Investing in human capital is a key factor that can sustain the high growth rate the Philippines has been experiencing in the past years. Education and health are crucial in achieving labor effectiveness and productivity. The poor, however, are confronted by the high rate of unemployment, underemployment, and low incomes.

People with access to education and health have better chances of getting well-paying jobs. Education is a fundamental long-term solution to the Philippines’ development challenge. It is a way to escape poverty and achieve better future and higher incomes. “Addressing Late School Entry and other Demand-Side Barriers to Primary Schooling”, a policy note by a team led by Dr. Jose Ramon Albert of PIDS discussed educational disparities and the need to improve the quality of education aside from attaining universal primary education. It is crucial to keep children in school, maximize their learning, and ensure that they complete their schooling.

Despite the growth of the Philippine economy in the past years, the gap between the richest and the poorest Filipino households in terms of health financing, access to services, and health status has not significantly improved. A policy note titled “The Puzzle of Economic Growth and Stalled Health Improvement in the Philippines”, by PIDS consultant Oscar Picazo and co-authors stressed that while macroeconomic growth and financial stability are important, the goal of a country’s growth efforts should be human development in a sustainable environment.

On top of these is the pressing need for job creation. In 2013, the unemployment rate was 7.3 percent while underemployment stood at 19.8 percent. Given this backdrop, Drs. Aniceto Orbeta, Vicente Paqueo, and Leonardo Lanzona, in a PIDS study titled “Labor Policy Analysis for Job Expansion and Development” underscored the importance of addressing the jobs challenge through the massive expansion of poverty-reducing jobs and sustained human capital development through education and training. Dr. Rafaelita Aldaba, in “The Philippine Manufacturing Industry Roadmap: Agenda for A New Industrial Policy, High Productivity Jobs, and Inclusive Growth”, stressed that the manufacturing sector can provide higher wage and higher productivity jobs than the services sector. The manufacturing sector is vital for the country’s economic transformation that can create more opportunities to improve the quality of life of Filipinos.

To know more about PIDS research on human capital development, visit the SocioEconomic Research Portal for the Philippines. Simply type “education”, “health”, “jobs”, “human capital”, “poverty”, and related terms in the Search box.

• Addressing Late School Entry and other Demand-Side Barriers to Primary Schooling
• The Puzzle of Economic Growth and Stalled Health Improvement in the Philippines
• Labor Policy Analysis for Jobs Expansion and Development
• Economic Policy Monitor 2013: Addressing the Jobs Challenge toward Inclusive Growth
• The Philippine Manufacturing Industry Roadmap: Agenda for New Industrial Policy, High Productivity Jobs, and Inclusive Growth
• Where Are the Poor Employed? Profiling the Working Poor
• Regional Integration, Inclusive Growth, and Poverty: Enhancing Employment Opportunities for the Poor
• Review and Assessment of Programs Offered by State Universities and Colleges
• Enhanced K to 12 Basic Education Program: Opportunities and Challenges
• Schooling Disparities: an Early Life Lever for Better (or Worse) Equity in the Future

CALENDAR OF EVENTS

1-5 SEPTEMBER 2014
International conference on impact evaluation
Venue: ADB headquarters, Mandaluyong City
Organizers: PIDS, ADB, 3ie

28 AUGUST 2014
Press Conference for 2014 Development Policy Research Month (DPRM)
Venue: Romulo Hall, NEDA sa Makati Building, Makati City

22 JULY 2014
PIDS-CPBRD Forum on Review and Assessment of Programs Offered by State Universities and Colleges
Venue: Conf. Rm. Nos. 1 and 2, Mitra Bldg., House of Representatives, Quezon City
Sponsors: PIDS, Congressional Planning and Budget Department (CPBRD), House of Representatives

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OUTREACH ACTIVITIES

Part of the Institute's mandate is to provide technical expertise to policymakers and shed light on important issues. The PIDS website has a section containing the comments and position papers on various topics submitted by the Institute's research staff upon the request of Senate and House committees.

VISIT OUTREACH SECTION

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PIDS UPDATES

PIDS Updates is a monthly electronic newsletter of the Institute. The main feature of the newsletter is In Focus, which highlights an important socioeconomic issue and intends to draw readers' attention to related research that has already been undertaken by PIDS.

VIEW PREVIOUS PIDS UPDATES

BOOK

PIDS Book 2014-04: Economic Policy Monitor 2013: Addressing the Jobs Challenge toward Inclusive Growth
by the Philippine Institute for Development Studies

This fourth issue of the PIDS Economic Policy Monitor (EPM) focuses on the need to pursue inclusive growth through the expansion of quality job opportunities. It revisits the jobs issue and provides recommendations on how to address it, taking into consideration the socioeconomic and political landscape and historical experience of the Philippines.

Consistent with past EPM issues, Chapter 1 analyzes the macroeconomic scenario of the past year and provides an outlook of the economy in the coming year. Chapter 2 reviews the laws, regulations, and policies formulated and adopted by the government in 2013 in support of the goal to sustain economic growth and achieve social equity. Chapter 3, the theme chapter, looks into the causes of the economy’s failure to generate substantial and quality job opportunities by examining the effectiveness of minimum wage and other labor regulations to determine if they are growth and welfare enhancing. The study finds that raising the minimum wage reduces employment in smaller firms, lowers household income, and increases the probability of falling into poverty. Along with recommendations for a minimum wage reform, expansion of gainful job opportunities from the labor-intensive manufacturing sector, and greater investments in education and other human development aspects, the study proposes a 12-point agenda called “Jobs Expansion and Development Initiatives” or JEDI. CLICK HERE TO DOWNLOAD

DISCUSSION PAPER SERIES

• DP 2014-36: A Spatial Integration Analysis of the Regional Fertilizer Markets in the Philippines
  by Ivory Myka R. Galang
  
  Fertilizer, which is an important production input, holds a significant share in the total cost of production for some crops. Based on the available fertilizer price data, it can be observed that price levels vary greatly across regions. To help determine whether or not this variability is alarmingly high, a spatial market integration analysis was done. Based on the Granger causality test, it is found that the price in one region either causes or affects prices in another region. The cointegration test suggests that regional markets are integrated. Long-run relationships are also shown to be statistically significant. The finding that regional fertilizer markets in the Philippines are integrated is consistent with the absence of market power in the fertilizer industry. The number of market players in the industry makes it highly unlikely for one or few dealers of fertilizer to control the market price of fertilizer. Click here for the full article
  
  
• DP 2014-35: Compilation and Synthesis of Major Agricultural Value Chain Analysis in the Philippines
  by Roehlano M. Briones
  
  Recently, the agricultural sector in the Philippines has enjoyed robust growth driven by rapid price increases in key subsectors, namely, rubber, sugarcane, and coconut. The largest subsectors, however, namely, rice and corn, relatively experienced slower growth and exhibited lower competitiveness than high-value crops (e.g., fruits and vegetables). This study undertakes a stock-taking of value chain studies and gap analysis for major agricultural commodities. It finds that value chain opportunities seem to be well-substantiated for export-oriented crops. The sites suitable for these value chains are those in which primary production and marketing systems are fairly well-established. The value chain studies also take note that risks and entry barriers do pose challenges toward agri-enterprises even in the high-opportunity areas. Value chain activities or niche products may also be found even for the less competitive, import-competing products. Click here for the full article

• DP 2014-34: Labor Policy Analysis for Jobs Expansion and Development
  by Vicente B. Paqueo, Aniceto C. Orbeta, Jr., Leonardo A. Lanzona, Jr. and Dean Gerard C. Dulay
  
  This study proposes a 12-point agenda, conveniently referred to as the Jobs Expansion and Development Initiative (JEDI) for poverty reduction. JEDI has two objectives. One is to expand gainful jobs through the acceleration of labor-intensive production, particularly, the manufacturing of tradable commodities. The other is to improve investments in education and other human capital development efforts and sustain total factor productivity gains. These objectives require inter alia minimum wage reform, which should be undertaken immediately, while investors are looking for new places to locate labor-intensive production and the Philippine economy is getting another look as a potential destination.
  
  The study challenges the idea that imposing minimum wages and other current labor regulations should be the weapons of choice. They do not work; worse, there is preponderant evidence of their detrimental consequences. Instead of imposing mandatory minimum wages, the paper points out that it would be better to use direct and temporary income subsidy, carefully targeted to extremely poor households to meet suitable norms that society considers a public good. Such an approach would be both efficient and equitable, conforming to the general principle of public economics that a public good should be financed by general tax revenues.
  
  The study concludes that the time has come for the country to leave the beaten path and try new approaches that would rebalance current labor laws and practices to expand gainful jobs and minimize unintended consequences detrimental to the poor, the young, the women, the less educated, and the unorganized workers. Click here for the full article
  
  
• DP 2014-33: Child Poverty in the Philippines
  by Celia M. Reyes, Aubrey D. Tabuga, Ronina D. Asis, and Maria Blesila D. Mondez
  
  Despite the remarkable economic performance of the Philippines in recent years, poverty remains a core policy issue. And with a relatively young population, the poverty situation concerns largely children who are at the critical stages of their physical, mental, and social development. This report provides a comprehensive profile of children who are living in poverty through data collected from national surveys and administrative records of government agencies. The estimations show that in 2009, 13.4 million or over a third of all children aged below 18 were living below the poverty line. Both the incidence and magnitude of poor children are increasing through the years. Moreover, around 10 million face at least two overlapping types of severe deprivation in basic amenities while an estimated three quarters of a million face at least five kinds of deprivation simultaneously. Although these children can be found in the different regions of the country, several areas that consistently lag behind in many poverty aspects have been identified. Meanwhile, longitudinal data show that a non-negligible number of families move in and out of poverty and this vulnerability poses risks on children’s well-being. With the recent trend in population growth, the lack of inclusivity of economic growth, and the exposure of the country to natural calamities, we would expect that the number of children in dire condition would not be significantly reduced within the next few years. Click here for the full article

DISCONTINUE OFFERING UNDERPERFORMING COLLEGE DEGREES -- STUDY

The Commission on Higher Education should enforce "more vigorously" its policy of closing existing programs of state colleges and universities (SUCs) that perform under par year after year in Professional Board Examinations (PBEs).

This is one of the recommendations of "Review and Assessment of Programs Offered by State Universities and Colleges" co-written by Dr. Rosario Manasan and Danileen Kristel Parel, senior research fellow and supervising research specialist, respectively, of state think tank Philippine Institute for Development Studies (PIDS).READ MORE

PRICE AND POOR USE OF FERTILIZERS THREATEN PH AGRI SECTOR

Large discrepancies in the commercial price of fertilizers and the sub-optimal application of fertilizer of farmers are major challenges that threaten the Philippine agricultural sector.

Study author Dr. Roehlano Briones, senior research fellow of state think tank Philippine Institute for Development Studies (PIDS), identified two significant challenges facing the sector of agriculture as regards the fertilizer sector--inefficient fertilizer marketing (as seen in the large discrepancies in pricing across adjacent regions) and sub-optimal amounts of fertilizer applied by farmers.READ MORE

GRADUATE EDUCATION PROGRAMS SHOULD ADDRESS PH DEVELOPMENT NEEDS

Philippine graduate education system is critical to serve the country's development goals. This was stressed in a research paper published by state think tank Philippine Institute for Development Studies (PIDS).

It is necessary to determine if the graduate education programs in the country contribute to the skills and competencies needed in the labor market, said Mira Alexis Ofreneo, author of the study and PIDS research consultant. Moreover, it is important that the country's masteral and doctoral programs are developing the competencies needed to manage, schools, corporations, and government organizations, Ofreneo said.READ MORE

Gross Domestic Product

The gross domestic product (GDP) decelerated in the first quarter of 2014. It grew by 5.7 percent, 2 percentage points below the growth rate during the same period last year, and by far the slowest in the last 9 consecutive quarters. Meanwhile, the gross national income (GNI) expanded by 7.6 percent, slightly above the 7.3 percent growth of the first quarter in 2013.

Source: Philippine Statistics Authority (PSA)

VIEW TABLE for the latest data on GDP and GNI.

Gross International Reserves

Gross international reserves (GIR) rose to US$80.7 billion as of end of June 2014, up by US$0.5 billion from the end of May. The GIR remains ample as it can cover 11 months worth of imports of goods and payments of services and income.

Source: Bangko Sentral ng Pilipinas

VIEW TABLE for the latest monthly data on GIR.

Inflation Rate

Year-on-year headline inflation slightly went down slightly to 4.4 percent in June, from 4.5 percent in May. This was mainly due to alcoholic beverages and tobacco; housing, water, electricity, gas, and other fuels; transport; and recreation and culture indices. Likewise, core inflation rate went down to 2.8 percent in June, from 3.1 percent in May.

Source: Philippine Statistics Authority-National Statistics Office (PSA-NSO)

VIEW TABLE for time-series data on year-on-year inflation rate.

Exchange Rate

The peso remained strong compared with the US dollar as the average peso-dollar exchange rate continued its downward trend in June to 43.8175. The highest rate for 2014 was that in January at 44.9270.

Source: Bangko Sentral ng Pilipinas

VIEW TABLE for time-series data on monthly peso-dollar exchange rate.

Philippine Stock Exchange Index

The Philippine Stock Exchange Index (PSEi) inched up last month. It stood at 6,864.82 by the end of July, a few units higher than last June's 6,844.31.

Source: Philippine Stock Exchange

VIEW TABLE for time-series data on Philippine stock exchange index (PSEi)

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