

The public sector confronts

tremendous pressure in improving

spending level because of backlogs

in key input and the continuing

exodus of students from private to

public schools due to financial

constraints. Per capita spending has

actually gone down in the last

several years. Similarly, education

expenditure among poor

households also went down during

the period 2003-2006. The

situation is projected to get worse

with household incomes shrinking

amid surging oil and food prices.

Given the current economic

crunch, more children are likely to

be left out and deprived of

education.

1 Prepared by the ABI Education Cluster of the Alternative Budget Initiative. The cluster is coordinated jointly

by E-Net Philippines and Action for Economic Reforms.

Key Indicators - Net Enrolment Rate

50

55

60

65

70

75

80

85

90

95

100

SY

1999-00

SY

2000-01

SY

2001-02

SY

2002-03

SY

2003-04

SY

2004-05

SY

2005-06

SY

2006-07

Elementary Level

High School Level

Figure 5. Net Enrolment Rate, SY 1999-00 to SY 2006-07



There is a need to address strategic issues that impact on education, instead of relying on quick-fix

and expedient solutions to solve critical problems confronting the education sector.

Declining Net Enrolment Ratio

Net Enrolment Ratio or NER (also referred to as participation rate) measures the proportion of

children of official school age range that are enrolled in school. The latest DepEd Factsheet showed a

consistent decline in the net enrolment ratio since the EFA and MDG summits in year 2000.

Elementary NER for SY 2006-2007 declined further to 83.2% from 84.4% during the previous school

year. The same trend is evident at the secondary level, with net enrolment ratio remaining low at

58% to 60% in the last five years. It managed a slight increase of 0.1 percentage point in SY 2006-

2007 compared to the previous year.

At the regional level, declining enrolment rates were noted in nearly all the regions during the last

seven years since SY2000-2001. Mindanao posted the lowest rates, with ARMM registering only

32.6% NER at the secondary level for SY 2006-2007. Among provinces, Davao del Sur had the

lowest NER for elementary level at 63.5 percent and Sulu for secondary level at 15.2 percent. The

Visayas regions also posted low NER particularly at the elementary level.

As with most other indicators, the National Capital Region (NCR) emerged as the best performer with

only 7.1% out-of-school among elementary-age children. The NCR, along with Central Luzon and

CALABARZON, topped the other

regions in net enrolment rates.

The education watch survey

conducted by E-Net Philippines

revealed that a significant number

of children were enrolled in

grade/year levels which do not

correspond to their ages. The study

found that some 60% of students

lagged by one to two years while

another 12% were behind their

school levels by at least three years.

Some 11.2% of children 6 to 11

years old were still in pre-school;

35.4% of children 12 to 15 years

old were still in elementary; and

52.5% among the 16 to 19 year old

age group were still in high school

while 3% were still in the

elementary level.2 That means that

children enter school at a later age;

a considerable number are

repeaters; and some had been

skipping school and coming back.

2 Civil Society Network for Education Reforms (E-Net, Philippines). Children Missing an Education (An


2007.

Table 22. Net Enrolment Ratio (NER) by Region for SY

2006-2007 (In Percent)

Elementary Secondary Region SY

06-07 Rank

SY

06-07 Rank

Philippines 83.2 58.6

NCR 92.9 1 75.1 1

CAR 80.9 8 59.1 5

I - Ilocos 82.7 7 68.2 4

II - Cagayan Valley 77.7 13 58.9 7

III - Central Luzon 89.1 3 69.1 3

IV-A – CALABARZON 92.4 2 71.3 2

IV-B – MIMAROPA 83.8 5 58.9 6

V - Bicol 83.8 6 54.3 8

VI - Western Visayas 75.0 17 52.9 10

VII - Central Visayas 78.9 10 53.9 9

VIII - Eastern Visayas 78.2 11 49.9 12

IX– Zamboanga Peninsula 77.6 14 47.7 16

X - Northern Mindanao 79.0 9 51.2 11

XI – Davao Region 75.9 16 47.8 15

XII – SOCCSKSARGEN 76.4 15 48.9 14

XIII – Caraga 77.8 12 48.9 13

ARMM 85.8 4 32.6 17

Source of data: Department of Education



Addressing late entrants and over-age children is important because these children are usually at risk

of falling out. Many never make it to school or drop out early to work and help in the family’s

livelihood. Others drop out of school when they reach puberty and are ridiculed in school. The

dropout rate among late entrants tends to be higher than among children who started schooling on

time. The pressure for a child to be involved in the economic activity of the family, directly or

indirectly, comes at the age of about 12 or 13 years old. At this age, children are tasked with more

economic responsibilities.

Drop out rates at record levels

The number of children who drop out and stay out of school remains alarmingly high. For SY 2006-

2007 elementary dropout rate averaged 6.37% while dropout rate at the secondary level was higher at

8.55%. Roughly, these figures translate to a staggering 1.4 million students falling out of the school

system every year.

Dropout rates remain high in the last seven years since SY 2000-2001. It recorded a double-digit

figure in SY 2005-06 at the secondary level. With the current food and economic crisis, a further

increase in dropout rates may be expected, affecting most especially the poor and disadvantaged

children.

Acknowledging that rising

cost of food and energy are

pricing education out of the

reach of poor families,

President Gloria Macapagal

Arroyo ordered schools not

to require their students to

wear uniforms to reduce the

cost of education. For its

part, Secretary Lapuz said

that DepEd is set to

implement appropriate

measures to cushion the

impact of the crisis on the

schooling of Filipino

children. The DepEd’s

recent projects like the

alternative learning systems,

feeding programs, and the “no collection and no uniform policies” are primarily intended to make

sure that schoolchildren are able to enroll and stay in school. The conditional cash transfer program

which worked effectively in Brazil and other Latin American countries will also be piloted in several

local areas.

While these measures may bring immediate relief, more strategic and comprehensive policies and

programs are needed to address problems related to school access and dropout.

Out-of-School Children and Youth

As mentioned above, the incidence of school dropout in both primary and secondary levels have

remained alarmingly high. This explains the low survival in school and accounts for the increasing

3

6

9

12

15

SY 2000-

01

SY 2001-

02

SY 2002-

03

SY 2003-

04

SY 2004-

05

SY 2005-

06

SY 2006-

07

HS Elem

6.37%

8.55%

Source of basic data: Department of Education

Figure 6. Elementary and High School Dropout Rates

SY 1999-00 to SY 2006-07



number of the out-of-school children. It highlights the deteriorating situation of basic education in the

Philippines.

The Bureau of Alternative Learning System (BALS) updated the 2003 Functional Literacy,

Education, Mass Media Survey (FLEMMS) figures on the out-of-school and placed the number of

those not attending school at 1.84 million for the 6-11 age group and another 3.94 million for the 12-

15 age group.3 The BALS figures are closer to the estimates of the study done by the UNESCO

Institute for Statistics (UIS) in their global monitoring of the out of school children. For the

Philippines, the UIS placed the number at 2.072 million out-of-school children of primary school age.

Given this figure, the Philippines has one of the biggest number of out of school children in Southeast

Asia - higher even than Vietnam and Indonesia in both absolute number and percentage.

Numerous studies and surveys consistently point to poverty as the biggest factor that accounts for the

high drop out and the increasing number of the out-of-school children and youth. FLEMMS 2003

data reveal that primary school age children coming from poor families are nearly three times more

likely to be out of school compared to the non-poor children. A similar situation is also observed

among children 12-15 years old. Children of poor background from this age group are twice more

likely to be out of school compared to the non-poor children.

The FLEMMS 2003 further reported the

high incidence of out-of-school -children

and -youth in the depressed regions of

Mindanao and the Visayas, as well as in

the thickly populated regions of Luzon,

specifically the National Capital Region,

Calabarzon and Central Luzon.

The NDHS 2003 supports these findings,

noting that children who live in rural areas

are twice more likely to drop out of school

compared to those who live in urban areas. Children of primary school age belonging to the poorest

20% of households are also three times more likely to drop out from elementary school compared to

children from the richest 20%. Data culled from the survey consistently shows that there is an

increasing number of children dropping out from school from grade 1 to grade 6 among the 20%

poorest households compared to other quintile groups.

It is also important to note that parents’ education, particularly the mother, impact significantly on

school attendance of their children. The UIS global monitoring of the out of school noted that in the

Philippines, children whose mothers have no formal education are 2.8 times more likely to be out of

school compared to those whose mothers have had some education. This is similar to those of

Vietnam, Iraq and Mongolia. This assertion is validated by the FLEMMS 2003. The computation

generated from the FLEMMS 2003 dataset reveals that children whose mothers have no formal

education are 2.5 times more likely to be out of school compared to those whose mothers have some

formal education.

Reasons for Not Attending School. Among the out-of-school children and youth, the main reasons

cited for not attending school were economic and poverty-related factors. Some 30% of school-aged

Filipinos were not in school because they were working or looking for work. Another 20% cited the

high cost of education as the main reason for dropping out of school. A few (2.1%) mentioned

3 Bureau of Alternative Learning System (BALS), Department of Education, 2007

Table 23. Percentage Distribution of Out of

School Children by Age Group and Economic

Status

Poor Non poor Total

6 - 11 Yrs Old 17.1 5.9 9.8

12-15 Yrs Old 20.5 9.2 12.7

16-24 Yrs. Old 77.2 63.2 66.5 Source: Functional Literacy, Education and Mass Media Survey 2003



accessibility factors (distance and lack of transportation), presumably because they are residing in

remote and isolated areas where poverty incidence is usually high. It is also significant to note that a

higher percentage of those who mentioned housekeeping chores, difficulty in coping with school

work and illness/disability belonged to the poorer section of the population.

Another major reason cited was the lack of personal interest which accounted for 22% of the out-of-

school children and youth. It is interesting to note that the lack of personal interest was the most

frequently cited reason for children in the primary and secondary age groups. For the older age

groups, employment and financial considerations were the most often cited reasons for not attending

school.

The lack of interest among school children indicates a weakness on the part of the school system to

make education interesting for the students. This may be due to poor teaching quality, inadequate

facilities and supplies and poor infrastructure. Poverty, social exclusion, school distance and poor

health are, likewise, factors that weigh heavily on children and dampen their interest to pursue

schooling. The challenge, therefore, is how to make the school interesting and encouraging rather

than intimidating; how to make it inclusive, non-discriminatory and poor-sensitive rather than

exclusive and elite-oriented; and how to make it accommodating rather than restricting. Finally, the

education content, process and experience should be made more meaningful to the children’s life

experiences by ensuring appropriate, culture-sensitive and values-based interventions.

On Education Quality

The poor and declining quality of education is clearly shown by the erratic and consistently low

scores obtained by pupils in achievement tests administered by the Department of Education over the

years. The increments in test scores show only marginal improvement and the rating fell far short of

the desirable level.

Table 24. Achievement Test Results

SY 2000-

2001

… SY 2004-

2005

SY 2005-

2006

SY 2006-

2007

Elementary Achievement Rate (MPS) 51.75 … 58.73 54.66 59.94

Secondary Achievement Rate (MPS) 53.39 … 46.80 44.33 46.64

For SY 2006-2007, the National Achievement Test (NAT) showed that Eastern Visayas and Caraga

placed first and second, both at the elementary and secondary levels with mean percentage scores of

74.1 and 71.9, respectively, at elementary level and 64.2 and 62.9, respectively at secondary

level. Both regions did very well in the NAT but had low NERs. In fact, the performance of the two

regions in most of the education indicators is way below the national average. Without necessarily

questioning the accomplishment of the two regions in performing well in terms of achievement tests,

the test results actually show inconsistencies and cast doubts about the effectiveness of the exercise in

measuring education quality and outcome. Other test results based on international standard measures

show that education quality in the Philippines is low and declining.

The deteriorating state of Philippine education can also be seen in its poor rating in international

competitive tests. The 2003 Third International Mathematics and Science Study (TIMSS) participated

in by 45 countries ranked the Philippines 41st in mathematics and 42nd in science. The country trails

the Asian countries that participated in the 2003 TIMMS, including Malaysia and Indonesia.

UNESCO’s Global Monitoring Report for 2007 generated the Education for All (EFA) Development

Index (EDI) for 125 countries. The index is used to gauge the overall accomplishment of countries in



terms of meeting the EFA goals. The Philippines ranked 75th, falling behind most Asian countries

such as China, Malaysia, Indonesia and Vietnam. In terms of education quality, using survival rate as

proxy indicator, the Philippines ranked 101st out of 125 countries. At this level, it fared no better than

some of the poorest countries in Asia and Africa such as Burkina Faso, Ethiopia and Myanmar.4

A study on achievement test scores and school characteristics done by the Philippine Institute for

Development Studies (PIDS, Orbeta, Aniceto Jr., May 2008)5 noted that among several school and

student characteristics, the following are important determinant of achievement test results: pupil-

teacher ratio; pupil-classroom ratio; presence of computer rooms (for math test results); and presence

of science labs (for science test scores). It is significant to note that apart from these indicators,

teacher quality has been identified as a consistent positive determinant of test scores at the elementary

level. Similarly, the incidence of pupil repeaters negatively affects school test scores particularly for

the high performing schools.

The implication of this study is clear and simple: let us invest in increasing the number of teachers

and improving the quality of teachers to make an impact on education quality.

School Cost and Family Spending Level

On school fees and other costs. NEDA’s Director General Augusto Santos cited the rising cost of

education as one reason that account for the increasing number of out-of-school children. Although

public schools offer free tuition, some families still could no longer afford other school-related

including transportation, food, uniform and books.

The Education Watch6 study done by E-Net Philippines noted that education remains to be a major

expense item for Filipino families. Apart from tuition fees, families also spend for textbooks, school

supplies, uniforms and school clothes, sports fees and other school-related fees/expenses. In addition,

parents have to shoulder the costs of transportation, school meals and snacks, room rental and other

incidental costs of schooling. While technically no tuition fee is collected, payment comes in various

forms and pass off as voluntary contributions for varied activities and projects including contributions

for school repairs, furniture and equipment purchase and sports activities. Parents are confused

whether payments they made were for specific projects or for tuition fees.

The survey findings showed that for public schools families spent an average of P 2,450 annually for

elementary students and P 5,246 for high school students. The computation excludes the cost of pack

meals and food eaten in school.

School fees and other costs borne by parents make access to education highly inequitable. Poverty

limits access of poor children to education. It is too costly for the poor to maintain their children in

school and poverty pushes children to drop out, seek employment and work. Yet, most schools,

including state-funded schools, continue to charge fees of all sorts, making education unaffordable to

many poor families.

4 UNESCO. Strong Foundations: Early Childhood Care and Education (Global Monitoring Report 2007). Paris:

UNESCO Publishing, 2007.

5 Presented during the 6th National Social Science Congress, PSSC, 7-9 May 2008. 6 Civil Society Network for Education Reforms (E-Net, Philippines). Children Missing an Education (An


2007.



Declining education spending of the poor. The Family Income and Expenditure Survey of 2006

reported a drop in real income and decrease spending on education and health care among poor

families compared to three years ago. The data show a decrease in the spending share of education

among poor families (those belonging to the bottom 30% income group) – from 2.9% of total family

expenditure in 2003 to only 1.3% in 2006. This means that in 2006, the poor spent just half of what

they spent for education in 2003. The same trend was observed for medical care, with poor families

spending only 1.7% for health in 2006 compared to 2.1% in 2003. This pattern of expenditure will

have long-term implications on human capital and poverty reduction in the country.

Reduced spending of the poor on education confirms what has been reflected in the data of the

Department of Education (DepEd) and the Education Network (E-Net). Parents are cutting on cost,

specifically on tuition fees, books, school supplies, educational materials and allowances, but with

consequent impact on learning achievement. Children are migrating from private to public schools,

which are generally more affordable. More students are working—and for longer hours—thus

affecting learning outcome. Worse, a huge number of children from poor families drop out and stay

out of school due to financial difficulties and the high opportunity cost of keeping children in school.

What accounted for this fall in education spending? Data from the National Statistics Office (NSO)

show that the poor had to spend more on food, fuel and utilities in 2006, which took away 66.4% of

the family budget. Given the worsening food and energy crisis in the last two years, expect the poor

to dig deeper into their pockets to cover food essentials and energy, leaving very little for education

and health.

Declining Public Spending on Education and the 2008 Education Budget

Government’s role becomes especially

important during difficult times and

crisis events. When families go hungry

and reduce their spending on education,

and when children drop out of school to

work, then government must act to

cover the financing gap and provide

safety nets to help the poor and

disadvantaged. But this is not happening

in the case of the Philippines.

In fact, the Philippines has been under-

investing in basic education, as shown

by the study done by Rosario Manasan

of the Philippine Institute of

Development Studies (PIDS). In 1997,

national expenditure on basic education

was 3.2% of gross domestic product

(GDP). This went down to 2.5% in 2001 and to 2.1% in 2005. Similarly, the share of basic education

in the national budget has been shrinking over the years. By 2007, the allocation for basic education

was down to only 11.9% of the national budget from a high of 16% in the late 1990s. International

benchmarks set the desirable level of education expenditure at 6% of GDP and 20% of total public

expenditure.

For 2008, the government allocated Php149 billion for basic education which represents 12.2% of the

national budget. This level of expenditure is low and falls short of the requirements for quality

Figure 7. Distribution of 2008 National Budget Shrinking Piece of the Pie – 2008 Budget

Others, 20.9%

IRA, 17.2%

DEBT,

26.8%

SUCs,

1.6%

DepEd,

12.2%

DILG, 4.3%

DPWH, 7.7%

DOTC, 1.7%

DND, 4.2%

DA, 1.9%

DOH, 1.6%



education. One study estimates the financing gap at Php 348.9 billion in 2007-2015. For 2008, the

gap is estimated at Php 36 billion.

Indeed, the current level of expenditure is low and falls short of the requirements for quality

education. It places the Philippines among the lowest spenders on education in Asia and the rest of

the world. Thailand spends over six times what the Philippine government spends for educating its

citizens, while Malaysia spends over ten times more. India spends nearly 4% of GDP on education

while Sri Lanka allots about 3% of GDP.

The trouble with the country’s public financing of education is that the government thinks it is richer,

talks as though it is performing better, but acts and spends on the same scale as those countries that

are much poorer and with far lower educational achievement. The Philippines’ spending level at 2.5%

of GDP is about the same as Bangladesh, Laos and Pakistan. But we are doing better (well, at least

for now) than Burma, Indonesia and Cambodia, which spend only between 1% and 2% of GDP. This

situation has prompted the Alternative Budget Initiative (ABI) led by Social Watch along with other

civil society networks to propose substantial increases in the education budget to address key issues

and cover critical gaps in financing.

UNESCO’s global monitoring of education performance shows that spending shares tend to increase

with income, suggesting that, over the long term, countries with bigger economies tend to allocate a

larger share of their GDP on education. When countries were classified into four groups based on

income, the spending level of the Philippines (a middle income country) on education at 2.5% of

GDP was even lower than the median (3.9% of GDP) expenditure of countries belonging to the

lowest income group.

Many Asian countries are now taking concrete steps to increase real spending on education in

comparison to the size of their economies. Not a few countries have achieved significant headway in

literacy, net enrolment, cohort survival and teaching quality. Sadly, the Philippines appears to be

stalling and moving in the other direction.

President Arroyo’s Proposed Budget for Education in FY2009

For FY2009, the proposed total budget for the education sector amounts to P204.9 billion, higher by

9.8 percent than its 2008 level of P186.6 billion. Of this amount, the Department of Education

(DepEd), including the School Building Program, is allocated some P167.9 billion, an increase of

12.6 percent from DepEd’s allocation for 2008.

The President’s budget message highlights the proposed allocation for basic education in 2009 which

includes the following:

� P2.5 billion for the creation of 19,553 new teaching and non-teaching positions;

� P7.5 billion for the construction of new classrooms to achieve a 45:1 elementary student per

classroom ratio;

� P2.3 billion for the procurement of 37.1 million textbooks to ensure a 1:1 textbook to pupil

ratio;

� P3.4 billion for the expansion of the pre-school program covering 680,855 five-year old

children;

� P1.7 billion for the purchase of 1.4 million desks/tables/chairs;

� P3.7-billion for Government Assistance to Students and Teachers in Private Education

(GASTPE) for 665,975 grantees;



(It is also important to note that the national budget under the Department of Social Welfare and

Development (DSWD) allocation contains an allocation of P5 billion for the Pantawid Pamilya

program to provide cash grants to 321,000 poorest households. The subsidy includes cash transfers to

the poorest households amounting to P300 per month per child who attends school.)

While the proposed 2009 budget for basic education increased by almost P20 billion compared to the

current year, its share of the national budget has actually shrank further to just 11.87% compared to

this year’s share of 12.2%. Factoring inflation rate and projected increment in student enrolment, per

pupil expenditure is expected to decline further as it did in the last years since 1998. Finally, the

proposed budget for the entire education sector dropped further to just 2.36% of GDP (from 2.5% for

2008). A study done by the Philippine Institute of Development Studies commissioned by NEDA and

United Nations Development Programme (UNDP) estimated that additional funds of P44.2 billion is

needed for 2009 to meet the Education for All (EFA) goals.

These realities are not consistent with the declared commitment of the President and her

administration of giving funding priority to education.

Earlier, the DepEd proposed a much larger budget of P240 billion to confront key issues that retard

the country’s education sector. This move certainly deserves commendation. Unfortunately, the

proposal did not find sympathies from the budget department and Malacañang. What was approved

was a much scaled down figure of only P167.9 billion. The proposed budget speaks very little about

addressing problems related to education access, efficiency and quality.

ABI Budget Proposal for Basic Education for FY2009

The ABI Education Cluster, after reviewing the proposed budget for FY2009 as submitted by PGMA

to Congress, proposes for additional funding basically to address two major concerns. The first

concern is how to address the increasing number of dropouts and out-of-school children and youth.

Particular attention must be given on how to reach the unreached — the poor who drop out of school

due to poverty and disadvantaged children which confronts a variety of barriers to education.

The second concern is how to ensure quality education for all Filipino students. This is about ensuring

effective teaching and quality teachers; and a conducive, child-friendly and inclusive school

environment.

To address these urgent concerns, ABI Education Cluster proposes the following additional budget

items amounting to a total increase of 18.697 billion pesos in the budget for Basic Education.

Table 25. ABI proposed budget increase for Basic Education

Budget Item NEP 2009

Proposed

Increase/

(Decrease)

Alternative

Budget

for 2009

Department of Education

Office of the Secretary

1. Funding requirement for the creation of new

teaching positions in 2009 (III. e. 17.a.2)

1,596,642,000

4,850,000,000 6,446,642,000

2. Human Resources Training and Development

including teacher's training, scholarship and

fellowship grants (III. e.17.o)

1,040,000,000

500,000,000 1,540,000,000



3. Medical/dental and optical health and nursing

services (III.c)

40,952,000 1,120,000,000

1,160,952,000

4. Provision for accumulated benefits for

teachers under the Magna Carta

8,000,000,000 8,000,000,000

5. Additional School’s Maintenance and Other

Operating Expenses (MOOE) for elementary

and secondary schools

2,800,000,000 2,800,000,000

6. National EFA Committee fund for EFA

monitoring and mobilization

16,000,000 16,000,000

7. Alternative Learning Programs - Field

operations of Alternative Learning Systems

including implementation of accreditation and

equivalency system (III.a.1)

240,420,000 1,411,000,000 1,651,420,000

DEPED OSEC TOTAL

18,697,000,000

Explanatory notes

1) P4.85 billion for the hiring of additional teachers on top of DepEd’s proposal Based on the

Department of Education’s (DepEd) estimates of schools without teachers and/or are in need of

additional teachers totaling 33,629 schools, 8,740 is funded under the National Expenditure Program

(NEP) 2009, thus the remaining unfunded teachers total 24,889 representing the backlog of teachers

for the country.

ABI Education cluster proposes a compensation and benefit package for these 24,889 teachers

amounting to 4.85 billion pesos at 194,689.00 per teacher based on DepEd's computation for salary

and benefits of Teacher I in 2008. In hiring these teachers, priority should be given to existing locally

hired teachers in view of their length of service as teachers in their community.

2) Additional P500 million for Teacher training to cover an additional one thousand pesos per

teacher per year for teacher training and scholarship.

3) Additional P1,120 million for the annual x-ray and laboratory tests required of teachers and

medicines for those afflicted with tuberculosis and other respiratory diseases at two thousand pesos

for each teacher for 560,000 teachers, including the proposed additional teachers for 2009.

4) P8 billion for partial payment of accumulated benefits for teachers under Magna Carta

ABI education cluster calls the attention of the Government to pay what is due teachers under the

Magna Carta for Teachers. The unpaid benefits of teachers as computed by DepEd amounts to P40

billion covering the following: 1) Overtime pay – P29,098,371,814; 2) Equality in Scales –

P4,082,589.251; 3) Medical and Treatment (Medical & Dental and Psychological Test) - P525,316;

and 4) Medical Treatment (Health card/insurance) – P6,303,792,000.



ABI education cluster proposes the payment for said unpaid benefits to be done in a spread of five

years at eight billion pesos for each year.

5) P2.8 billion additional MOOE to contribute to enhancing education quality To cover the

costs of running the schools, school materials and other expenses in maintaining a conducive learning

environment, based on DepEd Order 61 Series of 2007, DepEd spends P207 per student in the

elementary and P507 per student in high school. This amount is very minimal, so much so that

principals and teachers are pressured to generate funds. In turn, parents are at times forced to shell out

money for these expenses. To ensure quality education and to ease the burden on poor parents to

contribute, ABI believes that government should target at least one thousand pesos per student in the

elementary and P1,500 per student in high school until 2015 with consideration for inflation.

For 2009, ABI proposes an additional P2.8 billion for MOOE. This figure is based on a target of at

least P339 per student in elementary school and P672.50 per student for high school or an estimated

total of P8.5 billion for MOOE which is spread over three years at P2.8 billion per year.

Priority should be given to the 30% poorest and low performing areas.

6) Allocation of P16 million as National EFA Committee fund for EFA monitoring and

mobilization The Philippine Education for All (EFA) Plan 2015 has committed “functional literacy

for all Filipinos”. The National EFA Committee oversees and monitors EFA implementation at the

national level. The EFA Mobilization Fund of P16 million will cover budgetary requirements to set

up the local EFA committees and conduct corresponding activities.

7) P1.41 billion for expanded coverage of the Alternative Learning System to reach out to at

least 600,000 learners or 10% of the out-of-school children and youth

Strengthen and expand the Alternative learning system through the following specific allocations:

a) P900 million for additional 300,000 learners from among the out-of-school youth at three

thousand pesos per learner (as computed by DepEd) out of the 5.8 million out of school and

5.2 million illiterates.

b) P300 million for learning modules computed for one thousand pesos per set of

modules/learner/year for 300,000 learners. The complete ALS learning materials consists of

more than 280 modules. Currently not all learners have a complete set of module. The

proposed budget will allow printing of selected parts/modules covering a third of the total

ALS modules.

c) P150 million to cover additional number of mobile teachers so that there will be one

mobile teacher looking for the out of school in each DepEd district.

d) P26 million to cover 40 Learning Centers for indigenous peoples (IPs) at P650 thousand

for each learning center.

In the indigenous communities in Davao Oriental, Agusan and South Cotabato there

is high concentration of indigenous communities who are not able to finish high school or

even elementary education. To meet the learning needs of these learners in remote and poor

areas, learning centers must be conceptualized and constructed in partnership with local

communities to cater to children, youth and adults who need functional literacy programs and

continuing basic education.



The learning center can be a venue where education is closely linked to livelihoods,

culture, identity-self development and community empowerment. The proposed Community

Learning Centers (CLC) in the community will make available education for children, youth

and adults. Its curriculum and learning strategies are mostly learner and community-centered,

with deliberate efforts to integrate local knowledge into the curriculum, include local

elders/volunteers as teachers and develop learning materials in the local language.

The proposed budget of P650 thousand for each CLC will cover the construction of

CLCs for IPs, production of learning materials, allowances for CLC teachers and volunteers

and supplies and materials. Thirty-two CLCs for IPs need to be strategically located at

indigenous areas, initially at the following:

4 – Kankana-ey and Ibaloi in Benguet 6 – B’laan, T’boli in South Cotabato

4 – Ayta in Pampanga and Zambales 6 – Sama and other lumad in Zamboanga

8 – Mandaya, Mansaka and other Lumad in Davao

del Norte

4– Manobo, Higaonon and other Lumad in

Caraga

e) P10 million for an ALS summit

f) P15 million for expanded monitoring and evaluation of ALS

g) P10 million for national Literacy campaign to generate support for the six million Filipino

illiterates. This will consist of forums with local government units (LGUs), national

awareness campaign on literacy using media, leaflets, Information, Education and Campaign

(IEC) materials, Round Table Discussions to discuss literacy challenge and literacy

benchmark.



EQUAL STANDARDS FOR EQUAL OPPORTUNITIES 1

FRAMEWORK FOR A QUALITY, ACCESSIBLE, AND RELEVANT PUBLIC HIGHER EDUCATION SYSTEM2

What is Higher Education to Us The Youth Against Debt (YAD) defines education as a process each individual must embrace to be able to realize her/his actual or innate potential towards full human development. It is a fundamental function or a route for people to become productive members of a particular society. It is often associated with formal education or what many call as university education. However, the concept of education is primarily more than that. In reality, education is a combination of diverging experiences gained from different fields of learning and interactions. It is the learning and unlearning of knowledge, skills and morals/ethics provided by formal school education and the construction of understanding facilitated by everyday experience which is often called as informal learning. For us, the traditional role of higher education is to segment an existing homogenous labor pool, already capacitated by an effective basic and secondary education system, into specialized labor pools performing distinct highly technical tasks oriented towards national development needs, both in economic and social terms. The education system should thus be seen as a continuum – from basic (primary and secondary) education which already equips the populace the basic skills for production, to higher (tertiary) education which elevates social technical competency as investment for further development of the instruments of production. The responsibility of investing in higher education, therefore, is delegated to social entities directly accountable to national development, which is both a function of an overall government industrialization strategy and existing labor market demand. Thus, both the government and private sector alike have a stake in investing for a quality and relevant higher education system. Philippine Education

However, Philippine education is far from this. Our current educational system is characterized as:

• Lacking a clear national development policy. A national development policy is very crucial in determining the role and position of the education sector in the whole schema of social production. This is especially true for higher education, given that we (wrongly) assign to it the function of training our labor sector.

1 Prepared by the Youth Against Debt (YAD), a coalition of student and youth organizations. 2 With long excerpts from YAD and Freedom from Debt Coalition’s (FDC) the “Neglected Generation: Education Spending in the Philippines”, June 2008



• Governed by the policy of trifocalization3. The current education paradigm treats vocational-

technical education for basic production as extrinsically separate and independent of basic and higher education. This trichotomy may have been caused by the difference of the three levels in terms of cost. For example, basic education is supposedly universally free, and there is an option later whether to pursue vocational-technical education or a much more expensive higher education.

Maybe as a social reaction to the emerging problems of this education framework, there is a trend towards tying vocational-technical education with higher education. College courses being offered gradually begin to reflect the technical needs of the booming industries, such as healthcare and ICT (Information Communication Technology). There had also been proposals to create college programs that are modularized to include technical education, so one receives a technical education diploma sometime along the middle of the college program.

• Basic (primary and secondary) education is unable to capacitate the labor pool to a level of competence apt for specialized training due to lack of government and private investment for a quality education system.

Due to this incapacity, the populace had been conditioned to view primary and secondary schooling only as preparations for college, thus resulting in the relegation of much of the tertiary education to skills training.

In this case, we have higher education system only serving to bridge the gap between the technical skills of the existing workforce (produced by secondary education) and the demands of the labor market.

• Because of the service-oriented nature of labor demand, and the current framework of higher education only as a bridge between the basic education institutions and the labor market, private sector investment in higher education only serves to offer training for service industries.

• Labor demand remains to be services-oriented, particularly because private sector investment in higher education is focused solely on existing labor market demand (characterized by the growth of the services industry) and not on a specific industrialization strategy. The government is currently supporting a labor-exportation policy, primarily compelled by low internal employment rate and the macroeconomic value of foreign currency remittances of Overseas Filipino Workers (OFW). Thus, local skills-training is almost always influenced by current global labor demand.

Trends in the higher education system

There is a continuing increase in the cost of private higher education, causing a

3 Quoting Commission on Higher Education’s (CHED) policy.

Figure 8. Average Net Increases of Students per HEI



mass departure of college students from private college universities to state universities and colleges (SUCs) due to the inability of many students to afford unregulated private higher education. This would not be a problem if SUCs can absorb the said students.

However, the meager budget provided by the government cannot simply capacitate our SUCs to absorb the college entrants. SUCs are thus forced to pass on the cost to the students. For example, the UP System hiked tuition by as high as 300% in 2007.

Proof of this fact, during the formal opening of classes last June of this year, Divina Pasumbal, public information chief of Polytechnic University of the Philippines’ (PUP) public said more and more students from private schools were transferring to PUP because of its low tuition. However, PUP could only accommodate 8,000 students per year.

Figure 9. SUC Budget per College Entrant

Students thus, not being able to afford any school at all, have nowhere to go. This slows down net growth of college students resulting to less and less people enrolling in college. If continued, this trend will result in decreasing supply of skilled labor, which will inevitably take its toll on our economy.

Clearly, there is a lack of effective government investment on higher education both in terms of budgetary allocation and governance support, as manifested by the sheer volume of students that cannot afford tertiary education and the quality of students produced by our HEIs.

However, this was aggravated by the incongruent increase in the number of SUCs in the last decade, contrary to government policy of a moratorium on the creation of SUCs as proposed by the Presidential Commission on Education Reforms. The practice of building more negligible SUCs rather than strengthening existing ones opened higher public education to the dictates of patronage politics. These SUCs are not created to provide for the quantitative or qualitative needs of the education sector but primarily to increase the rapport and political esteem of local government officials to their constituents. The direct result is a decreasing per-unit budget allocation to public higher education, compromising the absorptive capacity of the public HEIs. Thus, there is commonly a trade-off between absorption of students and the quality of education offered.

SUC Budget per College Entrant

0

5000

10000

15000

20000

25000

30000

1995-1996

1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

2001-2002

2002-2003

2003-2004

2004-2005

2005-2006

2006-2007

2007-2008



This prompts the existing SUCs to conduct cost-recovery (e.g. user fees, community financing, cost sharing) as a survival strategy. It is compelled to devolve to the students an increasing part of its financial and operational burdens such as increased tuition and other miscellaneous fees.

The immediate corollary consequence of this is a staggering decline in the enrollment growth rate of SUCs. Since students are not able to afford private higher education, the overall annual percentage growth in enrollment is drastically slowing down. Due to lack of enrollees and resources, we ended up with SUCs that are very small by international standards.

Figure 10. Historical Enrolment Levels

Source: CHED Data As a consequence, we have a public higher education system suffering not only from a lack of resource input but also from a defective governance framework.

Vision for a Strong Higher Education System

The Youth Against Debt (YAD) believes in quality, relevant, accessible education on all levels, with each level designed not only to be preparatory for the next, but also, by itself, already contributive to larger social development goals. Following our three-level education system, the best design would be a primary or elementary level devoted to the learning of basic skills, knowledge and values, with the secondary level already preparing graduates for productive work so that those who wish to engage in the production process would already be equipped with the necessary skills. Like in developed countries, the tertiary level in the Philippines should thus be geared to those who would wish to either devote themselves to the production of new ideas and knowledge or train those who would handle more sophisticated technical jobs. In order to accomplish that, we need a strong public higher education system which:

• Provides and maintains equal quality standards for all students. There must be a certain level of variance between schools in terms of specific curriculum which should be determined by educators in consultation with the communities that the school services. The school must be intimately linked to the environment it operates in.

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

1995-

1996

1996-

1997

1997-

1998*

1998-

1999

1999-

2000

2000-

2001

2001-

2002

2002-

2003

2003-

2004

year

enrollment in percent



• Reflects and contributes to a national development plan. In the context of labor market globalization, this necessitates the reorientation of the labor supply produced by the new higher education system by establishing a strong return-of-service program. HEIs should be geared towards national agro-industrial development and local community empowerment.

• Can absorb the entire demand for higher education on the absence of private higher education institutions (this restores the public sector role as the main provider of higher education, with private sector effort acting only as an ancillary and support system). Thus, our SUCs must be made able to compete with private ones in terms of quality and relevance.

Policy Reforms

Such vision of a strong, relevant and sustainable public higher tertiary education can only be realized if the government, in the immediate will implement the following policies: 1. There must be moratorium on tuition and other fee increase in SUCs. So as not to compromise the

fiscal standing of SUCs about to increase its tuition and other fees, economic relief equal to the projected increase should be provided by the State upon justification of immediate and substantial need.

2. The following policy changes must made:

a. Republic Act 7722 or the Higher Education Act of 1994 must be amended so as to increase

the power of CHED in regulating and stabilizing tuition and other school fees. The amendment must include the power to impose fee increase cap and the power to prosecute in incidents of violation.

b. Section 42 of Batas Pambansa 232 or the Education Act of 1982, which allows private schools to determine the rate of its school fees without regulation, must be amended following the Supreme Court ruling in 153 SCRA 622 (Philippine Consumer’s Foundation vs. Secretary of Education, Culture, and Sports) which states that the power to regulate school fees devolves to the education departments

3. The institution of Multi-sectoral School Fee Boards must be mandated in all private and public

HEIs. These boards, which are to be composed of an equal number of representatives from the administration, academic and non-academic personnel, parents/guardians, students and alumni association, shall study, conduct consultation and thereafter recommend on tuition and other school fee adjustments.

4. Concurrent with the strengthening of pre-basic (e.g. Early Childhood Care and Development or

ECCD) and basic education (primary and secondary) using the Education for All (EFA) framework, technical training should gradually be infused to secondary education through establishing greater coordination with TESDA and DepEd, instead of relegating the task of technical training to higher education.



To guide the transition towards a strong developmental higher education system, the following proposals are suggested: 1. SUCs must be subjected to a periodic review, which will ascertain:

a. Effectively performing SUCs, based on a certain benchmark pegged on international

standards; b. For non-performing SUCs, how much performance was a function of resource input (to

determine potentially performing SUCs); and c. Best academic and management practices, which will be documented and used as a resource

by all SUCs. 2. SUCs which are performing or will potentially perform when given more resources must be

capacitated to a degree which will enable it to absorb the demand for the relatively non-performing SUCs in specific territories. Local and national development demands shall be considered when expanding.

a. In this modified outcome-based financing, both the potential and actual outcomes are

assessed. b. These performing SUCs are in essence competing with these SUCs for students, which

gradually weeds out non-performing SUCs without compromising the capacity to accept entrants and to offer those entrants quality education.

3. Regionalized return-of-service programs must be strengthened so as to gradually increase higher

education’s social return.

Financing Higher Education There is no question that public higher education system needs to undergo radical reforms both in terms of framework and governance. However, this should go hand-in-hand with higher levels of government support, in terms of budgetary allocation, policy support, and governance assistance. Sad to say, education spending in the Philippines is negligible and are nowhere near widely-accepted international standards concerning education expenditures. One such standard is the standard formulated by the United Nations Educational, Scientific and Cultural Organization (UNESCO). In 1996, the International Commission of Education in the Twenty First Century4, headed by former European Commission President Jacques Delors, submitted a report entitled “Learning: the Treasure from Within” to the UNESCO. The report among others resulted in the adoption of the United Nations of the Delors Benchmark for education where notably over a hundred countries including the Philippines willfully assented. The report recommended 6% of the Gross National Product to education. This percentage range is now referred to as the UNESCO Delors benchmark for education. However, that standard is not being followed in the Philippines. From the time the Delors standard was widely accepted as an international point of reference, education spending in our country as percentage of the GNP hovered no more than 3.8%.

4 The commission was itself an offshoot of the general conference held in November 1991 tasked ‘to convene an international commission to reflect on education and learning for the twenty-first century'.



This wouldn’t be much of a dilemma if the trend of our government’s spending on education was geared towards the fulfillment of the standard like that of other developing countries. Table 26. Education Spending vis-à-vis GNP, 1996-2007

Year GNP 6% of

GNP

Education

Spending

Delors

Gap

Education Spending

as % of GNP

1996 2,261,339 135,680 74,682 60,998 3.30%

1997 2,522,884 151,373 94,954 56,419 3.76%

1998 2,815,259 168,916 106,850 62,066 3.80%

1999 3,136,170 188,170 110,614 77,556 3.53%

2000 3,496,863 209,812 116,827 92,985 3.34%

2001 3,876,603 232,596 121,498 111,08 3.13%

2002 4,223,326 253,400 125,395 128,005 2.97%

2003 4,631,479 277,889 128,995 148,894 2.79%

2004 5,248,064 314,884 128,789 186,095 2.45%

2005 5,885,050 353,103 131,217 221,886 2.23%

2006 6,570,310 394,219 144,226 249,992 2.20%

2007 7,274,660 436,480 164,103 272,377 2.26%

*As computed by the Freedom from Debt Coalition

Yet the trend is nowhere positive. In reality, there is a decreasing and sustained drift towards state indifference concerning the education of our people. From 3.8% in 1998 during the time of Estrada, education expenditure as proportion of the total national income dipped to 2.26% in 2007 under President Arroyo. In fact, for 2009, the Philippine government proposes an education budget representing 2.14% of

GNP – a far cry from the 6 percent international benchmark. This is much lower than this year (2008) which is 2.19% only of the total national income. Even some countries that were not able to achieve education spending 6% of their GNP were better education financiers than us. Namibia, Oman, Iran, all posted education expenditures at 4% of their total national income in 2002 compared to our 2.97% showing during the same year.

Proposed 2009 Alternative Budget for SUCs

For FY 2009, ABI proposes an increase in the budget of SUCs, particularly 29 centers of excellence identified by the CHED. The proposed increase will be in the form of augmenting the budget for capital outlay (CO) and provision of additional subsidy for students. The proposed increase in CO is computed taking into consideration each SUC’s student population. The per capita CO budget as for FY 2009 is computed and compared with the average per capita CO for all SUCs. For those SUCs which have less per capita CO budget than the national average, it is proposed that their CO budgets be increased in the amount of the shortfall between their NEP budget and the average to equalize the CO spending for these centers of excellence. Table 27 details the relevant variables and the computation of the proposed increases for each of the identified SUCs.



Table 27. Details of Proposed Increase in Capital Outlay of SUCs for 2009

Region Institution

Student

Population

(2006-2007)

Adjusted

NEP 2009

CO

Expense

('000)

CO /

capita

Proposed

CO per

capita

increase

Proposed

Additional

CO ('000)

I Mariano Marcos State University

9,232 3,012

326.26

52.25

482.36


10,622 3,012

283.56

94.94

1,008.49


13,150 3,012

229.05

149.46

1,965.35

II Isabela State University – Cabagan

17,293 3,012

174.17

204.33

3,533.50


17,501 3,012

172.10

206.40

3,612.23


8,114 3,012

371.21

7.30

59.19


11,100 3,012

271.35

107.15

1,189.41


12,163 3,012

247.64

130.87

1,591.76


15,870 3,012

189.79

188.71

2,994.88


4,681 3,012

643.45

-

-

V Bicol University

11,946 3,012

252.13

126.37

1,509.63


9,100 3,012

330.99

47.52

432.40


14,486 3,012

207.92

170.58

2,471.03

VIII Eastern Visayas State University

7,653 4,512

589.57

-

-


6,001 3,012

501.92

-

-


3,402 3,012

885.36

-

-


4,177 3,413

817.09

-

-

IX Western Mindanao State University

8,940 3,012

336.91

41.59

371.84

IX Zamboanga State College of Marine Science and Tech.

2,530 3,012

1,190.5

1

-

-

X Central Mindanao University

5,384 3,012

559.44

-

-

X Mindanao Polytechnic State College

6,369 3,012

472.92

-

-

X Mindanao State University - Iligan Institute of Tech.

10,471 3,012

287.65

90.85

951.33

XI University of Southeastern Philippines

10,281 3,012

292.97

85.54

879.42



Region Institution

Student

Population

(2006-2007)

Adjusted

NEP 2009

CO

Expense

('000)

CO /

capita

Proposed

CO per

capita

increase

Proposed

Additional

CO ('000)


29,715 11,065

372.37

6.13

182.29

XII University of Southern Mindanao

12,325 3,012

244.38

134.12

1,653.08


13,273 3,012

226.93

151.58

2,011.94

NCR Polytechnic University of the Philippines

50,016 3,012

60.22

318.28

15,919.33

NCR Technological University of the Philippines

18,090 3,012

166.50

212.00

3,835.17


11,062 3,012

272.28

106.22

1,175.03

TOTAL

47,829.67

In addition to the proposed increase in CO budget, ABI proposes the provision of subsidy to cover relief for SUC students in light of the increasing prices which include education-related expenses such as daily transportation expenses going to and from the campus, spending for meals while in school, costs of textbooks and other school supplies. In computing the proposed increase, internally-generated income by these SUCs has been used as a basis. Table 28 provides the amounts of internally-generated income by SUCs from tuition fees and other income collected from students. Using this combined income as base, it is proposed that an amount equivalent to 20 percent be provided for under their respective budgets for next year to be used as subsidy to students. This should defray the cost of education to shield the students from any pressures from the SUCs to increase their collections from the students arising from inflation and the limited budgetary support they have been receiving from the national government. Table 28. Details of Proposed Increase for Student Subsidy

Internally - Generated Income –

('000)

Institution Tuition

Fees

Other Income

Collected from

Students

Proposed

increased Subsidy

to Cover Relief

('000)

Mariano Marcos State University 45,192 26,010

14,240.40

Pangasinan State University 21,000 27,208

9,641.60

Cagayan State University 79,000 -

15,800.00

Isabela State University – Cabagan 72,789 4,896

15,537.00

Bulacan State University 185,000 -

37,000.00

Central Luzon State University 65,000 -

13,000.00

Tarlac State University 60,154 57,946 23,620.00



Internally - Generated Income –

('000)

Institution Tuition

Fees

Other Income

Collected from

Students

Proposed

increased Subsidy

to Cover Relief

('000)

Cavite State University 68,989 70,690

27,935.80

Palawan State University 52,777 60,149

22,585.20

Western Philippines University 23,520 7,596

6,223.20

Bicol University 103,100 6,415

21,903.00

Capiz State University 39,542 43,088

16,526.00

West Visayas State University 81,858 27,257

21,823.00

Eastern Visayas State University 34,500 17,959

10,491.80

Leyte Normal University 11,139 10,494

4,326.60

Samar State University 10,000 22,075

6,415.00

Southern Leyte State University 27,130 12,912

8,008.40

Western Mindanao State University 35,966 131,385

33,470.20

Zamboanga State College of Marine Science and Tech. 4,750 500

1,050.00

Central Mindanao University 13,997 26,416

8,082.60

Mindanao Polytechnic State College 93,573 31,612

25,037.00

Mindanao State University - Iligan Institute of Tech. 36,219 19,430

11,129.80

University of Southeastern Philippines 46,631 30,180

15,362.20

Mindanao State University 31,297 15,270

9,313.40

University of Southern Mindanao 180,000 -

36,000.00

Philippine Normal University 49,202 5,383

10,917.00

Polytechnic University of the Philippines 52,166 42,110

18,855.20

Technological University of the Philippines 62,665 88,292

30,191.40

Benguet State University 54,606 17,458

14,412.80

TOTAL

488,898.60



Table 29 shows the combined proposed increases in CO and student subsidy for SUCs. The total proposed increase for the identified SUCs is P536.728 million. Table 29. Consolidated Alternative Budget for SUCs

NEP 2009

Proposed

CO

Increase

Proposed

Student

Subsidy

Total

Proposed

Increase

Region

Institution

(In '000 pesos)

I Mariano Marcos State University

400,507 482

14,240

14,723


220,079

1,008

9,642

10,650


285,236

1,965

15,800

17,765

II Isabela State University - Cabagan

360,057

3,533

15,537

19,070


175,101

3,612

37,000

40,612


257,171 59

13,000

13,059


121,444

1,189

23,620

24,809


187,824

1,592

27,936

29,528


145,494

2,995

22,585

25,580


96,587 -

6,223

6,223

V Bicol University

369,044

1,510

21,903

23,413


210,145 432

16,526

16,958


330,604

2,471

21,823

24,294

VIII Eastern Visayas State University

173,345 -

10,492

10,492


92,119 -

4,327

4,327


100,186 -

6,415

6,415


117,647 -

8,008

8,008

IX Western Mindanao State University

253,227 372

33,470

33,842

IX Zamboanga State College of Marine Science and Tech.

74,072 -

1,050

1,050

X Central Mindanao University -



NEP 2009

Proposed

CO

Increase

Proposed

Student

Subsidy

Total

Proposed

Increase

236,471 8,083 8,083

X Mindanao Polytechnic State College

99,587 -

25,037

25,037

X Mindanao State University - Iligan Institute of Tech.

379,713 951

11,130

12,081

XI University of Southeastern Philippines

168,579 879

15,362

16,242


1,282,234 182

9,313

9,496

XII University of Southern Mindanao

237,638

1,653

36,000

37,653


282,318

2,012

10,917

12,929

NCR Polytechnic University of the Philippines

663,637

15,919

18,855

34,775

NCR Technological University of the Philippines

393,214

3,835

30,191

34,027


237,383

1,175

14,413

15,588

TOTAL 536,728

Box 1. Delors Standard and Debt Service

The Delors Standard: A Short Review

Since its international recognition in 1996, the Delors standard built the necessary impetus to invest more on education by giving education spending a clear political weight among governments. It also sets the demarcating contour by clearly establishing the minimum level below which state subsidy on education cannot dip or be neglected without causing serious ill effects in terms of its quality, accessibility and sustainability. Because of this, governments, especially those based in developing countries, tried to comply with the standard by raising their level of public spending on education as proof of their concrete commitment to education. The graph below from a 2006 Education For All (EFA) study5 shows some of the countries (with data available) which have invested 6 percent or more of their gross national income (as measured by t gross national product or GNP)to education.

5 Education for All (EFA) 2006 Global Monitoring Report: Literacy for Life



Figure 11. Public Expenditure on Education as % of GNP, various countries, 2002

While it also showed countries that were not able to act in accordance with the widely accepted benchmark, it was reported that significant strides were made to fulfill the goal. According to the same study, an increase in education spending from 1998 to 2002 was reported in about two-thirds of the countries (with available data). Some of the glaring examples are Malaysia, Madagascar, Grenadines, Cameroon and Cape Verde. While in another study6, it was reported that countries like Bangladesh, Brazil and Egypt invested close to 6 percent of their GNP to education. It can be argued that appropriate level of government spending varies especially if taking into consideration the peculiarities of their economic and political backgrounds. But looking at countries with similar income per capita as the Philippines, even war-torn Lebanon is fractionally higher than the Philippines. All others are spending above five percent of their GNI (gross national income) to education. Thus, more than everything, education spending is mostly a matter of national policy. Least Spender on Education

While previous governments are equally accountable and guilty for our dismal state of education, the Arroyo government’s treatment of education expenditure is alarming if not outrightly exasperating.

6 UNESCO Institute for Statistics 2000 Facts and Figures

Table 30. GNP per Capita and Education Spending, 2004

UNESCO 2004

Data

GDP per Capita,

PPP in US$

Education spending

as % of GNP

Cape Verde 5,449 6.23

Lebanon 5,422 2.51

Philippines 4,834 2.36

Swaziland 4,646 6.24

Guyana 4,482 5.35



Of the total P1.66 trillion losses, the Arroyo Administration contributed P1.3 trillion in deficit making her the least spender on education.

Figure 12. Delors Gap per Administration

Delors Gap per Administration

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Aquino Ramos Estrada Combined Arroyo 01-07

Series1

While some will argue that total national incomes vary through the years, even the said amount is deflated to real value (1985 prices), Mrs. Arroyo will still emerge as the least spender compared to the total losses earned by Ramos and Estrada. Of course, the Arroyo government could also argue that its deficit was the product of a lengthy rule which is currently on its 8th year. However, we include the losses of the Aquino government7 together with Ramos and Estrada’s amounting to P733 billion, Mrs. Arroyo will still emerge as the most tightfisted of all post-Marcos governments concerning education spending.8

Where is the Money? So where did the money go? While there are many answers to this question, one way of knowing is by looking deeply into our debt problem. As of end-December 2006, the Consolidated Public Sector Debt (CPSD) stood at P 4.944 trillion or US$ 98.99 billion.9 A large chunk of our public sector debts are composed of debts by the National Government (NG). As of end of 2007, the NG Outstanding debt is pegged at P 3.782 trillion or US$ 81.6 billion.

7 The Delors Benchmark does not cover the Aquino government as it was only widely recognized in 1996. However, for the sake of argument, we included her administration. 8 Deflating the amount loss to real value, the combined deficit of Aquino, Ramos and Estrada (10 years) is P 345.6 billion as compared to the P 303.9 billion of Mrs. Arroyo gained in only seven years. 9 Department of Finance data as cited in “Sustaining the Momentum of Indebtedness: Debt and the Proposed 2008 National Government Budget”, Freedom from Debt Coalition, September 2007



Due to the government's standard policy of prioritizing debt payments as institutionalized by the automatic debt servicing provision enshrined in the Revised Administrative Code of 1987, succeeding administrations have been investing much less in social services in terms of percentage. This decrease in allocation for social services is evidently seen in the per capita and per student spending of the administration for health and education respectively. According to FDC, from the Estrada Government's P201.00 per capita on health, it radically dropped to P184.00 under Mrs. Arroyo. Furthermore, per pupil spending dropped from Estrada's P5,830 to P5,467 during Arroyo’s term. Consistently, the Arroyo administration’s top priority like her previous predecessors remains to be debt servicing. Education, which is supposed to get the highest budgetary allocation this year, is merely a third of what they will be spending on debt payment also this year (P181.86 billion compared to P624.09 billion).

Debt Constricted Education Financing

Finding light to the question where did the losses go can be seen by comparing total Interest payments from the time (1996) UNESCO adopted the Delors Benchmark for education up to 2007 and Delors gap earned by the Ramos, Estrada and Arroyo governments. As of 2007, total interest payments amounted to P 2.2 trillion compared to the total gap or losses our education suffered through the years which totaled to P 1.66 trillion. Clearly, increased social spending is being siphoned away by debt servicing. And the trend through the years is, the larger the payment of debt interests is, the larger the Delors gap becomes.

Figure 13. Delors Gap vs. Interest Payments

117,417154,493

232,607

346,976

1,318,346

1,782,867

-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

Ramos 96-97 Estrada Arroyo 01-07

Delors Gap vs. Interest payments

Total, Delors Gap

Interest Payments

Of Democracy and Resources

The real culprit in this dismal spending on education is not only our government's predilection in the acquisition of debt, but also more importantly, the institutional mechanisms that dictate and aggravate our reliance to more borrowings to pay our debts. Section 26 (B) Book 6 of the Revised Administrative Code of 1987 is the kernel stone of all these debt-creating laws. Because of the automatic debt servicing provision, payments for both principal and interest on public debt are automatically appropriated undermining social services like education and health. This is



done without the pleasure of the public’s review or scrutiny, which inevitably resulted in paying dubious if not illegitimate debts. The assertion that we are increasingly having a scarcity of resources is a fat lie. Correctly, what we have is a scarcity of democracy in the management and disbursement of our collective resources brought about by archaic institutional mechanisms. It not only compelled our government to reject widely accepted international standards on social spending such as the Delors standard, it also subjected our people to a life of forced indebtedness.

Automatic Appropriations on Education

Thus, the government must make an effort to reach the 6 percent of GNP to education. This can be done in a gradual manner, with a 1 percent of GNP increase yearly for education spending until 2010.

However, this must be complemented by a strong legislative effort to institutionalize the standard by passing a law giving automatic appropriations on education. It will force our legislators to finally repeal Sec. 31 (B) of Presidential Decree 1177 in Sec. 26 (B), Book 6 of the Revised Administrative Code of 1987, which ensures the automatic appropriation of payments for principal and interest on public debt. There must be no middle ground in this issue. Our national leaders must choose between the education of our people and the interest of foreign creditors. Equal Standards for Equal Opportunities

Now more than ever, education must be transformed from a tool of social and economic inequity into a process and apparatus which will equalize opportunities for the realization of premium human development and the deepening of social consciousness geared towards creating responsible, critical and dynamic persons. Lastly, education must become a vehicle for progressive social and economic mobility between citizens and the government geared towards promoting the individual's and society's future development. However, unless the appropriate political will and commitment from our government are exercised to transform our education into such a powerful force of change, we will have to content ourselves with the current educational system which will only give our people equal prospects towards collective poverty and obtuseness.



ALTERNATIVE BUDGET FOR HEALTH

1

The World Health Organization (WHO) reports that six of the top ten causes of deaths in the

Philippines are due to cardiovascular disease, cancer, chronic obstructive pulmonary disease, diabetes

and kidney disease. The country ranks ninth in terms of the number of tuberculosis cases in the world

and the highest in Southeast Asia. At present, 22.5 percent of Filipino adults are hypertensive and the

overall adult prevalence of diabetes is 4.6 percent. In 2000, a community survey conducted by the

WHO revealed that as many as 80 percent of people afflicted with diabetes remain undiagnosed and

untreated.

In terms of health workforce, there is severe inadequacy to meet the demands. In 2004, the WHO

estimated that there was one doctor for every 880 Filipinos, one nurse for every 235, one dentist for

every 1,800 and one pharmacist for every 1,664. The ratio today would be definitely higher

considering the unabated exodus of Filipino health workers abroad and the increasing population.

In terms of health insurance coverage, 64 percent of Filipinos were covered in 2005 and this increased

to 77 percent as of September 2006. However, these figures do not translate to access and affordable

health care services to most Filipinos as they have to face the high cost of medicines, low health

insurance benefits, problematic national health insurance program, and the freedom given to

physicians to bill patients without a cap. It is no wonder therefore that expenditures of households

with very young and/or elderly family members tend to have higher out-of-pocket spending for

health.

In Southeast Asia, Filipino women are one of those with high fertility rates at 3.5 births per woman.

The country also has a high maternal mortality ratio (MMR). In 2006, the MMR is 162 per 100,000

live births, considered as one of the highest in Asia as reported by the WHO.

Box 2. Health Status Performance Levels

NMR 50 percent die at first days of life

50 percent due to Pneumonia, Bacterial Sepsis, Respiratory Distress

IMR 75 percent of UFMR deaths occur at infancy

UFMR 2010 Target already achieved in 2006

45 percent due to Pneumonia and accidents (transport/drowning)

MMR 2006 MMR(162 per 100000LB) extremely higher than 2010 Target (90)

60 to 70 percent due to OB emergencies at labor, delivery, puerperium

TFR 2006 TFR (3.2) extremely lower than 2010 Target (2.1)

1 Prepared by the Alternative Budget Initiative Health Cluster.



ADOLESCENT MR Accidents are leading cause (28/100,000; 80percent in males)

TOP TEN MORBIDITY INFECTIOUS DISEASES

TB AND MALARIA MORBIDITY DECREASING

RANGE OF PERFORMANCE ACROSS REGIONS FOR KEY HEALTH INDICATORS

Range of performance may immediately point out areas with poorest performance. Poorest performance is consistently

registered for Region IVB for TFR, NMR, IMR and UFMR in the FPS 2006 data. Region IVB and V regional average

for TFR, NMR, IMR and UFMR fall below the national average.

DISTRIBUTION OF PERFORMANCE

There is unfair performance distribution for rural areas, for the poorest quintile and for mothers with no education. TFR

distribution is most unfair among the poorest income quintile in NDHS 2003 data. Performance distribution is most

unfair among those where women have no education for NMR, IMR and UFMR (disparity goes as high as 150 percent).

Philippine National Health Accounts (PNHA)

Generally, we strive to measure outcomes rather than inputs. But health outcomes can be very slow to

adjust to policy changes. Health expenditures is used to gauge the extent to which governments are

investing in the health and well-being of their citizens by strengthening and building capacity to

provide quality public health services.

Research suggests that increased spending on health, when coupled with good policies and good

governance can promote growth, reduce poverty and trigger decline in infant, child, and maternal

mortality

A large body of literature links improved health outcomes to economic growth and poverty reduction.

While the link between expenditures and outcomes is never automatic, it is generally positive when

expenditures are managed and executed efficiently.

Health care in the Philippines is mainly financed through out-of-pocket payments which account for

49 percent of total health expenditures in 2005. National and local governments’ contributions were

all time low although social health insurance’ share is slightly picking up. The gap between out-of-

pocket payments from national and local governments’ share has even widened over the past 12

years. This financial burden of paying for services is a major obstacle to the poors’ access to health

care and can make them even poorer (catastrophic poverty).

Underinvestment in health and the high costs of health and services drive impoverished households

deeper into catastrophic poverty.

In order to protect people from financial catastrophe or impoverishment caused by having to pay so

much for health services,a person should only personally shoulder a maximum of 20 percent of

his/her expenses for health. Government should be responsible for 60 percent of every citizen’s

expenses for health services.

The results of the 2005 PNHA reveal the following:

� Total health expenditure went up by 9.4 percent in 2005. The total health expenditure in the

country went up by 9.4 percent in 2005, from P165.3 billion in 2004 to P180.8 billion in 2005.

This could largely be attributed to the increase in health benefit payments from social insurance,

such as the Employees’ Compensation and the PhilHealth. Compared with the previous year, the

growth in 2005 was slower than the 11.9 percent increase in 2004.



With the total health expenditure growing faster than the population, per capita health spending

went up by P142 — from P1,978 in 2004 to P2,120 in 2005 or a 7.2 percent increase.

� Share of health expenditure to GDP went down. The share of health expenditure to GDP was

lower at 3.3 percent in 2005 compared to previous year’s 3.4 percent. It is still below the five

percent standard set by the WHO for developing countries. On the other hand, the share of health

expenditure to GNP remained at 3.1 percent which is within the National Objectives for Health

(NOH) target ofthree to four percent.

� Health benefit payments from social insurance exhibited the highest growth. Health benefit

payments from social insurance showed the highest growth rate at 24.9 percent or a four billion

pesos increase in 2005. This resulted from the big hike in payments from Employee’s

Compensation at 42.4 percent and PhilHealth at 24.4 percent.

� Government health spending remained far from the Health Sector Reform Agenda (HSRA)

target. The share of government on health expenditure declined to 29 percent which is below the

target of 40 percent based on the HSRA. Also, the government’s target to depend less on out-of-

pocket payments and provide more social health insurance is still far from being realized as the

share of out-of-pocket payments even increased to 49 percent while the share of social insurance

payments increased slightly to 11 percent in 2005. Based on the HSRA, the target for out-of-

pocket is 20 percent while the target for social insurance is 30 percent.

Highlights and Salient Features of Proposed 2009 Budget

The total proposed budget of P33.3 billion include the budget for attached corporations, such as the

Local Water Utilities Administration, a recently attached agency to the ever growing DOH, as well as

the allocation for LGUs to cover the premium subsidy to indigents under the National Health

Insurance Program.

Compared to 2008, the total budget for health has increased by 32 percent. The budget for health has

been on an increasing trend for the past three years — rising by 30 percent on the average from 2006.

Table 31. FY 2009 Budget for Health

DOH and Attached Agencies Budget

(in ‘000 pesos)

Department of Health

DOH Proper 22,998,855

Commission on Population 395,983

National Nutrition Council 3,816,337

Attached Corporations

Local Water Utilities Administration 300,000

Lung Center of the Philippines 157,560

National Kidney and Transplant Institute 185,000

Philippine Children’s Medical Center 236,000

Philippine Heart Center 185,000

Philippine Institute of Alternative Health Care 40,000

Allocation to Local Government Units

Premium subsidy for indigents under the NHIP 5,000,000

Total 33,314,735



The share of the proposed health budget to the national budget has increased from 1.3 percent in 2008

to 2.2 percent in 2009. It has also a higher ranking from sevenths in 2008 to fifth in 2009. The

proposed 2009 DOH Proper budget increased by P4.1 billion, or 21.6 percent higher than the CY

2008 budget.

The budget increase is mainly attributable to the 151 percent increase in Capital Outlay and to the

14.32 percent increase in Personal Services. It is to be noted that MOOE decreased by four percent.

Bulk of the proposed budget will go to the following health programs:

� An estimated P8.9 billion will be utilized to conduct activities that will accelerate the attainment

of MDG targets. This also includes the allocation of P1.5 billion for the provision for potable

water supply;

� P4 billion is allocated to upgrade selected DOH-managed and LGU-managed health hospitals;

� P1 billion is allocated to speed up the implementation of the Universally Accessible Cheaper and

Quality Medicines Act of 2008;

� P500 million is allocated to strengthen regulatory services.

The DOH Proper budget is translated to about P250 per person. Still very low and not enough but

this has slightly increased from P200 on the average in the previous years. In terms of function,

hospital services account for the biggest share of the total DOH budget, followed by public health. It

is to be noted however, that all other functions, including governance and regulation, increased for

2009.

In terms of administrative level allocation, there is a significant increase in the budget allocation for

CY 2009 for the central office compared to the allocation for the hospitals and the Centers for Health

Development. This is particularly true because this allocation includes amounts of goods and services

that will be sub-allotted or re-allocated to the Center for Health Development as leverage for priority

programs and as incentive for good performance. This includes budget for Hospital Enhancement

Program; procurement of drugs, medicines and supplies for public health, provision of safe drinking

water; and Health Systems Development.

While the amount of total appropriation increases every year, the share of the DOH budget decreases

over the same period. DOH budget as a portion of the total government appropriation fell from 2.5

percent in 1999 to 1.1 percent in 2006, one percent in 2007 and 1.3 percent in 2008. The DOH

approved budget in 1997 ranked fifth among all the executive departments but slid to the eighth place

in 2006.

The 2009 total allocation for the DOH will be increased by 37 percent from last year. Despite

increases noted from 2007 to 2008, increases are still nowhere near the recommended spending for

healthcare sector, which is five percent of the GDP. Meager increase is still not enough.

PUBLIC HEALTH DELIVERY SYSTEM

Health Human Resource

The question of how to achieve the MDG health targets is a question that not only demands a

comprehensive re-examination of institutional policy framework, identifying an equitable resource

allocation mechanism and aligning strategic plans and programs but it also involves a consideration

of the health manpower resources who will serve as front liners in health care service delivery across



the Philippines. The question is not solely a matter of inquiring ”what to do”, ”what is just and

equitable” and ”what will work” — it could also involve a question of ”who will work” and “who

will serve”.

Human resources for health (HRH) are central to the success of the country’s health reforms. An

adequate supply and equitable distribution of health workers who are highly skilled and highly

motivated is the vision of a responsive health care system. HRH should be doing the right work under

the right working conditions and receiving just compensation for their valuable service. But with the

rising trend of mass exodus of health workers either as deployed workers or migrant workers, the

health sector is amidst a notable depletion of its already diminishing supply of human resources.

Overseas deployment and migration of Filipino health professionals is high

Reports concerning the notably sharp increase of mass movement among health workers are

undeniably pressing. From the mid-1990s until 2000, the migration of highly skilled professionals has

been recorded to rise from 25 percent to 31 percent (PLCPD) when more than 100,000 nurses have

left the country to work abroad. Data in the year 2006 from the Commission on Filipinos Overseas

(COF) showed that among the health professionals who are leaving the country, nurses represent the

highest number, followed by doctors.

Production of HRH responds to global demand rather than on local demand.

The increase in demand for nurses and midwives abroad has resulted to significant increase in

enrollment in nursing and midwifery schools. As shown in Table 2, enrollment in BS Nursing has

increased by more than sevenfold from academic year (AY) 2001-2002 to AY 2005-2006. Enrollment

in midwifery programs has almost tripled in the same period.

Table 32. Number of Enrollees and Graduates in Health Programs, Philippines (2001-2006)

Enrolment1 Graduates1

Discipline 2001-02 2002-03 2003-04 2004-05 2005-06

2000-

01

2001-

02

2002-

03

2003-

04 2004-05

Dental Medicine 8,665 7,151 6,653 5,346 4,489 1,418 1,263 1,292 1,139 976

Medical Technology 18,990 18,656 15,387 11,550 10,827 2,776 2,539 2,775 2,553 2,075

Medicine 13,925 15,229 11,511 11,286 10,735 2,732 2,812 2,420 2,745 2,892

Midwifery 7,075 9,121 11,314 14,634 18,892 1,856 2,002 2,264 2,831 4,160

Nursing 53,391 93,790 186,420 302,128 405,288 5,039 5,785 9,328 16,035 36,416 Nutrition and Dietetics

3,595 2,449 2,722 2,071 2,140 653 492 487 420 376

Occupational Therapy /Health

2,420 1,396 840 1,162 356 752 443 406 288 163

Optometry 1,164 835 920 1,457 507 340 126 104 79 85

Pharmacy 12,277 11,877 11,135 10,712 10,381 2,080 1,802 2,157 2,472 2,176

Physical Therapy 17,143 13,660 10,273 7,132 7,465 6,439 4,749 3,881 1,756 1,432

Radiologic Technology

2,837 3,234 3,505 3,238 4,686 617 609 671 495 587

Respiratory/Pulmonary Therapy

1,808 1,263 516 358 487 322 263 141 103 111 1Program majors are included in counting. 2Program Fee includes tuition, miscellaneous and laboratory fees from enrolment to graduation, AY 2006-2007 3Faculty data is based on primary teaching discipline of faculty. The data covers 1,020 HEIs that submitted data out of 1,647 HEIs

Source: Commission on Higher Education 2007



However, despite the undersupply of doctors in the country, the enrollment in Medicine has even

declined by less than one-fourth from AY2001-02 to AY 2005-06.

Although HRH production is not part of the mandate of the DOH, it plays a key role in ensuring the

adequacy, quality and equitable distribution of HRH in the country. The DOH should pursue policy-

related measures to recruit, retain, and regain competent and highly trained health professionals who

will serve the country.

HRH in the country are not adequate and are unevenly distributed

The HRH Master Plan of the DOH-Health Human Resource Development Bureau (HHRDB)

recognizes that the Philippines today faces problems of inadequacy and uneven distribution of its

already unmotivated HRH. Due to the global shortage of health professionals, the country’s skilled

HRH continue to migrate and practice abroad. This is not surprising, given the high compensation and

abundant benefits offered by foreign employers. On the other hand, those who choose to stay cope

with low compensation, poor benefits, and difficult working conditions in our health facilities and

institutions (HRHN, 2007).

As a first step, the HHRDB developed the HRH Master Plan in 2004. Following the WHO’s working

lifespan framework, it addresses issues related to the entry, retention and exit of health workers in the

country.

Encourage the entry of human resources into the health sector.

The DOH should continue to encourage the training and development of dedicated and competent

health professionals who will not only service the global demand, but also the local demand;

especially in the different regions of the Philippines.

The DOH has recently engaged the ‘Pinoy MD Project.’ In partnership with PCSO, the project

provides scholarship to deserving medical students. The project will sponsor 100 scholars per year for

6 years. It is now on its third year of implementation with a total of 234 scholars. The DOH should

ensure that the scholars would indeed serve the country after they become professionals.

Promote the equitable distribution of health professionals in the country

Various deployment and placement programs have been initiated by the DOH to promote a more

equitable distribution of HRH in the country such as the Doctors to the Barrios Program, the Medical

Pool Placement and Utilization Program, Specialist to the Provinces, and more recently, the

Midwifery Deployment Program. An online job posting system called “e-jobs for Health” is being

advocated for LGUs to post their vacancies. The system is currently being utilized only by the DOH.

Table 33. Number of Doctors, Nurses and Midwives from 1998 – 2005

1998 1999 2000 2001 2002 2003 2004 2005

Doctor 2,848 2,948 2,943 2,957 3,021 3,064 2,969 2,967

Nurse 4,389 4,945 4,724 4,819 4,720 4,735 4,435 4,519

Source: DOH



HHRDB has started building a database of HRH in both the public and private sectors through its

HRH Stock Survey. Regional offices have been instrumental in conduct of this survey, which aims to

give data on the number of HRH comprising our workforce and their distribution. This will also help

in projecting the country’s need for certain categories of HRH in the next 10 years. A database and an

integrated information system should be established between the DOH and all the other agencies

concerned with HRH to promote evidenced-based HRH planning, production, deployment and re-

integration.

Fund the Full Implementation of Magna Carta

The Magna Carta for Health Workers or Republic Act (RA) 7305 was passed in 1992. It mandates a

host of benefits, including hazard pay, laundry allowance, subsistence allowance, holiday pay, and

even remote allowance or medico-legal allowance, for government doctors, nurses, midwives,

dentists, barangay health workers, and sanitation inspectors at the national and local levels.

The Magna Carta should have overseen and regulated the production and deployment of health

workers.

Health Worker Salary

The wide discrepancy in compensation between foreign and Philippine employment, and between

entry level wage of health professionals compared with other professionals -- such as educators,

engineers, and others, may help explain the problem of retaining health professionals in the

Philippines’ health workforce.

Table 34. Entry Point Salaries (Php) of Selected Health Professionals, Philippines, 2004

Entry Point

Salaries Doctors Nurses PTs Midwives Med Techs

Private Hospitals 9,758 – 16,000 5,522 - 8,200 8,475 4,500- 8,550 5,372 -10,355

Public Hospitals 15,841 - 20,020 9,939 - 15,841 9,939 7,606 -11,837 13,300

Table 35. Average Monthly Wage Rates of Selected Professions, Philippines, 2002 and 2006 Professional Categories 2002 *

(Php)

2006**

(Php)

Doctors 12, 971 18,134

Nurses 9, 869 8,944

General Secondary Educator 14,041 12,039

Pre-Elementary Educator 15, 071 12,389

College/ University Educator 24,921 18,859

Accountant/ Auditor 17, 113 No data

Electrical Engineer 23,351 No data

Civil Engineers No data 21,192

Computer Programmers (Call Center Activities) No data 24,700

Computer Engineers (Call Center Activities) No data 16,900

Computer Programmers (Medical Transcription & Related Outsourcing Activities) No data 19,657

Source: Bureau of Labor and Employment Statistics (Includes basic pay + guaranteed/ regular cash allowance)(in Philippine peso).

*Occupational Wage Survey, 2002; Confined to Metro Manila respondents from private institutions employing 50 people or more. **2006

Occupational Wages Survey, Philippines.



Implementation of the Philippine Nurses Act

Implementation of the Philippine Nurses Act will cover the implementation of the Philippine Nurses

Act of 2002, for the 12,210 nursing positions in the National Government amounting to P545,644,323

and for the 1,079 nursing positions in Specialty Hospitals amounting to P40,793,809.

Information Management Center: Harmonize and Strengthen Health Information Systems

Decisions are only as good as the information from which they are based. Timely, quality and

relevant health information is critical in achieving better health outcomes. This applies to one-on-one

dealings between doctors and their patients as well as in public health setting where policies and

programs affect human populations.

Information on population’s health status is valuable in identifying health problems and,

consequently, in implementing interventions designed to address these problems. Information

regarding the responsiveness of the health care delivery system and the impact of health programs

allow for adjustment in the initiatives and the redirection of program efforts. Finally, information on

the availability and allocation of resources is important in the efficient management of the overall

health programs and services.

DOH is data rich but information poor. Health information or the lack of quality health information is

one of the major problems of program implementation. Computerized Field Health Service

Information (FHSIS) launched in 1990 was unsuccessful to produce health information at our

fingertips.

Available and quality health information requires a concerted effort by the DOH, NSO, NSCB,

PHILHEALTH, the research community, development partners and stakeholders.

DOH still has a long way to go to become a knowledge organization. Knowledge management (KM)

is a big undertaking. It is a huge challenge to implement it, but the benefits of a successful KM

program are tremendous. Because of this, it is best to breakdown the KM implementation into small

and manageable tasks or projects that can be addressed individually or simultaneously.

KM implementation in DOH has two tracks. One is the almost no-cost KM where activities

undertaken do not have significant cost. Examples are how to improve meetings, how to develop

personal KM, how to take down notes effectively, and other small systems development. The other is

composed of KM initiatives requiring sizeable budgets. Examples are portal development,

establishment of communities of practice, and groupware collaboration software.

Overall, there is no updated health statistics and databases and inconsistencies in statistics. There is an

urgent need to improve current information systems and develop a strategic health information system

plan that would address the need for integration and harmonization of the different components of the

health information system as well as the development of clear policies on production, acquisition, and

use of health statistics.

A number of initiatives for integrating systems are currently being done. The Philippine Health

Information Network is now working on the harmonization and integration of the country’s health

information system. PHA’s scope includes special health surveys, vital registries, surveillance, health

researches, and administrative reports. Such initiatives need to be supported.



Effective Health Promotion

The Department of Health breastfeeding campaign recently came out with a television advertisement,

“Hindi ako baka” (I am not a cow). The ad shows animals nursing their offspring. The thesis of the ad

is simple; the milk of a mother is meant only for her child, now whose child are you?

The Department of Health invests in national campaigns using mass communications like radio,

television, print, cinema and traditional media like billboards and health events

The current health promotion program of the DOH is focused on providing health information and

promoting awareness through health campaigns. While health programs generally address public

health concerns through supply-side interventions, health promotion should complement these efforts

by influencing the behaviors of health service “consumers”. Health Promotion is the process of

empowering people to take control of the determinants of health, and thereby improve their health.

Health promotion should be at the core of any public health program. It should be strategic and well-

thought of, as well as appropriately funded to effect behavior change.

Health promotion represents a comprehensive social and political process, it not only embraces

actions directed at strengthening the skills and capabilities of individuals, but also actions directed

towards changing social environment and economic conditions so as to alleviate their impact on

public and individual health. (WHO, 1997)

However, the following have been noted:

� Client feedback is not given importance in the design and implementation of health

promotion activities;

� The communication channels used are not appropriate for reaching underserved communities;

� Health messages are sometimes inappropriate for the local needs and culture

� The current health promotion efforts seem to be ineffective. For example, the prevalence of

non-communicable and lifestyle-related diseases is rising steadily despite the Healthy

Lifestye (HL) campaign.

The DOH should advance its health promotion efforts beyond health communication. The DOH plans

to move towards a holistic approach to health promotion by going beyond providing clinical and

curative services. Health promotion aims to empower people to take control over their own health. It

aims to promote the proactive involvement of members of the communities through the health

promotion process.

The mass communication initiatives of the DOH should be complemented by interpersonal or face-to-

face communication at the local level to move people’s awareness into some positive health action to

improve their health.

The regional, provincial, and municipal capabilities to undertake health promotion activities need to

be strengthened to ensure that national mass media campaigns initiated by the Department of Health

is complemented with local health promotion activities like counseling, organization and

empowerment of community-based groups that will catalyze behavior change at the community level.

This complementation will foster behavior change among the Filipino people translate into change in

lifestyles and adoption of health behaviors.



There is no “one-size-fits all” strategy in health promotion that is appropriate for the diverse cultural

background of people in the different regions. Health promotion activities must be adapted to what is

acceptable to the target client, in terms of content, comprehensibility, language, and choice

communication channels. To achieve this, the capability of the National Center for Health Promotion,

the program managers, and CHD and LGU staff to customize health promotion messages need to be

strengthened. Most importantly, collaboration with the communities and mutual learning should be

part of capacity development.

National Epidemiology Center

The World Health Organization under the revised International Health Regulations (IHR) of 2005

requires all Member States to strengthen the core capacities for disease surveillance and response to

avert occurrence and international spread of diseases and other public health threats. The new

regulations have a greatly expanded scope, which apply to diseases including those with new and

unknown causes that present significant harm to human irrespective of origin or source. Currently

existing surveillance systems in the Philippines do not properly address such concerns.

The National Epidemiology Center (NEC) is primarily responsible for assessing the health status of

Filipinos, detecting or confirming disease outbreaks and implementing outbreak control measures

including but not limited to rapid containment. The NEC is designated as National Focal Point for

IHR

Four major disease surveillance systems exist in the country:

� the Notifiable Disease Reporting System (NDRS) of the Field Health Service Information

System (FHSIS);

� the National Epidemic Sentinel Surveillance System (NESSS);

� the Expanded Programme on immunization diseases targeted for eradication or

elimination Surveillance System (EPISurv); and,

� the Integrated HIV/AIDS Behavioral and serologic Surveillance System (HBSS)

including the AIDS Registry.

Altogether they provide vital information that guide policy and implementation of priority health

programs and projects. These disease surveillance systems were established for specific purposes and

each have their own individual data collection and reporting procedures, computer hardware and

software requirements and training and supervisory functions.

For so many years now, numerous health programs and foreign-assisted projects have established

parallel surveillance systems purportedly to complement existing surveillance systems. However,

these have resulted in inefficient surveillance systems characterized by redundancy and duplication of

effects, extra and sometimes prohibitive costs, a demoralized health workforce (vertical), inaccurate

and delayed reporting and ultimately unrealized health outcomes. Effective disease control relies on a

functional disease surveillance systems.

A formal assessment of the existing surveillance system was done in 2006 and revealed the following:

� Lack of manual of procedures that will serve as a guide to field staff in properly carrying out

surveillance and response tasks and responsibilities;

� Lack of capacity, especially at the local level, to perform the required epidemiological

surveillance and response functions;



� Lack of training and supervision; and

� Inadequate funding support for equipment, travel, logistics and other supplies essential for the

optimal operations of a disease surveillance system.

The inadequacy of the current disease surveillance systems and the need to comply with the 2005

IHR call for an urgent need to adopt newer approaches that will address those gaps without placing

undue strain into the system.

The Philippine Integrated Disease Surveillance and Response (PIDSR) is being adopted to address

these concerns and meet future challenges that were otherwise unforeseen.

Communicable Diseases

Combat the “Big Three” infectious diseases in the Philippines. Tuberculosis (TB), malaria and

HIV/AIDS are infectious diseases of both global and local importance. These “big three” infectious

diseases kill around six million people worldwide each year. As of 2007, the Philippines has been

ranked ninth among 22 countries worldwide with high burden of TB (WHO, 2008). TB is the

country’s sixth leading cause of mortality and morbidity while malaria ranks ninth in terms of

morbidity (DOH, 2006). There has also been a steady increase in HIV/AIDS registered cases from

January 1984 to January 2008 (NEC, 2008).

Maternal and Infant Mortality

In the Philippines, ten women die daily due to pregnancy and childbirth complications. The life of the

mother is intimately linked to the mortality of the infant, as such each day seventy newly-born infants

die (NDHS, 2003). These deaths are unnecessary and easily prevented if only a comprehensive health

system that provides the range of services needed by women and children from reporting to referral to

support is in place. Saving women’s lives begins with the basic principle that every pregnant woman

is at-risk from life threatening complications and should be accorded services, equipment and

supplies necessary to prevent death.

The DOH aims to provide services wherein women would be assisted by skilled health birthing

attendants (who have all the necessary supplies and equipment), have access to emergency obstetric

(EmOc) care, and access to a referral and transportation system that would ensure women who

experience complications will reach life-saving EmOc in time2, which in effect means that a

comprehensive health care system with programs, services, equipment, financing, and a referral

system should be in place to prevent maternal and infant deaths. (See Box 4).

2 Progress Towards the Millennium Development Goals, 1990-2005 Report. United Nations Economic and Social Affairs.



FY 2009 ALTERNATIVE BUDGET PROPOSAL FOR HEALTH

In light of the current health situation and the limitations of the Philippine health delivery system to

service the increasing health needs of the population, the ABI proposes the following alternative

budget that seeks to better equip the public health system to the people’s needs.

Table 36. Alternative Budget Proposal for DOH

Budget item GAA 2008 NEP 2009 ABI Proposal 2009

Variance

(ABI

Proposal less

NEP) 1. Implementation of Magna

Carta Benefits New line item

1,011, 534,996 1,011,534,996


Doctors to the Barrios and

Rural Health Practice

Program 42,284,000 28,031,000 42,284,000

14,253,000

3. Rural Health Midwife

Placement Program New line item

31,555,563

31,555,563

4. Provision for a pool of

resident physicians 10,862,000 10,862,000 21, 724,000 10,862,000


Philippine Nurses Act New line item

586,438,132 586,438,132

6. Health Information

Systems & Technology

Development 145,671,000 162,460,000 300,000,000 137,540,000

7. Health Promotion 133,441,000 152,800,000 171,161,000 18,361,000

8. Family Health

3,019,111,000 1,229,281,000

3,959,281,000

including

1,430,000,000 for

commodity-based

methods and

sterilization in public

health facilities and

P1.3 B for vaccines 2,730,000,000

9. Rabies Control Program 80,000,000 80,000,000 296,922,560 216,922,560

10. Purchase of mercury-free

thermometers for 66 DOH

hospitals (under Health

Facilities Enhancement

Program)

New Line item

13,200,000 13,200,000

11. Formulation of policies,

standards and plans for

hospital and other health

facilities

237,451,000

(including the

purchase of

autoclaves for

waste

management

239,831,000 (Is

the 100,000,000

for capital

outlay intended

for the purchase

of autoclaves

under GAA

2008)

241,131,000 (including

1,300,000 for waste

management training to

support the purchase of

autoclaves for health

care waste disposal) 1,300,000

Total ABI Proposed Additional allocation 4,771,967,251



Explanatory Notes

The budget proposals for items 1 to 5 seeks are geared towards strengthening the health human

resource sector. This is in response to the low number of health workers, including doctors, nurses,

and midwives, in proportion to total population. The mass exodus of Filipino health professionals to

other countries does not bode well to the need of our growing population for greater access to health

services.

We have to prioritize such allocation if we are to maintain and motivate our pool of health human

resource. Skilled and well-motivated workforce towards quality of health services cannot be

emphasized enough. Reforms to a large extent have been geared towards upgrading of infrastructures

but very minimal towards the development of a strong health human resource pool. Improving the

quality of our health system, we need to equally provide attention to our health human resource pool,

as they are our frontline service providers and the main machinery in running our health system. Our

lack of regard in providing proper valuation and compensation to the knowledge, skills, and expertise

of our health professionals have left our health system with countless loopholes, some of the most

prominent ones being: dissatisfaction, demotivation, and low productivity due to low salaries, limited

career progression, poor working conditions, and especially the non-provision of health worker

benefits such as those legislated in the Magna Carta for Public Health Workers 1992 and the Nursing

Act of 2002.

1. The proposed P1,011,534,996 additional funding for a new item that is intended to fund benefits

under the Magna Carta for Health Workers to stem the dwindling health human resources in the

country amidst rapid population growth.

The implementation of Magna Carta Benefits will cover for the subsistence allowance

(P523,746,00 for the P1,500/month) and hazard pay (P487,788,996 – computed at 25 percent of

the basic pay) of the 29,087 health personnel under the DOH based on Republic Act No. 7305, or

the Magna Carta of Public Health Workers, which, since its passage in 1992 has not yet been

implemented.

The passage of the Magna Carta is a victory but these legislations remain meaningless without the

financial resources needed for its implementation.

2. The P14,253,000 proposed increase for the implementation of the Doctors to the Barrios and

Rural Health Practice Program seeks to maintain the amount of funding for the same program

from the 2008 GAA level.

3. The P31,555,563 additional funding for a new line item that is intended to fund a Rural Health

Midwife Placement Program (RHMPP) to enable a greater number of the population to gain

access to basic health care services. Rural Health Midwife Placement Program aims to deploy

competent midwives to improve facility-based deliveries, fully-immunized children indices of

needed areas.

4. The P10,862,000 additional funding for the provision for a pool of resident physicians seeks to

double the budget proposed in the NEP.

5. A P586,438,132 allocation to fund a new item for the implementation of the Philippine Nurses

Act is proposed.



Items 6 to 11 are budget proposals for non-health human resource sector and are intended to

strengthen key health programs and public health functions.

6. P50,000,000 increase in the budget for Health Information Systems and Technology

Development seeks to support the thrust for the DOH to develop a strategic health information

system plan that would address the need for integration and harmonization of the different

components of the health information system as well as the development of clear policies on

production, acquisition, and use of health statistics for better targeting, health surveillance, etc.

7. An additional increase of P18,361,000 for Health Promotion is proposed to advance the DOH’s

health promotion efforts beyond health communication and move towards a holistic approach by

going beyond providing clinical and curative services such as proactive involvement of members

of the communities through the health promotion process.

8. Additional funding of P2,730,000,000 for Family Health. P1.7 billion cut was done on the Family

Health Program, the ABI Health Cluster recommends that this be restored to its 2008 allocation

plus additional 1.3 billion for support on fully immunized children’s program. This increase will

fund commodity-based methods and sterilization in public health facilities (P2.659 billion) and

vaccines (P1.3 billion).

9. An increase of P216,922,560 for Rabies Control Program. The 2009 budget will only provide 19 percent and 16 percent of the projected total anti rabies vaccine and RIG requirement

respectively, of the country in 2009. These vaccines and immunoglobulins are given to animal

bite victims as prophylaxis against rabies and not as treatment to rabies.

As of today, no treatment has been proven effective against rabies.Therefore, once signs of

symptoms of rabies appear among animal bite victims, who were not given rabies vaccine and

immunoglobulins (when indicated) at the soonest possible time, no amount of medical

intervention can save the lives of these rabies patient. Fortunately, despite being fatal, rabies is

preventable by providing immediate post- exposure prophylaxis (PEP) to all animal bite patients.

Our objective therefore is to provide vaccines and immunoglobulins at the soonest possible time

to kill the rabies virus and prevent the development of the disease. Delay in treatment

(prophylaxis) will lead to fatal consequences if the animal is indeed rabid. Hence, rabies vaccine

and immunoglobulins must be readily available at all times at the animal bite treatment centers.

10. A new item is proposed for the purchase of mercury-free thermometers for 66 DOH hospitals to

be funded in the amount of P13,200,000.

On July 30, 2008, the Department of Health (DOH) released Administrative Order No. 2008-

0021 on the "Gradual Phase-out of Mercury in all Philippine Health Care Facilities and

Institutions." The AO sets the policies and guidelines for all health care facilities in the country to

switch to mercury-free alternative products, including mercury-free thermometers.

The administrative order promulgated by the DOH is a response to the growing global concern

regarding the use of mercury and its environmental health impacts. The United Nations

Environment Programme (UNEP) has identified health-care related activities as an important

source of anthropogenic release of mercury into the environment. The heavy metal is found in a



variety of products used in health care facilities, including thermometers, laboratory chemicals,

blood pressure monitors, and dental fillings.

Because of the prevalence of mercury products in health care facilities and the frequency with

which these devices break and are not properly cleaned up, it is not uncommon for health care

facilities to exceed permissible levels of mercury in the ambient air.

As a potent neurotoxin, mercury attacks the body's central nervous system. The metal has been

linked to many neurological problems, causing symptoms such as trembling, loss of muscle

control, headaches, mental confusion, nausea, and hair loss. It can affect the brain, kidneys and

lungs, and is particularly harmful to children. In addition, mercury, which has an estimated half-

life in mammals of about 70 days, can alter the immune system.

Since mercury spills are expensive to properly clean up (for instance, the DOH had to seek help

from the UE Environmental Protection Agency to clean up the mercury spill in St. Andrew's

School in 2006), it is more prudent for Philippine hospitals to simply switch to mercury-free

alternative devices

To help implement the administrative order, a seed money of P13.2 M for the 66 DOH-

controlled hospitals (P200,000 for each hospital) is proposed to jump-start the hospitals' switch to

mercury-free thermometers, which have presently higher prices than the mercury thermometers.

As a benchmark, we take the Philippine Heart Center's purchase of 10,000 mercury-free

thermometers last year when it made the switch to mercury-free alternative devices. Since the

current prevailing price of a non-mercury thermometer is P20.00, we estimate it would take about

P200,000 for a hospital to switch to mercury-free thermometers.

11. An additional budget of P1.3 million is proposed under "Formulation of policies, standards and

plans for hospital and other health facilities" to be specifically used for waste management

training to support the purchase of autoclaves for health care waste disposal.



Box 3. Tuberculosis (TB) Remains a Major Public Health Concern

In 2006 TB, was the sixth leading cause of morbidity in the country according to the Field Heath

Services Information System (FHIS) aggregated by the Department of Heath (DOH).

In the same year, it was observed that morbidity rates for males outnumbered that of females with

82,969 for men and 47,639 for women respectively. The 2005 figures estimate that 291/100,000

population is diagnosed with TB. In the same year, 131/100,000 population were known to have

smear positive cases. This pegs the number of TB prevalence cases at 450/100,000 population. While

there is a decrease in the total number of TB morbidity rates across the regions the rate could be

dismissed as insignificant.

In the Philippines, Regions 3, 4-A and NCR are the top three regions where TB incidences are

highest. In 2006, Region 6 replaced 4-A when it registered a total number of 15,399 cases of TB for

the region. Prevalence rates such as this place the Philippines at the ninth place among the 22 high-

burdened countries. Considering the highly infectious nature of TB, as reported by the UNHP, it can

be expected that these rates will soar if aggressive measures to curb TB incidences are not taken to

curb it.

The burden of disease from TB is disproportionately high for the poor. Elderly and male with older

persons suffer the highest death incidences. Since TB principally affects the productive age group, it

is estimated that the country loses some P26 billion annually due to premature deaths from TB3. Data

from 2004 to 2006 note that TB is more common among males than in females. Filipino households

rely heavily on income brought by male members of the family. Foregone income because of

premature mortality due to TB among males totaling 17,574 was estimated to reach P18,716 billion.

Forgone income was biggest among those aged 45-64 years old who died of the disease (External

Analysis study).

Government Efforts

The Philippine government has agreed to the targets set to curb the incidence of TB cases towards the

achievement of Millennium Development Goal 6. These global targets include achieving case

detection rate to up to 70% and 80% by 2005, reducing prevalence and death rates by 50% compared

to 1990 levels by 2015 and reducing global incidences of active TB to less than one case per million

population per year by 2050. DOH reported that the country’s tuberculosis rate has ‘surpassed’ the

global standard of Case Detection Rate when it reached 72%; and the Cure Rate when it reached 81%

respectively (DOH Accomplishment Report, CY 2007). But, as will be explained later these figures

do not paint a complete picture of the TB situation in the country.

There are legislative measures passed to aid in the monitoring of communicable diseases such as TB.

A case in point is Republic Act No. 3573 which mandates that every physician, director,

superintendent or person-in-charge of hospital institution or dispensary or any householder, tenant or

occupant of any building, or director of college having knowledge of the disease shall immediately

notify the nearest station either by telephone, by messenger or by written notice specifying the disease

and the name and address of the person affected (External Analysis; p.41). Identifying infected people

is the first step in treating any ailment.

3 Peabody. Measuring the Burden of Disease and Economic Consequences of TB in the Philippines. 2003



TB DOTS Strategy

The primary strategy in TB alleviation endorsed by the WHO is the Directly Observed Treatment

Short Course (DOTS). Critical elements of this approach include a diagnosis and treatment regimen, a

prescribed protocol for record-keeping and monitoring of TB patients and access to reliable TB drugs

and microscopy centers.4

Despite the difficulties introduced by a devolved health system where the DOTS system confronted

many administrative difficulties, the DOTS program was implemented in 16 selected sites in 1995

and by the year 2000, the country reported 100% DOTS coverage.5 In the same year, the National

Tuberculosis Program (NTP) department of DOH reported that the treatment success rate for TB was

88% and detection rate improved to 48% after achieving 100% DOTS coverage.6

Challenges in Addressing TB

Although some gains have been made in combating TB through the implementation of the DOTS

strategy, the government has not been fully successful in dealing with TB.

(1) Limitation of TB DOTS

One of the most critical constraints is directed at the very strategy which DOH implements –DOTS.

The DOTS strategy is highly limited to facility-based case finding. Only those who visit health

facilities are accordingly treated and are able to receive needed medical attention. Within the DOTS

framework, identification of individuals with active TB in communities is not independently pursued

by local health workers or any other government health facility.

Another constraint that needs to be addressed is the difficulty of treating drug resistant TB. Those TB

strains are resistant to single drug and have been documented in every country and strains of TB

which are resistant to all major anti-TB drugs have emerged” (Philippine Coalition Against TB

[PhilCAT], 2005). “Drug resistant TB is caused by inconsistent or partial treatment – when patients

do not take the prescribed dosage of drugs regularly for the period prescribed because they begin to

feel better, or when doctors or nurses prescribe the wrong treatment regimens or when the drug

supply is unreliable. The results of a nationwide drug resistance survey in 2003-2004 showed a Multi-

Drug resistance-TB prevalence of 4.5% in new smear positive cases. Poorly managed TB programs

due to weak case finding, detection, and inability of tracing of defaulter (refers to persons who

stopped and discontinued TB medication) pose as a ‘threat to make TB incurable’.

RECOMMENDATIONS:

Active Case Finding

TB alleviation has been the main focus of the DOTS program pursued by the DOH. The shift from

TB case management to TB elimination is recommended. This would prove critical not only to

achieve the Millennium Development Goals but also to encourage more active engagement from

DOH to arrest the increasing rate of infection. The shift in strategy should be directed towards active

case-finding methods. The primary limitation of the DOTS program is that it is facility-based. An

active-case finding approach would ensure that people with TB would be given treatment measures

even if a DOTS center is beyond their reach.

4 Capuno, J. et al., A Policy Analysis of Private Sector Participation in TB DOTS (Draft). 2003 5 Romualdez paper (footnotes to be refined) 6 Ibid.



As of 2005, there are 263 DOTS certified facilities, 46 of which are private facilities. Of these 127

were accredited by PhilHealth. (DOH Accomplishment Report, 2005)

There is also a need to undertake a nationwide epidemiological research assessment to gather and

established the total number of individuals afflicted with TB. Current TB statistics needs to be

calibrated since the case detection rates is generally limited to those identified and diagnosed

infectious smear positive people who come to health facilities with symptoms of TB. Thus, an

epidemiological research assessment that utilizes the active case finding approach is needed in order

to identify, reach and provide appropriate medical attention to all those who may have TB within a

community.

TB Morbidity Rates per Region (3-year comparative figures)

2004 2005 2006

Region Population

Total

No. of

Cases

Population

Total

No. of

Cases

Population

Total

No. of

Cases

1 4,422,383 4,697 4,491,386 4,474 4,562,030 3,583

2 3,032,872 3,963 3,087,476 4,402 3,121,351 *

3 8,498,367 14,781 8,625,679 13,837 8,793,618 14,283

4A 9,928,968 10,499 10,187,785 14,715 10,475,286 13,462

4B 2,436,907 4,787 2,480,695 5,311 2,521,970 5,347

5 5,079,867 8,042 5,161,007 9,605 5,245,066 9,043

6 6,778,143 11,742 6,890,434 12,698 7,001,978 15,399

7 5,970,149 7,907 6,076,563 8,520 6,182,821 9,632

8 4,058,787 5,080 4,136,872 5,029 4,219,261 5,806

9 3,187,554 6,888 3,257,523 6,908 3,325,682 6,957

10 3,899,609 6,961 3,959,121 7,052 4,053,020 4,817

11 4,013,394 6,464 4,093,552 6,471 4,164,728 7,111

12 3,655,535 6,150 3,749,617 6,561 3,848,885 6,399

NCR 11,070,287 17,215 11,240,743 19,605 11,394,158 19,930

CAR 1,529,430 1,386 1,560,897 1,136 1,591,963 1,087

ARMM 2,733,941 4,341 2,776,638 3,653 2,817,783 4,487

CARAGA 2,393,402 4,351 2,445,620 3,981 2,503,254 4,398

TOTAL 82,689,595 125,254 84,221,608 133,958 85,822,854 131,741

*no available data

Sources: FHSIS Annual Report 2004, 2005, 2006

TB Situation in the Philippines

A. Globally, the Philippines is one of the 22 countries identified by the World Health Organization

(WHO) as having a high burden of tuberculosis, ranking at 9th worldwide and ranks 3rd in the

Western Pacific Region (2004).



B. There are 131 new smear positive TB cases in the country for every 100,000 population. It is the

6th cause of illness and death in the country (2004).

C. A person untreated of TB can infect 10-15 people in a single year by merely coughing near them.

TB causes more deaths among women than all causes of maternal mortality combined. TB is the

main cause of death among people with HIV/AIDS in the Asia Pacific Region. This is

disheartening since TB is a curable disease.

Box 4. Maternal Mortality

For every 100,000 pregnant women, 162 women die due to complications during pregnancy and child

birth. The common cases leading to death are hypertension, post-partum hemorrhage and severe

abortive outcomes.

One Death Too Many. Pregnancy is not a disease but a physiological process and therefore women

should not die due to pregnancy.

The role of women in procreation should not be a basis for discrimination. The Convention of the

Elimination of Discrimination Against Women (CEDAW) is the principal legal instrument addressing

women's rights, among them, the right to life-saving services during pregnancy and childbirth (Article

12).

With the current rate of decline, the Philippines is unlikely to reach the MDG target for MM by

2015. If we are to achieve our MDG target, we need to reduce the maternal mortality rate at a faster

pace than our historical performance. Efforts to significantly reduce the target to 52 deaths per

100,000 should be tripled. At current rate the decline over the past 18 years has been slow at 22.5

percent or at 1.6 per annum.

Among the MDG targets, those directly related to health are the least likely to be met. Progress

has been either slow or stagnating, while gains run the risk of reversal.

Address Direct Causes of MM:

1. Facility-based delivery

The 2003 NDHS reveal that 38 percent of live births were delivered in a health facility, and 61

percent were delivered at home. This means that 6 out of 10 women still give birth at home.

2. Professionally-assisted births

Of the 87.6 percent of pregnant women who sought prenatal care from a health professional only 59.8

percent of all births were attended by a health professional during delivery. (2003 NDHS)

Considering that most deaths occur during the first 72 hours postpartum, the DOH recommends that

mothers receive a postpartum check up within two days of delivery. The 2003 NDHS reported that

one in three women (34 percent) did not receive post natal checkup at all.



Health Workforce: A well performing workforce is one which is available, competent, responsive and

productive. There is a need to address entry into and exits from the health workforce and improve the

distribution and performance of existing health workers

Data on skilled attendants relating to maternal mortality reduction are not available. The numbers of

skilled attendants in the country are not known. Whether these attendants, despite their training, are

indeed skilled, as defined by the WHO, are not ascertained.

3. Access to Emergency Obstetric Care

While skilled attendants may influence the outcome of pregnancy, their overall effectiveness,

however, lies in their ability to immediately access facilities that provide basic or comprehensive

emergency obstetric care

4. Lack of reliable data continues to hamper country efforts to design and implement plans to

address maternal and child mortality.

It has been estimated that a third of necessary data is either lacking or unusable. It must become a

funding priority to support country-led continuous monitoring and tracking of health programs. This

contributes to additional detailed country analyses to add depth and context to the headline results.

There is a precious lack of such country-based investigations. Yet they are critical not only for local

documentation and accountability but also for the clues they give others about how to accelerate

progress.

Family Planning: Reducing the number of pregnancies prevent maternal deaths

“One in three deaths related to pregnancy and childbirth could be avoided” if all women have access

to contraceptive services according to UNFPA.

Unplanned, Unintended, Unmet Need: In the Philippines, the desired number of children is 2.5, but

the actual number of children is 3.5, one child more than the desired.

About 3.1 million pregnancies occur each year and nearly half of these pregnancies are unintended.

Food for thought: CPR goal of 55.2% in 2015 is realistic, but it:

• requires commodity funds ranging from 1.3 to 1.9 B in 2009 alone, and is expected to increase

every year

• reduces only 30% of unmet FP needs

Targeting 100 % reduction of unmet FP needs may prove to be less costly than targeting the

country’s MDG target of 100% CPR, but this would:

• results in just a CPR of 67.3% in 2015 (short by more than 30 %)

• requires 4% annual increase in CPT (far from the 1% annual increase as observed from past

years; from 1995-2005, highest recorded annual increase in CPR among countries with 50% and

above prevalence is 3.4%).

Targeting the MDG of 100% CPR in 2015 requires:

• 13% annual increase in CPR



• Commodity funds ranging from 1.8 to 3.3 billion pesos in 2009 alone, and is expected to increase

every year.

Forced Options: Of the 3.1 million pregnancies each year, about one third ends up in abortion.

In 1994, abortions reached a total of 400,000 cases, with teenagers accounting for 17 percent of

these cases.

High-Risk Teenage Pregnancy: Twenty-three percent (23%) of adolescents engaged in premarital

sex. There is an increasing incidence of teenage pregnancy. Reports show that 10% of all births are

among ages 15 to 19 years of age. One out of four women become mothers by the age of nineteen.

Teenage pregnancy is riskier than most pregnancies as the teen-age mother has a five times

chances of dying than women of age.

Deadly Options: Based on DOH records, abortion has also become the fourth leading cause of

maternal mortality, representing 12 percent of all maternal deaths resulting from complications

related to abortion. It remains the third leading cause of hospital discharges.

MM Highest in Asia: The alarming state of maternal health in the country is no doubt the result of

having one of the lowest investment on health in the region, further aggravated by increasing hunger,

under-nutrition, maldistribution of health goods and services, poverty and income inequalities.

Poor women and children consistently are not able to access services.

Access to Health Professionals: In Metro Manila, professional health workers attended to 92% of

births. In contrast, in ARMM only 16% of births were attended by health professionals. TBAs (hilots)

are still the most relied upon human health resource. In MIMAROPA 66.3% and in Easter Visayas

62.3% were assisted by hilots.

DISPARITIES IN PLACE OF DELIVERY

Delivery in a health facility is most common in NCR (70 percent). On the other extreme, only 6

percent of births in ARMM are done in health facilities. In 10 regions, at least 70 percent of births

occurred at home, with ARMM (88 percent), MIMAROPA and Zamboanga Peninsula registered the

highest percentage, at 83 percent and 84 percent respectively.

Over 90 percent of women from the poorest quintile gave birth at home while a mere 20 percent of

the richest quintile had home births. (WHO Fact Sheet,2007).

Regional Disparities: The slow decline in MMR are consequences not only of poverty and inequity,

but wide disparities in access to essential services. Acute disparities which tended to be hidden in

national averages, manifest across regions.

ARMM, MIMAROPA, Eastern Visayas, Bicol and the Zamboanga Peninsula have very high

maternal and child mortality rates. These areas have highest malnutrition rate in the country too. Rich

areas pull up national averages, failing to capture the reality of poverty and poor health conditions in

these areas.



DOH POLICY and STRATEGIC THRUSTS

1. Home-based traditional birthing attendants (TBA)-assisted births to Facility-based Professionally-

assisted births

2. Integration of maternal and newborn service package that is universally accessible through the

service delivery model

3. Ensure infrastructure readiness at the various level of the service delivery model

4. Ensure human resource readiness at the various level of the service delivery model

5. Prioritize interventions and resources to areas that are hard to reach and isolated, have high

maternal and or neonatal deaths, and that are poorly performing and unable to meet targets

6. Implement a customized communication tool for various stakeholders designed to bring about

desirable behavioral change

• Data Base, information and surveillance system

• Establishing sensitive indicators for performance and outcomes

• Improving data quality, disaggregation, timeliness

• Analyzing and acting on data

7. Health Education and Advocacy

• IEC/health education and advocacy

• National and local policy /decision makers

• TBAs/CHWs, Health Professionals, Pregnant women//families

8. Develop grant mechanisms and other financing schemes to make the strategy work

o Free access for mother

• Minimal ; may cover income loss, childcare or zero co-payment especially for indigents

• Cash transfer vouchers for transport

o Incentives for institutional and individual providers

• Philhealth reimbursement share

• Performance-based incentives

o Incentives for local government participation

• PhilHealth capitation fund

• Government grants

A woman’s health, educational and economic status has a significant bearing on whether or not she

and her newborn will die during or after childbirth.

Poverty and inequity are at the core of health insecurity. Filipino mothers who have less in life have

less chances of surviving childbirth. And if they do survive, they are likely to be consigned to a life of

health insecurity.



ALTERNATIVE BUDGET FOR AGRICULTURE AND FISHERIES1

Introduction

The recent rice crisis has shaken the country’s food security. For this year, the level of rice insecurity

has reached extreme levels that even some local governments have thought of securing their own food

needs first before selling to others. This naturally alarmed the leaders of the other localities that are

net importing areas and do not produce sufficient rice for their own.

This rice crisis also pushed the government to take a more active intervention in the industry.

However, not given as much importance is the worsening poverty in the agriculture sector, not only in

the rice sector. In the government’s 2006 poverty statistics, an estimated 4.6 million Filipinos fall

below the poverty threshold. In 2003, about 43 out of 100 fishermen are poor. If you look at the

programs for fisheries, little is allocated to help alleviate the growing number of poor in the fisheries

sector.

Ironically, we have never seen before this much government spending on agriculture. For this year

alone, NFA is scheduled to import 2.4 MMT amounting to Ph70 Billion pesos on top of the Ph22

Billion pesos price subsidy of the NFA rice given to consumers from January to August alone.

If only this fund was channelled to rice self-sufficiency early on, we will not be forced to buy rice

from the world market at a time when the prices are abnormally increasing. The Philippines was even

further fanning the fire, insistent on securing rice at all cost.

Philrice conducted a simulation in 2004 and they prescribed the needed public investments of about

Ph59 B to achieve rice self sufficiency. However, thanks to the rice crisis, the government‘s

expenditure for agriculture increased by 56% percent, from the 2008 budget of Ph 25.4 Billion only to

Ph 39.6 B in 2009, the highest increase for rice and fisheries budgets. In particular, GMA RICE rose

from P2.63 billion in 2008 to P9.4 billion in the proposed 2009 budget. On the other hand, GMA

Fisheries went up to P1.87 billion for 2009, from P1.09 billion in the 2008 budget.

Table 37. Overall Agriculture Budget By Fields Components

Component Indicators 2008 %

2009 DA

Proposed

Budget

%

Fertilizer -Distribute 17,500 soil testing kits and

6,000 leaf color charts

-Distribute 19 million kg of fertilizer

1,315,172,000 5.17 1,814,687,000 4.6

1 Prepared by the Alternative Budget Initiative Agriculture Cluster. The cluster is jointly coordinated by Rice Watch and Action Network (R1) and Tambuyog Development Center.


2009 Alternative Budget Initiative

95

Component Indicators 2008 %

2009 DA

Proposed

Budget

%

and soil ameliorants (e.g. Bio-N, zinc

sulfate, MOP, microbial inoculants,

and potassium humate)

-Establish 2 Bio-N mixing plants per

region

Irrigation

and

Infrastructure

-Generate 24,600 ha new areas and

rehabilitate/restore 149,000 ha

-Focus on construction/rehab of small

systems (~ 25,000 ha) except

Kabulnan, Balintingon, and Mal-Mar

- Construct/rehabilitate 2,900 km of

farm-to-market roads

12,831,972,000 50.43 17,678,803 44.6

Education

and

extension

-Conduct 11,000 training and training-

related activities

-Produce some 1,000 graduates of e-

Extension courses

-Fund/conduct 1,539 research and

development activities

2,351,466,000 9.24 2,290,373,000 5.8

Loans -Study how to maximize bank

compliance to the Agri-Agra law

-GFIs to make available P15B for agri

credit

-DA credit facilitation

141,209,000 0.55 4,285,000 0.01

Dryers and

other post-

harvest/post

production

facilities

-Establish 25 sites of Postharvest

Processing & Trading Centers

-Continue the distribution of 667

flatbed dryers

-Establish 175 storage facilities

2,210,544,000 8.69 2,075,632,000 5.2

Seeds and

other genetic

material

- rice seeds (bags): hybrid - 517,000,

certified seeds – 3.9 million

-corn seeds (bags): hybrid - 109,000,

OPV -137,000

-planting materials: 25 million pieces

- livestock & poultry breeders: 50,000

head

-fingerlings and broodstock: 183

million pcs

3,837,829,000 15.08 8,898,562,000 22.4

Other Support Services

Regulatory 1,008,850,000 3.96 681,346,000 1.7

Policy and Planning 1,750,569 6.88 1,283,878 3.2

Regular + Automatic Appro + RLIP 4,944,775 12.5

TOTAL 25,447,611,000 39,672,342,000

Source: DA



Same Old Stories with the 2009 Food Security Budget

As in pass years, the government has bannered rice self-sufficiency as its supposed guiding principle.

The agriculture budget increased by a huge percentage, but no significant change will happen in the

way agriculture will be done in this country. A look at the FIELDS budget would reveal that program

targets in very crucial elements especially in this period, decreased substantially.

The President’s budget in 2009 shows substantial cuts in education and extension programs, dryers

and post harvest, regulatory functions and planning services as well as in the loans and credit

functions of the DA as a result of its no direct lending policy as mandated by AFMA. However,

fertilizer support increased by Ph500 million as well as irrigation and seeds by about Ph5 Billion

each.

Little Lessons Learned

Climate Change

A closer look at the budget would show us that the DA has not learned its lessons, especially in the

eventuality of climate change. Weather experts have already predicted that the country will

experience a 99 percent probability of warmer and more frequent hot days and nights, and heat waves

over most land areas. More frequent rainfall events over most areas resulting in increased flood,

landslide, soil erosion, mudslide, etc. will have 90 percent probability. Meanwhile, increase in

tropical cyclone wind and rainfall intensities in some areas have 67 percent probability.

Yet, the call of the DA to shift to organic use and locally-made fertilizers was triggered not by the

contribution of fossil fuel-based fertilizers to climate change. It was more because of the increasing

price of petroleum and concomitantly, the price of fuel-based fertilizers.

Problems in the Hybrid Rice Program

The huge budget devoted to the implementation of the hybrid rice program will again lend credence

to criticisms hurled against the Department of Agriculture years ago, for not learning its lessons on

this technology. The recent rice crisis raised more concrete doubts about the effectiveness of the

hybrid rice program to increase rice production and achieve self-sufficiency. Proponents of the

Hybrid Rice Program, Ginintuang Masaganang Ani (GMA) Rice’s banner program claimed that this

is the answer to productivity and sufficiency problems, hence the huge budget allocation for this

single rice technology from 2005 up to 2009. But after several years of implementation and even

performance assessments at the ground level, the Commission on Audit (COA) found that the results

don’t seem to match the much-hyped promises.

The benefits that the hybrid rice technology reaped were location-specific. Several areas were not

compatible during the wet season and favoured only the irrigated areas. Not to mention the farmers’

report of the chalky make up of the grains of some hybrid varieties that caused lower milling

recovery.

The 2006 COA audit report found that the existing procurement system was not effective in ensuring

that the subsidized hybrid rice seeds are of the right quantity and quality. The report stated that the

government did not obtain the most advantageous prices for commonly-used supplies. Clearly the

regulatory function of DA needs to be further strengthened along with the removal in the government

list of areas that are not suitable for hybrid.



97

However, a close look at the 2009 budget would reveal that the areas for hybrid rice have even

increased. Although subsidy to certified inbred seeds also increased from 754,000 bags in 2008 to 3.9

million bags in 2009. Seeds contribute 10 percent to the success and growth in rice production.

It is not only the performance of government-procured hybrid rice seeds that is in question as

reflected in the COA reports from 2005-20072 and based on the study done by Cristina David of the

PIDS. The hybrid rice program has been a major source of corruption. Irregularities committed in

2004 and reported in the COA report in 2005 repeatedly came up in the succeeding reports until the

latest 2007 report that is the subject of the ongoing investigation. Many of the cited irregularities have

been linked to the hybrid rice program, from the master list of farmers, procurement of seeds,

selection of most appropriate areas for hybrid, aside from the most notable fertilizer scam allegedly

spearheaded by DA Undersecretary Joc Joc Bolante.

High Costs of Production

In this period of high cost of production, education and extension work on farmers about crop

management techniques as well as a dynamic research and development to come up with innovative,

low-cost technologies that will produce good yields and generate bigger incomes for farmers are most

relevant. As noted by Roger Concepcion, the former Bureau of Soils and Water Management

Director, there are inexpensive ways of nurturing and bringing back micro and macro soil nutrients

such as, the use of rice straws, and other organic materials. Combining crop management, proper

education and training contributes 25 percent3 to the growth in rice production. However, the 2009

agriculture budget on education for farmers has not only decreased in real terms but also in its share

in the total agriculture spending. The budget for education and extension of farmers was 8.69 percent

of the total agriculture budget in 2008 but goes down to 5.2 percent only in 2009 budget.

Wise Allocation of Meager Resources

A World Bank study said that the scarcity in operations and funds management have severely affected

the irrigation sub-sector. The government’s emphasis has been on the short-run, such as capital

investments rather than on the long-run such as, financial and physical sustainability of investment

and maintenance of capital assets. The reports from the farmers must be noted wherein many of the

irrigation systems in the country have been rendered useless because of heavy siltation with the soil

blocking the irrigation runways. Poor maintenance leads to poor service delivery and limited cost

recovery from the provision of water services. Further, the availability of water source has to be

integrated in the design and programming of new irrigation projects. A lot of irrigation projects are

useless because of lack of water resource.

The government provides subsidy to hybrid rice at Ph2,000 per bag and Ph760 pesos only to a bag of

certified seeds. Assuming that the government’s average target yield for hybrid seeds is 7.26 tons per

hectare while certified inbred seeds will yield 6.40 during wet season under the same farm

2 2006-COA (2006) Sectoral Performance Audit on the Utilization of Forfeited Swiss Deposits for the Implementation of the

Comprehensive Agrarian Reform Program (CARP); 2007- Management Services Report No. 2005 -08B,Government Wide Performance

Audit -Procurement System Department of Agriculture ; 2005-Commission on Audit (2005); 2006 -Commission on Audit (2006). Auditors’ Report on the Department of Agriculture for the year 2005. www.coa.gov.ph; 2007 --Commission on Audit (2007). Auditors’

Report on the Department of Agriculture for the year 2006. www.coa.gov.ph; 3 15 percent for extension and 10 percent for crop management, “Balisacan, AM and LS Sebastian,2006. Challenges and Policy Directions: Overview in Securing Rice, Reducing Poverty: Philippines; SEARCA, PHILRICE and BAR, p.14”



conditions4, then the rate of return on investment from hybrid is very low. With that amount of

subsidy, the corresponding increase from hybrid yield should at least be double than certified seeds.

Conclusion and Recommendations

Strengthening Regulatory and Monitoring Functions of DA

The numerous corruption allegations hounding the DA’s programs present cause for alarm. The DA

cannot wash its hands off easily and claim only the local government officials are to blame. These are

operational problems cited in the COA findings. Without politics into play, this would have been

avoided if only the DA has monitored, regulated and provided concrete guidelines in program

implementation.

We believe that the regulatory and monitoring functions of DA have to be strengthened in order that

absorption capacity of the agricultural sector is improved. A WB study has concluded that increasing

the budget, without adequate investments in capacity and improvement of coordination mechanisms

including across the layers of government bureaucracy regardless of the levels of the decentralizations

process, may hamper the productive absorption of funds in agriculture.

It is in this light that we are proposing to raise the budget of DA – to improve its regulatory functions

and monitoring capabilities and ensure that programs are effective and will generate the desired

impact. The COA reports have specified many possible strategies to make sure that the DA’s

programs and resources are effectively used and carried out. Culling out these recommendations

should be foremost in the agenda of the DA.

Phase out of Hybrid Seeds Subsidies

Doubts on the cost-effectiveness of hybrid rice subsidies lead us to propose for the review of hybrid

rice subsidies in areas where these are found to be ineffective. We move that democratization of

subsidies be implemented with the hybrid subsidies shifted to subsidies for more bags of inbred

certified seeds and other farmers’ varieties that are found to produce as much yield. Other fund

allocation of the hybrid subsidy can be redirected to extension and education for farmers.

Hybrid rice distributed by DA is actually overpriced by 100 percent as the farmers testified in their

interviews with COA. The 2006 COA report found that some farmers did not get their total seed

requirements from the Municipal Agriculture Office and bought hybrid seeds from private suppliers

and stores in their localities at the same price as their share in each bag.

Prudence in Selection of New Irrigation Areas

The challenges brought about by climate change provide greater need for honest-to-goodness

rehabilitation of existing irrigation facilities and build new irrigation facilities with assured source of

water. Studies on the effects of climate change found increasing temperature in major rice producing

areas and where the existing irrigation projects are located. These areas are bound to experience

scarcity in water supply as temperatures continue to soar leaving these irrigation projects useless.

One solution is to set up new irrigation projects in areas that are not vulnerable to the rise in

temperatures. The savings in this area can therefore be realigned for the alternative proposals of the

agriculture cluster (see proposal)

4 National Rice Self Sufficiency Plan,2009-2010, p. 13



99

Stronger Education and Extension

Extension and education are crucial. We are proposing realignment of more funds to this sector. In

these times of greater need to lessen production costs and enhance programs through various

innovative means, we propose that successful sustainable farming approaches are taught and shared to

farmers.

The proposal is to add P300 million to the existing budget allocated to education and extension

specifically for sustainable farming approaches such as organic farming, SRI and other sustainable

methods.

Greater Emphasis on Organic Fertilizers

The business-as-usual attitude towards rice farming can no longer continue because rice farms are

facing greater threats from climate change on top of the already nutrition-deficient rice farms due to

over-use of chemicals and fertilizers. No amount of synthetic or chemical fertilizers can increase yield

if the soils are virtually dead.

We agree with the Department of Agriculture in giving specific allocation of Ph500M to the

production of organic fertilizers. We suggest, however, that this program not simply rely on procuring

organic fertilizers from private dealers. More importantly, we want to promote self-reliance in organic

fertilizer production at the farm or community level.

We propose that the DA tie up with local governments who have efficient waste management

programs to secure source of materials for organic fertilizer production. This particular activity of the

project can be in tandem with the DENR’s Zero Basura Campaign which aims to facilitate the

implementation of RA 9003: Ecological Solid Waste Management Act targeting the closure of

dumpsites within the next 300 days.

Additional Post Harvest Budget for Small Organic Producers

Post-harvest for organic rice is necessary because this cannot be mixed with regular rice in the milling

and drying processes.

Additional Budget for NFA Palay Procurement

We have seen how government intervention has effectively prevented unscrupulous elements in the

private sectors from taking advantage of the crisis situation. Local traders are now facing difficulty

competing with the lower-priced NFA rice in the market.

The increase in palay prices at the height of the crisis provided the farmers the biggest incentive to

keep on producing rice and encourage them to continue nurturing their rice farms. But now that the

harvest season is about to come, farmers are suffering from another blow from the traders as they are

buying palay at very low prices of Ph9 to Ph12 per kilo.

We believe that assuring the farmers with a profitable market for their produce will effectively lead

them to invest and improve their production because of assured return on investment. Achieving rice

self-sufficiency is not always caused by direct government dole out in the form of subsidy and cash



transfer that is vulnerable to corruption. Hence, we propose the allocation of Ph15.725 B for palay

procurement as another measure to achieve rice self-sufficiency.

Greater Focus on Municipal Fisheries

We propose that the government invests in the municipal capture fisheries sector as the cornerstone of

its strategy on poverty alleviation and fisheries’ resource sustainability. We took note of the trend in

allocation of BFAR in comparison to the Office of the DA Secretary (Table C.2 and C.3).

This proposed investment should provide for the municipal fisheries sector the opportunity to become

more productive members of the fisheries industry. The municipal capture fisheries sector provides

half of the fish needs of the country. The Asian Development Bank noted that the fisheries sector is a

high risk entity and credit unworthy. In this light, the government should all the more invest in this

sector which is under the jurisdiction of the Local Government Units. Fiscal incentives should be

provided and effective measures implemented to allow productivity and eventually contribute to the

economic well-being of the fisherfolk dependent on capture fisheries.

Table 38. Comparative DA Osec, BFAR, AFMA Budget, 2007 and 2008

Particulars 2007

(in Php Bn)

2008

(in Php Bn) % increase

DA OSEC 2.23 2.31 130.50

BFAR 0.44 0.44 (0.68)

AFMA DA OSEC 13.07 20.20 54.61

AFMA BFAR 0.91 1.20 31.18 Source: DBM web

Table 39. Details of 2009 Agriculture-related Budget

FY 2009 President's Budget % of OSEC

OSEC 13,824,240,000 100.00

BFAR 2,342,106,000 16.94

Regular 469,998,000 3.40

GMA-

Fisheries 1,872,108,000 13.54

NAFC 1,085,278,000 7.85

ALTERNATIVE BUDGET PROPOSAL

Agriculture remains a major source of employment for the country. Its employment share is 35.1

percent in 2007 while its contribution to the country’s GDP is about 18.3 percent of GDP in 2007.

Despite these figures, the government has neglected this very important sector for many years. Hence,

it is not surprising that a big number of the poor can be found in the agriculture sector.

The agriculture and fisheries cluster believes that investments in agriculture could have huge impacts

on poverty alleviation—the number one responsibility of the government under the Millennium

Development Goals.



101

As such, these proposals are anchored on sustainable rice farming and sustainable fisheries. Aside

from MDG Goal 1, the cluster’s proposal is very much hinged on contributing to MDG’s target of

ensuring environmental sustainability.

Alternative Budget for Rice

Since significant increases in rural public investment were poured into the agriculture sector, greater

emphasis is placed on ensuring that these resources are allocated into appropriate programs and

utilized more efficiently.

The rice budget proposal is focused largely on quality rather than quantity, at least for the DA.

However, additional budget is requested for NFA to be able to improve its local palay procurement.

The proposal is to re-allocate expenditure within the current classifications rather than increase

expenditure on agriculture.

Recent developments in the policy advocacies of R1 and other civil society partners have seen the

launch of ORGANIC FIELDS with Agriculture Secretary Arthur Yap through his issuance of Special

Order Declaring a Task Force on ORGANIC FIELDS. The Agriculture Budget Initiative in

Agriculture and Fisheries cluster is proposing that the launch proceeds with the actual allocation of

definitive budget for the implementing mechanisms.

Table 40. Alternative Budget for DA/ AFMA Component

Major Final

Output

CY 2008

GAA NEP ABI Proposal Variance Remarks

DA

OSEC

Promotion and

development

of organic

fertilizers

----

500,000,000

0

0

Ensure that

funds should be

used to promote

farm-based

organic fertilizer

production and

not solely for

procurement

from

commercial

suppliers

AFMA

Irrigation

services

8,302,892,000 13,240,177,000 12,740,177,000 (300,000,000) *Special Provision: Re-

allocate budget

for new

irrigation

constructions

that are located

in high

temperature

zones where

water supply

will likely be a



Major Final

Output

CY 2008

GAA NEP ABI Proposal Variance Remarks

problem.

Post Harvest

Facilities and

Other

Infrastructure

6,363,999,000 6,695,778,000 6,745,778,000 50,000,000 Thresher, mobile mills for organic

rice producers

Extension

support,

education and

training

services

863,819,000 1,844,583,000 2,144,583,000 300,000,000 Additional P300 Mil budget for

education and

extension work

for sustainable

farm approaches

Production

Support

4,216,490,000 9,670,337,000 9,320,337,000 (350,000,000) Removal of P1 Bil in hybrid

seeds subsidies

and realigning

these for the

following:

500,000,000- for

additional

certified inbred

seeds to further

democratize

seeds support to

more farmers

and more

hectarage

150,000,000-

production

support for

organic

producers

Regulatory

Services

546,043,000 677,932,000 827,932,000 150,000,000

Policy and

Planning

513,570,000 1,090,072,000 1,240,072,000 150,000,000

Joint

government and

cso monitoring

of projects

TOTAL -0-

Alternative Budget For NFA



103

The agency has been procuring less than 1 percent of local palay harvests, a level that hardly made a

dent in influencing the palay buying price. On top of the NFA budget for 2009 of 4B in the GAA,

ABI proposes that NFA increase its target palay procurement for 2009. The targeted local

procurement of NFA for 2009 is 925,000 metric tons. This is about 5 percent of the projected palay

harvest of the year. At P17/kilo, it would cost the government around P15.725 billion. We propose

that the government increase its target procurement to 10 percent of the projected palay production

next year. Doubling the target to 10 percent would cost Ph31.45B. This is almost half of the

government’s spending of Ph70 billion for importation this year. More importantly, the government

helped the local farmers, instead of the global rice traders.

Table 41. Alternative Budget for NFA

Up to the early ‘90s, NFA has been getting money for palay procurement but since they were making

money from importation, the earnings can be used to procure palay at the farm gate. It is impossible

to expect NFA to make money from importation these days. Government must therefore provide

additional appropriation so that a significant volume is purchased directly from our rice farmers.

It is perhaps a blessing that the recent food crisis has struck and struck really hard. The attention that

is now given to agriculture should somehow bring concrete benefits toward greater empowerment of

small rice producers. No DA Secretary has declared openness to putting in organic rice farming and

sustainable agriculture in its plan, except at this time, with Secretary Yap. A calibrated shift toward

the kind of technology where farmers are less reliant on seeds and fertilizers produced by agribusiness

companies is indeed empowering. The confluence of events has perhaps provided for the softening of

the ground toward organic agriculture. We do hope that with this kind of a crisis, Secretary Yap

delivers.

Alternative Budget for Fisheries

This proposed budget is based on the Comprehensive National Fisheries Industry Development Plan

(CNFIDP) which was formulated by the stakeholders of the fisheries sector. However, no fund source

has yet been identified to finance this comprehensive plan.

We believe that the private sector can provide adequate financing for the Ph308M needs of

commercial fisheries, Ph108M for aquaculture, and Ph274M for the post-harvest components of the

CNFIDP. It is for this reason that the Municipal Fisheries Component of the CNFIDP is being pushed

under this alternative budget.

The proposal is to add P680M in the Office of the BFAR National Director. Aside from the

implementation of the Municipal Fisheries Component of the CNFIDP, the budget will be used as

additional funds for insurance and credit guarantees. Under the implementation mechanisms of the

plan, the BFAR Director assumes overall command. The BFAR Director has issued Fisheries Office

Order No. 213 which officially adopts the implementation of the CNFIDP.

NFA Corporate

Budget for Palay

Procurement

2009

ABI Proposal

Via GAA

appropriation

Variance

amount

volume

P15.725 billion

925,000 MT

P31.45 billion

1,850,000 MT

P15.725 Billion



The proposed alternative budget is expected to contribute to the attainment of MDG number 1, to

eradicate extreme hunger and poverty, number 2, to promote gender equality and empower women,

and number 3, to ensure environmental sustainability.

Table 42. Alternative Budget for BFAR

Budget Item GAA 2008

NEP

ABI Proposal Variance

(ABI Proposal

less NEP)

BFAR

GMA-Fisheries

Office of the BFAR

National Director

1,092,680,000

1,872,495,544

2,975,544,000

680,000,000

Table 43 below shows the details of the proposed increase in the BFAR budget.

Table 43. Details of Proposed Budget Increase of BFAR


Budget

Comprehensive Education

Program for Fisheries and

Aquatic Resource

Management Councils

(FARMCS) and Fisherfolk

Organizations

To develop the capacity of Fisheries Aquatic Resource

Management Councils (FARMCS) and fisherfolk

organizations on sustainable fisheries management,

establishment of cooperatives, enterprise development and

sustainable livelihoods.

42,000,000

Validation of Priority Use

Rights through Municipal

Registration and Licensing

To develop the capability of LGUs and FARMCs for

effective and efficient implementation of the municipal

registration and licensing system

60,000,000

Enhancement of Locally

Managed Marine Areas

To enhance understanding of the roles of locally managed

marine areas in fisheries conservation and implement locally

managed marine areas at specific demonstration sites.

24,000,000

Rehabilitation and

Regeneration of Coastal

and Inland Ecosystems

To rehabilitate selected degraded coral reefs, mangroves,

seagrass and inland areas that are critical areas for the

fisheries.

36,000,000

Sustainable Fisheries

Livelihood Support

To increase the income of small fisherfolk families and

organizations through engagement in resource and non-

resource based livelihood initiatives.

110,000,000

Infrastructure and Post-

harvest Facilities

Development for Municipal

Fisheries

To establish village-level cold storage facilities, small-scale

fish landing centers, and to set up the appropriate

organization that will operate/maintain the infrastructure

facilities.

16,000,000

Enhancement of Fishery

Law Enforcement

To organize community-based and Fishery Law

Enforcement Task Force (FLET), improve the scheme of

deputization of fish wardens; and provide support for Bantay

Dagat/FLET.

38,000,000



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Budget

Rationalization of

Municipal Fishing Effort

To promote the sustainable utilization of municipal fishery

resources and rationalize the fishing activities to ensure that

these are within the productive capacity of the fishery

resources.

154,000,000

Crop insurance To ensure fisherfolk of adequate financial assistance for

seaweeds, etc. in times of calamity and weather disturbances 100,000,000

Credit guarantee fund To secure adequate and favorable access to credit for

fishfarmers and fisherfolk. 100,000,000

TOTAL 680,000,000

Box 5. PHILIPPINE FISHERIES FACTS AND FIGURES

1. Philippines Population (2007)a 88.57 M

2. Population in coastal areas (2005)b 42.99 M

3. Number of coastal provinces

4. Number of coastal municipalities/cities 915

5. Number of major fishing groundsc 37

6. Length of our coastlined 31,109 Km

7. Fisheries Production (2005)e in million metric tons

• Municipal Fisheries 1.133 (27%)

• Commercial Fisheries 1.133 (27%)

• Aquaculture excluding seaweeds 0.557 (13%)

• Seaweeds 1.338 (33%)

8. Poverty- Magnitude of poor families (2006)f

• Philippines 4,677,305

• Luzon 1,985,362

• Visayas 1,148,481

• Mindanao 1,543,462

Poverty Incidence (Fishermen)g

• 43 out of 100 fishermen are poor (2003)

• Total population: 1,009,808

Ten Provinces with Largest Magnitude of Poor in 2006h



Rank Province Magnitude of Poor Families

1. Negros Occidental 190,455

2. Cebu 184,207

3. Pangasinan 151,660

4. Leyte 147,900

5. Quezon 146,188

6. Camarines Sur 134,599

7. Nueva Ecija 121,010

8. Zamboanga del Norte 115,560

9. Negros Oriental 110,724

10. Batangas 108,782

9. Fishing operators (2002)i

• Municipal 1,781,057

• Commercial 7,849

10. Fishing boats / vessels (2002)j

• Municipal 810,175

• Commercial 10,860

11. Number of Household Members 10 Years Old and Overk

Number of Municipal Fishing Operators 7,064,894

Male 2,867,340

Female 4,024,925

Number of Commercial Fishing Operators 32,095

Male 13,512

Female 17,991

a http://www.census.gov.ph/ b ArcDev (2004) as cited in CNFIDP c CNFIDP (2006) d http://philminaq.eu/index.php?option=com_content&task=view&id=77&Itemid=88 e http://www.bfar.da.gov.ph/styles/Publications03/statistics.htm f http://www.nscb.gov.ph/poverty/2006_05mar08/table_12.asp g http://www.nscb.gov.ph/poverty/2000-2003/pov_inc_00_03.asp h http://www.nscb.gov.ph/poverty/2006_05mar08/table_22.asp i http://www.census.gov.ph/data/sectordata/sr0515901.htm j http://www.census.gov.ph/data/sectordata/sr0515903.htm k http://www.census.gov.ph/data/sectordata/sr0515906.htm



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ENSURING SUSTAINABLE RESPONSES TO GLOBAL CHALLENGES1

THE 2009 ALTERNATIVE BUDGET FOR ENVIRONMENTAL SUSTAINABILITY

Introduction

The urgency of addressing issues around environmental sustainability continues to take center stage. The December 2007 United Nations Framework Conference on Climate Change (UNFCCC) held in Bali, Indonesia underscored the need for swift and concerted efforts among and between governments in addressing the most serious and pervasive global threat – CLIMATE CHANGE. Undeniably linked to unsustainable human activities in pursuance of economic gains, i.e. energy production and consumption, agriculture and forestry, marine resource utilization, industry and manufacturing, transportation, etc., its implications and impacts cannot be separated from the concerns of human society. At this point in time, this greatest challenge of the century poses the ultimate question: what kind of world do we want to live in? The consensus has already been stricken that climate change is upon us. While countries decry the devastation brought about by catastrophic weather patterns resulting in thousands of deaths and destruction of billion-dollar worth of properties, the recent twin-crises of food and fuel shortages that swept the globe provided us further with snapshots of the gravity of its impacts that imperils even the most basic requirements for human survival. While this greatest challenge of the century necessitates a deeper examination of one’s values and practices, the role of government is deemed more crucial. An effective response to a problem of this magnitude requires no less than an effective intervention at the country level. For, indeed, the challenge of climate change is no less that the complex challenges to governments in striking the balance between its economic and social objectives, as well as in delivering sound and effective public administration and governance. Addressing environmental challenges is an uphill battle in the Philippines. As government continue to grapple with relentless and escalating impacts of poor environmental conditions, major institutional weaknesses still prevail which limits the effectiveness of government efforts. These include the persistent and unresolved issues surrounding inconsistencies and lack of proper coordination among agencies tasked with environmental sustainability functions; lackluster enforcement of environmental laws; limited technical capabilities of the bureaucracy and venues for people participation in

1 This paper was prepared by the La Liga Policy Institute as a product of several discussion and consultations sessions with the members, partners and friends of the Alternative Budget Initiative (ABI). The La Liga Policy Institute, together with the Philippine Rural Reconstruction Movement, serves as convenor of ABI's environment cluster. Eighteen networks, organizations and individual members compose ABI's environment cluster. Among them are the Philippine Federation for Environment Concern (PFEC), Earth Savers Movement (ESM), Philippine Non-Timber Products Task Force, Partido Kalikasan, Haribon Foundation, Philippine Network on Climate Change (PNCC), Ecowaste Coalition.



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government programs; and most importantly, the chronic under-funding of the sector from government. Without addressing these core issues will render any efforts, both by the public and private sectors, ineffective. And, the welfare and future of the Filipino people undoubtedly compromised.

Where We Are Now

Escalating Environment-related Poverty

The 2007 MDG progress report on Asia and the Pacific underscores the close link between environmental deterioration and poverty in such a manner that the “increasing proportion of poor in the Asia-Pacific region are poor because they are living in areas where the environment is under stress.” (MDGs: Progress in Asia and the Pacific 2007: 16) The region exhibits a trend of increasing number of people living on less than $1 per day found in areas that are under environmental stress2. Early estimates also project that environment-related poverty is likely to increase by two-thirds come 2020 as areas under environmental stress are likely to increase due to impacts from natural disasters and climate change. The report also highlighted the region’s unique character where high economic growth rates continue to be pursued at a great cost to the environment.3 This is evident in widespread deforestation of natural forests, which at best are being replaced by lower productivity plantation forests. These unsustainable human activities have serious implications for global warming because it drastically reduces the critical ecosystem services provided by natural forest such as carbon sequestration. Deforestation is associated with 18 to 25 per cent of greenhouse gas emissions. Table 44 provides a summary of the progress of MDGs in the Asia and the Pacific. While the report reflects progress in most MDG indicators, the region still faces quite a challenge as none are on course of achieving them. Particular to Southeast Asia, indicators related to environmental sustainability have been either slow or

2 This includes urban slums, in dry lands, in flood or disaster prone regions, in remote upland areas, or in coastal zones where they depend on already depleted marine resources (MDGs: Progress in the Asia and the Pacific 2007: 16). 3 The UNESCAP report for 2005 also highlighted this where it identified the Philippines as among Asia-Pacific countries experiencing “ecological deficit” or utilizing natural resource faster than the rate that it can replenish.

Table 44. Asia and the Pacific MDGs Profile

� Early achiever; �On track; □ Off-track/Slow; � No progress/Regressing Source: MDGs: Progress in the Asia and the Pacific 2007



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even exhibiting no progress at all. The most notable challenges lie in improving forest cover, improving air quality, and reversing consumption patterns of ozone-depleting substances. The Philippine performance does not deviate from the Southeast Asian average. In fact, it was only in the establishment of protected areas where the country’s performance is above the sub-regional average. It has performed below average on areas such as reducing extreme poverty, number of students who reach grade 5, primary education completion rate, infant mortality, HIV prevalence, and improving supply of water in rural areas. The Philippines, together with Cambodia, Indonesia and Myanmar, was especially noted wherein economic growth has been pursued at the cost of rapid deforestation. Impact of Food and Fuel Crises in the Philippines

The global food crisis likewise had significantly impacted on the country. Rice prices rapidly spiraled making the country’s staple inaccessible to the majority of the population, particularly the poor. Alyansa Agrikultura, a national coalition of advocates for sustainable agriculture, points to various reasons for the crisis such as massive conversion of agricultural lands for non-agricultural use, government’s overall neglect of the agricultural sector, government policy that is biased towards rice importation, and proliferation of unsustainable agriculture practices that are highly dependent of chemical inputs, as well as weather-related problems which highlighted the country’s unreadiness in confronting the impacts of climate change. Indeed the global rice crisis manifested itself in crisis proportions in the country. Government has put immediate measures to address the multiple dimensions of the problem. Rice was distributed in poor communities, low-priced rice was sold in several markets and a rice self-sufficiency program known as FIELDS4 has been crafted. The Department of Agriculture even made a significant policy pronouncement putting ten per cent of its target hectarage under FIELDS for organic rice farming, where interventions in extension will capacitate farmers to produce their own organic fertilizers, as a prelude to full shift towards sustainable agriculture in the country. Sound Environmental Governance Remains Wanting

It is sad to note however that while the Philippines has taken a significant role in global initiatives on sustainable development and climate change5, the country remains lagging in meeting its environmental sustainability targets. The gaping policy-action gap remains among the major culprits in our present environmental dilemma (Ronquillo and Moralla, 2007). Since the Rio Summit in 1992, the Philippines has significantly progressed in terms of laying down the needed policy environment

4 FIELDS stand for F-fertilizers, I for Irrigation, E for Extension and Education, L for Loans, D for Dryers and other post-harvest facilities, and S for Seeds. The FIELDS program is to be implemented in 80 provinces targeting around 1.87 million hectares. 5 The Philippines has been very active in terms of climate change policy. Even before the UNFCCC was signed in 1992, the Philippines established the IACCC in 1991 through Administrative Order (AO) 220. It has played a key in role in international climate negotiations, having been a major player at the very start while serving as the main spokesperson for the Group of 77 (G77) and China (the developing countries negotiating bloc), particularly on financial resources and technology transfer. The Philippines has also been instrumental in obtaining the major agreement in Kyoto where the country chaired key negotiations that included the debates on Land Use, Land Use Change, and Forestry (LULUCF). Today, the leaders of the Philippine delegation continue to play a vital role in the negotiations launched in Bali for long-term cooperation and to serve as spokespersons for G77 and China. (Villarin et.al., p. 39).



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for pursuing sustainable development. Yet, most of these laws are not fully implemented, if at all, due to less priority given by government in terms of budgetary allocations. Institutional issues also serve to exacerbate the situation. For one, the Department of Environment and Natural Resources wields conflicting roles in protecting/conserving the country’s natural resources and in its regulatory function that includes approval of permits for exploitation of natural resources. Another is the lack of clear institutional mechanism by which agencies can harmonize their respective roles in addressing environmental issues. A clear example is the existence of two institutions in charge of climate change — the Inter-Agency Committee on Climate Change (IACCC)6 and Presidential Task Force on Climate Change (PTFCC),7 with related and similar tasks and functions. Indeed confronting the current environmental challenges do not only require sound policy environment. Ensuring implementation of laws require the necessary budgetary allocations for activities needed to meet their respective intentions. Further, clear institutional mechanism will ensure effective and efficient implementation. Eliminating ambiguities, duplication of functions as well as establishing an authoritative institution to tackle a specific environmental issue is required for a proactive and comprehensive approach in addressing the problem.

The Cost of Environmental Unsustainability

Previous studies have pointed to the wide-ranging implications of environmental degradation to the lives of the people. For instance, the impacts of deforestation such as disrupted hydrological condition of watersheds, accelerated soil erosion, siltation of rivers and valuable reservoirs, increased incidence and severity of flooding, and decreased supply of potable water have long been established in many literatures. However it was only recently where studies have highlighted the corresponding monetary values, both in economic and social terms. The Philippine Environment Report 2005, which reported on the country’s state of the coastal and marine resources, estimates an annual average of PhP 2.0 billion lost to the economy due to the depletion of the fish stocks brought about by unsustainable fishing methods. The Bureau of Fisheries and Aquatic Resources (BFAR) further estimates that another PhP 2.0 billion worth of fish catch, on the average per year, is lost due to siltation and sedimentation. The table below shows the decline in fisheries production over for the period 1997-2004.

6 The Philippines established the IACCC in 1991. Because climate change is an environmental issue that needs scientific and technical understanding, the IACCC is chaired by the DENR and co-chaired by the Department of Science and Technology (DOST). It is made up of 13 government agencies and an NGO network, the Philippine Network on Climate Change. It formulated the National Action Plan on Climate Change in 1997, which aims to integrate climate change concerns in the development plans of government agencies. 7 The PTFCC was created by President Arroyo on February 20, 2007, through Presidential AO No. 171. It was initially headed by then DENR Secretary Angelo Reyes. It is composed of heads of the Departments of Energy, Science and Technology, Agriculture, and the Interior and Local Government and two representatives from the private sector and the civil society. On August 15, 2007, AO No. 171-A was issued by Malacañang transferring the chairmanship of the PTFCC from the DENR to the DOE and increasing the membership of the Task Force to include the Secretary of Education and the Chairman of the Commission on Higher Education.



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Table 45. Fisheries Production: 1997 – 2004

Year Production

(in Metric

Tons)

Annual

Change in

Prod'n

(%)

Prod'n Value

(Billion Pesos)

Annual

Change in

Prod’n Value

(%)

Losses*

(Billion Pesos)

1997 884,651 25.9 1.4

1998 940,533 6.3 29.7 14.7 1.6

1999 948,754 0.9 32.2 8.4 1.7

2000 946,485 -0.2 33.9 5.3 1.8

2001 976,539 3.2 36.1 6.5 1.9

2002 1,041,360 6.6 38.9 7.8 2.0

2003 1,045,316 0.4 41.4 6.4 2.2

2004 1,070,725 2.4 43.8 5.8 2.3

Ave. 956,387 2.8 32.8 7.8 2.0 *losses due to siltation and sedimentation; municipal (30%); commercial (5%)

Source: BFAR

The Philippine Environment Monitor 2006 dealt with health impacts of poor environmental conditions. A poor environment contributes to many common health conditions in the Philippines. Figures 1 and 2 lists the common diseases and death in the Philippines and the corresponding degree of influence of environmental factors. Of all the environmental factors that contribute to diseases, air pollution, water pollution, sanitation conditions and hygiene practices are the most important, accounting for an estimated 22 percent of the reported illnesses and six percent of the reported deaths in the country. Diarrhea is the leading environmental health ailment and air pollution contributes to a similar quantity of respiratory and cardiovascular diseases.



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Source:

Philipp

0 10 20 30 40 50 60

Number of deaths (thousands)Number of deaths (thousands)Number of deaths (thousands)Number of deaths (thousands)

Attributable to environment

Other causes

Heart diseases

Pneumonia

Tuberculosis

Chronic lower respiratory diseases

Lung cancer

Transportation accidents

Intestinal infectious disease

Nutritional deficiencies

Dengue

Figure Figure Figure Figure 14141414. Causes of Deaths and the Environment. Causes of Deaths and the Environment. Causes of Deaths and the Environment. Causes of Deaths and the Environment

Figure Figure Figure Figure 15151515. Cause of Diseases and the Environment. Cause of Diseases and the Environment. Cause of Diseases and the Environment. Cause of Diseases and the Environment

0 100 200 300 400 500 600 700

Attributable to environment

Other causes

Lower respiratory infections & pneumonia

Bronchitis/ Bronchiolitis

Acute watery diarrhea

Influenza

Hypertension heart disease

Respiratory tuberculosis

Chicken pox

Heart diseases

Malaria

Dengue fever

Number of Number of Number of Number of cases cases cases cases (thousands)(thousands)(thousands)(thousands)

Source: Philippine Environment Monitor 2006



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With an annual expenditure estimates amounting to PhP 14.3 billion each year in terms of treatment and lost income alone, the report urgently draws attention to the need for effective environmental management problems. Specific to the air pollution-related diseases, the table below shows the estimated expenditures and income loss as estimated under the Philippine Environment Monitor 2006.

Table 46. Expenditures due to Air Pollution-related Diseases

Air Pollution

Related Disease Income Losses

due to Reduced

Workdays

(million P/yr)

Medical and

Hospitalization

Expenses

(million P/yr)

Total Cost

(million P/yr)

ALRI/Pneumonia 24 436 461

(children < 5 y/o)

COPD (adults) 22 347 368

Cardiovascular (adults)

6.4 127 134

Total 52.4 910 963 Source: Philippine Environment Monitor, 2006

Moreover, the United Nations Environmental Programme (UNEP) estimates that 80 percent of all natural disasters worldwide occur within Asia and the Pacific. In terms of disaster damage, the region accounted for more than 50 percent of the total global amount of damage from 1900 to 2004, with an estimated total economic losses amounting to US$73 billion. In the Philippines, global warming is largely attributed to the destruction of forests rather than carbon dioxide emissions.

Costs related to extreme patterns have been high. Loss in Philippine fisheries caused by El Niño pheno-menon in 1997-1998 was estimated at PhP 7.3 billion (Table 47). Typhoons have had the most severe impact among natural disasters in the Philippines through the years. In 2006, 2.38 million families were affected by the typhoons as opposed to only 7,870 in the MT Solar Oil Spill and 3,850 in the Leyte landslides. Damage to agriculture and infrastructure for the 2006 typhoons was estimated at P20 billion. (Villarin, et. al., 2008)

Table 47. Reported Losses in Philippine Fisheries due to El Niño in

1997-98

Sub-sector Production loss

(tons)

Economic Loss

(In million PhP)

Aquaculture 260,375 6,154.95

Brackish water fishponds 102,857 3,558.20

Freshwater fishponds 19,828 913.10

Cages/pens 6,000 120.00

Mariculture 131,690 1,556.65

Seaweeds 131,198 1,561.80

Mussels 492 4.85

Marine Fisheries 22,923 1,071.60

Commercial 4,522 221.00

Municipal 18,401 850.60

Inland Fisheries 599 18.73 Source: Guerrero 1999 in At the Eye of the Perfect Storm (Villarin et. al., 2008)



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It must be stressed that the poor, particularly the farmers and fisherfolks, and those living in marginalized areas bear the biggest brunt of poor environmental conditions. Poor environmental conditions undermine the capacity of the poor to pursue economic opportunities. Coupled with his/her inability to cope with environmental degradation and disasters further exacerbate one’s situation, condemning them further to a life of deprivation and misery.

Emphasizing Sustainable Development as Framework of Intervention

The first Earth Summit held in Rio de Janeiro in 1992 defined that the best way forward is through sustainable development. Defined by the Brundtland Commission as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs,” the journey to sustainability involves recognition of interdependent and mutually reinforcing pillars namely, economic development, social development, environmental protection and cultural diversity. Agenda 21 clearly identified information, integration, and participation as key building blocks to help countries achieve development that recognizes these interdependent pillars. It emphasizes that in sustainable development everyone is a user and provider of information. It stresses the need to change from old sector-centered ways of doing business to new approaches that involve cross-sectoral coordination and the integration of environmental and social concerns into all development processes. Furthermore, Agenda 21 emphasizes that broad public participation in decision making is a fundamental prerequisite for achieving sustainable development. (Allen, 2007) Confronting climate change likewise underscored the principles of sustainable development in its mitigation and adaptation measures. IPCC Assessment Report No. 4 (IPCC AR4) states that sustainable development can reduce vulnerability by enhancing adaptive capacity and increasing resilience. This strengthens the interventions toward achieving the core objective of the UNFCC which is “… to achieve .. stabilization of greenhouse gas concentrations in the atmosphere at a

level that would prevent dangerous anthropogenic interference with the climate system. Such a

level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to

climate change, to ensure that food production is not threatened and to enable economic

development to proceed in a sustainable manner,” (UNFCCC, Article 2) Thus far, a framework of intervention has already been defined which integrates adaptation and mitigations in confronting the challenges of climate change. Such framework will provide the necessary mechanisms by which policies, science, markets, capacity building and information are able to respond to the realities of climate change and ensure that the core objective of the UNFCCC as articulated in Article 2 are attained. This framework takes into account the existing knowledge as well as the important gaps and uncertainties. As such, adaptation requires integrated long term planning, comprehensive risk management, and good natural resources governance and management, which require programs to deal not only with the anticipated problems but also with those that societies and communities are presently facing. Needless to say, good governance plays a core requirement in achieving sound implementation of solutions and measures to the current global challenges.



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Figure 16. Integrated Adaptation-Mitigation Framework on Climate Change

Source: At the Eye of the Perfect Storm (Villarin et. al., 2008)

In the Philippine context, the role of good governance serves as major requirement for effective intervention to these global challenges. As mentioned in the earlier part of this paper, the country saw non/under-implementation of important environmental policies for reasons nothing short of being a question of government priorities and good governance. In the paper prepared by Villarin et. al. entitled “At the Eye of the Perfect Storm”, good governance in climate entails a clear and shared sense of priorities and requiring:

(1) action and investment plan; (2) specific and measurable targets; (3) programs with timelines; (4) clear indicators of success; (5) given the corresponding budgetary priority in requires; (6) translated into investment priorities; (7) mainstreamed into the Philippine Medium-term development Plan; (8) institutional stability; (9) uses a multi-agency, multi-stakeholder, multi-disciplinary approach; (10) a culture of implementation; (11) localization of responses.

Concretely, the paper suggested “No Regrets” measures particularly in the areas of energy, transport, industries, agriculture, waste management, forestry and land use. No regrets measures denote measures where everything can be gained by doing them, and where benefits usually justify the costs.

Engaging the National Budget Process for Environmental Sustainability

The Alternative Budget Initiative’s (ABI) engagement on the national budget process, which started in 2006, has focused its intervention in budgetary allocations for the DENR and its attached agencies. The DENR is mandated to be the primary agency responsible for the conservation, management, development, and proper use of the country’s environment and natural resources. It has three (3) attached agencies which include the Environmental Management Board



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(EMB), the Mining and Geosciences Bureau (MGB) and the National Mapping and Resource Information Authority (NAMRIA). The respective mandates of these attached agencies articulated in Table 5. Since last year, the ABI also started its call for the review and revitalization of the Philippine Council for Sustainable Development (PCSD) which is under the auspices of the National Economic Development Agency (NEDA).

Table 48. Core Functions of DENR Attached Agencies

Agency Functions

EMB � Implementation of five (5) major environmental laws, namely the Clean Air Act of 1999, Clean Water Act of 2004, PD 1586 or the Philippine Environmental Impact Statement System, Toxic Substances and Hazardous and Nuclear Wastes Control Act of 1990, The Ecological Solid Wastes Management Act of 2000

� It is further mandated to conduct education and information campaign, to provide research and laboratory services, and secretariat services in the adjudication of pollution cases by virtue of EO 192.

MGB � Administration and disposition of mineral lands and mineral resources and the conduct of geological, mining, metallurgical, chemical and other researches as well as geological and mineral exploration surveys.

NAMRIA � Acts as the central mapping agency, it is responsible for topographic mapping, nautical charting, oceanographic/hydrographic survey, land classification of public domain, aerial photography and remote sensing, management of resource information.

ABI’s engagement calls for increased allocations for the sector for what it calls as its Green Bottomlines.8 A major critique of the ABI is the apparent non-priority to the environment sector as reflected in its budgetary priorities. Data show that in spite of the critical nature of the sector, budgetary allocations have not even reached one percent of national annual appropriations with the DENR, as its major natural resource conservation and protection agency, does not figure among the top ten agencies receiving the highest budgetary allocations. For 2009, President Arroyo announced government’s commitment for heightened intervention in the reforestation, including watershed areas, as well prioritizing delineation and geo-hazard mapping activities. This commitment translated to a significant increase of 40.7 percent in the proposed national budget from the FY 2008 GAA level. While these commitments are reasons to be hopeful, the allocation remains inadequate due the level of interventions that need to be done. At the macro level, the environment sector budget still does not reflect its rightful place in government budgetary priorities. The share of environment sector accounts for a mere 0.93 percent of the PhP 1.4 trillion national budget proposal. DENR’s proposed budget amounting to PhP 11.4 billion is at 0.88%, up by 0.2% from last year’s share of 0.68%. The DENR still does not figure among government’s top agencies to receive budgetary priorities in 2009.

8 ABI’s Green Bottomlines are as follows: Forest management, Coastal resource management, Clean air, Clean water, Solid, hazardous and toxic wastes management, mining and the environment, and Climate change.



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Table 49. Distribution of DENR Budget Allocation by Agency/Office

Office GAA 2008 NEP 2009 Amount Inc/Dec % Inc/Dec

A. OSEC 6,014 9,278 3,264 54.3%

B. EMB 410 562 152 37.1%

C. MGB 546 622 76 13.9%

D. NAMRIA 1,148 960 (188) (16.4%)

Grand Total 8,118 11,422 3,304 40.7% Source: BESF 2009

Further, several serious issues still plague the 2009 budget proposals which the ABI is forwarding in its 2009 budget engagement. These general observations are as follows: 1. The President’s PhP 2.0 billion commitment for to step up reforestation efforts in the country

which is lodged under DENR budget line item OSEC-Forest Development/Central Office becomes highly discretionary. Reforestation activities can directly be lodged under budget line items OSEC-CBFM and OSEC-Protected Area Management given that targets have already been identified by the DENR’s concerned divisions.

2. Under the 2009 NEP, CBFM budget decreased significantly to PhP 100.9 million as

opposed to 2008 GAA level of PhP 218.45 million. 3. Unclear status of disbursement and utilization of the PhP 115 million budget

augmentation for community-based resource management under the 2008 General Appropriations Act.

4. Limited interventions in water quality management. For 2009, target interventions are all

located in Luzon. No concrete intervention in critical water bodies in Visayas and Mindanao. 5. Luzon-focused marine and coastal resource advocacy by the DENR. DENR-led

advocacy to protect and conserve coastal and marine resources are likewise limited to areas in Luzon. Advocacies as a means to raise awareness and direct CRM intervention should also be done in Visayas and Mindanao.

6. Weak enforcement of the Ecological Solid Waste Management Act of 2000. The 2006

COA report reveals that the enforcement of the Ecological Solid Waste Management Act of 2000 has been weak after six years of implementation as denoted by only 2 municipalities with sanitary landfill out of 116, and the unimproved practice of controlled and open dumpsite of 23 percent and 70 percent respectively. Note that the latter two practices are no longer allowed since February 2006.

7. Weak enforcement of Clean Air Act of 1999. Also in the 2006 COA report, only 18 out of

the 38 sampling stations (or 47 %) attained the targeted 20%/30% reduction in TSP levels and 14% or 37% were within the 90ug/Ncm DENR Annual Guideline value due to: a) presence of heavy traffic; (b) open burning of solid waste; c) unpaved spaces; d) diesel-fueled and smoke-belching vehicles; e) increase in human activities such as gold and silver smelting; f0 development of commercial establishment; and g) lack of necessary air quality monitoring equipment. Further, samples collected from monitoring stations were not immediately submitted to the laboratory for analysis as required, thus, exposing them to possible contamination which may affect the accuracy of laboratory results.



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8. Revenue loss for DENR due to uncollected weak collection of fees and fines. The 2006 COA Report audit also shows that the DENR could have earned PhP 475.13 million more, if stronger collection remedies have been enforced. If collected, such revenues could have been used for natural resource protection and conservation activities. The sources of revenue losses are outlined in Table 50.

Table 50. Revenue Loss of DENR in 2006

Deficiencies Amount

a. Non-collection of User’s Fee 9,787,425

b. Non-collection of lease rental for Foreshore Lands - Pacific Farms, Inc. - Occupancy without permit

36,171,279.66 2,600,304.33

c. Failure to conduct reappraisal of Foreshore Lands 10,194,755.96

d. Delayed processing of foreshore lease applications 589,391.31

e. Loss of income on leased properties 9,074,953.81

f. Loss of income on confiscates forest products - decrease in economic value while awaiting disposal - decrease in economic value on sale - unremitted share of DENR on proceeds of sale

12,679,382.37 8,739,110.63 5,839,509.41

Sub-total 95,676,112.68

g. Non-imposition of resource user’s fee form other government offices 379,452,000

Total 475,128,112.48 Source: COA Report 2006

The 2009 Alternative Budget for Environmental Sustainability

In the light of the serious environmental challenges facing the planet, the ABI is proposing the following budgetary augmentations for environmental sustainability. The proposal identifies new projects which can be considered as No Regrets measures where there is everything to be gained by doing them.

Table 51. Ensuring Sustainable Management of Forest through CBFM


NEP 2009

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC– Operations/ Community-Based Forestry Program (NEP p. 112)

218,450,000 100,900,000 218,450,000 117,550,000

1. ABI proposes the restoration of the CBFM budget to 2008 GAA level to fund critical CBFM activities such as (a) Livelihood Support and Enterprise Development, (b) Extension and Education, (c) Institutional Strengthening, and (d) Monitoring and Evaluation.

2. In recognition of Community-based Forest Management (CBFM) as government’s central strategy in pursuing sustainable and equitable management of forestlands (EO 263 series of 1997 and EO 606 series of 2007), the proposed augmentation amounting to PhP 117.55 million shall ensure funding for the effective implementation of the CBFM Strategic Plan for 2008-2017 which gives equal importance to the role of forest dwellers in forest management, complementing government’s heightened commitment to address the rapid degradation of the country’s forest and watershed areas through reforestation.

3. A mechanism composed of the DENR through its Community-Based Forest Management Division, civil society organizations, local government units and members of Congress



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(House Comm. On Appropriations and Senate Committee on Finance) shall work towards determining priority areas and area needs resulting from this additional allocation.

Table 52. Ensuring Sustainable Management of Coastal and Marine Resources through

Modeling of Converging Efforts of DENR, DA-BFAR, LGUs, and People’s Organizations


NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC-Operations

0 0 30,000,000 *For Special Advocacy on CRM

30,000,000

*New activities/ projects

1. Global warming is likely to trigger serious consequences for mankind and other life forms, including a rise in sea levels, which will endanger coastal areas and small islands, and a greater frequency and severity of extreme weather events. In the Philippines, the state of the country’s coastal and fisheries resources directly relates to food sufficiency in term of protein requirement of the poorest segment of society and to the availability of livelihood for small fishers. As such, ABI proposes an additional allocation amounting to PhP 30 million for a DENR-led campaign on coastal resource management that will feature the “convergence” of the DENR, BFAR and LGU efforts in protecting coastal resources and ensuring food self-sufficiency and livelihood of small fishers from the impacts of climate change and unsustainable human activities.

2. This campaign shall be implemented in the following six (6) critical coastal habitats and heavily-overfished areas: Lingayen Gulf (Pangasinan), Tayabas Bay (Quezon), Visayan Sea (Panay-Masbate), Cebu Strait (Cebu-Bohol), Panguil Bay (Misamis Oriental) and Macalajar Bay (Misamis Occidental).

3. Activities around this proposal shall include coastal resource management, strengthening of local communities, IEC and media, control and surveillance, law enforcement and documentation of best practices.

4. As a “convergence” undertaking of concerned national agencies, LGUs, fisherfolk organizations, it shall also serve as a vehicle in the national promotion of the ecosystem approach to resource management.

Table 53. Trash to Treasure: Transforming Solid Waste Problems to Sustainable Solutions

to the Food and Fuel Crises


NEP 2009

ABI Proposal

Variance

(ABI Proposal

less NEP)

EMB-Operations/ Toxic Substances and Waste Management (NEP p. 121)

47,760,000 59,750,000 559,750,000 *For Construction of five (5) waste to organic fertilizer/ bio-diesel facilities

500,000,000


1. ABI proposes an additional appropriation to the DENR budget amounting to PhP 500 million (or PhP 100 per facility) to study and pilot the construction of five (5) waste disposal facilities that will convert garbage into organic fertilizers and/or bio-diesel. This project shall go hand in hand with the department’s drive to close illegal dumpsites through its Zero Basura Olympics campaign.



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2. Deemed as the national government’s decisive intervention in the widespread and pervasive problem of garbage disposal, such undertaking shall also directly contribute in addressing the country’s fuel and food self-sufficiency problems. The project is also seen as a way to generate local employment.

3. Recognizing that the local government units (LGUs) have the primary responsibility in addressing solid waste problems but whose interventions have been limited due to large financial requirements to invest in such facilities, the proposed project shall nonetheless require and ensure LGU commitments in the form of counterpart funding and management of the said facilities. The National Solid Waste Management Council (NSWMC) could take the lead in developing guidelines related to technology assessment, area selection, management of such facilities, as well as ensuring mechanisms for active participation of local stakeholders including LGUs, NGOs, POs and other citizens groups in project implementation.

Table 54. Ensuring Environmental Health for Filipinos


NEP

ABI Proposal

Variance

(ABI

Proposal less

NEP)

EMB – Operations/ Environmental Management & Pollution Control (NEP p. 121)

252,600,000 339,770,000 1,879,770,000 *For Water Quality Monitoring for critical bodies of waters in Visayas & Mindanao *For Construction of three (3) regional Industrial Pollution Laboratories

1,540,000,000


1. To strengthen DENR’s role in environmental pollution monitoring and direct intervention, the ABI proposes an additional funding totaling PhP 1.54 billion to cover for the following: � To augment government intervention in terms of monitoring and management of critical

rivers, ABI proposes that DENR expand its targets beyond the rivers/bodies of water in Luzon with an additional appropriation of PhP 40 million (or PhP 10 million per area). ABI further proposes the inclusion of the following rivers requiring immediate interventions:

a. Mindanao

� Agusan River – due to proximity to mining activities and plantations that use excessive chemical fertilizers and pesticides; it also links to a critical habitat, the Agusan Marsh.

� Lake Lanao – home to 18 endemic species of freshwater fish and supports a large number of waterfowl, which was found to have massive algae contamination in October 2006. Poor sewage and agricultural waste management, soil erosion from indiscriminate logging and extensive land use and farming are seen as the initial culprits to the deteriorating state of the lake.

b. Visayas – for impact of siltation, erosion and flooding, the following rivers are

proposed for pollution monitoring and direct intervention: Iloilo River and Binahaan

River in Ormoc, Leyte.



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� ABI further proposes an additional budget for DENR’s Environmental Management Bureau (EMB) amounting to PhP 1.5 billion for the establishment of/upgrading to state-of-the-art Industrial Pollution Laboratories in three (3) strategic regions in the country to effectively monitor and make timely interventions to avert harmful pollution impacts to health and the environment. Such laboratories are hereby proposed to be set up in regions IV-A, VII, and XI.

Table 55. Ensuring Environmental Justice


NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC-Support to Operations/ Legal Services (NEP p. 109)

85,980,000 94,990,000 129,990,000

*For forest, land and mining

35,000,000

EMB-Support to Operations/Legal Services (NEP p. 9)

7,400,000 7,850,000 22,850,000

*pollution-related

15,000,000

TOTAL 50,000,000

1. To effectively safeguard and step up government efforts against environmental violators and exploiters, ABI proposes an increase in the DENR’s legal fund amounting to PhP 50 million, broken down as follows:

a. Forest and Land-related – PhP 15 million

b. Mining-related: PhP20 million

For the review, development and pursuit of cases against irresponsible mining operators both for old and recent cases. Old cases may include revisiting cases related to Bagacay Mines in Samar, Marcooper in Marinduque, Basay Mines in Negros Oriental.

c. General Pollution – PhP 15 million

Table 56. Building Capacities for Environmental Sustainability


NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC-Gen. Admin & Support/ Human Resource Development

69,480,000 77,530,000 97,530,000 20,000,000

1. To effectively carry out the tasks posed by the growing challenges on environmental sustainability, ABI proposes an additional allocation of PhP 20 million for Human Resource Development for the immediate evaluation of capacities and capabilities of the DENR and its attached agencies and work for immediate re-tooling of its staff at the national, regional and its representatives at the local level (e.g. ENRO, PENRO, PASu), particularly on issues such as ecosystem management, climate change, water and air quality monitoring, disaster management, etc.



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Table 57. Localizing Sustainable Development or Philippine Agenda 21 (PA 21)


NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

NEDA-Operations

0 0 100,000,000

*PCSD-led localization of PA 21

100,000,000

*New line item specific for PCSD operations..

1. To effectively mainstream the application and implementation of PA 21 or Sustainable Development principles, ABI proposes an additional allocation amounting to PhP 100 million for (1) review and revitalization of the Philippine Council on Sustainable Development or the PCSD, and (2) a PCSD-DENR led localization of PA 21 to at least one region, particularly on those where mainstreaming efforts have already been initiated.

2. Such augmentation shall be lodged with the National Economic Development Agency (NEDA) for sole utilization of the PCSD.

Table 58. Enhancing Environmental Partnerships between Government and the People


NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC-Support to Operations/ Planning, Monitoring of ENR Policies

202,641,000 226,611,000 228,877,110 2,266,110

1. ABI proposes the amount of PhP 2.266 million or one percent of the proposed allocation under OSEC-Support to Operations/ Planning, Monitoring of ENR Policies to ensure and institutionalize people’s participation in agency-level planning, monitoring and development of policies on environment and natural resources.

Summary of Alternative Budget for Environmental Sustainability

In summary, the ABI proposes a total of PhP 2,586,427,110.00 for environmental sustainability. The amount of PhP 100,000,000.00 will be an augmentation to the budget of the budget of the National Economic Development Agency (NEDA) for the purpose of reviewing and revitalizing the Philippine Council on Sustainable Development or PCSD. The rest of the proposed augmentation is for the Department of Environment and Natural Resources (DENR) towards enhancing its conservation and protection role.

Table 59. Summary of Alternative Budget for Environmental Sustainability

Budget Item

GAA 2008

NEP

ABI Proposal

Variance

(ABI Proposal

less NEP)

OSEC– Operations/ Community-based Forestry Program (NEP p. 112)

218,450,000 100,900,000 218,450,000 117,550,000

OSEC-Operations

0 0 30,000,000 *Special Advocacy on CRM

30,000,000



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EMB-Operations/ Toxic Substances and Waste Management (NEP p. 121)

47,760,000 59,750,000 559,750,000

*Construction of five (5) waste to organic fertilizer/ bio-diesel facilities

500,000,000

EMB – Operations/ Environmental Management & Pollution Control (NEP p. 121)

252,600,000 339,770,000 1,879,770,000

*Water Quality Monitoring for critical bodies of waters in Visayas & Mindanao *Construction of three (3) regional Industrial Pollution Laboratories

1,540,000,000

OSEC-Support to Operations/ Legal Services (NEP p. 109)

85,980,000 94,990,000 129,990,000

*forest, land and mining

35,000,000

EMB-Support to Operations/Legal Services *pollution-related (NEP p. 9)

7,400,000 7,850,000 22,850,000 15,000,000

OSEC-Gen. Admin & Support/ Human Resource Development

69,480,000 77,530,000 97,530,000 20,000,000

NEDA-Operations


No specific item for PCSD

operations

100,000,000

*PCSD: localization of PA 21

100,000,000

OSEC-Support to Operations/ Planning, Monitoring of ENR Policies

202,641,000 226,611,000 228,877,110 2,266,110

TOTAL PROPOSED ADDITIONAL ALLOCATIONS 2,586,427,110

ALTERNATIVE BUDGET CONSORTIUM

Convened by Social Watch Philippines

• Action for Economic Reforms • Akbayan Partylist • Akbayan Youth • ALYANSA ng mga Mag-aaral para sa

Panlipunang Katwiran at Kaunlaran-UP Diliman

• Alyansa ng Nagkakaisang Lakas ng Kabataan (ALYANSA)

• Alyansa Tigil Mina (ATM) • BIGKIS – UP Manila • Buklod – College of Social Science and

Philosophy UP Diliman • Bukluran – Pamantasan ng Lungsod ng

Maynila • Earth Savers Movement • Ecowaste Coalition • Education Network • Father Archie Casey, SX JPICC-AMRSP • Filipino Democratic Student Union (FDSU) • Haribon Foundation • Health Care Without Harm (HCWH) • Institute for Popular Democracy • Institute of Public Health Management

(IPHM) • ISKOLAR Student Alliance – UP Manila • Katipunan ng mga Anak ng Bayan

(KAAKBAY) • Kalayaan Youth • La Liga Policy Institute • LINGAP – Adamson University – RITUAL

– Rizal Technological University • Lodel Magbanua (personal capacity) • Medical Action Group (MAG) • Movement for the Advancement of Student

Power (MASP) • Nagkakaisang Iskolar para sa Pamahalaan at

Sambayanan (KAISA) – UP Diliman • Non-Timber Products Task Force • Padayon Youth • Pambansang Kilusan ng Kababaihan Sa

Kanayunan • Pambansang Koalisyon ng Kababaihan Sa

Kanayunan • Pandayan Kabataan • Partido Kalikasan • Philippine Federation for Environmental

Concern (PFEC) • Philippine Network on Climate Change

• Philippine Rural Reconstruction Movement (PRRM)

• Piglas Kababaihan (PK) • Public Services Labor Independent

Confederation (PSLink) • Rice Watch and Action Network • RITUAL – Rizal Technological University • Samahang Demokratiko ng Kabayaan

(SDK) • Sanlakas Youth • Southeast Asia Regional Initiatives for

Community Empowerment (SEARICE) • Student Council Alliance of the Philippines

(SCAP) • Sustainability Watch • Tambuyog Development Center • Teachers and Employees Association for

Change, Education Reforms and Sustainability (TEACHERS)

• United Antipolo • Unlad Kabayan • UP Paralegal Society • UPLift Philippines • WomanHealth Philippines (WHP) • Youth Against Debt (YAD) • Youth for Change (Y4C) • Youth for Nationalism and Democracy

(YND) In partnership with Minority Legislators led by:

• Minority Floor Leader Ronaldo Zamora • Representative Teofisto Guingona III • Representative Darlene Antonino –

Custodio • Representative Ana Theresia

Hontiveros-Baraquel Liberal Party Congressmen led by:

• Representative Lorenzo Tañada III Senators:

• Senator Alan Peter Cayetano • Senator Pia Cayetano • Senator Panfilo Lacson • Senator Loren Legarda • Senator Aquilino Pimentel, Jr.

SOCIAL WATCH PHILIPPINES. Address: No. 40 Matulungin Street, Brgy. Central, Quezon City. Contact Numbers: +63 02 4265626 / 4265632 • Email: [email protected]

Website: www.socialwatchphilippines.org

Documents

2009 Alternative Budget Initiative