Conference Declaration National Consultation of Civil Society Organizations

Financing for Development: “Pera lang ba ang Kailangan?” 22 November 2007

Innotech, Diliman, Quezon City We, members of 36 civil society organizations coming from Luzon, Visayas and Mindanao have gathered here to discuss and reflect on the resolutions of the Moneterey Summit initiated by the United Nations Development Program five years ago. We are united in raising the following observations and concerns with regard to generating resources to finance development and the MDGs:

Government statistics reported we seem to be “on track” in terms of the MDG’s poverty reduction target. However, as of 2003 we are not on track as far as child nutrition, child mortality, maternal health and water sanitation targets. In fact, education is one of the most threatened among the MDG targets.

There is gross underfinancing and misspending on physical and social infrastructures

that are critical in not simply propelling growth but to catch up on the development lag due to the past years of neglect in these sectors.

Even as there is already a revenue shortfall, the burden of generating the needed

resources is actually borne by those who have the least capacity to bear them given the regressive structure of our tax system. Further, a lot of the incentives given to investors are redundant and are actually causing a drain of the public coffers.

Debt principal and interest payments remain a huge burden that eats up a large chunk of

the national budget.

Official Development Assistance (ODA) has been disproportionately distributed among the regions and is disturbingly linked to the war on terror.

The export oriented, unilateral tariff reduction program of the government has led to a

disintegrated and unsustainable economic development unable to provide gainful employment to a growing number of the working population.

The cost to the environment of the development strategy that government is pursuing is

not always given due consideration. And we assert that trade, aid and debt are not the real determinants of growth but rather

good governance through strong institutions. Annexed to this document is an enumeration of recommendations covering the five thematic issues which surfaced during the conference workshops.

ANNEX A On mobilizing domestic resources: Core principle - Tax the rich more, the poor less.

– Implement tax reform measures • Higher taxes on cigarettes, liquor • Rationalization of tax incentives • Reform in personal and corporate taxes • Monitor local government fiscal operations and strengthen partnerships

between LGUs and CSOs – Improve resource allocation and utilization – Identify causes of revenue shortfalls and formulate solutions

• Review target-setting methodology • Establish agency’s ownership of the target revenue

– Resolve problems in revenue administration, i.e., VAT – Protect MDG budget from budget cut – Accelerate the recovery of stolen wealth – Combat corruption – Promote participatory budgeting – Support the proposals of the Alternative Budget Initiative – Establish mechanisms to mobilize the huge earnings and remittances of our OFWs;

On debt:

– Offer attractive MDG projects and programs where bilateral debts or grants can be channeled to, within, or outside the Paris Club rules

– Rechannel debt relief funds through: • Debt conversions • Debt reduction • Debt rescheduling • Grants

- As borrowings are marred by corruption scandals, government should stop foreign borrowing altogether

We ask the UN system and UNDP to spearhead an international campaign to change the concept of debt sustainability of the Bretton Woods Institutions. Debt sustainability should not be measured on the debtor’s capacity to pay but on the ways debt servicing has blocked or hampered the financing for MDGs. On ODA, we call on the donor governments and agencies to

• Increase and improve the quality of aid allotments • Realign the loan-grant mix to favor the latter • Increase the share of projects on human and social development • Realign regional and provincial distribution of aid to poorer areas

• Address social and environmental concerns • End all tied aid • Delink aid from the war on terror • Closely monitor the effectiveness of aid

Further, we call on our government to

• Fix ODA implementation problems • Plug the hemorrhage of government funds in repaying loans • Address the foreign consultants’ issue • End human rights violations in aid projects • Focus on long-term and alternative sources of development financing • Strictly follow the legal requirements in negotiating loan agreements • Adopt a policy of transparency and popular participation by giving

stakeholders access to information • Draw up comprehensive and consistent ODA performance standards • Re-evaluate government policies and thrusts on ODA • Look for untied aid

And we likewise adopt the Quezon City Declaration on Aid on July 2007 herein attached as ANNEX B On trade, we call on the government to

• Ensure that food and livelihood security and rural development are promoted in all the trade negotiations the government enters into

• Provide incentives to promote strong forward and backward linkages among sectors • Promote selective trade liberalization and apply time-bound protection • Institute reform in property rights • Establish clear agro-industrial plan • Create the Philippine Trade Representative Office to ensure coherence in trade policy

making, accountability, transparency and stakeholder participation in trade negotiations • Establish moratorium in ecozones creation and undertake a full study of their costs and

benefits taking in the balance sheet their impact on the environment • Seriously address the rampant smuggling problem

Finally, resources no matter how large might be squandered because of our tarnished and weak institutions. We therefore urgently call for

Electoral reforms Reduction of discretionary power residing on the presidency Strengthening of the party system Enacting a Freedom of Information Act Reorientation of the Armed Forces of the Philippines And an overall re-shaping of the attitudes and behavior of politicians, businesspeople and

citizens in general

Signatories: Earth Savers Movement Philippine Rural for Reconstruction Movement Action for Economic Reforms Asian NGO Coalition for Agrarian Reform and Rural Development (ANGOC) Center for Advancement and Strengthening of Community Property Rights (CASCO), Inc. Homeless People’s Federationof the Philippines (HPFP) Kitanglad Integrated NGOs Global Call to Action against Poverty (GCAP)- Philippines Kabataan Kontra Kahirapan (KKK) AnthroWatch Upholding Life and Nature (ULAN) Social Watch-Mindanao Rice Watch and Action Network PRRM Cotabato Iloilo Code NGOs,Inc. Assalam Bangsamoro People’s Association Social Watch-Iloilo Public Services Labor Independent Confederation (PS LINK) Bataan NGO/PO Network Social Watch- Visayas PILIPINA-CDO International Center for Innovation, Transformation and Excellence in Governance (INCITEGov) Civil Society Network for Education Reforms (E-Net Philippines) La Liga Policy Institute (La Liga)