TUESDAY / 11 APRIL 2017

IN FOCUS: The Unintended Consequences of Policies
and Programs

The Philippine policy system is marred by legislations and policies that are well-meaning but fail to serve their purpose. More often than not, they lead to inadvertent outcomes that adversely affect the poor and the marginalized, hamper productivity and innovation, engender corruption, and cause wastage of government resources. There are also regulations and statutes that proved to be successful and effective but are “heavily criticized”.

This is the central theme of the book “Unintended Consequences: The Folly of Uncritical Thinking” jointly edited by Vicente Paqueo, Aniceto Orbeta Jr., and Gilberto Llanto of the Philippine Institute for Development Studies (PIDS).

Composed of 10 chapters, the book tackles the most prevalent, relevant, and urgent socioeconomic issues that confront the Philippine society today. The topics range from food, housing rent, small-scale enterprises, and environmental concerns like overfishing and logging, to contentious subject matters such as sex education, minimum wage, cash transfer, and temporary employment.

In one chapter of the book, for example, Aniceto Orbeta and Vicente Paqueo posit that the call for the abolition of the government’s Pantawid Pamilyang Pilipino Program (4Ps) would negatively affect its recipients. Based on impact evaluation studies conducted on the 4Ps, the program has significantly improved children’s school enrollment, health services utilization, and the poor households’ spending on education and health. Also, the findings debunk the opinions of critics that the program spawns laziness, mendicancy, dependency, gambling, and other vices.

On the proposal to curtail or prohibit temporary employment contracts (TECs), research reveals that it could “lead to slower growth of employment and gross domestic product”. The authors assert that “TECs are needed to deal efficiently with seasonal, fixed-term, project-based demands as well as unexpected business fluctuations and economic shocks.” Prohibiting TECs, they say, would mean less flexibility in the deployment of labor when and where they are needed and are most valued.

Meanwhile, Danilo Israel and Vicente Paqueo deduce that the implementation of Executive Order (EO) 23 or the imposition of total log ban brought more harm than good. Investigations done in the Caraga wood industry have proven that illegal logging increased after the EO with the prevalence of rent-seeking and corruption.

These are just some of the instances cited showing how noble objectives can oftentimes lead to unfavorable outcomes.

The reasons for these “unintended consequences”, according to Paqueo and his co-editors, are ignorance, error or lapse in judgement, belief systems, political exigencies, problem complexity, failure to think critically, and the lack of empirical evidence to support the formulation of policies and programs.

They also opined that government interventions are also “largely driven by populist pressures, half-baked ideas, and narrow private-vested interests” that usually reap unfavorable results.

To avoid the recurrence of the same slip-ups, they recommend that government should invest more on data collection and analysis, and strengthen the capacity of research institutions to undertake credible impact evaluation of policies and programs. This would enable political leaders, voters, and experts to make well-grounded and more transparent economic and social decisions.

Likewise, they encourage key players to veer away from damaging policy decisions or policy oppositions “based on uninformed opinions and blind submission to popular and traditional systems of ideas and ideals”.

All stakeholders are also urged to demand policymaking bodies and government decisionmakers to formulate legislative actions and issuances based on “clear and sound theory of change and credible empirical evidence”.

You may access the e-copy of the book, the discussion papers below where the chapters are based, and other related studies from the PIDS website and the SocioEconomic Research Portal for the Philippines. Simply type the relevant keywords in the Search box.

• Cargo Truck Ban: Bad Timing, Faulty Analysis, Policy Failure
• The Impact of Legal Minimum Wages on Employment, Income, and Poverty Incidence in the Philippines
• Beware of the "End Contractualization!" Battle Cry
• Food (In)security and the Price of Rice Self-Sufficiency
• Rent Control in the Philippines: An Update
• Planting Seeds of Self-Defeat: Effects of Unrealistic Regulations on the Caraga Wood Industry and Forest Conservation
• Reducing the Unintended Consequence of Overfishing Due to Open Access: Learning from the Zamboanga Experience
• Pantawid Pamilya Pilipino Program: Boon or Bane?
• The Irony of RH Law Critics' Opposition to Comprehensive Sex Education

July 13, 2017, 9-5PM
Public Symposium on Building ASEAN Socio-Cultural Community and Nation Building
Venue: Marco Polo Hotel, Davao City

May 10, 2017, 2-4PM
Book Launch: "Unintended Consequences: The Folly of Uncritical Thinking"
Venue: PIDS Conference Room, 18th Floor Three Cyberpod Centris - North Tower, EDSA cor. Quezon Ave., Quezon City

March 30, 2017, 9AM-5PM
Roundtable on "The Future of the ASEAN Community:
Unlocking ASEAN's Next Chapter"
Venue: Shangri-La Makati, Makati Business District, Makati City

The Philippine Journal of Development is a professional journal published by the Philippine Institute for Development Studies (PIDS). It accepts papers that examine key issues in development and have strong relevance to policy development. As a multidisciplinary social science journal, it accepts papers in the fields of economics, political science, public administration, sociology, and other related disciplines. It considers papers that have strong policy implications on national or international concerns, particularly development issues in the Asia-Pacific region.

CLICK HERE for the guidelines in the preparation of articles. Submissions and inquiries may be sent to PJD@mail.pids.gov.ph.

• Two (2) Research Specialist (Item Nos. OP 34-1 and OP 34-5)
• One (1) Division Chief III (Publication and Circulation Division) Item No. RID 03
• Assessment of the Regulation on Balanced Housing Development (Research Associate)
• Invitation to BID for the Procurement of Various Information Technology Equipment For CY 2017
• Invitation to BID for the Procurement of ANTI-VIRUS and ANTI-SPAM Software
• Consultancy Services for the “Passing the Torch” Book Project

POLICY NOTES

• PN 2017-07: Quantitative Restriction on Rice Imports: Issues and Alternatives
  by Roehlano M. Briones, Ivory Myka R. Galang, and Lovely Ann C. Tolin
  
  This 2017, the Philippines’ quantitative restriction (QR) on rice, which allows the government to limit the volume of rice that could be imported each year, will expire. As such, local rice producers are expected to suffer from the adverse effects of cheap rice imports. This Policy Note examines the impact of QR on rice imports and presents policy options for the Philippine government given the looming deadline for converting QR into tariffs. Among others, it finds that the rice trade policy in the Philippines is highly protectionist. As a result, the retail price of rice has been kept excessively above the world price, making rice less affordable to consumers. It recommends the adoption of tariffication, with revenues earmarked as safety net for rice farmers. It also suggests a 35-percent tariff rate as the appropriate tariff equivalent. Click here for the full article.
  
  
  

• DP 2017-09: Achieving Innovation without Formal R&D: Philippine Case Study of Garment Firms
  by Fatima Lourdes E. del Prado and Maureen Ane D. Rosellon
  
  It is widely acknowledged that technological innovations that can come from research and development (R&D) are crucial to industry competitiveness and sustained economic growth. Non-R&D innovation, which is a common economic phenomenon, is often ignored in the policy research arena. Using three case studies, this paper attempts to address this gap. It describes how firms in low-technology sector adapt to fast-changing industry needs and respond to market demands, and generate products and services at a lower cost and within shorter cycle-times without the aid of a traditional R&D program. Findings indicate product or process upgrading even without the presence of a formal R&D unit is possible. The paper finds, among others, that to be able to carry out upgrading/innovation activities, it is necessary to hire the appropriate personnel that will undertake specific tasks in order to execute the product specifications required by the clients. Click here for the full paper.
  
  
• DP 2017-08: Technology and Knowledge Transfers in Production Networks: Case Study on Philippine Food Manufacturing Firms
  by Fatima Lourdes E. del Prado and Maureen Ane D. Rosellon
  
  This paper investigates firm-to-firm technology and knowledge sharing in firms from the food manufacturing sector. Traditionally driven by secret recipes and family-grounded procedures, food processing firms are naturally unwilling and indisposed to embrace collaborative undertaking and develop external ties due to perceived risks of leakage of company specific assets. This paper attempts to document the practical experiences of two manufacturing firms and their views on sharing technology and knowledge to their partners in the production network. Click here for the full paper.
  
  
• DP 2017-07: Evaluation of the Financial Sustainability of the Agricultural Insurance Programs of the Philippine Crop Insurance Corporation
  by Romulo A. Virola
  
  The Philippine Crop Insurance Corporation (PCIC) started implementing the Agriculture Insurance Program (AIP) of the Philippines in 1981. Since then, the AIP has expanded its coverage from palay and corn to other crops and other services including life and accidental death insurance to farmers and their families. The program provides premium subsidy that averaged 61 percent of gross premiums from 1981 to 2014 for palay and corn farmers. The paper finds that from 1987 to 2013, the penetration rate for the AIP has not been impressive: 4.5 percent for palay and 0.9 percent for corn; some regions have been underserved; and operating costs have been high with a historical average of 50 percent of premiums. It notes various areas of concern that need to be addressed toward improving the AIP, such as increasing penetration rate and expanding the coverage of marginalized farmers, extending coverage to underserved regions especially those prone to typhoons and flooding, and introducing innovative insurance products that can reduce operating costs, among others. Click here for the full paper.
  
  
• DP 2017-06: Energy Consumption, Weather Variability, and Gender in the Philippines: A Discrete/Continuous Approach
  by Connie B. Dacuycuy
  
  Using a discrete/continuous modeling approach, this paper analyzes energy use and consumption in the Philippines within the context of weather variability and gender. Consistent with energy stacking strategy where households use a combination of traditional and modern energy sources, this paper finds that households use multiple energy sources in different weather fluctuation scenarios. It also finds that weather variability has the highest effects on the electricity consumption of balanced and female-majority households that are female headed and in rural areas. Several policies are suggested. Click here for the full paper.