"The basic task of the Medium Term Philippine Development Plan for the period 2004-2010 is to fight poverty and build prosperity for the greatest number of the Filipino people. We must open up economic opportunities, maintain socio-political stability, and promote good stewardship--- all to ensure a better quality of life for all our citizens. We will focus on strategic measures and activities that will spur economic growth and create jobs. This can only be done with a common purpose to put our economic house back in working order."

-President Gloria Macapagal-Arroyo

The Medium Term Philippine Development Plan is a detailed roadmap towards achieving our common goal of reducing poverty through job creation and enterprise. After enumerating the Basic Tasks or 10-Point Agenda laid out by the President, it lays out the current macroeconomic situation then moves on to the fighting targets:

• GDP growth accelerating to 7-8% by the years 2009 and 2010
• An investment to GDP ratio nearing 28% by 2010
• Exports exceeding $50 billion by 2006
• A balanced budget by 2010
• Annual job creation exceeding 1.7 million jobs by 2009
• And poverty incidence reduced to below 20% by 2009

With the successful implementation of this Plan, we are also likely to achieve the country’s commitments to the Millenium Development Goals of the United Nations.

Part 1: Economic Growth and Job Creation
Part 2. Energy
Part 3. Social Justice and Basic Needs
Part 4. Education and Youth Opportunity
Part 5: Anti-Corruption and Good Governance

Part 1 - Economic Growth and Job Creation

Part 1 of the Plan covers nine chapters to accelerate growth and job creation, namely:

1. Trade and Investment
2. Agri-business
3. Environment and Natural Resources
4. Housing/Construction
5. Tourism
6. Infrastructure
7. Fiscal Strength
8. The Financial Sector
9. Labor

These chapters focus on the need to accelerate economic growth and to create even more jobs that what is currently being generated. There is special emphasis on vigorous support for micro, small and medium enterprises and agribusiness as they are the most efficient generators of jobs in terms of jobs to investment ratio.

A key strategy for job generation is the development of 2 million hectares new lands for agri-business which is expected to generate 2 million new jobs and enhance the productivity and incomes of Filipino farmers who comprise a large portion of the country’s poor. The Plan also aims to create 3 million micro-enterprises and provide them with credit, technology and marketing support, as embodied in the SULONG and the One Town One Product programs. LGU support is deemed vital, particularly in the establishment of SME support centers nationwide. Housing and its related enterprises is expected to generate 1 million new jobs through the Strong Republic Housing Program and measures to facilitate private sector financing such as the development of a secondary market for housing mortgages. Tourism development is another key element in the job generation strategy and if properly promoted and with a liberal airline policy can generate at least 3 million new jobs.

In addition to the support for MSMEs (micro small & medium enterprises) and agribusiness, these chapters also include an underlying theme of wealth creation by facilitating investments in mining, oil and gas exploration, the re-launching of massive reclamation projects and the development of the Clark-Subic corridor as the logistics center for the Asia Pacific region.

The basic strategy for enhancing trade and investments entails improving the global competitiveness of Philippine enterprises through the following measures:

1. Making food plentiful at reasonable prices to make labor costs globally competitive
2. Reducing the cost of electricity through power sector reforms
3. Modernizing infrastructure and logistics to make transport and related costs efficient
4.Mobilizing and disseminating knowledge to make our workers and manufacturing processes more productive
5. Reducing red tape in all government agencies to reduce the cost of doing business

To further promote trade and investments, the Plan expects the conclusion of the JPEPA (Japan Philippines Economic Partnership Agreement), the ASEAN PIP (Priority Integrations Projects) and the ASEAN-China agreements. Export procedures will be streamlined through the AEDS (Automated Export Documentation System) and the One Stop Export Documentation Centers.

The BOI will formulate a more focused incentives package along these priority areas:

1. IT and IT-enabled services
2. Automotive
3. Electronics
4. Mining
5. Healthcare
6. Tourism
7. Shipbuilding
8. Fashion Garments
9. Jewelry
10. Agribusiness

The Plan notes that while the agriculture sector has exceeded production targets, the sector remains uncompetitive due to the high cost of inputs (fertilizer, chemicals and seeds), large post-harvest losses and the disruption of extension services due to devolution. And employment and incomes are low due to the low degree of farming intensity and diversification, and the lack of technological and enterprise skills of the farmers.

The first goal is to develop 2 million new agribusiness lands through multi-cropping, the cultivation of idle and marginal lands, the expansion of fishery production in unutilized offshore and inland waters, and expanding the product mix through high value crops and value-adding through innovative packaging and agro-processing. Mindanao is envisioned to be the center for Halal food production with the intention of tapping the emerging export markets for Halal food products.

The second objective is to making food (wage goods) plentiful for our people at reasonable prices. Institutional and regulatory reforms will reduce the price of inputs such as fertilizers, pesticides and seeds. Logistics support to raise distribution efficiency and shorten the supply chain will reduce transport costs and marketing margins.

The lack of infrastructure and large public sector deficit are the main impediments to investor confidence and economic growth and the Plan squarely addresses both problems.

The Plan identifies the priority transport infrastructure projects with particular emphasis on completing the Nautical Highway developing roads and rail systems that will decongest Metro Manila and support the development of new centers of government, facilitate access to tourist areas, and support the affirmative action for peace and development in Mindanao and other highly impoverished areas. The Nautical Highway with RORO vessels and ports has shown remarkable success in stimulating trade and tourism activities in coastal communities by significantly reducing the costs of transport and cargo handling. The Plan also identifies measures to make cheaper and more accessible the digital infrastructure across the country through lower connectivity costs, regulatory reforms, and development of the human resource skills to support the development of the ICT-related industries.

The public sector deficit will be made more manageable through a combination of legislative and administrative measures which should generate about P100 billion in terms of additional annual revenues, savings through austerity and efficiency measures and through more aggressive action against smugglers and tax evaders.

The relative underdevelopment of the Philippine financial sector has constrained savings and the ability to finance more investments through the capital markets. Various causative factors have been identified and the Plan describes the strategies to modernize the capital markets through adequate regulatory powers (at par with global standards) to protect creditor and investor rights and the mobilization of long term savings through measures such as establishing the fixed income exchange and the securitization of housing loan portfolios of government agencies. Reducing long-term risks by managing inflation and fiscal risks is also critical to the development of the capital market.

To ensure the physical sustainability of the economic growth with job creation, measures to restore the environment have been identified, and they include the reforestation of 1 million hectares in 140 priority watersheds, the extensive replanting of mangroves, and the maintenance of fish sanctuaries in coastal and fishing communities. Water management covering drinking water, irrigation and flood control is also given emphasis in the Plan. Air quality improvement will be achieved beginning with the use of compressed natural gas for buses in Metro Manila and through urban greening of highly urbanized areas. The granting of environmental compliance certificates (ECCs) shall be liberalized and streamlined.

The last chapter of Part 1 addresses the problems of the labor sector, particularly the high unemployment rate among the youth (48.7% unemployed) and in the urban areas (2/3 of the unemployed) and cites the jobs-skills mismatch as one of the major causes. To address these problems, the Labor and Employment Action Plan provides for the following:

1. Improving workers’ competency, productivity and work values, and in particular, providing opportunities for the youth to acquire skills and competencies required by the market
2. Enhancing worker-employer relationship and improving labor welfare both here and abroad
3. Facilitating access of Filipino workers to both the local and overseas labor markets
4. Advocating flexible work and employment arrangements in tune with the requirements of the globalizing labor market which now widely practice subcontracting and outsourcing
5. Quick action on labor cases and the promotion of alternative dispute settlement in the workplace.

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Part 2 - Energy

Part 2 of the Plan covers energy independence and power sector reforms. Greater energy independence will be achieved through increased oil and gas exploration, the development of renewable energy, the expanded use of natural gas, the forging of strategic alliances, and through energy efficiency and conservation. Power sector reforms, intended to reduce electricity rates, include resolving the problem of NPC losses, encouraging private sector participation in power generation, and total barangay electrification by 2008.

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Part 3 - Social Justice and Basic Needs

Part 3 of the Plan is on the theme of Social Justice and Basic Needs. This section covers the anti-poverty program of Government, achieving national harmony through automated elections, the peace process and healing the wounds of EDSA 1,2 and 3. It also covers the basic need issues of peace and order and the rule of law.

Meeting basic needs through anti-poverty measures revolves around five goals, namely:

1. Enhanced livelihood activities through credit support and capacity building
2. Asset reform which includes agrarian reform, urban asset reform, and ancestral domain issues.
3. Improved accessibility and affordability of essential services which include clean water and health care and reducing by half the cost of medicines through measures to facilitate the supply of lower cost medicines.
4. Protection of the vulnerable which include children, youth with special needs, women in difficult circumstances, persons with disabilities, and older persons.
5. The empowerment of the poor through the KALAHI-CIDSS program and support for private sector led initiatives such as the Gawad Kalinga and Habitat for Humanity.

Measures to achieve national harmony include the automation of elections and strengthening political parties by reforming campaign finance which includes State subsidies for political parties.

Also under the theme of National Harmony is the Peace Process which incorporate measures such as the continuation of peace talks with the MILF, CPP-NPA-NDF, RRA and RPMM, the rehabilitation and development of conflict areas, enhanced reintegration, rehabilitation and the grant of amnesty, the catch-up program for ARMM and the affirmative action agenda for Muslims and the conduct of healing and reconciliation programs in conflict-affected areas.

Accelerating compensation to victims of human rights, building consensus in pursuing reconciliation and national unity, providing venues for the sharing of experiences for victims and perpetrators of oppression, and the speeding up of disposition of high-profile cases are among the measures to heal the wounds of EDSA.

The basic need of Peace and Order will be achieved through credible law enforcement though a trilateral partnership between the local executive, the police and the community, the professionalization of the PNP through the upgrading of recruitment standards and continuous career training and development, and the intensified operations to neutralize terrorism and other organized crime groups. The rule of law will be enhanced through measures to strengthen its five pillars: namely:

1. Courts and adjudication, through support for the Action for Judicial Reform, the strengthening of the barangay justice system, and the use of alternative dispute resolution (ADR)
2. Law enforcement (as previously discussed)
3. Prosecution, through intensified recruitment of prosecutors, improvements in the free legal service and maximizing the use of Katarungan Pambarangay
4. Corrections and rehabilitation, through the improvement of jail facilities and the strict monitoring of prisons records
5. Community, through strengthened linkages with other pillars and information on the criminal justice process.

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Part 4 - Education and Youth Opportunity

Part 4 of the Plan covers Education and Youth Opportunity, and contains three chapters, namely, Education, Science and Technology and Culture.

The strategies on education are categorized under:

1. Early childhood education , which include expanding the Early Childhood Care and Development (ECCD) to reach all 5-year olds and health and nutrition as part of day care, elementary, and high school
2. Basic education, which includes closing the classroom gap by building 6,000 classrooms a year, installing distance learning in conflict areas, providing computers in every high school, and upgrading math, science and English learning
3. Technical, vocational education and training, which includes ladderized interface of TVET to College, job-skill matching, and the establishment of community colleges.
4. Higher education, which includes the provision of scholarships and financial assistance and the upgrading of higher education curriculum.

The primary objective of the Science and Technology chapter is the acceleration of knowledge creation and transfer to promote technology-based entrepreneurship. Among the strategies are upgrading the pool of S&T manpower, disseminating productivity-enhancing technologies and practices to the rural and urban poor, maximize the use of the PCCARD, Philrice and other provincial extension models, upgrade existing and establish new R&D laboratories, design and testing facilities, and allocate a bigger percentage of agency budgets for R&D and field extension work. Other strategies include LBP and DBP financing for SUC demonstration and other income-generating projects, promoting extensively mariculture activities, and providing free patent search for MSMEs.

The Plan also intends to mainstream Culture and Development and institutionalize culture in education and good governance.

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Part 5 - Anti-Corruption and Good Governance

Part 5 of the Plan is on the theme of Anti-Corruption and Good Governance

The Anti-Corruption situationer enumerates the following problems:

Bureaucrat’s lack of autonomy from big economic interests
Low pay of civil servants
Low social awareness of the deleterious effects of corruption
High tolerance for corrupt practices
The need for greater transparency, integrity and accountability in government transactions

Anti-corruption strategies are categorized into the following:

1. Punitive, which include lifestyle checks and strengthening the investigative capacity of the Ombudsman and making it like HK-ICAC
2. Preventive, which include procurement reforms, simplification of procedures in frontline services, opening up government projects to public scrutiny, and the enactment of the whistle-blower law.
3. Promoting Zero tolerance for corruption, which include values formation and mobilizing media and civic organization to deliver the message of societal reforms.
4. Bureaucratic reform strategies include government reengineering under EO 366, rationalizing the pay of government workers, promoting meritocracy through the recruitment of the best and the brightest, and capacity building for the government work force.

Still under the National Harmony theme is the chapter on Defense Against Threats to National Security which contain the following strategies:

1. The Philippine Defense Reform Program
2. Measures to upgrading the capability of the AFP over 6 years
3. Ensuring the observance of the ceasefire
4. Enhancing the ability to fight terrorism

The next chapter under Good Governance is Responsive Foreign Policy. The main goal of Philippine foreign policy is to protect the interest of the country by responding to the eight realities in the global and regional environment:

1. The United States, China and Japan are the determining influence of East Asia
2. Philippine foreign policy decisions have to be made in the context of ASEAN
3. The international Islamic community will become more important to the Philippines
4. The role of multilateral and inter-regional organizations in promoting common interests
5. The defense of the nation’s sovereignty and the protection of its rights over maritime territory
6. The country’s economic growth will continue to require direct foreign investment and trade promotion
7. The Philippines will benefit most quickly from international tourism
8. Overseas Filipinos will continue to play a critical role in the country’s economic and social stability

The final chapter of the Plan covers Constitutional Reform. Constitutional reforms intend to address the following problems:

1. Obstruction and delay in legislation and policy-making
2. The highly centralized system of government
3. Personalistic politics
4. Lack of accountable and functional political parties
5. Lack of domestic capital resources

The goal of constitutional reforms is to create more effective political institutions and more relevant and accountable political parties and to enact more liberal economic policies and encourage the entry of more investments and minimize judicial interference in economic decisions which has scared off investors.

The constitutional reforms needed are as follows:

1. Shift to a federal form of government
2. shift to unicameral parliamentary system
3. Reforms in the electoral and political party system]
4. Defining political dynasties and make its prohibition self-executory
5. Changes in the restrictive provisions on national economy and patrimony

The Plan’s specific programs shall also be fleshed out in more detail with the publication of rolling medium-term public investment programs, beginning with the 2005-2007 MTPIP. The Plan shall also be complemented by Regional Development Plans/Investment Programs which will come out before the end of the year.

The successful implementation of the Plan rests on the support of all sectors of society - the Legislative, the Judiciary, the local government units, the business community, responsive civil organizations, the media, and all sectors of society. In the President’s words, everyone must share the responsibility of moving this country forward.

SOURCE: NEDA

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