Republic of The PHILIPPINES

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1 Republic of The PHILIPPINES Surface Area (1997) 300,000 km 2 Population (1999) million Population Growth (1999) 2 % p.a. Urban Population (1999) 58 % of total Population Density (1997) 247 inh./ km 2 GDP (1999) in billions US$ GNP (1999) in billions US$ GNP per capita (1999) US$ 1,020 Government Revenue (1999) 19.8 % of GDP Government Expenditure (1999) 17.9 % of GDP Monetary Unit Philippine Peso Human Development Indicator (1998) HDI Rank out of 174 countries 77 A. General Information Geography, Topography and Climate The Philippines is an archipelago country in the western Pacific Ocean, consisting of islands. It is surrounded by South China Sea in the Northwest, Sulu Sea in the Southwest, the Philippines Sea in the East and the Celebes Sea in the South, bordering China/Taiwan in the North, Vietnam in the West, and (Eastern) Malaysia and Indonesia in the Southwest/South by sea. (It has no 'land' boundaries.) Some geographic/demographic characteristics of the archipelago country can be listed as follows: majority of the islands are small (not more than 1 km 2 ); about 70% of the islands are uninhabited; and the two particularly large islands i.e. the Luzon and the Mindanao hold over 60% of the population. While the vast majority of the population are Christians (83% Roman Catholic, 9% Protestant) in The Philippines, Muslims, 5% of the population, are predominantly inhabited in some southern islands, Mindanao in particular, where religion-based political and military conflicts has been tense. The country is susceptible to various natural hazards due to its topographic and climatic characteristics, such as volcanic and seismic activities, tsunamis, typhoons, cyclones and El Niño phenomenon (mainly drought). The Philippines belongs to tropical-marine climate with two kinds of monsoon in different periods of time: one

2 2 from November to April, another from May to October. In addition to the monsoon periods, the dry/hot season (from January to June) and wet season (from July to December) are observed. The annual average temperature is around 25 C o. Characteristics and Recent Evolutions of Political System The Republic of the Philippines achieved full independence in 1946, following more than three centuries of the Spanish colonial rule, about fifty years of the US domination, and Japanese military invasion in the early to mid-1940s. The Republic adopts presidential system, in which the executive branch consists of President who acts as both Head of State and Head of Government (elected by popular vote to serve for 6-year term), and Cabinet as Council of Ministers (appointed by the president with the consent of the Commission of Appointments). The legislative branch is undertaken by bicameral Congress, consisting of the Senate (24 members, half of which elected every 3 years), and the House of Representatives (221 members, additional 50 members may be appointed by President). The judicial branch is undertaken by Supreme Court, with justices appointed by President upon recommendation of the Judicial and Bar Council. Main political parties include Laban Ng Masang Pilipino (LAMP) or Struggle of the Filipino Masses (ruling party in the current governmen), Lakas (largest opposition party), Liberal Party, People's Reform Party (PRP) and Aksyon Demokratiko or Democratic Action. The local administration system consists of four levels: 78 provinces, 83 chartered cities, municipalities/towns and barangays (villages). These are further categorized into 16 regional zones i.e. Region I to XIII, National Capital Region (NCR), Autonomous Region in Muslim Mindanao (ARMM)* and Cordillera Administrative Region (CAR). Except for NCR, all the other regions consist of 2 to 11 provinces. While 'region' is a mere administrative category, provinces, cities, municipalities and barangays have local government units (LGUs), composed of executive unit or councils and administrative staff, as well as local development councils (LDCs). The members of the LGU councils are all elected, and the councils are headed by (elected) Provincial Governor, City/Municipal Mayor and Barangay Captain at each level.

3 3 * The ARMM was created in 1989 in line with decentralization initiative in the post- Marcos (re-) democratization period. Islamic political/military movements are still active in southern regions today, including ARMM. Based in Basilan (Region IX: Western Mindanao) and Sulu (ARMM), the Moro Islamic Liberation Front (MILF) has been opposing the 1996 peace accord that settled down the conflict between the Government of The Philippines (GOP) and the Moro National Liberation Front (MLNF), another Islamic militia group, and the MILF is continuing the guerilla activities. Agriculture in The Philippines Agriculture in the Philippines today represents 20% of the GDP, and employs 40% of the total population. Agricultural sector is insignificant in terms of trade. Agricultural imports have been constantly exceeding the export in value in the last decade ( ). In , the Philippines experienced the worst agricultural performance in three decades, and in 1999, it swiftly recovered. In one year, the production of rice (palay) and maize, the two main agricultural produce of the country, have grown dramatically in value and quantity. While palay production recorded about 38% harvest increase that is the highest achievement in the last three decades, maize production recorded about 20% increase that is another highest achievement in the last two decades. Overall growth of the sector registered 6.49% during , but such a high level of growth is not expected in the period. In addition to various weather/topographic conditions and the impacts of climatic change (i.e. El Niño) that influence agricultural production greatly, the on-going conflict of Islamic militia groups is another factor to note, particularly in major maize producing regions including Mindanao. Considering that the dramatic agricultural recovery largely owes to natural conditions, the policy environment, rural infrastructure and rural political conditions are major bottlenecks to Philippine agriculture in the mid- to long terms. Economic Situation The Philippines is one of the countries affected by the 1997 Economic Crisis that originated from Thailand. The Philippine economy, composed mainly of agriculture, light industry and related service sectors, registered about 5% of GDP growth in 1997, - 0.5% in 1998, and above 3% in The macro economic recovery is largely owing to the recovery of agricultural production, which was once damaged by

4 4 the El Niño phenomena (drought) besides the negative impact of the said Economic Crisis. While the central government expenditure rose during the period of 1996 (18.4% of GDP) to 1998 (19.3% of GDP), the revenue dropped from 18.9% to 17.5% in the same period, reflecting the economic downturn. The Government of the Philippines (GOP) tightened the monetary policy in response to the currency depreciation in 1997, and the fiscal balance was stabilized. The GOP continues its successful efforts in lowering interest rates and inflation, stabilizing exchange rate, and promoting export, through economic and institutional reforms towards liberalization. Following the Economic Crisis, the GOP initiated structural reform program with assistance from the World Bank and the Asian Development Bank (ADB), along with the regular reviews of macroeconomic performance by the International Monetary Fund (IMF). B. Process of Decentralization in Course History, Objective and Responsible Agencies The current decentralization process originates from the democratic movement of 'People's Power' in mid-1980s, which overthrown the dictatorial Marcos regime ( ) and brought Corazon Aquino in office. In re-establishing democratic institutions, the Congress legislated the Local Government Code (LG Code) in 1991, which took effect in According to the LG Code, the objective of decentralization is 'to enable the territorial and political subdivisions of the State to attain their fullest development as self-reliant communities and make them more effective partners in the attainment of national goals'. An important note here is that, behind the legislation of the LG Code, there were powerful lobby activities on the Congress by elected local officials who formed several leagues of local governments. As the LG Code legislated, the Department of Interior and Local Government (DILG) was designated to be the leading implementation agency, and Master Plan for the Sustained Implementation ( ) was adopted in 1994 as the guideline for decentralization process. Functions, Resource and Autonomy of Decentralized Entities According to the Master Plan, certain functions and the associated power, assets and personnel were transferred from the central government to local

5 5 government units (LGUs). The primary function transferred to LGUs is provision of agricultural and social/basic services and facilities, and planning and implementation of Comprehensive Land Use Plans as a basis for all the development activities of LGUs within each jurisdiction. The Land Use Plans are to be designed by the local development councils (LDCs) set up at every four level i.e. provincial, city, municipal and barangay. The LGUs are also provided financial autonomy to the extent that they are able to generate own fund through tax collection etc., together with regulatory powers. In terms of financial resource, the LGUs are also entitled to the internal revenue allotment (IRA) from the central government. The IRA is a conflicting issue between national government and LGUs over its cut or maintenance in the national budget. In the approved national budget for FY 2000, 15 billion peso of the IRA was cut, which is heavily criticized by the organized local officers and LGUs. For LGUs that unable to earn much revenue through tax etc., the IRA is one of the most critical financial source to cover administrative operation costs, basic service provision and infrastructure/facility maintenance and so forth. C. Decentralization and Rural Development The Form of Decentralization and Agricultural and Rural Development Policies Unlike most other developing countries in the region, decentralization of the Philippines is designed to be comprehensive, integrating devolution of powers and deconcentration of sectoral planning/implementing functions and responsibilities. This is clear in the current agricultural development policy, the Agriculture and Fisheries Modernization Act of 1997 (AFMA), administered chiefly by the Department of Agriculture (DA). Besides the technological improvement and economic enhancement in agricultural and related sector, the objectives of the AFMA include promotion of people empowerment 'by strengthening people's organizations, cooperatives and NGOs and establishing and improving mechanisms and processes for their participation in government decision-making and implementation'. The role and responsibilities of LGUs are well recognized, at least on paper, in preparation and delivery of various agricultural and related support services. Another aspect of the AFMA is that, while the DA is assigned to be a chief administrative agency, its provisions expect involvement of diverse public and private actors, from departments

6 6 at national level to producers' groups/organizations, NGOs and LGUs at local level, in each of the following several policy sections i.e. establishment of the Strategic Agricultural and Fisheries Development Zone (SAFDZ), formulation and implementation of the Agriculture and Fisheries Modernization Plan (AFMP), credit policy, irrigation policy, information and marketing support service policy and other infrastructure policy. Agricultural Support Services and Decentralization Various roles of the LGUs are articulated in the above-listed policies within the framework of the AFMA, except for infrastructure policy. In establishment and delineation of the SAFDZ, the DA shall take a lead but in consultation of four national-level departments concerned, LGUs, farmers' and fishers' groups and organizations, private sector agencies and local communities. In credit policy, all the existing credit guarantee schemes in agricultural and fishery sector will be consolidated into the Agriculture and Fisheries Credit Guarantee Fund (AFCGF), which is to be managed and implemented by the Quedancor, or Quedan and Rural Credit Guarantee Corporation. The Quedancor are expected to have the Board of Representatives, consisting members from cooperatives, LGUs and rural financial institutions. The Fund itself targets at small-scale agriculture and fishery activities and to rural small- and medium enterprises (SMEs). In irrigation policy under the AFMA, irrigation systems are categorized into national irrigation systems (NISs) and communal irrigation systems (CISs). The NIS' are administered by the National Irrigation Administration (MIA) that is to eventually turn over its functions to Irrigators' Associations. For the CISs, devolutionary change is stipulated: the DA shall devolve the planning, design and management of CISs to the LGUs, in addition to transfer of related NIA's assets and resources. The LGUs are expected to raise own budget to undertake the devolved functions and transferred assets and resources. For information and marketing support service policy, LGUs, cooperatives, fishers' and farmers' groups and organizations and private sector agencies are identified as both beneficiaries and development partners of the DA and three other concerned public agencies. Under the National Marketing Assistance Program to be established by the DA under the AFMA, the National Information Network (NIN) shall be set up, covering the national to provincial and city/municipal levels.

7 7 Enabling Policies, Constraints and Evaluation of the Decentralization Process There are several mechanisms that are designed to enable the process of decentralization process in the Philippines, in which NGOs, people's (farmers' and other) organizations (POs) and private sector agencies can actively participate. Consultations and public hearings to apprise national public agencies' performance and project activities are made mandatory, which could serve as a monitoring and evaluation (M&E) function. Recall system is in place to deal with registered voters' dissatisfaction with local officials for accountability and performance. Local initiative for referenda can be participated by NGOs and POs. Besides the earlier-mentioned Local Development Council (LDC), such non-mandatory local special bodies as the Agrarian Reform Council and the Fisheries and Aquatic Reform Council can be represented by NGOs and POs upon appointment by local Chief Executive. There are some technical problems being pointed out in the decentralization process, including inconsistencies in personnel system between national and local officers, insufficient financial capacities and the inadequate IRA of LGUs to undertake transferred tasks and responsibilities, and so on. The enabling functions, largely remain to be mere formal setting, can be further strengthened to solve these problems, as well as effectively accelerate the decentralization process as a whole. Meanwhile, such functions as the Commission on Audit (COA) and the Ombudsman are reportedly making a substantial contribution as far as government transparency is concerned. Prospect In the Philippines, a significant progress has been made in decentralizing administrative and political systems and functioning, and yet, hindered by the limited or lack of resource mobilization/management capacities of LGUs, particularly those in poorer areas and at barangay (village) level, as well as reluctance of some local élites and those at national level to pave the way for enhanced public participation in decision-making and planning. While consolidating greater participation by local communities, NGOs, POs and private sector agencies in decentralized planning, implementation and M&E in institutional terms, the public sector reform should be accelerated, such as the Department of Interior and Local Government, the

8 8 Department of Finance, and the Office of the President, to name a few. However, as a whole, an encouraging prospect can be sought in the continuous and active movements of local officers, NGOs, farmers/peasants etc. for achieving democratic institutions for equitable benefit-sharing and livelihood betterment and security at local and higher levels.

The Republic of INDIA

The Republic of INDIA Surface Area (1997) 3,287,590 km 2 Population (1999) in millions 997.515 Population Growth (1999) 2 % p.a. Urban Population (1999) 28 % of total Population Density (1997) 324 inh./