Tuesday, September 27, 2005

May Pera Pa Ba?

NCPAG FORUM: Moving Forward with the Millenium Development Goals: May Pera Pa Ba?
National College of Public Administration and Governamce Assembly Hall
UP Diliman
Sept. 30, 2005
1:30 - 5:00 pm

The Forum

“May Pera Pa Ba?” explores the likelihood of achieving the MDGs in 2015 not only by looking into the progress the Philippines has made towards attaining the goals but by assessing the country's fiscal situation and quality of governance as well – two areas deemed critical in creating an enabling environment that will foster operationalization of the identified targets.

Role of Public Investment, Public Policy, and Good Governance in Attaining the MDGs

Attainment of the MDGs, particularly by low income and highly indebted countries, requires massive scaling up of resources and social infrastructure investments. When domestic resources are lacking, resource mobilization becomes critical. It is in this context that public policy and good governance are expected to lead to more efficient government spending, better aid utilization and more equitable resource distribution. Having adequate resources is necessary but not a sufficient condition to attain the goals. Good governance should provide an enabling policy environment necessary for creating strong institutions and developing sufficient implementation capacities needed to operationalize the targets and attain the goals.

Governance, however, weakens with corrupt leadership and inadequate financial resources and technical capacity to manage an efficient public administration. This necessitates investing in improving governance by supporting civil society and promoting the rule of law, political and social rights, accountable and efficient public administration and sound economic policies.

How well do you know your MDGs?

• What started it all? (Adel: MDG background – Millennium Summit)

• How do we fare in terms of achieving the goals?

The 2 nd Philippine Progress Report on the Implementation of the MDGs showed a high probability for attaining most of the MDG targets, except for

• Which country gives the least aid in proportion to GDP?
a. US b. Saudi Arabia c. Japan d. Switzerland


• US. The US gives the least aid as a proportion of GDP. Although it gives more foreign aid in absolute terms than any other country, it amounts to only 0.1% of its GDP. The US gives $11 billion a year in global aid, and recently announced an increase of $5bn over the next three years. USAID's share in the Philippine ODA amounts to only US$ 20 million in 2004.

Among the country's funding sources, the Government of Japan through the Japan Bank for International Cooperation (JBIC) remained as the largest source of ODA loans, accounting for 61% (or US$6.5 billion with 73 loans) of the total ODA, followed by the World Bank (WB) with 13% (or US$1.4 billion with 26 loans) and Asian Development Bank (ADB) accounting for 11% (or US$1.1 billion with 35 loans).

• Do we have enough money to implement the MDGs?

A study commissioned by the UNDP for the UN International Conference on Financing for Development revealed that the financial shortfall in attaining the basic social sector goals (education, health and water and sanitation) alone from 2002-2010 would be PhP 122.4 billion under the Medium Term Philippine Development Plan (MTPDP) 1999-2004 economic assumptions, and PhP 352 billion under an unchanged policy regime. The paper estimates the resource gap to range from an additional 2% to 5% of the central government budget. One limitation of this study though, is the non-consideration of local revenues in estimating the resources available for MDG implementation.

• Are MDG funds reflected in our national budget?

Yes. In fact, the programs and projects in the Medium-Term Public Investment Program (MTPIP) 2005-2010 that are supportive of MDGs amount to P1.74 trillion, about 81% of the total MTPIP requirements for the medium term. Of this estimate, the national government is expected to finance the biggest share amounting to P718.2 billion, followed by the government-owned and controlled corporations (GOCCs) and government financial institutions (GFIs) with P484.7 billion, and the private sector and local government units with P473.9 billion. Grant financing is expected to share P67.2 billion to the coffers to meet the MDGs.

• How much was spent on financing the MDGs? How was it affected by our huge debt burden?

The national government spent PhP 192 billion (44% of the total national government expenditures) in 2004 for social services, in addition to the PhP 36 billion spent by the LGUs. Although this item is exempt from budgetary cuts, delivery of basic social services still suffered due to the government's limited fiscal flexibility. Debt servicing for interest payments alone took almost 1/3 of the 2004 budget, partly causing the proportion of national government's social expenditure to GDP to decline from 6.35% in 2000 to 5.1% in 2004. Inflation and high population growth rate likewise exerted pressure on real per capita spending on health, education, social security, welfare and employment and housing, forcing government agencies to work with reduced budgets that further widened the financing gap for the MDGs.

• What critical areas of development should the Philippines invest in?

Millennium Project Head Professor Jeffrey Sachs proposed poverty mapping, investment strategy and financing strategy to meet the MDGs by 2015. He identified the three critical areas for investment: human capital, physical environment and infrastructure.

• Some people, even high-ranking officials in the bureaucracy are still unaware of the MDGs. How do you make them known to all concerned?

The government has launched two Philippine Progress Reports on the Implementation of the MDGs and has conducted consultative workshops to monitor, mainstream and advocate it to development partners. Legislative briefings were also made in the Senate and House of Representatives. Roundtable discussions to encourage Congress and Senate in discussing urgent and MDG-responsive legislation were also held by the Philippine Legislators' Committee on Population and Development (PLCPD), in partnership with NEDA, United Nations Resident Coordinator (UNRC), United Nations Population Fund (UNFPA), Senate Economic and Planning Office (SEPO), Congressional Planning and Budget Department (CPBD), Philippine Business for Social Progress (PBSP), People's Legislative Advocacy Network (PLAN) and Social Watch Philippines (SWP). A Special Committee on the MDGs was also created in the HOR.

For the civil society initiatives, SWP developed the Social Watch Monitoring System to ensure that national goals and strategies are translated into concrete programs and projects at the local level. A Conference Declaration was also made, embodying the civil society's commitments to actively monitor the implementation of the MDGs. Meanwhile, the PBSP led the business sector in crafting their framework for action. It shows how business can help attain the MDGs through core business, social investment and policy advocacy. The UP-NCPAG, on the other hand, is a staunch advocate in mainstreaming the MDGs in the Association of Schools of Public Administration in the Philippines (ASPAP) and in LGUs.

• How do we make sure MDGs are fulfilled?

The National Economic and Development Authority (NEDA) heads the expanded Multisectoral Committee on International Human Development Commitments (MC-IHDC) which monitors, evaluates and reports on Philippine compliance to MDGs. DILG Memorandum Circular No. 2004-152 was also issued to provide LGUs with a menu of programs and projects they can choose from to localize the goals and targets. Moreover, the Medium Term Philippine Development Plan (MTPDP) 2004-2010 cites the MDGs not just as priority goals but a commitment to ensure a brighter prospect for all Filipinos. Likewise, the MTPIP 2005-2010 – the critical link between planning, programming and budgeting, has identified investments per MDG goal to account how much goes to MDG programs, activities and projects. The business sector, civil society organizations and donor community are also committed to helping the government achieve the MDGs.

• With our fiscal problems and burgeoning population, how do we finance the MDGs?

The government has embarked on administrative and legislative measures to increase tax collection and savings generation. With the limited government resources to finance all MDG investment needs, the LGUs, private sector and civil society are also being tapped to provide support in meeting the other targets. Moreover, the government aims to expand microfinance services to the poor, tap OFW remittance, improve ODA utilization, right-size the bureaucracy and undertake privatization to increase and better manage public resources. Currently, proposals on debts swaps such as debt for equity and development/poverty reduction are being discussed to accelerate and meet the required spending for the MDGs. Considering the country's huge debt stock, however, such initiatives may have only minimal impact on reducing debt.

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