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Gov.ph Newsletter
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2003 STATE OF THE NATION ADDRESS
TECHNICAL REPORT

ECONOMY AND INFRASTRUCTURE

Improved Macroeconomic Growth Performance
  • Posted improved Real GDP and GNP growth for the first quarter of 2003 at 4.5% and 5.6%, respectively. The GNP exceeded the 4.3%-4.8% growth target while GDP hit the high end of the 4.0%-4.5% goal for the period.

  • Maintained a subdued inflation rate of 2.8% for the first five months of 2003, from 3.6% in the same period last year. This is lower than the 4.5%-5.5% inflation target for the year.

  • Maintained interest rates at around 6.75% for borrowing and 9% for lending facilities. Overnight rates were at their lowest since May 1992.

  • Maintained a generally stable peso-dollar exchange rate for the first four months of 2003 at P53.76 versus the greenback, despite external and internal pressures on the local currency. The peso was partly boosted by the measures implemented by the Bangko Sentral ng Pilipinas (BSP) against speculative demand for dollars.

Strengthened Fiscal and Financial Institutions
  • Kept the deficit level contained at P79.58 Billion for the first six months of 2003 which is 22% lower than the P102.22 Billion ceiling for the period and 33.5% lower than the P119.72 Billion deficit in the January-June 2002 period. For the whole year of 2003, the government hopes to keep the deficit contained at P202 Billion, or 4.7% of GDP.

  • Total revenues amounted to P306.34 Billion, with both the Bureau of Internal Revenue (BIR) and the Bureau of Customs (BOC) surpassing the target by P20.81 Billion or 7% in the first six months of the year alone. Along with revenue enhancing measures, prudent government expenditures also helped keep the deficit in check, with total expenditure for the first six months at P385.92 Billion, 0.1% lower than the P386.24 Billion spending last year and 0.5% lower than the programmed expenditures of P387.75 Billion for the period.

  • Generated P129.42 Billion in total remittances from privatization as of 30 June 2003. As of 30 April 2003, a total of 52 government-owned and -controlled corporations (GOCCs) have been fully sold and an additional 29 have been partially sold.

  • Managed several multilateral and bilateral conferences and participated in loan negotiations led by the Department of Finance, resulting in ODA loan and grant agreements totaling US$1,165.83 Million projects in 2002.

  • Generated a total of P742.33 Million in total CARP remittances through relentless efforts by the Presidential Commission on Good Government, from 2001 to July 2003.

  • Signed into law the Special Purpose Vehicle (SPV) Act to help liquidate non-performing loans as well as foreclosed assets and replenish beleaguered loan portfolios of banks with fresh capital that may subsequently be released and utilized to fund developmental and social projects such as housing.

  • Certified Securitization Bills (SB 2092 and HB 2759, 2733) for immediate enactment to create the necessary infrastructure to establish a market environment for a wide range of asset-backed securities.

Sustained Investment Inflows
  • Promoted reform measures to attract more foreign investments. Total approved foreign direct investments (FDI) registered with the Board of Investments (BOI), Philippine Economic Zone Authority (PEZA), Clark Development Corporation (CDC) and Subic Bay Metropolitan Authority (SBMA) for the first quarter of 2003 amounted to P6.31 Billion, 26% higher than the P5 Billion FDI in the same period last year. This is a significant development from the 26% decline of total approved FDI in 2002 to P46 Billion from P62.4 Billion in 2001.

Achieved Growth in Foreign Trade
  • Registered US$23.55 Billion in total external trade in goods for the first four months of 2003, an increase of 8.1% from US$21.78 Billion in the same period in 2002. Imports for the period stood at US$12.34 Billion, up by 13% from US$10.93 Billion last year, while exports grew by 3.2% to US$11.21 Billion from US$10.86 Billion a year ago.

Advanced Domestic Trade and Industry
  • Formulated the Micro, Small and Medium Enterprises (MSME) Plan to create a seamless and one-stop system with uniform application forms, criteria, and loan amount modules under a single-branded program, guided by key strategic concepts: (a) comprehensive and integrated approach to SMEs; (b) seamless access to government services; (c) virtual organization integrated by a strong brand; (d) supply side push (i. e. financing) thru National Government directive projects; and, (e) plan localization.

  • Promoted SME development:
    • The "SULONG" program was launched to boost lending to SMEs which are estimated to comprise about 98% of local industries. The program features lower and standardized interest rates (9%) and transaction fees, relaxed financial hurdles, uniform loan documentation, and relaxed collateral requirements. For government financial institution (GFI) wholesale lending, the program has adopted harmonized accreditation criteria for banks.
    • Allocated P10 Billion from GFls to finance SME programs over six months, with P10-P20 Billion more available in subsequent months. From January to June 2003, a total of P11.81 Billion was released to MSMEs by LBP, DBP, SBGFC, Philexim Bank, Quedancor and NLSF. Of the total amount released, P1.56 Billion were wholesale loans to thrift banks and rural banks and P9.93 Billion were retail loans released directly to SMEs. Some 147,439 SMEs have benefited from this program.
    • Amended Monetary Board regulations to lower credit costs and increase availability of funds for SMEs: a) deferred by one year the implementation of the common rate of 91-day T -bill interest rate from 91-day T-bill minus one percent; b) lowered and standardized at six percent the reserved requirement on NOW (negotiable order of withdrawal) accounts; c) reduced risk weight applicable to qualified SME loan portfolio from 100% to 75%
    • Issued E.O. 176 institutionalizing the "Isang Bayan, Isang Produkto, Isang Milyong Piso" Program on February 11, 2003 to stimulate local economic activity. The program has so far released P756 Million to 654 municipalities, cities, districts and provinces nationwide.
    • Signed into law the Barangay Microbusiness Enterprises Law on 13 November 2002 to bring the underground business into the ambit of the formal system
    • Activated a total of 25 SME Centers nationwide to serve as one-stop shop for information and business counseling

  • Launched in May 2002 the Small Enterprises Technology Upgrading Program (or SET-UP), with an allocation of P100 Million, to enhance the productivity and competitiveness of SMEs through technology application/ upgrading. The program, which provides opportunities to strengthen backward linkage with farmers and forest product producers and gatherers in the supply of raw materials to the SMEs, contributes to livelihood and job creation especially in rural areas, and ultimately to economic growth and poverty reduction in the country.

    To date, product testing and laboratory services were provided to 10,212 SMEs, generating income for Regional Testing Laboratories amounting to P7.3 Million; generated employment to 2,768 personnel; assisted 370 SMEs in packaging development and label design resulting to P42.1 Million additional income for participating firms; and developed 109 new products, 12 of which are now being exported.

  • Merged the Guaranty Fund for Small and Medium Enterprises (GFSME) and Small Business and Guaranty and Finance Corporation (SBGFC) to provide a more stable equity base for SME financing. In 2002, SBGFC, the surviving corporation, approved P1.2 Billion in credit support to SMEs, representing more than double the combined approvals of the two corporations in 2001. A total of P1.05 Billion was also granted under the wholesale and retail lending programs of SBGFC. On the other hand, Land Bank released a total of P14.5 Billion to MSMEs, which is 9% higher than the P13.3 Billion recorded in December 2001.

  • Approved guarantees, from August 2001 to June 2003, for 78 loan accounts with SBGFC amounting to P271.648 Million, and 60 loan accounts with the Philippine Export-Import Credit Agency (PhilEXIM) amounting to P263.596 Million since the restoration of the policy of providing guarantees to SMEs. On the other hand, Quedan and Rural Credit Guarantee Corporation (QuedanCorp) released P886.841 Million for 273 loan accounts from the year 2001 to May 2003.

  • Provided funding assistance to micro-enterprises benefiting 15,954 families and home improvement/housing construction benefiting 312 families under the Self Employment Assistance-Kaunlaran program being implemented nationwide.

  • Issued E.O. 156 in December 2002 to provide a comprehensive industrial policy and directions for the motor vehicle development program

  • Developed a web-enabled Business Name Registration System (WEBNRS) to facilitate on-line business name approvals

    On domestic investments:

  • Approved 519 investment projects from 2002 to first quarter of 2003 with total investments of P66.87 B. Top project proposals were:
    • Coral Bay Nickel Corp - P8.72 Billion for the manufacture of nickel/cobalt mixed sulfide
    • Victoria's Bioenergy Inc. - P4.5 Million to produce a renewable energy generation facility
    • Fujitsu Computer Products of the Philippines - P2.882 Billion to fund manufacture of media level servo track writing (MLSTW) at the Camelray Industrial Park I Special Economic Zone and is estimated to generate annual export of $820 Million and 2,000 new jobs
    • Globe Telecom Inc. - P2.25 Billion for infrastructure and telecom facilities
    • Hi-Tech Bioenergy Inc - P1.716 Billion for a waste handling facility
    • Laguna AAA Water Corporation - P1.69 Billion to fund the water supply, treatment and distribution project in Sta. Rosa and Cabuyao, Laguna
    • Genpack Corporation - P1.05 M for a tin can manufacturing plant
    • Kyushu Matsushita Electric Corp. of the Philippines - P0.85 M to manufacture DVD multi-disk drives
    • Convergy's Philippines Services Corp. - P0.55 M to provide IT-enabled services
    • E-Performax Contact Center Corp. - P0.51 M for a call center

  • Approved 15 new economic zones and proclaimed 11 zones

Rebuilt The Philippines' Image as a Premiere Tourist Destination
  • Promoted Visit Philippines 2003, Visit Island Philippines and Tourism Volunteer 12 to utilize the more than seven million Filipinos abroad to promote tourism by asking them to send home one tourist each per year; and presented the "More than the Usual WOW Philippines" video campaign to the international scene which won the 2003 Internationale Tourismus Börse "Best Video Tourism Advertising Campaign" in Germany.

    Due mainly to these efforts, visitor arrivals to the Philippines in 2002 rose to 1.93 million, a 7.7% increase from 1.79 million in 2001, translating into tourism receipts of about US$1.64 Billion, and generated a total of 3.8 million employment, with the United States as the Philippines' biggest market (21% of total visitors). From January to May 2003, tourist arrivals totaled 730,769. Some two million tourists are targeted for the year 2003.

  • Recent adverse tourism developments like the SARS outbreak and threat of terrorism in pocket areas of the country slowed down international tourism in the region. Notwithstanding this, Philippine tourism to date has remained resilient with the growth of domestic tourism, which registered approximately P3.1 Billion of total domestic tourism receipts from April to May 2003.

  • Launched WOW Makati Campaign in line with the "Make Makati the Shopping Capital of Asia" Program and promoted the 4 Days/3 Nights "More Than the Usual" shopping experience campaign. These activities coincided with the WOW Philippines Grand Fiesta Sale from January 15-31 where 60 of the country's biggest shopping malls simultaneously offered as much as 80% discounts. About 1,069 tourists availed of said tour package.

  • Developed Laoag, Vigan, Baguio/Banaue, and Bohol as premiere tourist destinations by completing roads, port and airport facilities in these areas
    • Pursued the establishment of Tourism Economic Zones (TEZ) through the development of Panglao Island in Bohol as pilot site. TEZs are priority tourism areas accorded with special business benefits and incentives as Tourism Economic Zones. To date, DOT and PEZA have agreed to promote TEZs. Formulation of guidelines on incentives and benefits to business operators and locators and the site development plan are on going, while the province of Bohol is currently completing documentation requirements for land consolidation of some areas in Panglao.

  • Pursued the development of a tourism estate along Roxas Boulevard to lodge the Bagong Nayong Pilipino. The project involves the conversion of 67 hectares of land into a theme park, hotel/leisure complex, retail shops and commercial area. Land survey on the relocation sight is 95% complete while sourcing of funds and the development plan preparation are currently being worked-out by DOT in coordination with PAGCOR, PEA and the Nayong Pilipino Foundation.

  • Secured the endorsement of the World Tourism Organization (WTO) to declare 2003 as Visit Philippines Year (VP 2003) and coordinated various tourist related activities in support of VPY 2003, such as the preparation of a synchronized national calendar of events, restoration of Intramuros as the focal point of VPY 2003 festivities, showcasing Makati as a primary shopping, sightseeing and nightlife destination, and the creation of regional tour packages to boost the international and domestic tourism in each province

Improved Transportation

Land Transport
  • Maintained the present levels of transportation fares so as not to burden the economy and the Filipino masses despite increases in prices of oil products and spare parts and notwithstanding petitions for fare hike and agitations by militant transport groups

  • Implemented the Information Technology Project (IT Project) under the Build-Own-Operate (BOO) scheme, which will interconnect 250 Land Transportation Offices (LTOs) nationwide, automate and integrate the agency's critical business processes, and enable online transaction processing

  • Fully implemented the Drug Testing Program for driver's license applicants to protect road users from accidents and other road hazards. DOTC-LTO is being strengthened for more effective implementation of the Driver's License System.

  • Developed the inter-modal transport terminal through private sector participation

  • Developed the Motor Vehicle Inspection System (MVIS) and Vehicle Modernization Program to improve vehicle roadworthiness

  • Increased travel speed in Metro Manila from 16.9 kph in July 2002 to 17.3 kph in January 2003 through modified traffic schemes in EDSA, C-5, Quezon Avenue, Commonwealth Ave., SSH-Pres. Quirino, and Marcos Highway; established six MMDA Road Emergency stations to accelerate response to traffic accidents and unexpected traffic gridlocks

    Other traffic management activities include road widening and sidewalk clearing, Parking Discipline Program, registration and monitoring of tow trucks, "no-contact apprehension", upgrading and professionalization of traffic enforcers. Intermodal terminals (northbound at EDSA and southbound at Magallanes interchange) and provincial and city bus terminals along Roxas Boulevard will be constructed soon. Thirty-three footbridges and 35 bridges shall be constructed in Metro Manila to further improve flow of traffic.

  • Rail Transport and Mass Transit Lines
    • LRT Line 1 Capacity Expansion Project II
      • Package A, involving the purchase of 12 additional air-conditioned 4-car trains additional civil works. Biddings are also ongoing with target completion in December 2004;
      • Package B, involving the air-conditioning of old fleets; target completion is in April 2004. Rectifier Sub-station works and installation of air-conditioning on old rolling stocks are ongoing.

    • LRT Line 1 South Extension Project (Baclaran to Bacoor)
      • SNC Lavalin International, Inc. (the private contractor) to re-submit the Joint Venture Agreement (JVA) to DOTC/LRTA as unsolicited proposal to be subjected to price test or "Swiss Challenge" in September 2004; target completion in 2006;
      • The Light Rail Transit Authority Board approved the Settlement Agreement with the private contractor in January 2003.

    • LRT Line 2 or MEGATREN, Metro Manila Strategic Mass Rail Development (Santolan, Pasig City to Recto)
      • Phase 1 (Santolan-Cubao) started operation on 5 April 2003
      • Phase 2 (Cubao-Recto) ongoing; for full operation by December 2004

    • EDSA MRT Line 3 Phase II (North Ave. to Monumento)
      • Project has been approved, subject to reduction of return on equity and project cost by Metro Rail Transit Corporation (MRTC)
      • Supplemental agreement between DOTC and Metro Rail Transit Corporation shall be subjected to price test or "Swiss challenge" in accordance with section 4-A of the BOT law; Terms of Reference (TOR) for the "Swiss Challenge" finalized

    • MRT Line 4 Phase I (Old Bilibid-Quezon Avenue-Batasan)
      • Unsolicited BOT proposal was approved on first pass last January 1998; target project completion in 2007
      • Revised proposal being reviewed by DOTC prior to re-endorsement to the NEDA-ICC for evaluation/approval

    • MRT Line 7
      • Tala, Caloocan to SM North Avenue, including an inter-modal station in Tala, Caloocan. The line will traverse North Avenue, Commonwealth Avenue, and Quirino Highway.
      • Under evaluation by the Project Bids and Awards Committee-Technical Working Group (DOTC PBAC-TWG)

    • MRT Line 8 East Rail Line (Sta. Mesa-Ortigas Avenue-Angono, Rizal)
      • The 20-km. line will follow the general alignment of Shaw Blvd. and Ortigas Avenue
      • Under evaluation by Project Bids and Awards Committee-Technical Working Group (DOTC PBAC-TWG)

    • Northrail Project (initially Caloocan to Malolos, Bulacan)
      • Target date of construction is September 2003 in areas already cleared of informal settlers; partial operations (Caloocan-Valenzuela) to begin by April 2004, while commercial operations for the whole stretch (Caloocan-Malolos) shall begin by June 2006
      • A total of 358 families in Caloocan relocated in April 2003; 16,097 families in Malabon, Valenzuela and Bulacan to be relocated starting September 2003
      • Formulation of terms of reference (TOR) for site preparatory works, geodetic survey of right-of-way, land acquisition and selection of security services ongoing
      • Finalization of a draft MOA on funding and implementation of North Rail Relocation program with HUDCC and other national shelter agencies in process
      • Amendments to the Environmental Compliance Certificate (ECC) issued to the Valenzuela to Malolos section and the ECC for the Caloocan to Valenzuela section are in process
      • Feasibility study under evaluation by NEDA

    • South Manila Commuter Line Rehabilitation Project (Phase 1 Caloocan to Alabang)
      • Approved by NEDA and is awaiting approval of the loan application with the Korean government (EDCF-KOEXIM); involves the acquisition of brand new diesel multiple units; rehabilitation of stations along existing Philippine National Railways (PNR) right-of-way; strengthening of the tracks and bridges, as well as other civil works components, including the construction of fencing along either side of the tracks

    • For the period 2001 to April 2003, a total of 10,772,948 Philippine National Railways passengers were transported, composed of 675,382 long-distance passengers to and from Bicol and 10,097,566 commuters in and around Metro Manila.

Water Transport
  • Initiated the following measures to reduce cargo costs from Mindanao to Luzon:
    • Opened on 31 March 2003 the 919-kilometer Strong Republic Nautical Highway covering 17 cities, towns and islands that will reduce cost and travel time from Luzon to Mindanao using roll-on/roll-off (RoRo) vessels. The Cagayan de Oro-Batangas via Dumaguete Long Haul Route RoRo Food Highway which links Manila to Dapitan and Dipolog was inaugurated last June.

    • Issued EO 170, which provides the policy framework for the promotion of private sector participation/investment in the Road RoRo Terminal System (RRTS) in the country

    • Completed construction of RoRo ramps in 52.63% of ports under the Philippine Ports Authority and pursued construction in different areas of the country; provided incentive package and cheaper ship financing to entice shipping companies to expand and modernize the RoRo vessel fleet

    • Suspended previously approved 35% increase in wharfage and usage fees and opened Pier 15, South Harbor on 16 January 2003 to serve domestic-run ships

Air Transport
  • Held air services consultations with Singapore, South Korea, Macau, Qatar, Bahrain, United Arab Emirates and Japan, which resulted in new routes for Philippine carriers that increased capacity entitlements and additional frequencies to the Philippines on routes to these countries. Air consultation talks with U.S. and Vietnam are also tentatively scheduled in July this year.

  • Initiated development of new airports in Iloilo and Laguindingan, Misamis Oriental and completed the Laoag International Airport (terminal building and arrival/departure area) and Vigan Airport (terminal building, including water system) projects. Existing airports in Mactan, Antique, Jolo and other numerous airports were also developed through the following: rehabilitation, widening and concreting of runways; building of new and rehabilitation of existing terminal buildings; construction of security fences; and removal of obstruction on the runway.

  • Improved safety and efficiency of the air transportation system and retained the Category 1 rating of the Philippines based on the outcome of the re-assessment of the U.S. Federal Aviation Administration on the Air Transportation Office's oversight capability as required by ICAO. Proficiency training for air traffic controllers was also conducted.

Sustained Infrastructure Support
  • Constructed/improved a total of 5,510.33 km of national roads and 85,312 lineal meters of national bridges, which include sections of the Pan-Philippine Highway connecting Region II and the eastern part of Central Luzon to Metro Manila via the North Luzon Expressway; Nasugbu-Batangas City Road; Palawan North Road from Langogsan to Roxas; EDSA/Quezon Avenue Interchange in Quezon City; Rural Road Network Development Projects in Cagayan, Eastern Samar and Nueva Ecija; and Maramag-Kibawe-Kabacan Road from Pinamaloy to Damulog, Bukidnon

  • Completed 2,108 flood control projects, such as the West of Manggahan Flood Control Project; Ormoc Flood Mitigation Project; Flood Control Component (Phase I), Pampanga Delta Development Project in Pampanga and Bulacan; and Pinatubo Hazard Urgent Mitigation Project (Phase II) to prevent tragic loss of life and livelihood

  • Facilitated countryside growth with the rehabilitation/construction of 2,689 km of farm-to-market roads and implementation of 5,211 mostly community-based infrastructure projects, such as feeder roads

  • Initiated implementation of the "Program of Roads Development to Improve Law and Order," involving the construction and improvement of vital roads in critical areas, such as the Basilan Circumferential Road, Sulu Transcentral Road, Zamboanga City-Pagadian Road and Abra Kalinga Road

  • Priority road projects under the President's 8-Point Agenda

    • North Luzon Expressway Expansion Project
      • Being implemented under an ODA and BOT scheme. The ODA portion is proposed to be under the 27th regular Yen Loan Package, which will start in 2006.
      • Involves the widening and improvement of the expressway from Balintawak to Dau started in February 2003; construction of additional outside lane from Balintawak-Valenzuela-Meycauayan shall start this July; Meycauayan Interchange right-of-way issue resolved
      • Target completion date for works at the northbound lane of the San Simon-San Fernando Section is September 2003. Overall project completion to date is slightly ahead of the construction schedule.

    • South Luzon Tollway Extension Project
      • Involves the construction of the Calamba, Laguna to Sto. Tomas, Batangas Road and the Alabang Viaduct retrofitting and rehabilitation
      • SLEX: Calamba to Sto. Tomas and Alabang Viaduct - under the proposed project implementation scheme, the National Development Company (NDC) shall have the right to build and own the project using NDC bonds, and eventually lease the project back to the Philippines National Construction Corporation (PNCC) under a lease-to-own agreement. MOU between PNCC and NDC was signed on 10 June 2003. Target commencement of construction is 23 August 2003, for possible completion by end-June 2004.
      • STAR Stage 2: Lipa to Batangas City - STAR Infrastructure Development Corporation (SIDC) is exploring alternative financing schemes and targets to attain financial closure in two (2) months.
      • Construction period is currently being compressed to make the expressway passable to traffic by end-June 2004, with final completion by August 2004 (instead of end-December 2004)

    • Cavite Coastal Road Extension Project
      • Transfer of operations and maintenance control of the Manila-Cavite Toll Expressway Project from the Public Estates Authority to the private contractor was approved in May 2003.

    • Subic-Clark-Tarlac Expressway
      • Package 1 (Subic to Clark) is a 50.5-km expressway with five interchanges. As of June 2003, work on right-of-way acquisition is 41% accomplished, while the detailed design is 57.14% completed.
      • Package 2 (Clark to Tarlac) is a 44.4-km expressway with nine interchanges. As of June 2003, work on right-of-way acquisition is 84% accomplished, while the detailed design is 96% completed.

Provided Adequate Energy Supply
  • Provided electricity to 3,608 barangays from January 2001 to June 2003 bringing the total number of energized barangays to 37,255 out of 41,999 barangays, and attaining an 88.70% barangay-level electrification. Among the barangays energized are those in priority areas such as Lake Lanao, Masbate, Siargao, Sultan Kudarat and Camp Abubhakar.

  • Implemented mandatory rate reduction of 30 centavos per kwh effective July 2001 billing period

  • Reduced purchased power cost adjustment of the National Power Corporation (NPC) to 40 centavos per kwh which was passed on by electric distribution utilities to consumers effective the June 2002 billing period

  • Provided large industrial commercial end-users pricing incentive in incremental electricity consumption through the Special Package to Enhance Electricity Demand (SPEED). These large users were granted a 50-centavo per kwh discount on incremental consumption until 2004. As of April 2003, nine distribution utilities, one electric cooperative and MERALCO have signed a MOA with NPC to avail of the package.

  • Constituted all bodies required under the Electric Industry Reform Act: the Steering Committee to formulate the implementing rules and regulations (IRR); National Transmission Corporation (TRANSCO) which will acquire all transmission assets of NPC; Power Sector Assets and Liabilities Management Corporation (PSALM) which will assume all assets and liabilities of NPC; Energy Regulation Commission which replaced the ERB. The IRR of R.A. 9136 or the Electric Power Industry Reform Act (EPIRA) were promulgated in March, further reinforcing reforms in the power sector.

  • Promulgated the rules for the Wholesale Electricity Spot Market (WESM) where trading of electricity will take place. The WESM rules set the responsibilities of the market operator, system operator, WESM participants and the Philippine Electricity Market Board. Demonstration WESM to start in August 2003

  • Reviewed and initiated consultations with 18 firms/consortia on 35 Independent Power Producers (IPP) contracts. Substantial agreements were reached with 16 firms representing 25 contracts with total expected savings amounting to $832M in net present value terms, 10% of NPC stranded cost.
    • Resolved issues relative to 25 out of the 35 IPPs' contracts, thereby generating savings for the government of about US$832 Million in net present value (NPV) without undermining the viability of the firms to earn fair and reasonable returns

  • Implemented a restructuring program for electric cooperatives (ECs) pursuant to EO 119 ("Restructuring Program for Electric Cooperatives") issued in August 2002. Of the 119 ECs, 117 have approved Performance Improvement Programs (PIPs)/Rehabilitation Efficiency Plans (REPs). The National Electrification Administration (NEA) assumed management of ten inefficient and problematic electric cooperatives to revive and shepherd them back to viable operations.

  • Implemented Task Force Kapatid, whereby ECs voluntarily assist each other in energizing critical areas

  • Updated the Oil Contingency Plan to include emergency procedures for ascertaining the security and stability of oil supply, including tapping non-traditional oil suppliers such as Russia and pursuing the development of indigenous oil sources, particularly natural gas, by enhancing incentive packages for investments on this product

  • Launched a natural gas vehicle (NGV) program for public transport in October 2002, outlining the government policies and strategies in developing the commercial use of natural gas to make public transportation less vulnerable to volatility of world oil prices. Among the initiatives to bring down fuel cost for public transport through the use of natural gas are: enhancement of incentive packages for investment in natural gas and grant of franchises for three natural gas bus fleets (one for Batangas-Bicol route and two for Batangas-Manila route).

  • Cushioned the impact of price hikes by ensuring staggered implementation of price adjustments, thereby also helping stabilize transport fares
    • Following the end of the US-Iraq war in March this year, local prices of oil have dropped seven times. Prices of diesel and gasoline have been reduced in the last three months by an average of P1.50 per liter and kerosene by P1.10 per liter.

  • Implemented consumer-related and industry reform programs such as unbundling of rates for a more transparent system of billing duly itemized electricity services
    • The Energy Regulatory Commission (ERC) has approved rate unbundling applications of 10 electric cooperatives and two distribution utilities.

Promoted the Philippines as a Center for Information and Communications Technology Development
  • Created a Commission on ICT to focus on the development of the ICT industry. The commission brings together all the agencies of government which will be responsible for ensuring our competitiveness in the global markets and the implementation of e-government.

  • Established an e-Government fund of four (4) Billion pesos for the seamless processing of business registration, OFW processing, and the development of a single government portal.

  • Implemented the Community e-Center Program to consolidate all government initiatives in providing their services through the Internet-enabled community e-centers and allow remote community access to distance education and online marketplaces for the selling of goods and services for farmers and SMEs.

  • Identified eight IT hub areas, seven of which have already established telecommunications industry high-speed networks and connectivity: Pasig-Ortigas Business District; Fort Bonifacio Global City and RCBC (Makati City); UP-Ateneo-Eastwood (Quezon City); Alabang-Paranaque-Filinvest (Northgate Cyberzone); Subic and Clark; Cebu Business District-Asia Town IT Park; Davao City

  • Focused efforts on attracting investments in call centers and back office operations. The Philippines now has 45 call centers, mostly in Metro Manila, and two in the Clark Ecozones, one in Laguna and one in Cebu.

  • Set the policies for a liberalized telecommunications environment resulting in the operation of 11 international gateway facility (IGF) operators who can provide international long distance calls, six cellular mobile telephone system operators, 11 public trunk radio operators, 14 inter-exchange carrier licensees that service other carriers' traffic using their own networks, and 74 local exchange operators or those with fixed line services

  • Set the policies for systematic and accelerated ICT advancement particularly on:
    • High-speed networks and connectivity to IT hub areas, to remove barriers to the market entry to information technology hub areas and allow full competition in the provision of high-speed networks and connectivity. Cost of local internet connections has been reduced to P15 per hour from P30 per hour in 2000.
    • Retail pricing, to address the artificial oversupply of local telephone lines (3.6 million) by allowing local exchange carriers to design price packages which may include local measured service pricing to suit particular market segment
    • Public calling stations, telecenters and community e-centers that address the uneven distribution of fixed telephone lines in the regions and bridge the digital divide between the "information-have" and "information-have-not" communities and ensure universal access of small, medium and micro enterprises seeking to invest in the provision of these facilities particularly in unserved rural areas
    • Allocated radio frequencies for use by broadband wireless access network operators

  • Provided internet access to some 1,324 barangays nationwide, with payphone service and internet capability, a good number of which are in far-flung areas

  • Initiated the Project BIG STAR (Bringing Information Technology to Grassroots through Science and Technology Advancement Resources) jointly with the Mirant Philippines Foundation and the Philippine Business for Social Progress (PBSP). Under the project, government develops magnet public schools which can serve as a resource center for IT training such as networking, programming and other IT-related competencies.

  • Jumpstarted e-governance in the country through Technology Support for E-Governance (SUPRE-GOV). This has provided technology support to 986 LGUs for the computerization of vital areas in local governance and capacity building in the implementation and maintenance of application systems that support revenue-generating functions.

  • Forged collaborative R & D among the private sector, academe and government research institutes through the Comprehensive Program to Enhance Technology Enterprises (COMPETE) by establishing the Virtual Center for Technology Innovations (VCTI): High Performance Research and Education Network (PREGINET) responsible for bridging the digital divide between cities and the countryside.







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