OUR NEW SOCIAL CONTRACT: Panawagan Para Lubusin ang mga Nasimulang Reporma

The Philippine economy is growing at a pace that is being envied by its neighbors. Not too long ago, it was the “sick man of Asia” who struggled with stagnant economic growth and was perennially topping international most-corrupt government lists. In contrast, today it enjoys being Asia’s “rising tiger” and is projected to continue benefitting from being in a demographic “sweet spot.” Economic growth has been above six percent annually since the beginning of the current administration, far better than the country has ever achieved since the 1970s; this GDP growth rate is currently second highest in Asia. Good governance measures such as increasing transparency and addressing corruption—as highlighted in the Daang Matuwid vision of President Aquino—have resulted in high tax collection yield, renewed international investment confidence leading to better sovereign credit rating, higher net Foreign Direct Investment inflow, and yearly marked improvements in global corruption surveys.

However, the increasing wealth of the nation is hardly felt by the average Filipino. Though there has been a 2.8% decline in the poverty incidence from 2009 to 2014, poverty incidence increased slightly from 2013 to 2014 because of typhoon Yolanda and the rise in price of rice. This only highlights the need to enhance social protection measures to address the vulnerability of the poor and near-poor. At present, one out of four Filipinos remains poor.

Several basic indicators from the recently concluded Millennium Development Goals (MDGs) were not met. Maternal mortality remains high at 221 deaths per 100,000 compared to the goal of 52. And although total fertility rate is decreasing, there is an observed rising trend in teenage pregnancy and delivery. Such data have been largely attributed to the still limited access of women to reproductive health care. The spread of HIV/AIDS is nowhere near being reversed and is fact increasing at an alarming rate of 21 new cases a day. Malnutrition is rampant with underweight children under five years old at 19.9 percent in 2013, which is a far cry from the 13.6 target. While the country achieved modest gains on gender equality and education for all, the challenge remains huge as the global community commits to attaining the new set of Sustainable Development Goals by 2030.

Specific gaps in the Aquino administration’s performance include the unsuccessful passage of vital bills such as the Freedom of Information, Anti-Political Dynasty, and the Bangsamoro Basic Law, as well as the failure to redistribute the coco levy fund for the welfare of the poor coconut farmers. Moreover, it must be underscored that despite the good governance battle cry, President Aquino has been accused of playing favorites: those closest to him—Gen. Alan Purisima being the favorite example—are still able to enjoy protection and the benefits of selective justice. To be fair, some of these have been shortcomings of the legislative and judicial branches.

And there have been gains. An example is the expansion of the conditional cash transfer (CCT) mechanism through the Pantawid Pamilya Pilipino Program (4Ps). There has also been increased transparency and accountability in governance particularly through the Bottom-up Budgeting (BuB) mechanism and Priority Development Allocation Fund (PDAF) scam which imprisoned several political VIPs and a chief justice.

In addition, PhilHealth coverage has been expanded, including the coverage of poor households enlisted in the National Household Targeting System (NHTS) through RA 10606. These insurance premiums are financed using the gains from the passage of the Sin Tax law (RA 10351). Another progressive healthcare-related law that Aquino heavily supported is the Responsible Parenthood and Reproductive Health (RA 10354). 

Moreover, the People’s Survival Fund (PSF) (RA 10174) was passed, which is an automatic yearly allocation of one billion pesos to fund climate change adaptation and disaster risk reduction projects of local government units (LGU) and community organizations. The recently developed hazard maps of the Department of Science and Technology (DOST)’s Project NOAH (Nationwide Operational Assessment of Hazards) is a big help in providing evidence-based planning on how the PSF will be utilized and distributed, as well as aid in pre-, during, and post-disaster response.

The Aquino Administration’s fight against corruption restored confidence that fuelled both local and foreign investments into the economy. The challenge now is to continue the work that has been started in order for the gains to be more inclusive and to provide increased social protection for the vulnerable.

With the 2016 elections approaching at top speed, the question at hand is how the next administration will carry this through.

Active Participation of the Basic Sectors

Economic growth should be inclusive. And at the same time, government should provide mechanisms in order to empower the poor so that the poor themselves will get out from the poverty trap. This means going beyond empty promises for participation. The National Anti-Poverty Commission (NAPC) was created so that the basic sectors can directly engage the government through its anti-poverty programs. Thus, there is a need to solidify the commitment of the President, who has been designated as the Chairperson of the NAPC by working closely with the leaders and members of various basic sector groups.

The structure of NAPC—particularly the 14 Basic Sector Councils and their elected vice- chairperson—was designed to ensure responsive, inclusive, participatory and, most importantly, representative decision-making at all levels. Thus, the en banc is crucial; this is where the representatives of the fourteen councils meet with the highest executive to discuss policies, measures and mechanisms that will address the needs of the poor and marginalized.

Unfortunately, with all the talk on inclusive growth, it is demoralizing that President Aquino has failed to call for an en banc meeting with the NAPC and the Sectoral Representatives of the Basic Sector Councils. The challenge, therefore, lies on the next President to ensure that regular en banc meetings are held.

2016 Elections

President Aquino is already facing his last few months in government. Members of academe, media, non-governmental organizations, as well as government agencies have assessed Aquino’s term using the “Social Contract with the Filipino People;” a promise that was delivered during his electoral campaign and made into an Executive Order in 2011.

While these assessments exist, one has yet to come from the very audience that the Social Contract seeks to address: the poor.

Our New Social Contract

Our New Social Contract proposes specific policy agenda away from rhetorical aspirations. Specificity requires that rights-based demands are solution-centric and are subject to accountabilities from both parties. 

The primary objective is to influence decisions and policies in the next administration in order to ensure that the benefits of growth are both readily available to and easily felt by the poor.

Six themes were developed to frame the long list of consolidated policy recommendations from the Basic Sector Councils. Specific policy recommendations were then picked out in order to develop a time-bound, achievable, and acceptable social contract between the basic sectors and the incoming administration.

The major agenda points of the basic sector’s New Social Contract are as follows:

1) Economic reforms and a sound industrial policy

One of the Aquino administration’s remarkable achievements is an average economic growth rate of 6.3 percent in the last five years, consequently boosting the country’s investment and credit ratings. There is consensus, however, that such growth has yet to be translated into creating more jobs for the people, reducing poverty and inequality. In order to do this, the next administration has to sustain the level of growth in the next five to ten years, continue to expand the manufacturing sector, democratize asset distribution in the rural sector while modernizing agriculture, and implement a sound industrial policy hinged on preparing Filipino industries and agriculture to become more competitive under a continuously globalizing world.

The following are key and actionable policy issues necessary to pursue inclusive growth, asset reform, and poverty reduction:

  • Completion of the Comprehensive Agrarian Reform Program (CARP) coupled with improving farm productivity and incomes;
  • Enactment of the Coconut Farmers Trust Fund Bill, ensuring that recovered coco levy funds and assets benefit small coconut farmers and rehabilitate the coconut industry;
  • Passage of a bill that will reform the Philippine Coconut Authority (PCA) that is truly responsive to the needs of the coconut farmers and the industry through: 1) a broadened mandate that is not limited to just copra and oil but higher value-added coconut products, 2) the removal of palm oil from its original mandate, 3) providing greater participation of coconut farmers and workers in the institution's policy- making body by allotting more seats in the board, 4) developing coco-based community enterprises where coconut farmers are real partners and decision makers, 5) strengthening the institution’s research and development work, and 6) ensuring that increased productivity will contribute greatly to increased incomes of the coconut farmers;
  • Enactment of the long overdue National Land Use Act, in order to institutionalize a national framework on land use in terms of protection, production, settlements, and infrastructure;
  • Implement the National Fisheries Industry Development Program that is based on sustainable coastal and fisheries resource management, preventing illegal and unregulated fishing practices, ensuring livelihood and shelter for artisanal fisherfolk through a Fisherfolk Settlement Program, and establishing a Fish Fund to develop the capacities of LGUs through integrated coastal resource management;
  • Passage of an Alternative Mining Law, ensuring the management of mineral resources towards a sustainable approach of using and protecting the country's natural resources, and protection of ancestral domains of indigenous peoples;
  • Enactment of the Security of Tenure Bill to protect workers’ rights from unfair contractualization. 

2) Challenges towards Greater Social Protection

Even if there have been significant increases in the income of the poor as the economy sustains its pace of growth, others slide (back) into poverty. Senior citizens lose their incomes when they can no longer work; families must sacrifice cash incomes that teenagers are no longer able to earn when they proceed to high school; people get sick; and increasingly these days, livelihoods are washed away by storms or withered by extreme heat. Yet, the ability of people to cope with such risks is at the core of their ability to partake of the high returns from the economic growth that we boast is second only to China.

The policy recommendations are:

  • Adopt a socialized/ equitable Social Security System (SSS) pension increase, which entails an increase that varies according to the pension amount being received by the beneficiaries. Specifically, higher pension increase is proposed to be given to those who are currently receiving less compared to others as identified through a poverty-based mechanism that will be developed. The SSS benefit program must have wider latitude for social protection beyond mere pension-provision. Moreover, representation of the basic sectors through the NAPC must be upheld by reforming the SSS Board;
  • Ensure use of PhilHealth cards to provide adequate financial support for healthcare services. This will encourage more Filipinos to seek healthcare when necessary and protect those who are already benefitting from the expanded premium subsidy from undue costs of seeking health care. Focus must be given to persons with disabilities (PWDs), indigenous peoples, fisherfolk, farmers, and urban poor;
  • Secure financial support for the PhilHealth Coverage of all Senior Citizens by compelling the Department of Budget and Management to expand the PhilHealth premium subsidy to include seniors who are shifting from being dependents of their family to PhilHealth members themselves. After all, actual collections from the Sin Tax consistently exceeded the targets for 2013 and 2014. In particular, there was an excess of P17.2 Billion in 2013 and P7.3 Billion in 2014, which is more than enough to cover the necessary premium;
  • Expand 4Ps coverage and re-calibrate to include older children and their families. Although universal access to primary education has been achieved, 4Ps may be expanded to target increasing the low completion rate of 78.5 percent. Also, linking 4Ps parents to existing government programs on capacity building and employment (e.g., cash for work, TESDA trainings, etc.) will help provide income so parents can support their children until they graduate, as well as replace the income that these children used to earn. Such measures also help keep children outside of the labor force;
  • Enactment of the Positive Discipline and Anti-Corporal Punishment Bill to eliminate violence against children committed in the pretense of discipline. This will ensure that children are protected from traditional violent methods and the use of positive and non-violent forms of discipline is promoted;
  • Increase programs that targets decreases in maternal mortality and teenage pregnancies. Such gender-responsive programs includes faster roll-out of reproductive health education for even younger women, promoting births attended by skilled health personnel, and capacitating local public health facilities in rural health units and barangay health stations to deliver appropriate maternal care services. Men must also be made aware and involved in order to provide active care and support;
  • Universalize programs that support the bankability of the enterprising rural poor. Rationalize but scale-up and expand credit enhancement/guarantee schemes for new agrarian reform beneficiaries, landless farmers, indigenous peoples – none of whom have collateral that they can offer to banks. Infuse the mandated funds into the Philippine Development Trust Fund so that organizing, capacity building, development of cooperatives, and social enterprise innovation for bankability – will take place not just for agrarian reform beneficiaries even as Department of Agrarian Reform (DAR) winds down its operations; and
  • Reform the National Housing Authority and institutionalize People’s Plan Fund. Of 70,000 housing units built by NHA in Mega- Manila in recent years, 11,000 to 22,000 houses remain unoccupied. The default rule of the NHA is to build houses far from the city, with little regard for the fact that neither services nor public utilities exist in such places. This despite the fact that a Joint Memorandum Circular signed in 2013 by ten cabinet secretaries and the NHA mandates that relocation has to be onsite and in-city. Relocation has to be organized on the basis of a People’s Plan. The people’s planning approach is best served if this is internalized within NHA’s processes and if the scale and scope of Social Housing and Finance Corporation (SHFC) and LGU and community-co-production programs are expanded. Only ₱41 billion of the promised ₱50 billion fund by the President has so far been used. It is also necessary to institutionalize the People’s Plan and allocate ₱50 billion each for Luzon, Visayas, and Mindanao over the next five years for the housing of informal sector families.

3) Creating the Spaces for Economic Inclusion, Facilitating Mobility and Employment

Opportunities to include the poor in economic processes can be provided through improved transportation networks, access to sustainable employment and decent work, and education opportunities within cities and rural areas. As such, instead of pushing people out of the cities through resettlement or accommodating them in the fringes (in danger zones, along railways, esteros, etc.), policies should make both rural development and urbanization work for both the poor and non-poor. In particular, fund sources linking housing and employment can be drawn from government investments and private property owners and speculators. Such initiatives can best be complemented through the development of secondary hubs and development of an industry road map in rural and urban areas. This intensifies the grounds for the development of a sound industrial policy.

  • Allocate six to seven percent of GDP for infrastructure investments to increase mobility among urban and rural workers. Access to employment and livelihood opportunities, more than housing, is one of the factors that draw people to cities. At the same time, the cost and time incurred in traveling from urban to rural areas (and vise versa) point out a need to search for alternative measures to fund infrastructure programs. A subsidized scheme should be developed and a mechanism for drawing funds from capital investments must be explored;
  • Full implementation of Accessibility Law (Batas Pambansa 344) and Equal Opportunity for Employment Law (RA 10524) anchored on the United Nations Convention on the Rights of Persons with Disabilities for inclusive development of persons with disabilities (PWDs);
  • Institutionalization of EO 417 will ensure that PWDs are provided with sustainable and long-term livelihood programs and employment;
  • Sources of finance for housing can also be drawn from future public investments in transport infrastructure and from property owners and speculators. Transportation networks can be developed given the increase in land prices in cities. Property owners and speculators residing on government land can be taxed. The existing Philippine National Railway (PNR) and the MRT-LRT systems, which are prime real-estate properties, can be used to link the city centers to the transportation backbones or to peripheral areas;
  • Create an infrastructure program for secondary towns and peri-urban areas. Infrastructure programs should provide for sustainable employment and decent work, if not enhanced mobility to areas of employment. As such, stations should consider the location of markets to account for the needs of workers. While regional development strategies seek to decongest the center (to areas of development such as Regions III and IV-A), national road networks and transport corridors have to be linked to remote towns and to secondary urban hubs. This way, investors, especially in agro-processing manufactures will move out of their comfort zones in our congested metropolitan areas to secondary hubs. At the same time, workers will no longer need to go to the cities, since their labor power will be embedded in the products that travel to the cities;
  • Incorporate the Department of Trade and Industry’s industry road maps into the Philippine Development Plan. Sustainable employment and decent work can be best ensured by providing industry sector road maps that indicate the location of, for instance, food, manufacturing or automotive industries;
  • Continue to adopt the Accelerated and Sustained Approach to Poverty Reduction (ASAPP), a strategy that creates secondary growth hubs in the country’s 10 poorest provinces by improving government’s delivery and convergence mechanisms to create more jobs in these areas.

4) Climate resilience

The Philippines is one of the most highly vulnerable countries to disasters brought about by climate change despite its minimal contribution of carbon emissions. Resilient communities should be our new normal. For this, the policy recommendations are:

  • A comprehensive disaster risk reduction and climate change adaptation program that integrates efforts at the national as well as local levels in order to ensure comprehensive and appropriate pre-during-post solutions and initiatives to disasters. LGUs, especially those with less structural and financial capacity, must be provided the necessary support to ensure that they comply with the mandate to institutionalize local disaster risk reduction management ofDices (LDRRMO). In such offices, greater people’s participation and representation must be incorporated in disaster risk reduction and management governance at all levels;
  • Expedited implementation of the People’s Survival Fund law (RA 9729);
  • Enactment of the Internally Displaced Persons (IDP) Bill for the protection of the rights of the IDPs in times of disasters, both natural and human-made;
  • An enhanced national greening program that serves not only the objective of massive genuine reforestation efforts to regenerate the country’s forests, but also addresses the problem of balancing economic development (using easily harvestable trees) and environmental protection (ensuring the planted seedlings grow and eventually mature into a healthy ecosystem). Illegal logging remains rampant so forest protection, from illegal settlers burning trees for charcoal to big corporations, must be guaranteed; and
  • Implementation of Renewables Energy Act of 2008 (RA 9513) for a more proactive effort from the government to start the roll-out of choosing power plants that utilize renewables over fossil fuels, and the eventual phase-out of coal-Dired power plants.

5) Political reforms and people’s empowerment

Political reforms include good governance strategies, anti-corruption, and laying down mechanisms to empower the poor and marginalized. The Aquino administration claims that the unprecedented economic growth is a by-product of the Daang Matuwid vision, where Good Governance is a vital part of the equation that leads to Inclusive Growth. Policy recommendations are:

  • Ensure participatory governance at all levels where organized groups are represented in economic planning and other mechanisms. Basic sector participation must be ensured in all levels of planning and budgeting processes in all government bodies, including government owned and controlled corporations, as part of the governance framework on the Philippine Development Plan. The inclusion of sectoral representatives the the Autonomous Region in Muslim Mindanao must be ensured;
  • Continued implementation of Bottom-up Budgeting to further support and provide funding requirements for the development needs of organizations, municipalities, and cities. The imbalance of bargaining power between civil society organizations (CSO) and LGUs with the BuB must be corrected by creating an empowerment fund for CSOs;
  • Passage of an enabling law on access to information, such as the Freedom of Information Bill to ensure full disclosure of public documents, promote transparency and access to government information, and therefore aid in anti-corruption measures; and
  • Enactment of the Anti-Political Dynasty Bill.

6) Long lasting peace towards inclusive development

Ensuring equitable access to productive assets and economic development remains a crucial challenge for the next administration not only in order to sustain the growth achieved thus far, but also to address the condition that has fuelled decades-old insurgencies in the country. Special focus must be given to Mindanao where Moro rebel groups’ struggles for self-governance and indigenous people’s fight for ancestral domain continue to spark violent confrontations with government forces and with other communities. Maintaining open communication lines with rebel groups is an important step towards achieving lasting peace and development.

Other measures worth considering for the incoming administration are the following:

  • Immediate resolution of justice-related cases such as the 2015 Mamasapano incident and the 2010 Maguindanao massacre;
  • Resumption and, if possible, conclusion of the peace process with the National Democratic Front and the Moro Islamic Liberation Front;
  • Passage of a Bangsamoro Basic Law in the spirit of promoting long-lasting peace and economic development in Mindanao; and
  • Recognition and protection of the indigenous people’s rights over their ancestral domain, including the right to decide the kind of development they deem suitable for themselves, as in the recent case involving the Lumads.
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