PHILIPPI NE INSTITUTE FOR DEVELOPMENT STUDIES Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas
DEVELOPMENT RESEARCH NEWS Development Research News
May - June 2009
Vol. XXVII No.3
ISSN 0115-9097
Editor's Notes
Poor incentive
Most countries generally equate development to eco-
structure drives quality of
nomic growth and vice versa. The Philippines is no
Philippine
exception. Years of economic growth, however, have failed to uplift the lives of Filipinos, with most of the population remaining poor. One may then ask if economic growth is the answer to the country’s develop-
bureaucracy down
ment or if there may be other factors that are critical to achieve development? In the 1990s, the United Nations Development Programme advocated the concept of human development which does not solely rely on economic indicators but gives importance to longevity, access to knowledge and achievement of a decent standard of living. Human development does not rest solely on incomes but on outcomes. Certain elements,however, impinge on the attainment of positive human development outcomes. One of which is institutions such as the government bureaucracy. The 6th and latest 2008/2009 Philippine Human De-
velopment Report (PHDR), as prepared by the Human Development Network, focuses on the theme “Institutions, Politics and Human Development in the
Philippines� . For the main feature in this issue, we focus on the Report’s analysis and roots of the low quality of the country’s bureaucracy. Inequities re-
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What's Inside 5
National Launch of the PHDR 2008/2009
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PHDR Mindanao Launch
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he perception that corruption in the Philippines is getting worst has been reflected in the 2008 corruption perception index (CPI) released by Transparency International, an independent global civil society organization committed to the fight against corruption. Last year, the country slipped to a CPI of 2.3, down from its score of 2.5 for three years in a row since 2005.1
Between the public and private sectors, the public sector has always been perceived as the more corrupt. It is often said that the meager salaries and benefits in government—or what can be collectively called as incentive structure—is one of the reasons government workers are prone to corrupt practices. While corruption in itself is of concern, the matter is even more compelling in the face of cross-country evidence of a strong causal link from improved ‘governance’ to better development outcomes, including GDP per capita, infant mortality and literacy. 2 With an established connection between governance and human development outcomes, the question then arises: how about the link between incentive structures and governance? To explore this link, Dr. Toby Monsod of the UP School of Economics undertook a study for the Philippine Human Development Network (HDN) that explored whether and how the incentive structures embedded in the Philippine bureaucracy have affected agency performance, particularly in the human services sector. Titled “The Philippine Bureaucracy: incentive structures and implications for performance,� Monsod’s piece is featured 1 The CPI ranks 180 countries by their perceived levels of corruption based on expert assessments and opinion surveys. The index is between 10 and 1 wherein a high CPI means a country is perceived to be less corrupt relative to others. 2 Using world governance indicators they developed, Kaufman, D., A. Kraay, and M. Mastruzzi of the World Bank estimate a “development dividend� for good governance of about a 300% increase in incomes per capita in the long run and that the same improvement lowers infant mortality 2.5 to 4 times, and raises literacy by 15 to 25 percent.
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in the Philippine Human Development Report 2008/2009. This article summarizes some key points in Monsod’s paper. Inequities in the incentive structure For many years now, the monetary incentive structure has been marred by both external and internal inequities. External inequities refer to how government salaries compare with equivalent jobs in the private sector and other competing markets. The results of a compensation and benefits study conducted by the Civil Service Commission (CSC) from 2002 to 2006 confirmed that jobs in the public sector were compensated at lower rates than their private sector counterparts. For instance, senior managers and highly technical personnel in government — such as directors, school superintendents, district engineers, prosecutors, assistant secretaries, and the like — were receiving 74 percent less; subprofessional and professional technical personnel — including division chiefs, public attorneys, school principals, public health nurses, and others — 40 percent less. The structure of wages and other incentives in government are prescribed by Republic Act 6758, or the Salary Standardization Law (SSL) of 1997, as well as by Joint Resolution No. 01, s. 1994 of the Senate and the House of Representatives. Internal inequities, meanwhile, refer to distortions across comparable jobs within and among government agencies. One source is the congressionally approved exemption from the SSL enjoyed by a select group of public sector agencies and corporations. The exemptions allow employees to receive compensation that is much higher than what is mandated under the SSL, regardless of agency performance. As of April 2008, a total of 20 government-owned or controlled corporations (GOCCs) and three national government agencies enjoyed SSL exemption. Other special laws which favor specific occupational groups such as the Magna Carta for Public Health Workers (Republic Act No. 7305) which entitles public health workers to receive special benefits not granted to other government personnel, likewise create internal distortions. Internal inequities also arise from job classification distortions such as when the same job is ranked differently across agencies. A clear example cited by Monsod is the Economist III position of the National Economic and Development Authority (NEDA) which
May - June 2009 is one salary grade lower than the Budget and Management Specialist III of the Department of Budget and Management (DBM) even though the job qualifications and scope of work of both positions are comparable. Salary grade refers to how a job is valued within the salary schedule which in turn depends on a job classification framework; a lower grade is equivalent to a lower base pay. In addition, the government’s compressed salary schedule and longevity policy tends to, perversely, discourage per formance. Monsod explained: “The SSL schedule contains 33 salary grades, each with 8 steps. This results in very narrow bands that overlap at the 4th step. Longevity in turn is rewarded with a permanent step increment in base pay (rather than a onetime bonus). These two policies combined can create a situation where a long-serving subordinate receives a higher salary than his/her newly appointed supervisor. This distortion also gives rational employees a greater incentive to stay in a position and underachieve or underper form, since added responsibilities and longer hours resulting from a promotion will likely outweigh any incremental gains in compensation from superior performance.” Nonmonetary disincentives Nonmonetary incentives include a sense of mission, professional pride, or ideology which motivate agents to pursue organizational goals. Since there are no high-powered legal monetary incentives in government service, the relative significance of nonmonetary incentives becomes magnified. Monsod points out that successfully creating a sense of mission depends on how well managers can define and protect the organization’s core tasks and boundaries. A number of practices have made this difficult, however, particularly in recent years. One instance is the practice of creating ad hoc bodies and presidential consultants/advisers, whose mandates, in many cases, overlap with that of regular agencies and officials. This muddling of jurisdictions and accountabilities not only creates discord across offices but tends to diminish the sense of duty and professional status within the ranks of civil servants. For example, aside from official cabinet secretaries for foreign affairs, energy, and education, there is also a Presidential Adviser
DEVELOPMENT RESEARCH NEWS on Foreign Affairs, a Special Adviser for Energy Affairs, and two Presidential Assistants for Education. A Philippine Strategic Oil, Gas, Energy Resources, and Power Infrastructure Office, a Minerals Development Council, and a National Organic Agriculture Board were also created which stand apart from each of the departments of Energy, Environment and Natural Resources, and Agriculture. Monsod observed a net decrease in the number of offices and agencies attached to the Office of the President between 1993 and 2007 (Figure 1). This was due to a sharp decline in the number of agencies during the period 2001–2003 resulting from the work of the Presidential Commission on Effective Governance (PCEG) which was mandated to streamline the number of agencies in the Executive. However, when the PCEG was abruptly abolished in 2004, the number of agencies again began to increase.
3 Figure 1. Flow in the number of government agencies under the Office of the President, by Administration.
Base data: DBM, 2007. Computations author’s own.
Figure 2. Number of presidential appointments (1994–2008, with five missing years)
After a steady decline in 1994 to 1998, the number of presidential consultants/advisers has also been growing steadily since 2001, tapering off a bit in 2005, before peaking in 2008 (Figure 2). Presidential appointments enjoy title and authority sans the accountability. This situation sows confusion and diminishes morale across the ranks. There is also the issue of political appointments into formal plantilla positions which, as Monsod emphasizes, violates the constitutionally mandated notion of ‘merit and fitness’ in the bureaucracy. Approximately 10,000 positions, including those at the highest level career posts as well as highly technical posts, are subject to presidential prerogative. The CSC has no power, whether to veto or protect, when the subject is a “presidential appointee.” Salient findings of the study Monsod finds evidence that, in general, the disincentives from a 20-year old compensation structure as well as from the increasing political intervention into the bureaucracy over the last few years had taken a toll on the quality of the career service. At the same time, she notes that a better quality of bureaucracy is associated with better agency performance, at least in the human development services sector. These are shown in the following: First, the study looked at trends in the numbers of career service personnel across the
May - June 2009
Source: Directory of Government Officials, DBM,
first, second, and third levels of the corps and in the share of eligible people occupying third-level career executive services (CES)positions and found a stagnant or decreasing quality at all levels of the corps in recent years. It is assumed that higher numbers of career service personnel and a greater share of eligible people occupying CES posts would be associated with greater quality of the bureaucracy. Contrasting patterns were obtained for the first (clerical, trade, crafts, custodial) and second levels (subprofessional, professional, and technical positions). In the first level, a decrease in the number of career service personnel was evident while at the second level, the opposite trend was found. This increasing trend at the second level, however, was likely driven by public school teacher hires, which merely reflects the increasing
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population of schoolchildren rather than an improvement in the quality of personnel in previously existing positions. At the third level, meanwhile, there is a decreasing number of career personnel in nonexecutive service (NEC) positions, indicating that the corps may be losing quality among highly technical positions. There is also a decreasing trend in the share of Career Executive Service Officer (CESO) eligibles occupying CES positions starting around 2004 across all national government agencies (Figure 3) which cannot be attributed to a lack of supply of CESO eligibles. According to Monsod, this indicates that the share of political appointments (read: ineligible personnel) is increasing and/or that CESO eligibles are leaving voluntarily. A decreasing trend of CESO eligibles is also apparent even in GOCCs (Figure 4).
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Second, the study has analyzed the correlation between the quality of the bureaucracy and agency per formance. Monsod explained that the impact of incentives on the quality of the bureaucracy should ideally be measured through job satisfaction surveys and through flow data of personnel in and out of agencies. However, since these data are not available, the percentage of CES positions occupied by CES or CESO eligibles is used as a proxy variable. CES refers to third level positions (salary grade 25 and up), excluding NEC positions. To be eligible to occupy said positions, one must pass a stringent set of tests administered by the Career Executive Service Board (CESB) or the CSC. Agency performance in turn is measured by a subjective, “user satisfaction� measure, specifically, agency public approval ratings, in lieu of objective measures which are unavailable.
12 Figure 3. Percentage of CESOs and CES eligibles occupying CES positions at the executive branches of national government agencies
Base data: CESB, various years.
Figure 4. Percentage of CESOs/CES eligibles occupying CES positions in GOCCs: SSL exempt
Base data: CESB, various years.
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May - June 2009
National Launch of the PHDR 2008/2009
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overnment institutions are linked to and shape human development. Being so, the government should therefore always aim to deliver better quality public goods and services so that human development goals can be achieved. However, to have this, the current formal rules, informal norms, and enforcement features of the government institutions need to be changed. This was among the topics discussed in the latest (2008/2009) Philippine Human Development Report (PHDR) whose theme is “Institutions, politics, and human development” and which was presented during its national launch at the Crowne Plaza Galleria in Mandaluyong on May 20, 2009. As Dr. Toby Monsod of the Human Development Network (HDN) noted in her presentation of the key findings of the Report, there is a need to update the government compensation system, professionalize and protect the career executive and managerial corps, and ensure transparency in the budget implementation and other government transactions. From its first publication in 1994, there has since been six issues of the Report focusing on certain aspects of human development. These reports have acquired a reputation for having factually based, insightful, and wellwritten analyses of human development issues in the Philippines. The PHDR is today a highly respected publication not just in the Philippines but also in the community of nations. This latest PHDR, prepared by the HDN, with support and collaboration from the United Nations Development Programme (UNDP), New Zealand’s International Aid and Development Agency (NZAID), and the Philippine Institute for Development Studies (PIDS), centers on the effects of institutions and politics in the country to human development by looking into the aspects of health, education, and per capita income. It looks into critical institutions in the Philippines— the Civil Service Commission (CSC), the Department of Budget and Management (DBM), and the Department of Education
(DepEd)—to provide understanding of these institutions’ performance in the context of human development. Dr. Arsenio Balisacan, president of the HDN, welcomed participants from national government agencies, the diplomatic community, academe, and nongovernment organizations who witnessed the launching of the 6th and latest PHDR. The event was graced, among others, by UNDP Country Director Mr. Renaud Meyer; New Zealand Ambassador to the Philippines Andrew Matheson; and HDN Founding President Prof. Solita CollasMonsod. The discussions benefitted from the reactions of Senator Edgardo Angara, DepEd Secretary Jesli Lapuz, Civil Service Commission Chair Ricardo Saludo, and former Associate Justice of the Supreme Court of the Philippines Adolfo Azcuna; and from the insightful words of wisdom of National Scientist Dr. Gelia T. Castillo who gave the closing remarks.
The Philippine institutions The PHDR argues that it is the institutions that structure behavior which matter deeply on whether human development advances or not. In this way, the human capabilities are determined by the level and quality of private and public goods and services being consumed. The public goods are produced by the government organizations and are expected to promote human development. However, the PHDR emphasized that the quality of inputs into human development will suffer if the combination of formal and informal rules hampers rather than enables the agencies’ fulfillment of their tasks. The most controls affecting government agencies, according to the PHDR, are those that directly motivate government employees, determine the level and management of agency funds, and exact accountability. Perverse incentives in the civil service, both monetary and nonmonetary, have taken their toll on the bureaucracy as indicated by the stagnant or decreasing trend in quality at all levels of the corps. In addition, data showed that salaries can be as much as 74 percent
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below comparable jobs in the private sector and are not always uniform across agencies or jobs of the same nature. Moreover, the number of ad hoc bodies, presidential consultants and advisers, and political appointees to plantilla positions has been increasing in recent years, resulting in further demoralization. The PHDR therefore suggests that the existing rules and practices that are impinging the civil service need to be reformed or, at the very least, contained in order to enable human development outcomes. Another major point presented is the budget. The Report notes that the budget, as a whole, constrains, rather than enables, the government. Mandatory government obligations already comprise an average of 80 percent of the total annual budget, leaving little headroom to increase spending on basic services or fund innovations. This leads to overdependence on official development assistance (ODA) for critical projects and reforms. The PHDR stated that such dependence, combined with weak congressional oversight, has created room for leakages and corruption. On the part of the judiciary and other special offices, it was reported that the issue of partisan political appointments has seriously affected such institutions that are meant to enforce and safeguard the rules themselves. The performance of the Civil Service Commission, the Office of the Ombudsman, and the Courts, in particular, has been affected in varying degrees by the direct and indirect interference, or circumvention of rules, from the appointing authority. Exacting public accountability will only be realized if the autonomy of the enforcement bodies is protected and consistently observed. The PHDR outlined some specific formal institutional changes such as the enactment of a new Government Classification and Compensation System and Career Executive System to reestablish professionalism and meritocracy in the civil service corps; the Budget Reform Act, Budget Impoundment Control and Regulation, and Intelligence and Oversight Act to restore Congress’ power of the purse; and the Freedom of Information Act to implement the constitutional guarantee of access by the people to information on matters of public concern.
May - June 2009 Particularly in the education sector, there is a need to review the Magna Carta for Public School Teachers to guarantee provision for a one-year probationary period for newly hired teachers to assess if they possess the necessary qualities before being permanently hired, appropriate multiyear budgeting rules, and the changing of qualification standards for principals and school superintendents. The judiciary, on the other hand, can design and adopt for itself an independent search mechanism for qualified candidates that would do away with the influence of recommendations from politicians.
Reactions Civil Service Commission (CSC) Chair Ricardo Saludo particularly agreed on the PHDR’s recommendation to improve the government compensation system, referring to the Salary Standardization Law III that is already in the process. Sec. Saludo added that the CSC is pushing for the strict implementation of the Performance Management System–Office Performance Evaluation System (PMS-OPES), which is a new strategy that will establish a culture of performance and accountability in the bureaucracy. The PMSOPES evaluates office performance or the collective performance of individuals within the smallest operating unit of an organization. Likewise, DepEd Secretary Jesli Lapus agreed with the need to review the Magna Carta for Public School Teachers and appropriate multi-year financial system, saying that “if education is important, money should be put in it.” However, Sec. Lapus countered a statement in the Report which says that teachers opting to stay long years in position receive higher incentives. He explained that most, if not all DepEd teachers, could not wait to be promoted to managerial positions. This is because the only way for them to increase their salaries and their professional standing is to be a school administrator. The Secretary, however, emphasized that more good teachers are needed than managers. What is necessary, according to Sec. Lapus, is to study an alternative salary scheme that would keep the best and brightest teachers that the country is continuously losing. On the other hand, the implementation of an open voting in the Judicial Bar Council is a significant step in strengthening the independence of the judiciary and the Ombudsman, resulting in quality enforcement of pub-
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DEVELOPMENT RESEARCH NEWS lic accountability. According to former Supreme Court Associate Justice Adolfo Azcuna, reforms such as the open voting system which assure monitoring and transparency have already been implemented by the Judiciary. What matters, said Azcuna, is the continuous monitoring of the performance of justices after their appointment. For his part, Senator Edgardo Angara pointed out that the change the country needs is a fundamental reform and that the country falls behind due to lack of implementation. The Senator said that there is a particular need for an established, transparent political party system in the Philippines. This way, politicians would be trained to be effective and good leaders who would serve the country. As the PHDR states, “deeper than policies and larger than the individuals, it is the institutions that structure behavior which matter deeply on whether human development advances or not.” In the end, however, the road toward total human development lies not on the hands of politicians and institu-
tions alone. In reality, it is the individual who matters inasmuch as institutions are constituted by individuals. This was pointed out by National Scientist Gelia Castillo in her closing message during the Report’s national launch. Dr. Castillo emphasized that when reforms do not transform, it is important to have empowered individuals, both in the public and private sectors, who will serve as watchdogs to the institutions being created. “We cannot organize people power against institutions because institutions are us. Institutions do not resign; they simply persist,” she said. The lessons from the six provinces that won awards for being the top and the most improved provinces on the measurement of the Human Development Index (HDI), according to Dr. Castillo, is that it is not necessary to be rich to progress in human development, but for richer provinces, it is a “sin” not to progress in human development. In a country like the Philippines wherein there are so many reforms needed, the negatives are the opportunities and the positives are bonuses.
APQ
Box 1. The provincial picture: who’s on top; who’s at the bottom? Who gained most; Who gained least?
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he UNDP defines human development as the process of enlarging people’s choices and enhancing human capabilities and freedoms, and enabling them to live a long and healthy life, have access to knowledge and a decent standard of living, and participate in the life of their community and decisions affecting their lives. Human development is measured by the Human Development Index or HDI, which is a summary measure of human development. It seeks to measure the average achievement of a country in three basic dimensions of human development: a long and healthy life, knowledge, and a decent standard of living. Philippine Economic Society President and Member of the Board of the Human Development Network Dr. Winfred Villamil, in his presentation of the provincial HDIs during the national launch of the 2008/2009 Philippine Human Development Report, explained that the HDI, as defined by the UNDP, is motivated by the principle that income alone cannot faithfully reflect the basic dimensions of human development. Income is a means toward human development, not an end. Therefore, it is “outcomes” that matter from a human development perspective rather than incomes.
Global ranking The UNDP publishes a global Human Development Report (HDR) that quantifies the three dimensions of human development across countries, using life expectancy at birth, adult literacy and combined primary, secondary, and tertiary enrolment rates, and adjusted per capita gross domestic product (GDP) in purchasing power parity (PPP) in US dollars. In its latest edition (2007/2008), the Philippines ranked 90 th among 177 countries, down six places since the preceding computation when it was ranked 84th. Although its ranking dropped, the country remained in the category of countries with “medium human development” and its HDI maintained its upward trend from 0.758 in 2000 to 0.771 in 2005. Functional literacy rates and gross enrolment rates continued to be above that of the medium group average by 18.7 percent and 24.2 percent, respectively, an advantage that allowed the country to rank much better in terms of HDI than in terms of per capita GDP by 11 notches. Its GDP per capita relative to the group average did improve, however, from a level slightly below the group average in 2000 to a level 5 percent above it. The Philippines also maintained its creditable record in the
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Gender related Development Index (GDI), a measure that adjusts HDI for gender inequality. Among the 157 countries with a similar GDI value, the Philippines’ rank was four notches better than its HDI rank. Its position among other countries notwithstanding, what is more useful for domestic policy purposes are the subnational disparities in the measured subcomponents of human development, which are not revealed by the national averages. Provincial picture The 2008/2009 PHDR is the sixth in its series, and the fifth update of the provincial HDIs. It covers the period 2004 to 2006. Dr. Villamil presented subnational or interprovince measures and identified which provinces have performed better or worse across time in each component of the HDI. The top province on life expectancy is La Union (74.6) while Tawi-Tawi (53.4) is in the bottom. It is explained that the high disparity in life expectancy observed across provinces is due to disparities in access to quality health care. The largest gainer in life expectancy from the year 1980–2006 is Camarines Sur while the smallest (negative) gainer is Tawi-Tawi. Knowledge, on the other hand, is measured through the high school graduate ratio and basic education enrolment rate. The top province in high school graduate ratio is Benguet (76.6) while the bottom is Sulu (23.1). The largest gainer for this ratio, as compared to the 2003 data, is Abra while the smallest (negative)
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gainer is Batanes. For basic enrolment rate, the top province is Batanes (100.0) and at the bottom is Maguindanao (75.2). The largest gainer for this rate is the Province of Western Samar while the smallest (negative) gainer is the Province of North Cotabato. In the HDI, a decent standard of living is proxied by an income measure, and ideally, a decent standard of living per province would be measured by provincial per capita GDP. Per capita GDP data, however are disaggregated up to the regional level only. Thus, estimates for the provincial per capita income are based on the Family Income and Expenditures Survey (FIES), albeit with adjustments. The top province in real per capita income is Benguet with P36, 355 while Tawi-Tawi is at the bottom with P6, 664. On the other hand, Siquijor is the largest gainer in real per capita income with 43.6 percentage change from 2003 and Antique is at the bottom with a -16.9 percentage change from 2003. In terms of HDI levels, the top and bottom ten provinces based on the HDI for 2006 are shown in Box Table 1. The top HDI provinces are all in Luzon while seven out of the bottom ten provinces in terms of HDI are located in Mindanao. Benguet retained the top rank with an HDI of 0.787, followed by Rizal (0.725), Cavite (0.718), and Bataan (0.716). The top three provinces with the highest increase in HDI are Benguet, which remains at Rank 1, Biliran, which leaps from Rank 61 in 2003 to Rank 29 in 2006, and Siquijor, from Rank 58 to Rank 31. APQ
Box Table 1. Human Development Index (2006) Top Ten
Index
Benguet* Rizal* Cavite* Bataan* Laguna Pampanga Ilocos Norte Batanes Nueva Vizcaya La Union
0.787 0.725 0.718 0.716 0.708 0.706 0.700 0.699 0.699 0.692
Per Capita Income Rank minus HDI Rank 0 6 4 0 0 0 2 -5 -7 4
Bottom Ten
Index
Romblon Zamboanga del Norte Eastern Samar Sarangani Masbate Lanao del Sur Basilan Maguindanao* Tawi-Tawi* Sulu*
0.487 0.487 0.484 0.475 0.457 0.445 0.434 0.430 0.332 0.326
Per Capita Income Rank minus HDI Rank 2 2 -3 -3 2 0 1 -6 1 -1
*Rankings robust all trimming rules applied to 2006 FIES data shown in Statistical Annex 11 (Report). The other provinces are robust to other rules’ top and bottom lists but without their rankings. Note: Metro Manila .795 Source: PHDR 2008/09
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PHDR Mindanao Launch
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he Philippine Human Development Network (HDN), the United Nations Development Programme (UNDP), New Zealand Agency for International Assistance (NZAID) and the Philippine Institute for Development Studies (PIDS), together with the Civil Service Commission (CSC) Region Xl as local partner, launched the Philippine Human Development Report (PHDR) 2008/2009 in Mindanao last June 18 at the Grand Men Seng Hotel in Davao City with the theme “Institutions, Politics and Human Development in the Philippines.� CSC Regional Director Annabelle Rosell and HDN President Dr. Arsenio Balisacan welcomed the representatives from different national government agencies, local government units, the academe, private sector, and media to this Mindanao launch of the Report that centers on how government institutions function and affect the quality of human development in the country.
Provincial HDIs Dr. Clarissa David from the HDN presented the state of human development in the country as well as the provincial Human Development Indices (HDIs) or the average achievement in three basic dimensions of human development such as longevity, knowledge, and standard of living. These dimensions are measured through life expectancy at birth, simple literacy and combined enrollment rates, and real per capita income, respectively. The 2008/09 PHDR shows that the five lowest provinces in terms of HDI are from the Autonomous Region in Muslim Mindanao (ARMM). Sulu continued to record the lowest HDI (0.326), followed by Tawi-Tawi, Maguindanao, Basilan, and Lanao del Sur. Life expectancy is also low in four ARMM provinces based on the 2000 census used by the Report. Tawi-Tawi is at the bottom, registering only 53.4 years, together with Sulu (55.5), Maguindanao (57.6), and Lanao del Sur (58.7).
According to Dr. David, Tawi-Tawi and Sulu are the only two provinces where life expectancy dropped over the last 26 years from 1980 to 2006. Life expectancy in Tawi-Tawi dropped by 10.6 percent and in Sulu by 1 percent. With an HDI of 0.645 and 0.570, respectively, Davao del Sur ranks 14 while Davao del Norte ranks 33 out of 77 provinces. Davao Oriental, meanwhile, has a very low HDI (0.497), ranking 12th to the last. It is interesting to note, Dr. David added, that Davao Oriental, ranks lowest among the Davao provinces in terms of HDI but highest in life expectancy. Davao Oriental, Davao del Sur, and Davao del Norte people are expected to live 69.9 (23rd), 69.4 (26th), and 66.3 (50th) years, gaining 10.1, 8.8, and 4.9 years in life expectancy, respectively. As Benguet tops provinces in High School Graduate Ratio (HSGR) with 76.6 percent, Sulu (23.1), followed by Sarangani (28.4), Davao Oriental (29.9), Masbate (32.3), and Negros Oriental (33.6) comprise the Bottom 5. Davao del Sur and Davao del Norte are in the middle of the rank with 56 percent (24th) and 46.5 percent (50th). All Davao provinces increased in HSGR, with Davao del Sur gaining 6.6 percentage points, Davao del Norte, 5.4, and Davao Oriental, 2.1 percentage points. In terms of Basic Enrollment Rates, Davao del Norte ranks 39th at 89.1 percent, Davao del Sur ,62nd at 87.1, and Davao Oriental at 72 nd (or one of the bottom 10 at 81.9 percent).The bottom list consists of Maguinandao with the lowest at 75.2, followed by Sarangani, Zamboanga del Sur, North Cotabato, Lanao del Sur, Bukidnon, and Tawi-Tawi. The lone Visayan province in the bottom 10 is Negros Oriental. Dr. David noted that worrisome declines were observed in North Cotabato, Kalinga, Zamboanga del Norte, Tawi-Tawi, and Davao
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Oriental which all experienced a drop of 10 percentage points or more. Davao del Norte and Davao del Sur, meanwhile, dropped by 0.9 and 3.4 percentage points, respectively. For the third aspect, the Report revealed that the Bottom 5 provinces are Tawi-Tawi, Sulu, Basilan, Masbate, and Lanao del Sur. It was also noted that Tawi-Tawi experienced the sharpest decline in real per capita income, with an almost 42 percent decrease. Lanao del Sur (33%), Apayao (2%), and Abra (24%) also registered dramatic declines. Davao del Sur with P27, 998 (12th) and Davao del Norte with P23, 396 (28th) have relatively high real per capita incomes compared to Davao Oriental with P17, 715 (62nd). Only Davao del Sur gained in this aspect by 2.4 percent while Davao Oriental and Davao del Norte lost 2.4 and 5.1 percent, respectively. Overall, Davao del Sur improved by 5.57 percent and Davao del Norte by 1.38 percent, closer to the perfect HDI score of 1 from previous levels. Davao Oriental practically stayed at the same level. Improvements in Davao del Sur seem to have been driven by gains in education (8.9%). Improvements in Davao del Norte were likewise driven by gains in education (7.8%) as well as in life expectancy (5.2%), said Dr. David. A reason for poor performance by most Mindanao provinces, especially in the ARMM, in terms of human development is their being conflict-ridden areas. According to the 2005 PHDR that centered on Peace, Human Security, and Human Development, open conflict in Mindanao has prevented socioeconomic programs from achieving their goals and instead exacted heavy social and economic costs on affected communities.
Philippine institutions Government institutions are linked to human development outcomes because human capabilities depend on the level and quality of private and public goods and services that promote human development, Dr. Toby Melissa Monsod emphasized as she discussed the highlights of the 2008/09 PHDR. Monsod, author of a background paper “The Philippine bureaucracy: incentive structures and implications for performance” for the
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Report, stated that there is a need for a deeper institutional view of the Department of Education (DepED) and of the government in general to understand the culture of disinterest toward reforms. This is vital because institutions — formal rules, informal rules or “ways of doing things,” and enforcement characteristics — shape behavior of people. Dr. Monsod said that there is a limit to the extent that formal political rules can compensate for bad norms. She pointed out that informal rules like adhering to kinship and personal relations must be realigned in order to reinforce formal rules. Realignment of crooked informal rules can be achieved through demand forces like constitutionalled movements that embody better norms and, more importantly, are distinct from and would not replace or capture formal rules. DepEd Region IX Director Teresa Estigoy, as one of the panel of reactors, acclaimed the enactment of RA 9155 or the Governance of Basic Education Act of 2001, which is consistent with the Decentralization Policy and would serve as a driving force for the central, region, division, district, and school heads to actualize DepEd’s reform package. Director Estigoy added that the law recognized the basic education reform agenda that promotes collaboration among school management and empowered students to produce and design projects for their respective schools. Concurring with the Report, the director said that DepEd has to cope with pressures from politicians who hinder the department’s drive to improve and advocate change in the system for further educational development of the Filipino children. Davao del Norte Governor Rodolfo del Rosario, also as a panel reactor, commended the Report for capturing the minds of the readers beyond mere presentation of statistical data. Governor del Rosario proudly shared that holding a People’s Day every Monday is his province's greatest institutional reform and serves as a one-stop-shop public service response to the public’s queries and requests. Project NOBLE (No Barangay Left Behind) was also implemented, which ensures a P1 million allocation for each barangay to ensure a fair share from the provincial budget.
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DEVELOPMENT RESEARCH NEWS
May - June 2009
Governor del Rosario also seconded that change in rules and norms leads to institutional change. This, however, depends on the qualities, vision, and management of leaders. The development of a nation or a province is greatly affected by bad politics which is the root cause of the problems as compared to good politics which holds the promise of reforms, added del Rosario. Davao City Regional Trial Court Judge Virginia Europa, meanwhile, admitted that the problems of corruption and congestion have been around for a long time and have often been integral on how to enforce of sanction. The Supreme Court, said Judge Europa, would like to adopt in the Philippine Judiciary all the inputs raised during the Convention of Chief Justices relative to the Norms of Conduct for all judges worldwide to improve judicial conduct. This was the Judge’s response to the Report that called on the Judiciary to adopt an independent search mechanism for qualified candidates that would do away from the influence of recommendations from politicians. Dr. Ronnie Amorado, National Coordinator of the Aha! Ehem!, a nongovernment organization that serves as a watchdog against corruption, was the last to speak among the panel of reactors. He called the Report a revelation on institutions and governance that gave emphasis on DepEd. He also seconded the Report, citing his experiences as an anticorruption advocate with Aha! Ehem!, a joint anticorruption project of the Philippine Province of the Society of Jesus and the Office of the Ombudsman. He also mentioned that HDI and corruption are correlated based on statistics wherein countries with high HDI are low in corruption.
Meeting with the press During the press conference that followed the forum, CSC Regional Director Rosell was asked about the statistiscs in the region relative to appointees who are not eligible. She clarified that the presence of noneligibles is not much of a problem in the local and national agencies in the region considering that most of these positions are in the first and second levels. She added that looking at the number of noneligibles, most of these positions are personal and confidential staff of elective
A huge number of representatives from different national and local government agencies, the academe, private sector, and media attended the 6th Philippine Human Development Report Mindanao Forum launched at the Grand Men Seng in Davao City.
officials and these positions do not really require eligibility. Dir. Rosell also said that for 3rd level positions (CES-director positions) these are usually covered by the CSC-NCR but a rough estimate would perhaps show about 50 percent eligibles and 50 per cent noneligibles among the appointed incumbents in Region 11. Dr. Monsod added that appointments at the local level comply with the eligibility requirement. But within the third level positions, the trend shows that the officials were appointed through political accommodations. As parting words, Dr. David expressed that the desired objective of the Network is for the 2008/ 09 PHDR to reach the public. It is very important, according to her, that the public demands good service from its government. It is very important that the public understands what is going on and knows the vital information that is critical for decisionmaking. The Report is useful especially to the local media who can utilize its contents and situate them in their areas. In this way, the findings of the 2008/09 PHDR will find their way to the public and inform them of what is going on in the Philippine bureaucracy.
APQ
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sulting from a poor incentive structure such as low salary compensation and benefits vis-a-vis the private sector employees as well as within various national agencies because of certain “exemptions,” affect the morale, and consequently, the performance of the civil service corps. A long overdue reform in the government incentive structure is thereby warranted. It is a way to fix inequities and improve government services that will produce a new breed of civil servants with a renewed pride and sense of mission in the conduct of their duties. It is also something that has long been awaited by many unheralded hard-working and long-suffering public servants.
DRN
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Poor incentive...from p. 4
Ed notes...from p. 1
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The public approval ratings of the Department of Education (DepEd), Department of Social Welfare and Development (DSWD), and Department of Health (DOH) from 1999 to 2007 were juxtaposed against the percentage of CESO occupying CES positions for each agency. The results show a positive correlation for all three departments, indicating that bureaucratic quality does affect agency performance in the Philippines. Implications As this study has underscored, both monetary and nonmonetary incentive structures embedded in the bureaucracy critically impinge on quality and performance. It thus suggests that if country shortcomings in development outcomes are to be addressed, perverse incentives need to be reformed or, at the very least, contained. Reforms in the government compensation system ought to be implemented once and for all. The current SSL is more than 20 years old. Until now, however, a proposed Government Classification and Compensation Act (GCCA) designed by the CSC is still pending in Con-
gress. The GCCA hopes to fix current salary distortions and better link employee effort and performance to monetary rewards. Establishing a Career Executive System (House Bill No. 3956 or Senate Bill No. 270) is also proposed. Such a system would help clarify parameters as regards personnel hiring, particularly in the third level executive levels, in order to reduce or check ineligible political appointments. It would require clarifying the extent of the Presidential prerogative – which positions are subject to it? which should be based solely on merit and fitness? – as well as clarifying the role of the CSC in enforcing the same. Finally, an official policy of transparency as regards presidential consultants/advisers is urged. Even if the appointment of advisers and consultants is a presidential prerogative, the question is what their terms of reference are and how they are to be held accountable. While regular Cabinet officials undergo a Congressional confirmation process and are subject to administrative laws, presidential consultants/ advisers — who enjoy “cabinet-level” titles and authorities — are not. SVS