September - October 2000
Vol. XVIII No. 5
What's Inside 5
ERBL: Linking legislation and research
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SERP-P: Gateway to policy research
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OPAC@PIDS: Providing broader access to information materials
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Enhancing the competitive environment in the Philippines
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Curtain call: Retiring gracefully from PIDS
ISSN 0115-9097
Providing the infrastructure for research * and networking Mario B. Lamberte**
T
he Philippines has lagged behind East Asian economies in the last
22 years in terms of per capita income measured in US dollars
Editor's Notes
(Table 1). Although development is multidimensional and cannot be represented by one variable, the per capita income indica-
tor is used because it is generally associated with other socioeconomic indicaWhen September comes, PIDS employees are in high spirits. Not just because the Institute is celebrating its anniversary for one whole week. But mostly because this is the time of the year when the employees are the focus of attention as due recognition is given them for another year of hard work. At the same time, the opportunity for both the management and staff to put forward to the policymaking and research communities the Institute’s major accomplishments for the year and its plans to further its contributions to the critical task of national decisionmaking provides the PIDS personnel with a sense of keen anticipation and fulfillment. to page 16
tors.
Both Singapore's and Korea’s per capita incomes increased tenfold during the period 1977-1999. Meanwhile, Malaysia’s and Thailand’s per capita incomes rose almost fourfold during the same period. The Philippines’ per capita income, however, which was higher than that of Thailand in 1977, only doubled during the same period.
*Welcome remarks delivered during the opening ceremonies of the PIDS 23rd founding anniversary, 25 September 2000, Carlos P. Romulo Hall, NEDA sa Makati Building, Makati City, Philippines. ** President, Philippine Institute for Development Studies (PIDS).
We may look at the performance of these countries in another way by comparing them to a reference point— the average per capita income of middle-income countries. Obviously, this is a moving reference point, not a fixed one, and that makes it an interesting fighting target for emerging market economies like the Philippines. In 1977, Japan's and Singapore’s average per capita incomes were already way above the average per capita income of middle-income countries. By 1999, Korea and Malaysia joined this group of countries despite the douto page 2
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Infrastructure...
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Table 1.Per capita income of East Asian economies (In US $)
From page 1
bling of the average per capita income of middle-income countries. Thailand is already close to passing the reference point, and if it does, which could happen in a few years given current trends, then that would leave the Philippines and Indonesia as the only two countries in this group whose per capita incomes fall well below the average per capita income of middle-income countries. Aside from growth in factor inputs, total factor productivity (TFP) growth, which comes from technological progress and improvements in organizational efficiency, also contributes to real economic growth. The Philippines’ TFP growth performance has been disappointing. Its TFP growth was the second lowest in the East Asian region during the period 1960-1980 (Table 2). It is the only country that obtained a negative TFP growth rate during the period 1979-1996. It has been observed that a higher TFP growth rate is closely associated with rapid structural changes of the economy. Without a high TFP growth rate, capital accumulation cannot possibly sustain a country’s economic growth rate.
Japan Singapore Korea Malaysia Thailand Philippines Indonesia Average for middle income
1977
1999
5,670 2,880 820 930 420 450 300 1,140
32,230 29,610 8,490 3,400 1,960 1,020 580 2,000
Source: World Development Report, 1979 and 2000/2001
Choosing the right development path The biggest challenge is how to bring our economy to a level above the average middle-income economy in the next 10 years. This is indeed a tall order considering that our economy is only half way the reference point at present. This is doubly hard considering that the reference point usually moves up through the years. It therefore means that our economy must perform better than the rest of the middleincome economies. Unfortunately, there is no unique path to getting our economy to a level
above the average middle-income countries. There are lessons that we can draw from our past experience and those of other countries but they will be insufficient. Given the present condition of our economy and recent trends in the world economy, we have to search for a development path that is most appropriate for us. This is where policy-oriented research studies are most needed to help our decisionmakers make an informed choice of policies that can raise our per capita income above the average level of middle-income countries.
Table 2. Various estimates of total factor productivity growth for East Asia (Annual growth, in percent) Period
1966-90 1960-80 1986-92 1975-90 1979-96
Hong Kong
2.3 3.8 -
Korea
1.7 0.7 1.9 3.1 -
Source: International Monetary Fund (1998)
Singapore
0.2 0.3 4.0 1.9 2.5
Chinese Taipei
2.6 1.3 2.5 3.5 -
Indonesia
1.0 0.8 0.9
Malaysia
Philippines
0.7 2.8 2.0
0.5 -0.9
Thailand
1.1 4.0 2.0
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But we have to keep in mind that pursuing aggregate growth alone would not be adequate. Growth in income must also be widely diffused across regions and households of the country. At present, per capita income greatly varies across regions of the country and has not changed much through the years. And there is a strong, negative correlation between regional per capita income and poverty incidence.
Rising to the challenge The research community must therefore rise to this challenge. However, let me caution you that policy research has some limitations. First, no social science research is based on perfect and complete information. Often, researchers face severe data constraint that could affect the quality of their quantitative models and analyses. Second, research studies looking at the same policy issues can have differences in the framework used, data set and methodologies, thereby leading to different policy implications or recommendations.
"Research results must be discussed among researchers and stakeholders such as policymakers, business community, nongovernment organizations and others." -Dr. Mario B. Lamberte
Let me enumerate the Institute’s mandates: j to develop a comprehensive and integrated research program that will provide the research materials and studies required for the formulation of national development plans and policies; j to serve as the common link between the government and existing research institutions; j to conduct and undertake research and arrange for research to be conducted by other research institutions and individuals; and
These suggest that research results must be discussed among researchers and stakeholders such as policymakers, business community, nongovernment organizations (NGOs), and others. At the end of the day, the quality of our decisionmakers counts a lot. Unlike researchers and academics, they do not have the luxury of time to debate on issues. They have to make crucial policy decisions using whatever information is available to them.
We have, of course, been carrying out these mandates through the years but our strategies have changed, necessitated by changing circumstances. We think that this is an opportune time for us to make a big change in our strategy due to the following reasons:
Being a part of the research community, the Philippine Institute for Development Studies (PIDS) must take a critical role in the research community by finding new ways of carrying out its mandates more effectively.
j Demand for policy-oriented research studies has increased tremendously over the last few years. There are several reasons for this. One is that the reforms being made are in areas where existing
j to establish a repository for economic research information.
stock of knowledge is insufficient to guide decisionmakers. Thus, new analyses have to be done. Two, most of the recent reforms being contemplated require legislative action. The efforts of our legislators to raise the quality of debate in Congress have created a huge demand for policy research. j PIDS will continue to have limited manpower and financial resources to deal with the growing demand for policy research. As a strategy, it will not be good for PIDS to expand its in-house research staff considering that some policy issues require research change. Although PIDS has been heavily relying on external experts to work on several research topics, its financial resources could not be drastically increased in the coming years. j Strong policy-oriented research institutes/centers have recently emerged. This is one wholesome development especially since many of these institutes/centers are conducting policy-oriented studies on their own and holding policy fora. But to page 4
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Infrastructure... From page 3
it also means that PIDS has become a small player in the research community and, therefore, must begin carving out a niche for itself where it can make a lot of difference given its limited resources. j The information technology (IT) revolution provides new opportunities and ways for conducting research and disseminating research results. This is one development that must not be ignored by PIDS. We must exploit it so that we can more effectively carry out our mandates. Thus, our new strategy is: Providing the infrastructure for research and networking.
The new strategy Roads, bridges and telecommunication facilities can do great wonders to a country’s economy. They connect markets and people and reduce trans-
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actions costs, thereby facilitating the exchange of goods and services. They also reduce asymmetry of information and improve the efficiency of the market. This reality has inspired us to also develop an infrastructure for research and networking. However, unlike roads, bridges and telecommunication system, ours is a virtual infrastructure system anchored on IT innovations. The objectives of this new strategy are (1) to encourage more researchers to conduct policy-oriented studies, and (2) to facilitate public discussions of major economic policy issues. In developing this strategy, we are guided by the old but recently rediscovered operational concept of network externalities. The idea here is that “certain new products being produced today increase in value as more people use them.� Examples are telephone network, railroad network and, most recently, the internet. Your telephone is worthless if you are the only one connected to it. Likewise, your internet connection is not worth very much if you are the only one connected
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to it or you have no one to e-mail to or websites to visit. But as more people are connected to these networks, their value increases. The same is true with the infrastructure for research and networking system. Its value increases as more people use it. In this sense, policy-oriented studies become more valuable as more people have access to them and actually use them. We are, therefore, hopeful that the infrastructure for research and networking can facilitate interaction among researchers, which we call R2R transactions, between researchers and stakeholders such as policymakers, business sector, NGOs and other interested parties, which we call R2S transactions, and among stakeholders, which we call S2S transactions (Figure 1). How would you, as an ordinary citizen, like to have direct interaction with your legislator or policymakers on
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Figure 1. Transactions that can be facilitated by the infrastructure for research and networking
Stakeholder A
Stakeholder B
Researcher A
Researcher B
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ERBL:
Linking legislation and research
P
ublic policies formulated by members of the national leadership pertain to“what governments choose to do or not to do.” A policy that is finally enacted is actually a product of choice from among a few or many policy options and alternatives. The choice to enact a particular policy has both direct and indirect impacts on the nation and its citizens. Thus, it is imperative that the choices be made wisely and upon solid data based on research and consultations. Each Philippine lawmaker is assumed to be backed up by a technical team which undertakes serious research and consultations. In the House of Representatives, the Congressional Planning and Budget Office (CPBO) provides such kind of support. Nevertheless, there still may not be sufficient existing technical support available to the legislators to meet their demands and needs for timely, relevant and responsive policy research studies that would help in the policymaking process.
Policies resulting from a mixture of critical analyses of vast information, highlighted arguments, and exploration of a wide array of options and alternatives are relatively responsive to the needs of the targeted public and are beneficial for the common good. On the other hand, policy research derives its ultimate satisfaction from be-
ing able to directly serve as inputs to policies formulated. This is a mutual need which the PIDS and the CPBO addressed with enthusiasm.
PIDS responds to the need In the second quarter of 2000, the Institute set out to initiate a collaboration with the legislature through the CPBO as a response to the legislative body’s demand for such policies and the Institute’s own enthusiasm to contribute to policymaking. The partnership between the two government in-
The ERBL webpage
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stitutions is expected to enhance the quality of policymaking and legislation in the country. Dubbed as the Electronic Resource Base for Legislation (ERBL) Project, the joint undertaking aims to: j strengthen the quality of legislation in terms of substance and content, and j to make information available in order to encourage debate and discussions to magnify the public’s opinion. In the initial stage of the project, the CPBO committed to provide all the necessary legislative documents such as copies of bills, House Committee reports and status reports, among others. The Institute, meanwhile, provided technical assistance to the CPBO in the areas of web design, database build-up, to page 14
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T
he importance of socioeconomic research and analysis to decisionmakers and policymakers cannot be overemphasized.
SERP-P:
Gateway to policy research
Through the years, the demand for policy-oriented research, which could serve as inputs to the deliberation and formulation of socioeconomic policies, has increased tremendously resulting in the rise in number of institutions conducting policy-oriented studies.
Despite this, however, there is still a dearth of information on what studies have been done and are available, where they can be found, and what key findings they might contain. This poses a constraint to many decisionmakers and policymakers on which information can help them in the process. In this regard, it seems that one of the biggest hurdles in policy research is not the absence of research studies per se but the lack of dissemination on their availability. The problem could be rooted to the fact that there is no central body or a mechanism in the country today which supplies such information in an organized manner.
The SERP-P project is actually a take-off from a previous undertaking of the Institute known as the Clearinghouse Project, a database of policy research studies from various academic and research institutions that appeared in the Institute’s bimonthly newsletter, Development Research News (DRN). Compared to the Clearinghouse project, however, the SERP-P is more comprehensive in terms of content and coverage, and makes use of the latest information technology as well as the benefits of research networking. The SERP-P's main objectives are three-fold: j to disseminate the availability of and key information about research materials and studies required for the formulation of na-
The SERP-P page
It is in response to this shortcoming that the Institute embarked on a project to develop an electronic database of policy research. The database was named SocioEconomic Research Portal for the Philippines (SERP-P) and launched during the PIDS Anniversary opening ceremonies on September 25, 2000, together with three other new online initiatives of PIDS, namely, the Economic Resource Base for Legislation (ERBL), Online Public Access Catalog (OPAC) system at the PIDS library, and the Network for Agricultural Research.
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tional development plans and policies; j to promote and strengthen research networking and collaboration among researchers conducting economic and policy-oriented studies; and j to provide the public with easy and immediate access to socioeconomic information. The database will contain ongoing, completed and pipeline projects conducted by various private and government research organizations and academic institutions in the country. It is envisioned to become the Philippines’ gateway to policy research, thus increasing the availability of key inforto page 14
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OPAC@PIDS:
Providing broader access to information materials
W
ith the advent of the new millennium and the technological innovations that go with it, it is but natural that libraries also undergo changes. In recent years, the concept and face of the library had evolved (and are continuing to evolve) into more flexible, client-oriented structures designed to better serve knowledge-based organizations. In fact, new models are emerging in which traditional library practices and services are blended with an electronic environment that transcends the four walls of the library. The PIDS special library, in its aim to provide its clients adequate and immediate access to information, has also changed with the dictates of time and technology. A user survey in late 1997 was done to determine the specific needs and wants of its in-house researchers and staff.
Fuelled by the Management’s desire to upgrade and modernize the library in line with the emerging direction of special libraries, an inter-staff Library Committee which includes users within the Institute was created to provide guidelines on the direction that the library is to take. The first step it took was to increase the budget for the library and review and streamline its collection. Afterwards, it approved the contracting of a consultant to help in the upgrade and modernization of the library.
Thus, in January 1998, Mrs. Lourdes David, head librarian of the University of the Philippines-College of Science Library, was invited as Library consultant. She reviewed and evaluated the library’s existing setup, collection, facilities and equipment, staff complement and services. She then mapped out, based on consultations with the PIDS management, members of the inter-staff Library Committee and other personnel of the Institute, a strategic development plan that took into consideration the PIDS vision and mission, the direction and objectives envisioned for the library’s upgrading
The OPAC Page
September - October 2000
and modernization, and the desired computerization of access to its collection and networking with other libraries. The Online Public Access Catalog (OPAC) was a major part of this development plan. For the next two years, then, the library’s catalog records were successfully converted into an electronic format using CDS/ ISIS, a familiar Windows-based library software. By September 2000, the OPAC was one of the PIDS online initiatives launched in time with the Institute’s 23rd founding anniversary. This new PIDS initiative is a technological endeavor meant to facilitate library research not only for inhouse but also outside researchers and, in the future, for foreign-based researchers who may want to have access to the PIDS library collection. The OPAC is a Windows-based and user-friendly electronic catalog system designed to assist library users in their search and reto page 16
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Enhancing the competitive environment in the Philippines
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ompetition disciplines and regulates the market by diffusing the economic power of sellers and buyers (due to actual or potential threat of competition) to manipulate prices and outputs. In general, it is an efficient regulator by allocating resources efficiently and maximizing consumer welfare. In effect, competition generally promotes efficiency and overall welfare, manifested in low prices and better quality of goods and services. However, competition may not always be present nor is it the goal in itself. There may be inherent structural factors and tendencies in firm behavior which would cause deviations from competition. At the same time, neither is competition an end in itself as there are times when the market can fail and competition will not lead to efficient resource allocation. Thus, ideally, the government should promote competition when it fulfills its role as an effective regulator and step in when it does not. This, in essence, is what competition policy is about. The primary objective is efficiency. That is, competition policy should promote competition as long as it encourages efficiency and growth. At the same time, it should allow for seemingly anti-competitive set-ups and economic regulation where the market fails. In addition, if pos-
sible, competition policy should also be made consistent with social objectives. And ultimately, the goal is to increase welfare. Responding to the need for a rational competition policy in the Philippines, the Philippine APEC Study Center Network (PASCN) and its lead agency, the Philippine Institute for Development Studies (PIDS), came up with the Competition Policy Project in 1998 which was aimed at examining the elements of and rationale for competition policy with the end view of developing an appropriate competition policy for the Philippines. The project also involved the conduct of sector studies assessing the state of competition in sectors such as telecommunication, oil, aviation, electricity, banking
and manufacturing (see sidebar for the highlights of these studies). The major findings and policy recommendations of the different overview papers and sector studies written under the project were presented and discussed in a symposium during the 23rd founding anniversary of the PIDS.
In his opening remarks delivered before the multisectoral audience, Trade and Industry Acting Secretary Thomas Aquino emphasized the need for transparency of rules under a competitive market structure. The government therefore has a major role in ensuring the implementation of fair policies and keeping an environment where competition can flourish. There should also be transparency in terms of who the players and regulators are. Behind all these should be the consciousness that there are also competition policies in bigger arenas: the regional (APEC and Association of Southeast Asian Nations or ASEAN) and global market (World Trade Organization or WTO) frameworks. Dr. Erlinda Medalla, senior research fellow at PIDS and team leader of the PASCN-PIDS Competition project, presented the framework paper which clarified the issues surrounding a competition policy, specifically on the objectives of and rationale for formulating a
Dr. Erlinda Medalla, team leader of the PASCN-PIDS Competition Policy Project, presented the benefits from promoting rational competition policies in the Philippine market. To her left is Tariff Commissioner Atty. Anthony Abad.
DEVELOPMENT RESEARCH NEWS
rational and workable framework for the Philippines. Her study pointed to the need for a new perspective on competition policy and a new way of understanding the issues in order to have a better and appropriate approach to formulating a competition policy. Attention to competition has been brought to light in the past decade because of the worldwide reduction of trade barriers. Regional and global organizations are biased toward breaking down these barriers and have moved toward a border-less, global market. Dr. Medalla said that this shift poses a challenge to a large part to the domestic market which had been, on the one hand, protected from the onslaught of better, less expensive products from other economies and, on the other, still does not possess any competitive advantage over imported products. Dr. Medalla identifies four major factors affecting the state of competition, namely: j Barriers to trade = also considered barriers to entry such as high transportation costs, and tariff and nontariff barriers; j Barriers to entry = classified as structural and behavioral barriers to entry such as firms’ response to potential competitors/entrants which could lead to abuse of the dominant position; j Other market failures = examples are economies of scale, economies of scope, synergies and transaction cost economies; and j Government policy = examples are direct regulation of industry, direct government equity participation in certain business activity and other structural regulatory restrictions.
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Sectoral Highlights Downstream Oil j Deregulation brought in new players. In fact, the mushrooming of new players in the past few years is quite notable. j However, the new players have yet to create a dent in the market share in the retail side. j The problem is how to prevent abuse of dominant position (if there is any) through an effective competition policy. j Two ways to foster competition in the retail subsector: Divorcement (separates ownership of retail stations from the gas or oil companies), and Divestment (breaking up of the big three by divesting some portion of their gasoline stations). Power Sector j The industry is dominated by a vertically integrated, state-owned company, the National Power Corporation (NPC), which leads to higher electrical prices. j Key features of the restructuring plan: Unbundling of generation and transmission functions (presently controlled by NPC), Soliciting of greater private sector participation in the generation and distribution activities, and
These factors suggest three layers of policy environment affecting the state of competition. The first is trade policy, which has had a significant impact on the general state of competition in the country. The second layer of the policy environment covers the other government policy measures and regulations which, in themselves, wittingly or unwittingly, tend to distort prices and hinder competition (and consequently a well-functioning market). The third layer of policy environment is the anti-trust legislation intended to prevent anti-competitive conduct of firms that could result from such structural or behavioral factors.
Retention of government control over transmission to ensure open access to the grid, considered a bottleneck facility. j Apart from privatizing NPC, other key issues include: the allowable extent of ownership, and the available mechanisms to mitigate the market power of the dominant firm. j One policy recommendation is to introduce competition in the transmission and distribution sectors. Telecommunications j Benefits from deregulation and increased competition are most evident in this sector. j The single most important achievement of liberalization is that it expanded consumer choice. j There are new emerging issues, however, arising from the rapid growth of the industry and technology. j There remain threats to competition due to: Lack of explicit rules in the policy on access to essential facilities; Unclear policy on vertical and horizontal mergers; and Asymmetry in regulation, particularly in the universal access strategy and the assignment of service areas.
The last is usually considered the core of competition policy. This suggests four major elements of an ideal competition policy for the Philippines. 1. Creation and enforcement of an effective anti-trust legislation. Provisions in the anti-trust legislation should prevent restrictive business practices that result in abuse of dominant position but should allow for limitation in competition on grounds to page 10
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Competition...
Sectoral Highlights
From page 9
of efficiency (arising from market failures discussed earlier) or clear public interests. Considering the encompassing nature of competition and the interrelationships and linkages between sectors, it should also be general in application—that is, it should be applicable to all sectors regardless of ownership. It should contain rules governing monopolies and cartels, restrictive agreements, mergers and acquisitions, and outright prohibitions of clearly unfair competition practices. These rules, where possible, should identify, per se, prohibition to simplify some of the tasks. 2. Review of government regulations and policies with respect to their impact on competition and competition policy objectives. A major thrust in competition policy would include reviewing government regulations and regulatory bodies with respect to their real impact on competition and overall welfare. Most importantly, the major tasks would entail the review of the following:
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Air transport j The reforms in the domestic air transport made possible the entry of five new players in the industry. j The lower domestic airfares are the most important results of deregulation. j There is yet to be liberalization in the international air transport industry. This resulted in poor performance and growth. j For the domestic industry, one area for competition policy is on mergers and acquisition. j Liberal market access should be accompanied by freer access to inputs in the provision of air service. Manufacturing j Positive correlation/relationship between concentration and profitability in Philippine manufacturing could lead to two interpretations: concentration could lead to collusion and exploitation, and more efficient firms grow and the less efficient ones contract. j There has been no major increase in the size of industry and systemic movement of resources toward the manufacturing sector.
j The manufacturing industries are characterized not only by heavy protection and regulation but also by high concentration. j The results highlight the need for a working competition policy, if the country wishes to maximize the benefits from the structural reforms that have been undertaken. Banking and insurance j The easing of restrictions on the entry of new banks and their branching was very evident in the rapid growth of banking offices. j Commercial banks’ average spread and rates of return both prior to and after the restriction on foreign bank entry were eased in 1995. Both declined during the post-liberalization years prior to the Asian crisis. j In the insurance sector, reforms were slower but the deregulation of entry also led to an increase in both domestic and foreign private insurance companies. j Key issue for competition policy is what guidelines to take on mergers and acquisition. j One competition policy issue in the regulatory framework aspect is the creation of a national competition law for the whole banking sector.
j regulations on public monopolies, j the regulatory framework covering natural monopolies and access to essential facilities, j and competitive neutrality in other government businesses.
If the required policy reforms made consistent with competition policy objective are to be implemented, vigorous advocacy is required.
In all these elements, the role of competition policy and the relevant competition policy authority should be both reactive and proactive.
4. Information and education campaign.
In addition, competition policy should ideally also be able to review and re-examine major government policies in the light of competition policy objectives.
Finally, education and information campaign on competition policy and laws should be an integral part of the process. After more than three decades of trade protection before trade reforms were implemented, and having been under two decades of martial rule, it is not surprising that there is a lack of public awareness about what competition really means and what it entails.
The elements of competition policy outlined above require a lot of technical expertise. The competition authority should have very competent and knowledgeable manpower to define markets, identify anti-competitive actions, and judiciously construct and administer “competition tests” on issues of concentration, agreements, mergers and acquisitions. Being new in the area of implementing competition policy, there would be expected a
3. Advocacy for competition policy to facilitate and implement the required reforms in government policy with welfare-reducing anticompetitive effects.
to page 15
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Curtain call:
Retiring gracefully from PIDS
F
or 23 years now since it was established in 1977, the Institute has witnessed the arrival and departure of a number of employees who have all become a part of PIDS' evolution into a wellrespected policy research institution that it is now.
ronmental economics at the Department of Economics of the University of Washington as part of a PIDS-United Nations Development Programme (UNDP) institution-building grant program. From then on, Dr. delos Angeles has emerged as one of the country’s top natural resource and environmental economists focusing on policy research.
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Natural Resources Accounting Project (ENRAP). On top of her numerous achievements, she was chosen as the Most Outstanding Alumna in the field of economics in 1993 by the University of San Carlos Alumni Association in Cebu City. After her retirement from PIDS last May 4, 1999, she continued undertaking resource valuation studies. At present, she is the project leader of the Samar Island Biodiversity Study (SAMBIO), a multilateral collaboration, which seeks to ascertain the benefits of conserving Samar’s rich forest reserve.
Angelita N. Guerinia Known to many as Angie, Ms. Angelita Guerinia was a bookkeeper/ accountant at PIDS for 19 years until 1997. A transferee from the previous Ministry of Budget, she joined the Institute in August 1978. She was the one person to talk to when employees need to ask about their government loans and related transactions.
Five of them said goodbye before the year 2000. And to thank them for their contributions to the Institute, the During her stint at PIDS, Dr. delos management and staff organized a Angeles undertook various research thanksgiving and recognition program projects such as the Economic Policies in their honor on September 26, 2000. for Sustainable Development in the The most memorable part of the pro- Philippines, the Natural Resourcegram was when each honoree was in- Based Industries (NRBI) Project, the Silent Angie was a diligent worker troduced—it was a trip down memory Impact Evaluation of the Central lane as one listened to the significant Visayas Regional Project-I (CVRP-I), and would only leave her working stamoments of the honorees in the Insti- the Mangrove Resource Valuation tion to answer her phone calls or take tute, what their colleagues felt about Project, and the Environmental and her well-deserved breaks. Her countethem and their successes nance reflects her simple that were truly an inspiradreams: a fulfilling job and tion especially to the new Moving on: Glad to have known them and sad to see them go. From a happy family. employees whose lives at left: Dr. Marian delos Angeles, Dr. Ponciano Intal, Jr., Mr. Glenn Relente PIDS are just beginning. Her retirement from and Ms. Angelita Guerinia. PIDS, however, did not spell the end of her government Here are the five honservice. She has found a new ored alumni of PIDS this calling as Budget Officer in year: the Inter-Country Adoption Board (ICAB) of the DepartDr. Marian S. delos ment of Social Welfare and Angeles Development (DSWD). Dr. Marian S. delos Angeles joined the Institute Dr. Ponciano S. Intal, Jr. in September 1983 as a ReBetter known as PSI, search Fellow. She took her Dr. Ponciano S. Intal, Jr. post-doctoral training in natural resource and envito page 12
DEVELOPMENT RESEARCH NEWS
Curtain... From page 11
geared the Institute toward marked prominence in the research community in his capacity as President from 1991 to 1999. He launched a heightened advocacy program in order to reach out to a wider audience, established a network with both local and foreign institutions and undertook collaborative work with them, developed and helped organized the Philippine APEC Study Center Network (PASCN), expanded the Institute’s inhouse research staff, and widened the dissemination outlets of the PIDS research work by introducing the Policy Notes. After his fruitful stint at the helm of PIDS, PSI—the man of ideas—still keeps in touch with PIDS and the rest of the research community as the Executive Director of the newly founded Angelo King Institute of the De La Salle University in Manila.
Glenn P. Relente More popular as Tata Glenn, Mr. Glenn Relente began his career at PIDS in November 1979. He has literally taken his driving profession seriously Ms. Anicia "Aning" Sayos
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at a fast pace and has been known to scare the wits out of his new and even old passengers. The most common story about Tatang is the way he would regale his willing and sometimes reluctant listeners with stories that are told over and over again. Playing Miss Daisy to Mr. Relente’s Tatang was a wonderfully unusual experience to any female PIDS employee. It is this exact Tatang character that remains in the memory of his co-employees at PIDS. A most unfortunate and unexpected incident after the 1998 Values Orientation Workshop (VOW) in Tagaytay left him partially paralyzed and cut short his employment at the Institute but his 16 years at PIDS definitely left an indelible mark: there could only be one Tatang at PIDS.
September - October 2000
Infrastructure... From page 4
certain policy issues? These interactions will definitely raise the quality of policy research and decisionmaking in this country. What then are the operational aspects of the new strategy? There are four elements of a solid infrastructure for research and networking.
Research agenda First is the Research Agenda. Like a road system, research must be directed to specific policy issues. Our instrument is a five-year research program anchored on eight thematic areas:
Anicia C. Sayos Ms. Anicia Sayos is Aning to most of her colleagues at the Research Department. She started as a stenotypist/ clerk at PIDS in February 1979. The following year, she was promoted to secretary to the director. In her 20 years at PIDS, she strived to work her way up the career ladder. After completing the Program in Development Economics at the University of the Philippines School of Economics (UPSE), she pursued a masteral degree in Economics. Her efforts were recognized when she was promoted to Research Assistant in 1987 and to Senior Research Specialist in 1989. Under the competent supervision of Dr. Rosario Manasan, Aning came to author a few research papers focusing on housing. She is admired by her colleagues for her commitment to work and dedicated service to the public. She has unselfishly shared her secretarial skills and work principles with her coworkers. After 20 years, Aning has moved on to a greener pasture. At present, she is with the Asian Development Bank (ADB). DRN
j Macroeconomic management in a globalized setting; j Competitiveness and competition policies; j Governance; j Social sector reform; j Infrastructure development; j Modernizing Philippine agriculture; j Environment and natural resource management; and j Policy analysis and planning tools and monitoring systems. The policy issues and specific research topics of each of these research programs are available on our website. This five-year research agenda was developed with the help of a former Director-General of NEDA and a former congressman who consulted a number of stakeholders and researchers over a period of one year. Given its limited resources and capability, PIDS can only address a specific number of policy areas. We hope that other research institutions and individuals will pick up the rest.
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Literature The second element is Literature. Decisionmakers, planners and researchers must have access to existing stock of knowledge. We have two instruments for this.
nected to the PIDS local area network (LAN) or via the worldwide web. It therefore serves as a gateway to the Institute’s resources and provides a broader and more convenient access to these materials.
One is the SocioEconomic Research Portal for the Philippines (SERP-P). It is an electronic database of completed, ongoing and pipeline policy-oriented studies related to economic development and policymaking in the Philippines that will be made available to policymakers, planners and researchers.
Database The third element is Database. Decisionmakers, planners and researchers must have access to important databases. We have two instruments for this.
The other is the Online Public Access Catalog (OPAC) which is a computerized version of the card catalog records of the PIDS library that can be accessed online either via PCs con-
One is the PIDS Information and Database System which provides researchers, decisionmakers and planners with internet-based reliable economic information in various formats. It contains both Philippine and international databases.
PIDS President Dr. Mario B. Lamberte welcomes the invited guests to the opening of the 23rd PIDS founding anniversary celebration.
The other one is the GIS-based Socioeconomic Profile of the Philippines. It is an automated, internet-based and user-friendly database system that provides ease in analyzing spatial data as presented in a geographical format.
Network The fourth element is Network. Like a system of highways, research institutions, individual researchers and decisionmakers must be networked to facilitate the flow of information and exchange of ideas. The existing instruments we are using are the Philippine APEC Study Center Network (PASCN), the Social Science Policy Network for Agriculture, and the Electronic Resource Base for Legislation.
September - October 2000
We firmly believe that the infrastructure for research and networking can provide a solid and wholesome platform for closer interaction among researchers and stakeholders and elevate the quality of the debates on certain policy issues to a higher ground. Just imagine what would happen to the quality of the debate on the proposed National Oil Exchange Corporation if everybody has access to the latest version of the bill, explanatory notes and views of the proponents, various studies on the subject, position papers, and comments of interested parties. The same can be asked of the recent proposal to fix the exchange rate. Finally, you might have the following questions in your mind: j Is this feasible? My categorical answer is YES. We have both the necessary manpower and technology. It is just a matter of mixing them together. j Is it sustainable? My answer is: It depends. This effort certainly requires cooperation from members of the research community and the decisionmaking sectors. j Is it promising too much? I think the best way to answer this is to refer you to a comment that has shaped our attitude toward this new initiative. It says: “I don’t know how really useful this will be.” The person who said it was John von Neumann, inventor of the modern computer. He made this famous comment right after he invented the modern computer. Of course, to many of us, von Neumann, together with Morgenstern, is closely associated with the famous expected utility theory. DRN
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September - October 2000
"This project is something that PIDS alone
ERBL...
cannot do but really requires working with,
From page 5
initially, CPBO and, possibly, the Senate in the future." - Mr. Mario Feranil
and setting up of a link between the two institutions’ electronic systems. The Institute likewise provided the prototype and initial maintenance of the site including the setup of a research base for legislation by matching the pending bills with relevant research resources from PIDS and other affiliate institutions.
j Full text of committee reports for major economic bills; j Status report on major economic bills; j Research materials that are relevant to the featured bills; j Notes on the legislative process; j Threaded discussion group; j Write-to-your congressman module; j User customization; and j Links to other and related sites (such as the Congressmen’s individual homepages).
The ERBL has four components, which make up the subpage within the PIDS homepage (http://www.pids.gov. ph). These are: j access to pending economic bills, j research base to pending legislation from PIDS studies and those of its affiliate institutions, j electronic discussion on bills filed, and j advocacy in the form of conferences and other fora.
SERP-P... From page 6
mation about research materials and studies. Currently, only select research studies of the Philippine Institute for Development Studies and the UP School of Economics are available in the SERP-P. However, as the network of partner-institutions grows, the portal will also grow both in terms of coverage and content. The SERP-P will then have a more comprehensive coverage of research outputs and will become more useful to the research community, thereby encouraging more institutions to participate in building the database.
The ERBL subweb offers the following features: j Full text of major economic bills – users can do a search on bills by field (author, bill number, subject, keywords, date filed, status, etc.) or by full text;
Ultimately, the goal is for the partner-institutions to undertake a dynamic role in developing SERP-P by participating in the entire project cycle, that is, in the planning, implementation, monitoring and evaluation stages. The SERP-P will then be a joint undertaking between PIDS and its partner-institutions in the research community. The SERP-P utilizes a browseruser interface or what people commonly call the “point-click” technology. To access the portal, one only needs a personal computer with Internet connection. The portal is equipped with a user-friendly search facility whereby users can search the information they want by title of study, author, research area, institution, type of publication, type of study, or keyword. In case they
The ERBL project was launched to a varied audience during the 23rd founding anniversary of the Institute. Mr. Mario Feranil, director of the project services department and head of the PIDS team in charge of the project, presented the new online initiative and its features. DRN
still cannot find the information that they want, they can use the free text search facility. In addition, the full text of some studies can also be downloaded from the SERP-P website in portable document format. This way, users will have immediate access to studies in the SERP-P and they need not request or buy copies of these studies from the source institution(s). It is envisioned that, in the future, all studies contained in the portal will have downloadable full-text versions. SERP-P may be accessed via the Institute's website at http://www. pids.gov.ph. Any comments or suggestions may be addressed to publications@pidsnet. pids.gov.ph. DRN
DEVELOPMENT RESEARCH NEWS
Competition... From page 10
lack in expertise and a need for institution- and capability-building. The question is: What would be the best way of developing such expertise and institutions? A major issue is whether or not to create a central body responsible for competition policy, especially considering the severe lack of capable manpower and institutions. Nonetheless, given the huge benefits that could be derived from a working competition policy, the government should actively seek ways to bring about its development. And a prerequisite to this would be the drafting of a carefully crafted anti-trust law which would form the legal basis for its development while including provisions that would assure due process. Dr. Medalla suggests that its judicial application could perhaps be focused on a specific provision or action at a time. For example, it could focus its initial efforts on one particular industry well known for anti-competitive practices. This would provide valuable demonstration effects as well as the much needed experience and jurisprudence. Related to the issue of a Philippine anti-trust policy was the topic of the paper of Tariff Comissioner Atty. Anthony Abad. He pointed out that competition policy is not an anti-trust policy; however, anti-trust policy is a major component of the former. The rationale for the implementation of an anti-trust law is to prevent an anti-competitive behavior in the market such as monopoly and the abuse of the dominant market position. In fact, it is even a driver for competi-
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tion policy. And while, as Commissioner Abad said, there are already existing anti-trust laws and regulations in the Philippines, the responsibility of deciding and enforcing said laws is so diffused. There are also other factors that impinge on the enforcement of antitrust laws such as political capacity to withstand pressure and technical capacity. Commissioner Abad noted that there could be two options in considering the formulation of an anti-trust law. The government could opt for a comprehensive approach, that is, come up with a comprehensive anti-trust law that is general in application but effectively harmonized and linked with other government policies that deal with competition policy. Another option is for a piecemeal approach, that is, the amendment or refinement of existing laws. Meanwhile, the focus of Professor Jose Tabbada’s paper is the design of workable institutional arrangements in the implementation of a competition policy. Even in the absence of a comprehensive law or policy on competition in the Philippines, competition is being promoted and safeguarded by a number of government agencies such as the Department of Trade and Industry and the Securities and Exchange Commission, and interagency bodies created under different administrations. In terms of their effectiveness, interagency bodies more often than not have been been ineffective and nonfunctional. There is also the problem of overlapping structures and duplication of tasks of the offices. For example, one government agency would have two offices with essentially the same mandate. In this light, Prof. Tabbada noted three alternative institutional arrange-
September - October 2000
Vol. XVIII No. 5
September-October 2000
Editorial Board Dr. Mario B. Lamberte President Dr. Gilberto M. Llanto Vice-President Mr. Mario C. Feranil Director for Project Services and Development Ms. Jennifer P.T. Liguton Director for Research Information Ms. Andrea S. Agcaoili Director for Operations and Finance Atty. Roque A. Sorioso Legal Consultant
Staff Jennifer P.T. Liguton Editor-in-Chief Genna J. Estrabon Issue Editor Sheila V. Siar, Jane C. Alcantara and Edwin S. Martin Contributing Editors Valentina V. Tolentino and Rossana P. Cleofas Exchange Delia S. Romero, Galicano A. Godes, Necita Z. Aquino and Federico D. Ulzame Circulation and Subscription Genna J. Estrabon Layout and Design
ments for implementing a competition policy for the country. These are: j Maintaining the existing arrangement where the responsibility for implementing competition policy is scattered among and perto page 16
DEVELOPMENT RESEARCH NEWS
OPAC.. From page 7
trieval of bibliographic records even without the assistance of the library staff. The system provides users with a means to view bibliographic descriptions of PIDS collections wherever they may be. At present, work is being finalized in having the OPAC accessible via the PIDS local area network (LAN) but in the coming months, the OPAC will be available on the Web. This means that very soon, users can access and download information from the OPAC anytime and anywhere. In addition, part of the PIDS library’s future plans is the digitization
Editor's... From page 1 This year—the Institute’s 23rd anniversary— PIDS President Dr. Mario B. Lamberte takes pride in presenting to its valued clients and audience the recent efforts, mostly in terms of online endeavors, that the Institute has initiated in order to help establish the necessary infrastructure for research and networking. It is a source of esteem for every PIDS employee as well as those who are involved with the Institute in one way or another to be a member of one of the few government offices with a high information technology (IT) orientation and capability. It is this kind of facility which has enabled the Institute to lay down a new environment for Philippine research by giving policymakers and researchers broader and faster access to a varied range of vital socioeconomic information. As the PIDS gradually moves its way to its silver year in 2002—expected to be a grand celebration—it is therefore with high hopes that the efforts carried out this year will bring great fruits and reward two years after. DRN
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of all the Institute’s research materials and publications and making these available in CD-ROM. This plan is aimed at preserving the wealth of research outputs that the Institute has generated for 23 years as well as at helping PIDS’ various clients gain easy and low-cost access to its materials. Aside from the PIDS research outputs, the library also has a wide collection ranging from macroeconomics to international cooperation and international relations to economic and social policy planning, economic condition, research and systems to institutional framework (including law, politics, and human rights). It also holds CD-ROMs, reference books, newspapers, theses and dissertations, newspaper clippings and maps in its collection. The materials are acquired through donations, exchanges and purchases/subscriptions and lately, based on recommendations of the PIDS research users and screened by the Institute’s inter-staff Library Committee. Inquiries about the OPAC may be addressed to either ttina@pidsnet.pids.gov.ph or canne@pidsnet.pids.gov.ph. DRN
September - October 2000
Competition... From page 15
formed by several offices in the government; j Creating a separate competition board which shall be placed under, or attached to, one of the offices in the existing arrangement; and j Establishing an independent commission which shall be vested with broad powers and insulated from political pressures as well as provided with financial autonomy and flexibility. Aside from the framework and overview papers, six sectoral studies were likewise presented during the PIDS anniversary symposium on competition policy wherein the state of competition in each of these sectors— power sector, downstream oil industry, air transport, telecommunications, banking and insurance sector, and the manufacturing industry—was discussed and analyzed. DRN
DEVELOPMENT RESEARCH NEWS is a bimonthly publication of the PHILIPPINE INSTITUTE FOR DEVELOPMENT STUDIES (PIDS). It highlights the findings and recommendations of PIDS research projects and important policy issues discussed during PIDS seminars. PIDS is a nonstock, nonprofit government research institution engaged in long-term, policy-oriented research. This publication is part of the Institute's program to disseminate information to promote the use of research findings. The views and opinions expressed here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the studies contained in this publication, or any of the PIDS papers, as well as suggestions or comments are welcome. Please address all correspondence and inquiries to: Research Information Staff Philippine Institute for Development Studies Room 304, NEDA sa Makati Building, 106 Amorsolo Street, Legaspi Village, 1229 Makati City, Philippines Telephone numbers 892-4059 and 893-5705 Telefax numbers (632) 893-9589 and 816-1091 E-mail address: publications@pidsnet.pids.gov.ph Reentered as second class mail at the Makati Central Post Office on April 27, 1987. Annual subscription rates are: P200.00 for local subscribers; and US$20.00 for foreign subscribers. All rates are inclusive of mailing and handling costs. Prices may change without prior notice.