Scaling the Economic Mast

Vol. XVII No. 5

September - October 1999

Scaling the Economic Ship’s Mast*

by Dr. Mario B. Lamberte**

T

he 22nd founding anniversary of the Philippine Institute for Development Studies, which we are celebrating this week, gives us a good platform for looking at the new challenges that lie ahead of us while at the same time drawing inspiration from our past contributions to the country’s development efforts through the provision of rigorous analyses of policy issues.

As you may well know, the Philippine economy is now sailing on uncharted, global waters. While we recognize the vast opportunities offered to us by this new environment for accelerating the development of our

WHAT'S INSIDE 2 3 4 5

A Fair to Remember: PIDS at 22 The 1999 Research Fair: How Did it Fare?

On the Research Community and Government: A Matter of Trust and Transparency The Role of the International Community and Donor Agencies in the Research Process

country, we must, however, also be wary of the new dangers that lurk out there, as amply demonstrated by the recent Asian financial crisis.

This tells us that we must do more to build a sturdy economy, free from the excess baggage of inefficiency caused by distorted economic policies in the past. We must, therefore, scale the mast of our economic ship higher so that we can clearly spot and carefully study emerging development issues and convey them to policymakers ———————— * Welcome remarks delivered during the opening ceremonies of the PIDS Research Fair on September 28, 1999.

Acting President, Philippine Institute for Development Studies (PIDS). **

6 10 11 14 16

Involvement of the Private Business Sector in Economic Policy Research The Sicat Legacy The Effort of Producing PIDS Family Day at Fontana: Getting Sporty Post-Crisis Philippines: The Social Impact

ISSN 0115-9097

so that they can steer our economy forward with great ease and confidence.

Every year, we celebrate our foundation week through a series of activities that reflect the Institute’s core mission. This year, we do the same in substance but somewhat different in form to highlight two major adjustments we made to improve our effectiveness in connecting with the public.

First, instead of inviting stakeholders to come to PIDS to a workshop to discuss pressing policy issues, this year, we go to them. Thus, last week, our staff went to Congress and discussed with some Congressmen certain policy is-

=8

EDITOR'S NOTES This special issue highlights the activities held during the 22nd founding anniversary of the Philippine Institute for Development Studies (PIDS) last September 27 to October 2, 1999.

Our feature article in this issue is the speech delivered by Acting PIDS President Dr. Mario B. Lamberte during the first-ever PIDS Research Fair entitled “Research for Development.” It basically captures the thrust of the Institute in 1999 and its mission in the last 22 years.

In the next pages (pages 4 to 6) are the speeches of three sectoral representatives, namely, Atty. Raphael Lotilla (government); Mr. Sergio Ortiz-Luis (private sector), and Mr. Terence Jones (international community), who, along with other noted personalities in the research community, were invited to witness the collaboration of different institutions toward the promotion of research results and the efforts of the research community in re-

= 16

DEVELOPMENT RESEARCH NEWS

2

A Fair to Remember: PIDS at 22

I

t started out as a modest plan to serve the nation.

A few good men in the late 1970s conceived and established an independent public institution that would help steer the nation toward economic development through the provision of rigorous research and analysis of policy issues to help the national leadership in making policy decisions. The distinguished group was led by Dr. Gerardo Sicat, the first Director-General of the National Economic and Development Authority (NEDA) and Minister of Economic Planning. Then, under the leadership of Dr. Filologo Pante as president and the guidance of Dr. Sicat, the product of such idea—the Philippine Institute for Development Studies (PIDS)—took on numerous tasks as an independent analytical arm of the government.

More than 20 years later, the Institute has developed its own character and captured its own niche in the research world. Today, it continues to do more than its original mission. Policy assistance has covered more grounds and, therefore, contributed to a wider range of issues and topics. Understandably, though, despite such broad coverage, it cannot address all outstanding policy challenges faced by the government. Fortunately, in the Philippines, there are a number of akin institutions looking into critical policy issues in various other fields.

On its 22nd anniversary in September 1999, the Institute decided to bring these similar institutions together to highlight their respective contributions to a better understanding of the

various issues at hand and to forge a closer coordination and collaboration of research efforts among all key research institutions in the country in order to respond better to the research and analytical demands of policymaking. This it did through the organization and setting up of the first-ever Research Fair in the country With the theme “Research for Development,” the Institute invited several institutions to participate and showcase their select research ouputs during the two-day Fair (September 28 and 29) through publication display, poster-paper exhibit and electronic presentations. The participating institutions, apart from PIDS, were: Ateneo Center for Social Policy and Public Affairs; Center for Integrative and Development Studies, University of the Phil-

September - October 1999

ippines (UP); Development Academy of the Philippines (DAP); Economics Research Center, UP School of Economics; Institute for Labor Studies/ Bureau of Labor and Employment Statistics (BLES), Department of Labor and Employment (DOLE); Institute of Strategic Planning and Policy Studies, UP-Los Baños; National College of Public Administration and Governance, UP; NEDA; National Statistical Coordination Board (NSCB); National Statistics Office (NSO); National Tax Research Center; Philippine Exporters Confederation, Inc. (PhilExport); Social Weather Stations (SWS); Yuchengco Center for East Asia and the College of Business and Economics, De La Salle University (DLSU); University of Asia and the Pacific; and the Philippine APEC Study Center Network (PASCN) of which the PIDS is the Lead Convenor and Secretariat.

Invited to deliver short remarks during the opening ceremonies were

Some of the familiar faces in the crowd who came to greet the Institute on its anniversary and support another milestone in its 22 years of existence, (from left) Ms. Cynthia Medalla, Mr. Sergio Ortiz-Luis, Atty. Raphael Lotilla, Dr. Erlinda Medalla, Mr. Joseph Francia and Mr. Ernest Leung.

DEVELOPMENT RESEARCH NEWS

I

n celebration of its 22nd founding year anniversary, the Philippine Institute for Development Studies (PIDS) decided to try a different mode to highlight its outputs. It organized its first-ever Research Fair. A brainchild of PIDS Senior Research Fellow, Dr. Erlinda Medalla, the Fair proved to be a big ---and eventually, rewarding---challenge for the Institute.

For the past decade, the Institute has been organizing symposia, workshops, and seminars for both foreign and local participants with dedication and competence.

However, a Research Fair was something different since it required more time and demanding preparations. Thus, days before the Fair, the Institute staff were kept busy as everyone had to check every small detail of the first-ever PIDS Research Fair to ensure its success. And based on the feedback received from the Fair's visitors and participants as shown in the results of the evaluation survey, the hard work and collective effort, not only of the staff but also of all the participating institutions, seemed to have worked out well.

Survey results Majority (60.12%) of the 173 visitors surveyed said the Research Fair was very good.

Although only less than half (47.98%) found the theme Research for Development very good, more respondents think that the physical arrangement and the choice of participating institutions were very good. Many respondents considered issues related to economics as the most relevant in the Research Fair. Labor issues and local governance ranked next to economics.

As to the most attractive booth, the PIDS/PASCN booth appealed to about 29 per-

the heads of three organizations representing different sectors, namely, the government and academe, the private sector, and the international community, who spoke on these sectors’ respective roles in research and the research community. NEDA Deputy Director-General Atty. Raphael M. Lotilla, speaking on behalf of NEDA DirectorGeneral Dr. Felipe Medalla, presented his observations on the relationship of

3

September - October 1999

The 1999 Research Fair: How Did it Fare? cent of the respondents who found their various displays very organized and the data wellpresented and interesting. On the other hand, the Institute for Labor Studies (ILS) booth ranked second because of its online information for jobseekers. Respondents also found the ILS booth interesting and noted its "x" factor personality. The National Economic and Development Authority (NEDA), National Statistics Office (NSO), and National Tax Research Center (NTRC) closely followed in third place.

Almost all of the respondents did not encounter any problem during their visit to the Fair although some respondents were inconvenienced by the small venue, lack of parking space, a few unpleasant encounters with the building security, and lack of giveaways.

Most respondents suggested that the next fair should be held in a bigger venue to accommodate more visitors and to encourage the participation of more government agencies, schools, and nongovernment organizations.

Some recommended that more booths be set up---some to provide food---while others encouraged the distribution of complimentary materials like brochures and pamphlets. They also suggested more publicity, wider media coverage and a longer period of about three to four days for the Fair.

On the part of the 15 participating institutions, meanwhile, in line with their objectives to promote their own institutions and es-

the research community and the government. He noted in jest that the relationship of PIDS and the government may be likened to something that is “getting paid for biting the hand that feeds.� However, he continued, in a more serious tone, that with the level of integrity which the Institute has been able to preserve for the past decades, such a relationship will do well to serve as a model for other institutions funded

tablish linkages with other research institutions during the Fair, majority of them indicated that their expectations were met. In general, majority of the participants were more than satisfied with the preparations for the Fair and the physical arrangement. Both the venue and turn-out of guests were rated very good by the respondents.

Majority of the respondents were likewise impressed by the support given by the PIDS staff and gave them an excellent rating. A third of the participants did not encounter any problem while a few complained of lack of parking space and difficulties with the personal computers assigned to them.

One importrant suggestion brought up by the participating institutions for future conduct of research fairs was to have simultaneous seminars or outlets during the Fair where they can present their outputs. This is definitely one area which the Institute will seriously consider in the next Research Fair.

In other words...

Judging from the responses of the visitors and participating organizations, the Research Fair was a success. Moreover, with most of the respondents recommending that the Fair be made a regular or annual activity, the survey results proved to be valuable inputs in the preparations for similar endeavors in the future. DRN

by the government. He also expressed his appreciation for the studies which the research community, as a whole, has undertaken and presented. He then commended the holding of the Research Fair, which represents an important collaborative undertaking of this particular knowledge community.

=9

DEVELOPMENT RESEARCH NEWS

I

t has been my privilege to represent the Director-General of the National Economic and Development Authority (NEDA) and Secretary of Socioeconomic Planning in several anniversary celebrations of the Philippine Institute for Development Studies (PIDS). And again this year, I am glad to be representing Secretary Felipe Medalla who is on an official trip abroad. Of course, his personal representative, Mrs. Cynthia Medalla, is here with us. Thus, it shows you the personal support that the Secretary has for the research community as a whole and PIDS in particular.

I would therefore like to convey his congratulations to PIDS and the participating research institutions to this particular activity. We look forward not only to a research fair like this but also to other cooperative activities to be undertaken by your institutions both here in Metro Manila and, hopefully, in the various regions in the country.

Relation of trust Let me refer you at this point to one proposed definition of policy research that is being undertaken by an institution like PIDS. And this is getting paid for biting the hand that feeds you.

The more that you bite, the more that you should be fed. This, I think, describes the relationship between government and a policy research institution within the government. There is a certain tension or balance that has to be maintained. First, there has to be a relation of trust between the policy research institution and government.

Without that, the research institution runs the risk of becoming irrelevant and not being heard. PIDS, however, ———————— *Remarks delivered during the opening ceremonies of the PIDS Research Fair on September 28, 1999. **Deputy Director-General, National Economic and Development Authority (NEDA).

4

September - October 1999

On the Research Community and Government: A Matter of Trust and Transparency*

by Atty. Raphael P. M. Lotilla** in the course of its work, has established that relationship of trust with government and has been able to preserve the integrity of the results of its research. This, I think, is a model that can be used for other research institutions which receive support from the government.

Even in the context of an intolerant society such as that described by Aldus Huxley in his work Brave New World, there is always room for people who ought to know everything or who ought to have access to even critical works about what the government is doing and how society is proceeding.

Hence, whether we are in a dictatorial society or a democratic one, policy researchers will have work for them.

Nonetheless, what distinguishes the role of a policy research institution/research community in a democratic society from one in a dictatorial society is that in the former, the principle of governance—if we accept that it is the primary responsibility of the government—is one which is shared with the different sectors of society, particularly the civil and business sectors.

It also means that the research community should have greater rules of transparency in the dissemination of its research results. It must reach not only government officials but also other sectors of society to be able to implement the policy recommendations of its research.

Commitment of support to the research community In this endeavor, NEDA and the other agencies of government are committed to a multi-stakeholder approach in governance. We therefore wish to assure you of our commitment to support you in your endeavors. From my own personal experience, of course, I also know that there are certain instances, especially those involving foreign policy and national security, wherein a researcher’s research recommendation, once adopted by government, becomes confidential, thereby preventing a researcher to publish his work.

Nevertheless, considering that ours is a porous society, the likelihood that others, including the enemies of the state insofar as national security issues are concerned, would have in fact more access to the information than our own people is quite real. Thus, it is better to disclose the results to our people than deprive them of the information that they ought to know.

On that note, let me congratulate all of you once again. I assure you that you have the full support of Secretary Medalla, the NEDA and the Philippine government in this endeavor. Good morning to all. DRN

DEVELOPMENT RESEARCH NEWS

5

September - October 1999

The Role of the International Community and Donor Agencies in the Research Process*

I

would like to salute and congratulate the Philippine Institute for Development Studies on the occasion of its 22nd anniver-

sary.

Having just recently taken up my post in the Philippines, I should admit my unfamiliarity with the research community in this country. I do know, however, that PIDS is widely considered externally as a respected and eminent center for policy research on development. It does not come as a surprise therefore that, today, we are celebrating 22 years of productive research by PIDS.

Research as key element in development activities As a representative of an international development agency, I can attest to the fact that research is a traditional element in our activities. And for very good reasons since research outcomes have been the source of many ideas and innovations that had enabled the development community to address some of the challenges confronting the developing world over the past 40 or 50 years. Some concrete examples are the innovations in agricultural research and the advances in medical science.

As a result of these and many other initiatives, we have seen significant improvements in the quality of life in a number of developing countries, as evidenced by a reduction in infant mortality and a longer life expectancy.

In these examples and in many others, the role of the international community is multifaceted as a catalyst, namely, in supporting innovative ideas for technology generation; in supporting the adaptation of technologies in

by Terence D. Jones** various country settings; and in synthesizing the lessons of these research works and related activities and helping in their dissemination. The first element is support to basic and applied research; the second refers to technology development and adaptation; while the last involves dissemination, advocacy and feedback.

Traditionally, our support for research has also consisted of sponsorship of studies, capacity development for research bodies, and stimulation of exchange between countries over time.

The series of international conferences sponsored by the United Nations (UN) in the 1990s, for instance, have helped stimulate new research agendas in line with new policy horizons, namely, sustainable human development, poverty eradication and a rights-based approach to development.

In many respect, the United Nations Development Programme (UNDP) and other agencies have been more concerned in this decade with PIDS’ main focus, that is, development studies rather than traditional research per se. Looking back over the past 22 years, one notes that both the political (demise of the NIEO and the cold war) and economic (structural adjustment and the Washington consensus) param———————— *Remarks delivered during the occasion of the Research for Development Fair, in celebration of the 22nd Founding Anniversary of the Philippine Institute for Development Studies, September 28, 1999. **Resident Representative, United Nations Development Programme-Manila.

eters of development studies have undergone fundamental shifts in perspective. Unfortunately, development studies are still mostly dominated by their economic origins. This is not surprising perhaps in a development world seemingly dominated today by global market economics and its donor supporters.

Need to make development studies more interdisciplinary In the 1990s, however, we do have perhaps the makings of a shift in the orientation and content of development studies. In the context of the UN conferences and of UNDP’s social and human development paradigm— human development indices as opposed to economic growth indices— and because of the overarching importance accorded today to poverty eradication rather than simple economic growth, there is the potential for development studies to become truly interdisciplinary and more relevant politically. Instead of research for development, however, we need first to be answering the question: Development of what and for whom?

The constraints to such a shift are still daunting given the difficulties of answering that question. On interdisciplinarity, staffing and management patterns in development studies, institutions are still dominated by economists, even in the case of the preparation of the Human Development Report (HDR). Gender studies and human rights offer better examples of the potential for genuine interdisciplinarity. However, it seems likely

=6

DEVELOPMENT RESEARCH NEWS

6

Involvement of the Private Business Sector in Economic Policy Research*

F

irst of all, I wish to congratulate the Philippine Institute for Development Studies (PIDS) for having reached the ripe age of 22 in 1999. This means that having been born in 1977, you have survived four presidents and a good number of NEDA directors-general.

A history of working together My institution, the Philippine Exporters Confederation, Inc.

Role of International Community...

From page 5

that for some time to come, their work will be done in separate institutions.

Demography, geography, sociology, culture, and politics or governance are still essentially outside or on the edge of development studies or mainstreamed simply in economic terms. The tendency in poverty and growth studies is to blame the sociallylocal while extolling the virtues of the economically-global. Noneconomic factors are generally regarded as defects that need repair or replacement rather than identities which have value in their own right.

The other major constraint faced by development studies is the failure of its work in political terms. In poverty studies, for example, we start with the definition, move on to identify indicators or measures for monitoring

by Sergio R. Ortiz-Luis, Jr.** (PHILEXPORT), is just eight years old.

PIDS has been part of those eight years.

I remember that we have worked with Dr. Mario Lamberte on financing for small and medium enterprises (SMEs) way back in 1992, and with Dr. Erlinda Medalla on customs valuation soon after. Dr. Ponciano Intal, Jr. is still doing a study for us on the distribution sector, and we have touched base with your

and then establish institutions to implement poverty programs. All too often, however, the action that follows is inadequate and is not linked to the policy or practices recommended. Small wonder that little progress has been made in eliminating poverty or in justifying the resources spent on development research.

Making development research more useful to development How might we redress some of these inadequacies and make development research more useful for development? I make a few suggestions which are largely based on Prof.

Raymond Apthorpe’s presentation last year to the Development Studies Association annual conference in the United Kingdom, to wit: k Discourse analysis: more emphasis should be given to selecting the framework for analysis as well as the concepts, words and numbers used in analysis, if we are to move away from globalized generalizations and trans-

September - October 1999

younger fellows, particularly Dr. Myrna Austria, on business adjustments to policy reforms under the Asia-Pacific Economic Cooperation (APEC), World Trade Organization (WTO) and ASEAN Free Trade Agreement (AFTA).

We expect to be doing even more with you in the years to come.

How did PHILEXPORT get into economic policy research anyway? Normally, the research needs of exporters are in the areas of market information and production technology. What product is selling where? At what price?

———————— *Remarks delivered during the opening ceremonies of the PIDS Research Fair on September 28, 1999. *President, Philippine Exporters Confederation, Inc. (PhilExport).

ferred conditionalities as determinants of the research process. k Interdisciplinarity: we need to start with a social analysis of people, who they are, and their history if we are to begin on the right track in researching poverty. k Politics and poverty: the policy and practice of poverty programs need to be embedded in a sound analysis of the politics of patronage if we are not merely to recycle funds and history. k Poverty and wealth: we should also study the patterns and processes of mobility into and out of poverty in the context of studying wealth, since this is an important association which we usually ignore by focusing only on the problem of poverty and the poor. k Social exclusion and empowerment: the prevalence of participatory rapid appraisal (PRA) type assessments to guide poverty interventions needs to be balanced by more effective empow-

DEVELOPMENT RESEARCH NEWS

Can I produce a better design and ship it to that market at a lower price? With the fast-paced competition in international markets, the rapid turnover in consumer preferences and designs, the changes in technology, and the daily nitty-gritty of doing business in the Philippines, the ordinary exporter has little time to look beyond his next trade fair or his next shipment.

Filipinos, however, sociable as we are, eventually find time to band together and share tales of “derringdo” and business troubles. Exporters come together in sectoral industry associations, local organizations, and eventually national business groups. And when you start looking for the sources of your problems beyond your own business or sector or region, you get confused. You know that there is some-

7

September - October 1999

thing wrong because business is not as good as it could be but you cannot really pin down what is wrong. You talk to politicians, and they make sense. You talk to government officials, and they make sense. But when you put together the sensible things they say, you become more confused than before.

Being the PHILEXPORT—the national organization of exporters which was expressly organized to speak to government for the export sector— we could not, however, remain confused.

Hence, we started talking to you about our problems. And you were able to put things in perspective for us within the framework of economics and policy. We got to understand the principles of markets and competition

Mr. Terence Jones in an animated conversation with Dr. Mahar Mangahas, president of the Social Weather Stations (SWS), an independent survery organization in the country.

ering processes designed to end social (and political and economic) exclusion. Action research, focus groups, social mobilization, and association building are, in reality, more important for poverty studies and action to lessen poverty. To go further would bring in

class analysis as well. In development studies, we are all peoplecentered now.

However, the issues on who puts which people and in which center actually beg the question of development of what and for whom.

In these troubled times, the international community can help by fostering transparency and openness through the support of greater au-

...You were able to put things in perspective for us within the framework of economics and policy. We got to understand the principles of markets and competition better. better. Certainly, we still do not understand enough to be able to analyze things as well as you do. Probably, if you ask any of our Trustees member what he/she thinks is the real effective exchange rate (REER), he/she cannot explain it. But certainly, he/she knows that it’s better for markets if the value of the peso vis-à-vis the dollar is near enough that rate.

=8 tonomy and independent financing for development studies while respecting the principle of mutual sharing of experiences.

At any rate, I doubt that my talk today has convinced PIDS to change its name to PIPS but I do hope for their fruitful collaboration with UNDP and other UN entities like the United Nations Research Institute for Social Development (UNRISD) and United Nations University/World Institute for Development Economic Research(UNU/ WIDER) in addressing the research agenda set by the series of UN-sponsored international conferences.

Finally, I wish PIDS and the other research institutions in this Fair every success in the new millennium as we enjoy today the outputs of their work through the displays in this Research Fair.

Thank you.

DRN

DEVELOPMENT RESEARCH NEWS

Economic Ship's Mast...

From page 1

sues related to the housing sector. Our staff also went to Tuguegarao, Cagayan Valley to discuss with local government officials and civil society the urban development challenges under a decentralized government framework. On Thursday of this week, our staff will go to the Senate to discuss with the Senate staff the social impact of the Asian financial crisis. Our activities with the Senate and the House of Representatives will be done on a regular basis.

We are indeed glad to have the Policy Studies Group, the Office of the Senate President, the Congressional Planning and Budget Office, and the Office of the Speaker of the House of Representatives as our partners in these activities.

Second, we want to strengthen our collaborative efforts with major research institutions in the country. We know that the Institute’s resources cannot match the demands for research of complex development issues out there. But we take comfort in the knowledge that there are a number of research institutions in the country which are trying to do the same thing

Private Business Sector...

From page 7

Together, we made things happen. The PhilExport and the PIDS were able to convince the Ramos Administration that an export-led development strategy will provide the right formula for our laggard economy to catch up with the economic tigers of East Asia.

We were able to effect the passage into law of the Export Development Act of

8

that we do in their own way. Thus, as part of our celebration this year, the Institute, together with development research institutions in the country, is holding a Research Fair that will showcase select research works. When I went around the various booths early this morning, I am indeed amazed to see so much knowledge that have been produced by the country's researchers in the last few years. This somehow gives me some confidence that our country can compete well in the knowledge-based global economy of the next millennium.

To provide our policymakers, businessmen and other stakeholders a better handle in formulating national policies and, at the same time, take into account spatial aspects of our development, PIDS has started to develop a Geographical Information System (GIS), which gives important socioeconomic information at the regional level. At the click of a button, you would know poverty incidence, employment, gross domestic product, inflation, crime rate, and population at the regional level. Hopefully, we can bring the GIS at the provincial and municipal levels. All these data will become available in our website. The participating institutions also have a lot more to offer to you.

1994, which proudly proclaimed exports as a lynchpin of national development. That law, among others, institutionalized the Export Development Council and the active participation of the dominant exporters’ organization, the PHILEXPORT, in its policy deliberations and quarterly meetings with the President. That was just the start.

Now, exporters are represented by PHILEXPORT in the Economic Mobilization Group, the Small and Medium Enterprise Development Council, the AFTA-WTO Commission, and in a host of other councils, task forces, and

September - October 1999

I must thank the 15 participating research institutions for their enthusiasm in joining this Fair. We could have included more research institutions to this Fair were it not for the limited space. This Fair is not only intended to bring major research institutions closer together but also to bring the research community closer to stakeholders like you. You certainly deserve the best information, analyses and advice on certain policy issues. We, the development research institutions in the country, think that we can be more effective and contribute more to our share in the development efforts if our arms are linked together in a bayanihan way.

This Fair was conceptualized and is being coordinated by Dr. Erlinda Medalla, a senior research fellow at the Institute, with assistance from Mr. Mario Feranil, acting vice-president of PIDS. On behalf of the Philippine Institute for Development Studies and the 15 participating research institutions, I would, therefore, like to warmly welcome all of you to this Research Fair dubbed as Research for Development. We do hope that you come out of this room better informed. Thank you for your positive response to our invitation. Have a nice day and enjoy the Fair. DRN workgroups with government at the local, national and sectoral levels.

Most of what we have been pushing in these policy fora are based on what you, at PIDS, have studied and written about. For inspite of our active involvement in economic policy discussions, we are not economists and we will always need your guidance. It does not mean that we will believe everything you say. After all, economics seems to be the only profession that

= 13

DEVELOPMENT RESEARCH NEWS

9

September - October 1999

Fair to Remember...

From page 3

On the private sector’s involvement in research, meanwhile, Mr. Sergio Ortiz-Luis, president of PhilExport (the national organization of Philippine exporters), complimented the efforts of the research community, particularly the PIDS, in enlightening the public. “You were able to put things in perspective for us within the framework of economics and policy.” He was, however, candid enough to say that there is a lot of room for further improving the level of understanding of many in the private export business on the intricacies of the science of economics. Something that needs to be continuously nurtured through a closer and regular interac-

s Dr. Lamberte proudly shows Prof. Solita Monsod the research products of PIDS. t Proud of her creation. Dr. Erlinda Medalla (seated) "guards" the PIDS booth and its colorful presentation of research results. A visitor scrutinizes some of the PIDS publications and materials.

research agenda set by the United Nations in its international conferences.

tion between representatives from the research community like the PIDS and members of the PhilExport. “We got to understand the principles of market and competition better.”

Finally, Mr. Terence D. Jones, the United Nations Development Programme resident representative in Manila who was asked to represent the international community during the

Fair, acknowledged the contribution of research in addressing the problems which have confronted the developing world in the last 40 to 50 years. The international donor community has helped a lot in the utilization of these outputs through its consistent support to research organizations. In this regard, he hoped that the Philippine research community, in particular, the Institute, will continue to pursue the

On the whole, the Research Fair was warmly welcomed by various sectors as a big contribution to the promotion and appreciation of research as a tool in decisionmaking and policymaking. Visited by a large crowd of public and private agency employees, students and faculty of several colleges and universities in Metro Manila, researchers, businessmen, media and the general public during its two-day exhibit, the Fair indeed proved to be memorable and something to remember. DRN

The Development Research News and other PIDS publications are available online at http://www.pids.gov.ph

DEVELOPMENT RESEARCH NEWS

I

n the 1970s, Dr. Gerardo P. Sicat, then the Philippines’ Minister of Economic Planning and first Director-General of the National Economic and Development Authority (NEDA), dreamed of a research institution for the country that would be able to respond to the need of providing relevant analysis of thorny issues on social and economic development policies and strategies. He later decided to make this dream a reality when he founded one such institution, the Philippine Institute for Development Studies (PIDS).

Twenty-two years after, he stood before the men and women who made up the Institute and reflected on the questions...Was the effort worth it? Has the Institute been able to respond to such need?

In remarks delivered at the Loyalty Awards Ceremony of the 22nd t

Dr. Sicat congratulates Mr. Glenn Relente, one of the Loyalty awardees. t MBL the sax player. A multitalented man, Dr. Lamberte impresses the crowd with a solo sax number.

10

September - October 1999

The Sicat Legacy “Has the effort of producing the PIDS made a difference for the nation?

Have my hopes more than 20 years ago been satisfactorily answered?”

–Dr. Gerardo P. Sicat, founding father of PIDS

founding anniversary celebration of the Institute (see next article for full text), Dr. Sicat gave an unequivocal “yes” to these questions.

Present in the audience during the ceremony were many of the veteran staff of the Institute—a number of

...A research institution for the country that would be able to respond to the need of providing relevant analysis of thorny issues on social and economic development policies and strategies.

whom are now respected economists in their fields—who started as fresh graduates when they joined the Institute but were honed and trained under the auspices of the Institute through the years.

During the ceremony, too, recognition was given to two support staff who have rendered loyal and dedicated services to the Institute as it sought to accomplish its mandate, namely, Mr. Glenn Relente, motorpool dispatcher, and Mr. Alejandrino Pasion, reproduction machine operator. Both awardees' original appointment papers at the Institute in 1979 were signed by Dr. Sicat who was then Chairman of the Board. DRN

DEVELOPMENT RESEARCH NEWS

Y

esterday, I opened a little book that I had stopped reading some years back. I had planned to file it back in a suitable shelf in my library. In the process of doing so, I discovered two faded newspaper clippings between the pages.

11

September - October 1999

important concluof a positive * sions or negative nature, we could anticipate future issues of analysis and inform policymakers better.

The Effort of Producing PIDS

These two clippings were reports on a talk that I had delivered before the 21st annual meeting of the Philippine Economic Society in December, 1984. One of these was the Manila Bulletin (the Bulletin Today in those days) story entitled “Dismantling of all controls proposed” which came out on January 16, 1985. The report said that I called for the dismantling of all forms of controls and regulations that stifle private sector initiatives. I quote myself: …Most of the problems confronting the Philippine economy today are the result of a cumulation of…interventions in the market system...These [interventions] were put in place because of ‘good intentions’… and were often the result of an ‘activist’ and ‘compassionate’ role that government [put in place] as ‘shortterm policies’… but they eventually created ‘monsters’ in the long term.

The challenges and sometimes frustrations that I faced as National Economic and Development Authority (NEDA) director-general and National Economic Council (NEC) chairman in the course of about 11 years of stewardship were often related to the crafting of policy solutions to economic problems. Based on debates within the ———————— *Inspirational remarks delivered during the Loyalty Awards Day ceremony of the 22nd founding anniversary of the Philippine Institute for Development Studies (PIDS), October 1, 1999. **Former Secretary of Socioeconomic Planning and Director-General of NEDA, and former chairman, PIDS Board of Trustees.

by Dr. Gerardo P. Sicat** government and interactions with the general public, I often found that there was a strong presumption among those in position to change policies that any economic problem would be solved by direct interventions or regulations. I have learned long ago that many solutions could—if they contradicted market logic—lead to more unintended misallocation of resources.

Such an institute would be close to the NEDA structure but not engulfed into its day-to-day activities. It was to become a living link to institutions of research in the country, partly through a sharing of programs and partly through delegation of effort and dialogues on research issues and policies.

Oftentimes, these "solutions" created or raised protective barriers or the price to industry and eventually to consumers. They also entrenched the position of specific interest groups that, in time, became the opponents of beneficial policy change. Thus, the initial remedy sought for a short-term gain became the monster that would be hard to slay.

Birth of a think-tank The major reason for the founding of the PIDS was to create a think tank, a research engine for understanding the economic development problems of the nation such as the problems that I have just mentioned.

In designing and implementing the PIDS concept, I sought advice from colleagues within NEDA and among professional friends outside of the government. I wanted to have a research institute that would be able to respond to the need to analyze thorny issues on social and economic development policies and strategies—the current ones as well as those that would be relevant sometime in the future—that were often debated within government. If only we had technical studies that laid bare

Return of the founding father. Dr. Sicat shares some anecdotes with the PIDS staff on the creation and history of the Institute.

I got an initial capital fund from the United States Agency for International Development (USAID) PL 480 fund to initiate the Institute’s work program. I also mobilized other external funds for staff training abroad. Programs that I introduced to train graduate skills of young people at the University of the Philippines School of Economics (UPSE) became basic sources of supply of young staff recruits for both NEDA and PIDS.

= 12

DEVELOPMENT RESEARCH NEWS

...Producing PIDS From page 11

The most important task of building the institution was in choosing the staff and those who would lead it. I did not hesitate to lose good men at NEDA, such as Dr. Filologo Pante, Jr. and Dr. Romeo Bautista, and place them in management positions in the new institute. The leadership of PIDS, more than a decade later, would pass on to Dr. Ponciano Intal, Jr. who, though not from NEDA, was a member of the research community.

12

graduates as we could and threw into their path some post-doctoral work in the best schools in the United States.

In this way, the likes of Dr. Erlinda Medalla and Dr. Rosario Manasan were taken into the staff. In later years, Dr. Mario Lamberte, Dr. Gilbert Llanto, Dr. Josef Yap, and many others who were graduates from different schools, joined PIDS.

Continuing involvement in economic issues One of the silent successes of the PIDS is that it has kept the community of economists in the country fully en-

September - October 1999

jamin Diokno, now budget secretary.

Of course, the list of names is long. For instance, a study on “Poverty, Growth and the Fiscal Crisis� has, among others, such names as Dr. Emmanuel de Dios, Dr. Edita Tan, Dr. Ma. Socorro Gochoco, and Dr. Florian Alburo.

Many important policymakers of the past have also participated in dialogues on economic issues sponsored and organized by PIDS. Former Prime Minister Cesar Virata has often been engaged in some fora of the PIDS. Jaime Laya, former Central Bank governor and Budget minister as well as

We also made sure that the Institute would begin its work slowly in building its staff which was designed to use the large technical expertise that already existed in local universities and other research institutions. Thus, collaborative efforts and subcontracting work of research projects were initiated.

Whenever possible, short-term foreign staff were employed. Dr. John H. Power, who had worked with many economists in the country including myself when we were colleagues at U.P., would visit to analyze industrial protection reforms. In due time, Dr. Robert Evenson, Dr. Richard Hooley, Dr. T. N. Srinivasan, and Dr. Frances Stewart would also contribute their efforts.

Building the professional staff was a careful effort, not only because of the tightness of supply of graduate economists and development practitioners, but also because of the desire not to raid other institutions in the country of their supply of researchers.

Thus, we carefully chose from the best possible crop of technicians fresh from graduate schools. It turned out that U.P. was training graduate Economics students for doctoral degrees and we hired as many uncommitted

The students and the mentor. Dr. Sicat talks with Dr. Caesar Cororaton, Dr. Erlinda Medalla and Dr. Celia Reyes, three fellows who started their roots with PIDS.

gaged in economic issues. It has kept them occupied continuously in undertaking research strategies and in refining their answers to policy challenges on these issues. Many of the economists who work in research, in staff positions in various ministries, and as advisers to major policymakers have had associations with PIDS research projects.

I can name a few, such as Dr. Felipe Medalla, who is now directorgeneral of NEDA and chairman of the Board of Trustees of PIDS, and Dr. Ben-

NEDA deputy director-general, had participated in at least one publication.

And recently, I saw Dr. Cielito Habito, immediate former head of NEDA, in a working seminar on the future research program of the PIDS. And other former NEDA heads, Prof. Solita Monsod and Dr. Cayetano Paderanga, Jr., have often been invited as panelists or commentators in public fora on policy issues.

The PIDS has also become a magnet for keeping senior economists in

DEVELOPMENT RESEARCH NEWS

job transitions busy with economic issues in the country. For instance, the likes of Dr. Gonzalo Jurado and Dr. Cristina David have been harnessed by PIDS to work on certain economic policy areas.

The other success of PIDS is that it has become a useful conduit for technical assistance on research issues from the international cooperation community and helped link the economic and development research communities. It has continued to deal with, for instance, USAID, the Canadian Interna-

Private Business Sector...

From page 8

wins the Nobel Prize for opposing views. But it gives us a starting point for our own discussions. More important, it gives us a coherent framework for analyzing what is happening to our businesses.

Distinct differences in approaches There are, of course, still distinct differences between the policy research you do for yourselves and those that we want done for us. Let me mention some of them.

One, the policy analysis you do for us is meant to make things clear to us, to make us understand policy issues and concerns ourselves. For instance, what is all this hubbub about competition policy? Will it be useful to the export sector if, say, we impose this policy on exporters of sugar and packaging and shipping? This is a matter which we are still trying to understand and, eventually, take a position on.

Two, it is often the case that previous research on an issue has already been undertaken by you but the study was shelved and forgotten. For in-

13

"PIDS has become a useful conduit for technical assistance on research issues from the international cooperation community and helped link the economic and development research communities." tional Development Agency (CIDA), Japanese assistance agency, European Commission, Australian development assistance agency, and so on. stance, the case for market-determined exchange rates has been made since the early 70s. Thus, we just need to bring up the matter once again and express it in different ways and manners relevant to today’s situation.

Consider us therefore your advocates. But, of course, convince us first.

Show us how this or that policy change will affect our business. And if we see that it is good for us, then we will be among your principal advocates for that particular policy reform.

We also have other occasional differences. Business, of course, looks at a shorter planning horizon and may not readily appreciate your strategic concerns. We look at applications while you may first be considering principles.

We want action while you may still want to deepen the analysis. These differences, however, are sources of healthy tension and should be occasions for continuing and fruitful dialogues between us.

Need for continuing dialogues and consultations Our common problem now is the perception that reform is moving slowly today. Some even say that we have our hands full just containing possible policy reversals. We therefore need to

September - October 1999

Dissemination and support staff work: Lending a hand to ensure success Finally, I would like to comment on the research dissemination program of the PIDS. I think that this has kept the PIDS prominent in the consciousness of many policymakers in Congress, in the Executive Branch, and even in the private sector. Ms. Jennifer Liguton has done much to help in the dissemination effort and in keeping alive the other vehicle for dissemination that was

= 15 consult together more closely and understand each other’s concerns better.

We may not have enough common time to really make this happen but we must find ways to consult. Hopefully, information technology will provide the means.

For PHILEXPORT, our policy concerns over the next few years will focus on three areas: k business and adjustments to policy reforms under APEC,WTO and AFTA; k support to our participation in policy fora with government; and k efforts to foster entrepreneurship and ensure that adjustments are really made by business to changes in the policy environment.

We expect to be working with you on these areas of research.

Finally, before the brave new world of the 21st century comes rushing on us, I hope that all of us in the country shall have put our act together and be prepared to grapple with the anticipated challenges of the new millennium as well as to cope with whatever new surprises it may bring.

Thank you and good day.

DRN

DEVELOPMENT RESEARCH NEWS

A

t the end of every PIDS anniversary celebration comes one of the most awaited activities of the year for the PIDS staff, the Family Day. Every PIDS employee is just too eager to go out and enjoy one whole day out of the office.

A day of fun and pleasure after a year of hard work? Not such a bad bargain considering that the PIDS Family Day is usually held in an idyllic place outside of Makati City. This year, the staff and their families engaged in healthy competition and some bond-

14

September - October 1999

Family Day at Fontana:

Getting Sporty ing exercises at the Fontana Resort in Clark, Pampanga.

Four teams—Yellow, Violet, Green and Blue—showed their energy and enthusiasm as well as their terpsichorean and shouting skills in the

cheering competition and games like the obstacle relay race, modified basketball and lazy river relay race. In the modified basketball, MVP wannabes dunked the ball in the circled arms of their teammates while others went a la Michael Jordan and leaped a few feet.

Both the obstacle and lazy river relay races left the participants gasping for breath out of sheer exhaustion and pure fun. In between these team competition games were parlor games where all the guests, including the children, could join.

At the end of the day, the Blue Team emerged as overall leader by winning two of the three games and col-

t

Go, Emma C., go! Ms. Emma Cinco of the Green Team dunked the ball with gusto and the effort was enough to win the modified basketball game over the Yellow Team.

t No. 2 team. The Green Team shows their shouting and contortioning skills and romped away with the second place in the cheering competition.

Bobet on air. Mr. Victoriano "Bobet" Macasaquit overcomes the hurdle with ease. And if he falls, Mr. Luis Nuguid has a ready hand to spare.

DEVELOPMENT RESEARCH NEWS

15

September - October 1999

They're blue but they won. The Blue Team bagged the first place in the cheering competition. Who wouldn't? Their hair, eyelashes and lips were shockingly blue while their songs and cheers lifted the audience out of their blues.

Vol. XVII No. 5

lected a large sum of money as their cash prize.

The PIDS Family Day is not only a day to unwind. It is a time to get better acquainted with the same people you see everyday in the office through

...Producing PIDS From page 13

begun in my time, the Journal of Philippine Development.

The hope that PIDS will establish a strong link with the research community is an ongoing affair. It has maintained joint programs, research delegation, and sometimes funding facilitation programs for research projects.

This was demonstrated by the list of research institutions that participated in the research fair conducted this week.

An institution can deliver its ware only if it has a dedicated support work force in the administrative end. All the many staffers of PIDS—from research assistants to typing and computer specialists and messengers—have helped

games and other team activities. It also allows each respective family member to experience firsthand the unique relationship within the PIDS staff. This connection sets PIDS apart from other agencies, and will continue to do so.

DRN

to keep the research operations in a smooth flow.

I know that in the beginning of a new millennium next year, the PIDS will face formidable tasks in further improving its mission, raising resources, and creating an effective human and professional work force.

These will, once again, be challenges to face.

For today, however, I ask myself the question: Has the effort of producing the PIDS made a difference for the nation? In short, have my hopes more than twenty years ago been satisfactorily answered?

I am happy to say that my own answer to this question is a yes, without reservation.

So, I congratulate all of you at PIDS today. DRN

September - October 1999

Editorial Board Dr. Ponciano S. Intal, Jr. President (on leave) Dr. Mario B. Lamberte Vice-President and Acting President Mr. Mario C. Feranil Director for Project Services and Development and Acting Vice-President 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 Liza P. Sonico, Joel C. Cruz 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 Jane C. Alcantara Lay-out and Design

DEVELOPMENT RESEARCH NEWS

16

Post-Crisis Philippines:

The Social Impact

T

he government should establish a community-based monitoring system that would provide timely and adequate response to crises and eventually serve as the anchor for a national social monitoring system.

This is the general recommendation of the study entitled “Social Impact of the Regional Financial Crisis in the Philippines” presented by PIDS Senior Research Fellow Dr. Celia Reyes to the Senate staff during the PIDSSenate Economic Forum Series last September 30, 1999 at the Senate Building in Pasay City. The integrative study was written by Dr. Reyes, together with Dr. Rosario Manasan and Dr. Aniceto Orbeta, Jr., both senior PIDS research fellows, and Mr. Generoso de Guzman, president of ARCSIGMA Statistical Consultants, Innovators, Implementors, Inc.

The study analyzes the nature and extent of the social impact of the financial crisis that hit Asia in July 1997 as exacerbated by the El Niño drought and La Niña typhoons. It also identifies the groups adversely affected by the crisis and looks into institutional responses and household coping mechanisms, with the view of developing appropriate policy responses and reforms toward a sustainable social protection system in the country.

The study’s specific recommendations include: k support programs that enhance access to basic commodities; k undertake pump-priming programs that will create employment opportunities; k promote credit programs that match the collateral base and cash flow of the borrowers; k focus on the provision of pri-

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 Re-entered as second class mail at the Makati Central Post Office on April 27, 1987. Annual subscription rates are: P150.00 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.

September - October 1999

mary healthcare services rather than curative care; and k rationalize government investments in tertiary education.

The PIDS-Senate forum, attended by members of the Senate technical staffs, is part of an ongoing series of regular lectures and discussions conducted by the PIDS to help update the legislative staffs on recent theoretical developments in economic analysis and empirical research results on key policy issues of legislative interests.

A detailed report of the study will be published in the NovemberDecember 1999 issue of the DRN newsletter. DRN

Editor's Notes From page 1 sponding to a better understanding of policy issues.

To provide the readers with an insight on the feedback to the Research Fair, we have included in this issue the results of the evaluation of both participating organizations and Fair visitors as regards the facilities, services and other logistical arrangements provided by PIDS (page 3).

Also in this issue are short articles on the annual PIDS Family Day (page 14) and the PIDS Loyalty Awards Ceremony (page 10). This year’s ceremony was made more special with the presence of the founding father of PIDS himself, Dr. Gerardo Sicat, whose inspirational speech was a touching narration of the Institute's creation and his personal affirmation of the realization of that dream (page 11).

As part of the Institute's new public affairs activity, the results of the study on the social impact of the Asian financial crisis was presented last September 30, 1999 before the Senate staff by a group of PIDS Research Fellows during the PIDS-Senate Economic Forum Series. A brief account of the study is included in this issue (page 16). DRN