COUNTRY REPORT OF
THE ASEAN ASSESSMENT ON
THE SOCIAL IMPACT OF
THE GLOBAL FINANCIAL CRISIS:
THE PHILIPPINES
with the support of:
This volume is a product resulting from a project jointly implemented by the staff of the International Bank for Reconstruction and Development/
the World Bank and the ASEAN Secretariat, with financial support of the Australian Government. The findings, interpretations, and conclusions
expressed in this paper do not necessarily reflect the views of the Executive Directors of the World Bank, the governments they represent, the ASEAN
Secretariat, the Australian Government and/or ASEAN Member States. The World Bank, the ASEAN Secretariat and the Australian Government do
not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in
this work do not imply any judgment on the part of the World Bank concerning the legal status of any territory or the endorsement or acceptance
of such boundaries.
i
I. The ImpacT of The crIsIs and The GovernmenT’s response
after posting strong economic growth for several years, the philippines is currently experiencing an economic
slowdown as a result of the global economic crisis. The Philippine economy grew at an annual average rate of 5.6
percent between 2003 and 2006 and reached 7.3 percent in 2007, the highest growth in three decades. However,
this strong economic performance was not sustained as the country has not been spared the effects of the global
economic crisis. In 2008, domestic industrial production, particularly the export-oriented manufacturing industries,
began to slow down due to the reduction in global demand (Figure 1) (NSO, 2009a and 2009b). Exports, which
account for nearly half of GDP, declined towards the end of 2008 and eventually contracted. As a result, GDP grew
at a slower pace in 2008 at 3.8 percent than in previous years, and it decelerated even further in the first half of 2009
(NSCB, 2009a) (Figure 2).
The global economic crisis came at a time when the philippines was still struggling with the lingering effects
of the food and fuel crisis in 2008. Considered to be the single largest rice importer in the world, the Philippines
was badly hit by the sharp increases in international rice prices in mid-2008, which translated into an 18 percent
increase in domestic food inflation in July 2008 and a 57 percent increase in the retail price of rice. Fuel prices
also peaked in October 2008 at 10.7 percent (NSO, 2009c). These price increases were considered to be significant
especially if compared to the average inflation rate of 2.8 percent in 2007. Simulations using data on the income and
spending patterns of households from the 2006 Family Income and Expenditures Survey show that the combined
effects of the food and fuel inflation in July 2008 may have increased the incidence of poverty in the Philippines by
3.9 percentage points, causing an additional 3.3 million people to fall into poverty.1 In the months after the peak of
the food and fuel crisis, the impact of the global economic crisis began to be seen, exposing even more Filipinos to
economic shocks.
1 World Bank staff estimates using the 2006 Family Income and Expenditures Survey (NSO, 2006)
1
5++=! 1)=! 53$'! */&@&@?! 2#$! &,(1*2! +5! 2#$! .'+91'! $*+)+,&*! */&@&@! 9$.1)! 2+! 9$! @$$)?! ! $D(+@&).! $4$)! ,+/$!
G&'&(&)+@!2+!$*+)+,&*!@#+*V@7!
! households have felt the impact of the global economic crisis through a combination of reduced earnings and
reduced 021$& "$3#& The national unemployment rate increased from 6.8 percent -(.:*+2#*(+& to %$97-$9&
P(7)$0(39)&employment.#0$& *.'2-#& ("& #0$& ,3(:23& $-(+(.*-& -%*)*)& #0%(7,0& 2&in October 2008 ("&7.6 percent
$2%+*+,)& 2+9& %$97-$9& $.'3(4.$+#;& "#$! )12&+)1'& 3)$,('+-,$)2! /12$! &)*/$1@$=! 5/+,! 87C! ($/*$)2! &)!
in July 2009 (NSO, 2009d). The government reported that as many as 208,128 domestic workers and 6,951 overseas
L*2+9$/! :;;C! 2+! >78! ($/*$)2! &)! U3'-! :;;M! FJKL?! :;;M=I7! "#$! .+4$/),$)2! /$(+/2$=! 2#12! 1@! ,1)-! 1@!
Filipino workers (OFWs) temporarily or permanently lost their jobs between October 2008 and August 2009 due
:;C?H:C!=+,$@2&*!0+/V$/@!1)=!8?M6H!+4$/@$1@!G&'&(&)+!0+/V$/@!FLGW@I!2$,(+/1/&'-!+/!($/,1)$)2'-!'+@2!
to the 9$20$$)! L*2+9$/! :;;C! 1)=! Q3.3@2! :;;M! =3$! 2+! survey commissioned */&@&@! FPL]N?! :;;MI7! Q!
2#$&/! \+9@!global economic crisis (DOLE, 2009). A crisis assessment2#$! .'+91'! $*+)+,&*!by the World Bank in May
2009 has also shown that around 37 percent of working adults had their work hours or days shortened or their
*/&@&@!1@@$@@,$)2!@3/4$-!*+,,&@@&+)$=!9-!2#$!W+/'=!S1)V!&)!Y1-!:;;M!#1@!1'@+!@#+0)!2#12!1/+3)=!!
($/*$)2!+5!0+/V&).!1=3'2@!#1=!2#$&/!0+/V!#+3/@!+/!=1-@!@#+/2$)$=!+/!2#$&/!@1'1/-!+/!&)*+,$!/$=3*$=!+/!
salary or income reduced or had lost a job between February and April 2009 (World Bank, 2009a).2 The increasing
#1=! '+@2! 1! \+9! 9$20$$)! G$9/31/-! 1)=! Q(/&'! :;;M! FW+/'=! S1)V?! :;;M1I7:! "#$! &)*/$1@&).! )3,9$/! +5!
number of retrenchments at the height of the crisis was reflected in another household survey, which showed the
/$2/$)*#,$)2@&12!2#$!#$&.#2!+5!2#$!*/&@&@!01@!/$5'$*2$=!&)!1)+2#$/!#+3@$#+'=!@3/4$-?!0#&*#!@#+0$=!2#$!
unemployment rate reaching 34.2 percent in February 2009, up from 30.9 percent in September 2008 (SWS, 2009).3
3)$,('+-,$)2!/12$!/$1*#&).!76! ($/*$)2! &)! L*2+9$/! :;;C! 2+! HM7C! ($/*$)2! &)! U3'-! :;;M7! the number of
,1&)! \+9I! 1'@+! &)*/$1@$=!percent in July 2009. Meanwhile, visible underemployment (in other words, Y$1)0#&'$?!
4&@&9'$!3)=$/$,('+-,$)2!F&)!+2#$/!0+/=@?!2#$!)3,9$/!+5!($+('$!0#+!0+/V!5+/!5$0$/!2#1)!X;!#+3/@!1!
people who work for fewer than 40 hours a week) remained high at 11.1 percent (NSO, 2009d) (Figure 3).
0$$VI!/$,1&)$=!#&.#!12!HH7H!($/*$)2!FJKL?!:;;M=I!FG&.3/$!&R+9$%$.'3(4.$+#&B2#$)&FG&("&#(#23&$.'3(4$9H!
:67;!
:;7;!
H67;!
H;7;!
67;!
;7;!
`U1)E:;;>! Q(/! U3'! L*2! `U1)E:;;C! Q(/! U3'! L*2! `U1)E:;;M! Q(/! U3'!
a)=$/$,('+-,$)2!b12$! _&@&9'$!a)=$/$,('+-,$)2!b12$!
!
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!"#$%&'T!JKL!!
&
evidence suggests that #0$%$& 02)& :$$+& 2& )0*"#& "%(.& "(%.23& #(& *+"(%.23& $.'3(4.$+#& 2+9& #02#& #0$&
D1*9$+-$& )7,,$)#)& #02#& there has been a shift from formal to informal employment and that the sectoral distribution
of labor has changed. The economic crisis seems to have put particular pressure on formal employment,
)$-#(%23&9*)#%*:7#*(+&("&32:(%&02)&-02+,$97!"#$!$*+)+,&*!*/&@&@!@$$,@!2+!#14$!(32!(1/2&*3'1/!(/$@@3/$!+)!
particularly in the (1/2&*3'1/'-! sector. In April 2009, when retrenchments of workers were at their peak, the
5+/,1'! $,('+-,$)2?!manufacturing &)! 2#$! ,1)351*23/&).! @$*2+/7! B)! Q(/&'! :;;M?! 0#$)! /$2/$)*#,$)2@! +5!
number of wage and ($1V?! 2#$! )3,9$/! +5! 01.$! 1)=! @1'1/-! 0+/V$/@! F*+)@&=$/$=! 1@! 5+/,1'! @$*2+/!
0+/V$/@! 0$/$! 12! 2#$&/!salary workers (considered as formal sector workers) grew only by 2.5 percent, while the
0+/V$/@I! ./$0! +)'-! 9-! :76! ($/*$)2?! 0#&'$! 2#$! )3,9$/! +5! ($+('$! 0+/V&).! 1@! 3)(1&=! 51,&'-! 0+/V$/@!
number of people working as unpaid family workers increased by 9.4 percent compared with April 2008. As export-
&)*/$1@$=! 9-! M7X! ($/*$)2! *+,(1/$=! 0&2#! Q(/&'! :;;C7! Q@! $D(+/2E+/&$)2$=! ,1)351*23/&).! (/+=3*2&+)!
oriented manufacturing production slowed down, the number of workers in the manufacturing sector declined
by 1.5 percent in April 2009, while the number of workers in construction and mining increased by 1.5 percent
:
! "#$! (/$4&+3@! 2#/$$! ,+)2#@! 0$/$! 3@$=! 1@! 1! /$5$/$)*$! ($/&+=7! "#$! #+3@$#+'=! @3/4$-! #1=! 1! 2+21'! +5! H?8;;!
/$@(+)=$)2@T!]3^+)!F;! ($/*$)2I! 9'1,$! #&.#$/!
a year earlier (11 percent say they are better off and 31 percent have experienced no change). Most Filipinos (70
*+,,+=&2-!(/&*$@!5+/!2#$!=$2$/&+/12&+)!&)!2#$&/!c31'&2-!+5!'&5$?!0#&*#!,1-!9$!122/&93219'$!2+!2#$!/$*$)2!
5++=! */&@&@7! B)=&*12&+)@! 2#12! 2#$! .'+91'! the deterioration #1@! 155$*2$=! #+3@$#+'=@! 0$/$! attributable to
percent) blame higher commodity prices for $*+)+,&*! */&@&@!in their quality of life, which may be@#+0)! 9-! 2#$! HH!
($/*$)2!+5!/$@(+)=$)2@!0#+! that the global economic crisis has affected households were shown by the
the recent food crisis. Indications2#12!*&2$=!\+9!'+@@!&)!2#$!51,&'-!1)=!2#$!M!($/*$)2!2#12!/$(+/2$=!/$=3*$=!
&)*+,$d! $1/)&).@! 1@! 2#$! (/&,$! /$1@+)@! 5+/! 2#$&/! /$=3*$=! c31'&2-! +5! '&5$7! Q9+32! C&A3(:23&?$2%@(+@4$2%&A%(/#0&("&B$.*##2+-$)&:4&M%*.$)#$%&
! "+21'! Q@&1! Q,$/&*1@! L*$1)&1! N3/+($! Y&=='$!N1@2!
"H!;C! HX76e! H878e! H67:e! e!
"776e! E67Xe! H>7Xe! H:76e! X;7!($/*$)2!+5!2#$!'19+/!5+/*$!1)=!HH!($/*$)2!+5!2#$!(+(3'12&+)7!b$,&221)*$@!
5/+,!19/+1=!1**+3)2$=!5+/!1/+3)=!H;!($/*$)2!+5!OP%!&)!:;;C7
4 Overseas workers account for about 27 percent of the labor force and 11 percent of the population. Remittances from abroad accounted for around 10 percent
6
!W+/'=!S1)V!@2155!$@2&,12$@!3@&).!2#$!:;;8!G1,&'-!B)*+,$!1)=!ND($)=&23/$!K3/4$-!FJKL?!:;;8I7!
of GDP in 2008.
5 World Bank staff estimates using the 2006 Family Income and Expenditure Survey (NSO, 2006).
3
3
The slower growth of remittances from abroad may not increase poverty since richer household tend to benefit
M0$&)3(/$%&,%(/#0&("&%$.*##2+-$)&"%(.&2:%(29&.24&+(#&*+-%$2)$&&'(1$%#4&)*+-$&%*-0$%&0(7)$0(39&#$+9&
more from overseas (1$%)$2)& while poorer households tend to benefit #$+9& #(& domestic remittances.
#(& :$+$"*#& .(%$& "%(.&remittances%$.*##2+-$)& /0*3$& '((%$%& 0(7)$0(39)&more from :$+$"*#& .(%$& "%(.&
Figure 4 shows the share of remittances from both +5! /$,&221)*$@! 5/+,! 9+2#! to total household income
9(.$)#*-& %$.*##2+-$);! G&.3/$! X! @#+0@! 2#$! @#1/$!domestic and overseas workers=+,$@2&*! 1)=! +4$/@$1@!
disaggregated by income deciles. It confirms that poorer households receive a larger share of domestic remittances
0+/V$/@!2+!2+21'!#+3@$#+'=!&)*+,$!=&@1../$.12$=!9-!&)*+,$!=$*&'$@7!B2!*+)5&/,@!2#12!(++/$/!#+3@$#+'=@!
than richer households =+,$@2&*! ones receive 2#1)! /&*#$/! #+3@$#+'=@! 0#&'$! /&*#$/! +)$@! that a reduction
/$*$&4$! 1! '1/.$/! @#1/$! +5!while richer/$,&221)*$@! more remittances from overseas. This suggests /$*$&4$! ,+/$!
/$,&221)*$@!5/+,!+4$/@$1@7!"#&@!@3..$@2@!2#12!1!/$=3*2&+)!&)!/$,&221)*$@!5/+,!19/+1=!&@!'&V$'-!2+!155$*2!
in remittances from abroad is likely to affect rich rather than poor households. Simulations of the impact of a
/&*#!/12#$/!2#1)!(++/!#+3@$#+'=@7!K&,3'12&+)@!+5!2#$!&,(1*2!+5!1!/$=3*2&+)!&)!2+21'!/$,&221)*$@!@3..$@2!
reduction in total remittances suggest that a decrease in remittances from abroad and domestic sources by 10
2#12! 1! =$*/$1@$! &)! /$,&221)*$@! 5/+,! 19/+1=! 1)=! =+,$@2&*! @+3/*$@! 9-! H;! ($/*$)2! &)*/$1@$@! (+4$/2-!
percent increases ;76! ($/*$)21.$! (+&)2@7! Y$1)0#&'$?! 1@! 2#$! =+,$@2&*! '19+/! ,1/V$2! @'1*V$)@?!
&)*&=$)*$! 9-! 19+32!poverty incidence by about 0.5 percentage points. Meanwhile, as the domestic labor market
slackens, remittances from domestic sources are also expected to fall. The crisis assessment survey showed that,
/$,&221)*$@!5/+,!=+,$@2&*!@+3/*$@!1/$!1'@+!$D($*2$=!2+!51''7!"#$!*/&@&@!1@@$@@,$)2!@3/4$-!@#+0$=!2#12?!
+5!2#$!#+3@$#+'=@!2#12!/$*$&4$!/$,&221)*$@!5/+,!=+,$@2&*!,&./1)2!0+/V$/@?!19+32!&Y02%$&("&B$.*##2+-$)&*+&M(#23&P(7)$0(39&E+-(.$&FGH5&:4&E+-(.$&L$-*3$&
"#$%&'T!W+/'=!S1)V!@2155!*1'*3'12&+)@!91@$=!+)!:;;8!GBNK!FJKL?!:;;8I7!
!
M0$& '%(#%2-#$9& $""$-#)& ("& #0$& ,3(:23& $-(+(.*-& -%*)*)& -(739& 3$29& #(& 2& 0*,0$%& 9(.$)#*-& 7+$.'3(4.$+#&
'7)0& 173+$%2:3$& 0(7)$0(39)& *+#(& '(1$%#4;& "#$! 3)$,('+-,$)2! $55$*2@! +5! unemployment 2+! push
2+9&The protracted effects of the global economic crisis could lead to a higher domestic2#$! */&@&@! =3$!and '+0!
vulnerable households /$=3*2&+)! &)! unemployment effects of the crisis due to low export demand and the
$D(+/2! =$,1)=! 1)=! 2#$!into poverty. The#+3@$#+'=! &)*+,$! *+3'=! $4$)231''-! &)*/$1@$! 2#$! )3,9$/! +5!
reduction in household (+4$/2-! '&)$7! Q'/$1=-?! )$1/'-! #1'5! number of Filipinos living below 43')$/19'$! 2+!
G&'&(&)+@! '&4&).! 9$'+0! 2#$!income could eventually increase the +5! 1''! G&'&(&)+! #+3@$#+'=@! 1/$!the poverty line.
&)*+,$! @#+*V@7! "#$! .+4$/),$)2! #1@! $@2&,12$=! 2#12! X6! ($/*$)2! +5! G&'&(&)+! #+3@$#+'=@! 51*$! 2#$! /&@V! +5!
Already, nearly half of all Filipino households are vulnerable to income shocks. The government has estimated
(+4$/2-! Filipino households face the risk of falling into poverty &@! that the proportion (++/! FMH78!
51''&).! &)2+!percent of1)=! 2#12! 2#$! (/+(+/2&+)! +5! 43')$/19'$! #+3@$#+'=@!and#&.#$/! 1,+).! 2#$!of vulnerable
that 45
($/*$)2I! 2#1)! 2#$! )+)E(++/! F:>7;! ($/*$)2I! FJQ%R! 1)=! JKRS?! :;;8I78! W#12! #1@! 9$$)! '$1/)$=! 5/+,! 2#$!
households
(/$4&+3@! $*+)+,&*! (91.6 percent) 1@! the HMM>! Q@&1)! 5&)1)*&1'! */&@&@! 1)=! 2#$! N'! What
$D($/&$)*$! +5!is higher among the poor*/&@$@?! @3*#! than2#$!non-poor (27.0 percent) (NAPC and NSCB, 2006). J&)+!
6
has been learned from the experience of previous economic crises, such as the 1997 Asian financial crisis and the
(#$)+,$)+)?!&@!2#12!1!@39@21)2&1'!(/+(+/2&+)!+5!(++/!#+3@$#+'=@!1/$!3)19'$!2+!(/+2$*2!2#$,@$'4$@!5/+,!
El Nino phenomenon, is that a substantial proportion of poor households are unable to protect themselves from
&)*+,$!@#+*V@!1)=!$4$)!)+)E(++/!#+3@$#+'=@!*1)!@3**3,9!&,,$=&12$'-!2+!2#$!$55$*2@!+5!*/&@$@!Fb$-$@?!
:;;:I7!
income shocks and even non-poor households can succumb immediately to the effects of crises (Reyes, 2002).
&
!G1,&'-!B)*+,$!1)=!ND($)=&23/$!K3/4$-7!
4
4
faced with shrinking income, households take a variety of actions to cope with the economic crisis. The crisis
assessment survey showed that most households are finding ways to cope with the economic crisis and a majority
is choosing to reduce their household expenditures by reducing their food consumption or by replacing certain
food items with cheaper *#++@&).! 2+! /$=3*$! 2#$&/! #+3@$#+'=! $D($)=&23/$@! 9-! /$=3*&).! 2#$&/! 5++=!
*/&@&@! 1)=! 1! ,1\+/&2-! &@!alternatives (Table 2). This coping strategy is particularly evident in poor households
*+)@3,(2&+)!+/!9-!/$('1*&).!*$/21&)!5++=!&2$,@!0&2#!*#$1($/!1'2$/)12&4$@!F"19'$!:I7!"#&@!*+(&).!@2/12$.-!
as food accounts for as much as 90 percent of the total expenditures of these households.7 Other households
&@! (1/2&*3'1/'-! $4&=$)2! &)! (++/! #+3@$#+'=@! 1@! 5++=! 1**+3)2@! 5+/! 1@! ,3*#! 1@! M;! ($/*$)2! +5! 2#$! 2+21'!
cope by seeking additional jobs or finding other sources of income to meet their basic needs, usually having to
$D($)=&23/$@!+5!2#$@$!#+3@$#+'=@7>!L2#$/!#+3@$#+'=@!*+($!9-!@$$V&).!1==&2&+)1'!\+9@!+/!5&)=&).!+2#$/!
take jobs that offer no labor protection. Households in urban and rural areas adopt similar coping strategies, but
@+3/*$@!+5!&)*+,$!2+!,$$2!2#$&/!91@&*!)$$=@?!3@31''-!#14&).!2+!21V$!\+9@!2#12!+55$/!)+!'19+/!(/+2$*2&+)7!
urban dwellers more frequently resort to reducing their expenditure on transportation, gas, light, and water. Some
A+3@$#+'=@!&)!3/91)!1)=!/3/1'!1/$1@!1=+(2!@&,&'1/!*+(&).!@2/12$.&$@?!932!3/91)!=0$''$/@!,+/$!5/$c3$)2'-!
migrant /$=3*&).! 2#$&/! going back to their home provinces to start up 1)=! 012$/7! K+,$! or seeking work
/$@+/2! 2+!workers consider $D($)=&23/$! +)! 2/1)@(+/212&+)?! .1@?! '&.#2?!their own businesses,&./1)2! 0+/V$/@!
*+)@&=$/!.+&).!91*V!2+!2#$&/!#+,$!(/+4&)*$@!2+!@21/2!3(!2#$&/!+0)!93@&)$@@$@!+/!@$$V&).!0+/V!+4$/@$$@?!
oversees, although some have reported finding it difficult to find jobs abroad because of the global recession. Other
1'2#+3.#! @+,$! #14$! /$(+/2$=! 5&)=&).! &2! =&55&*3'2! 2+! 5&)=! \+9@! 19/+1=! 9$*13@$! +5! 2#$! .'+91'! /$*$@@&+)7!
ways to cope include borrowing money from informal lenders (friends and relatives) and formal institutions, selling
L2#$/!01-@!2+!*+($!&)*'3=$!9+//+0&).!,+)$-!5/+,!&)5+/,1'!'$)=$/@!F5/&$)=@!1)=!/$'12&4$@I!1)=!5+/,1'!
assets, and reducing household expenditures on health and medical care as well as on children’s education (World
&)@2&232&+)@?!@$''&).!1@@$2@?!1)=!/$=3*&).!#+3@$#+'=!$D($)=&23/$@!+)!#$1'2#!1)=!,$=&*1'!*1/$!1@!0$''!1@!
Bank, 2009a). For young workers, overseas migration is still an attractive option, but most agree that investing in
+)!*#&'=/$)f@!$=3*12&+)!FW+/'=!S1)V?!:;;M1I7!G+/!-+3).!0+/V$/@?!+4$/@$1@!,&./12&+)!&@!@2&''!1)!122/1*2&4$!
+(2&+)?!932!,+@2!1./$$!2#12!&)4$@2&).!&)!$=3*12&+)!&@!1!,+/$!1((/+(/&12$!'+).E2$/,!@2/12$.-7!&
education is a more appropriate long-term strategy.
&
M2:3$&I>&P(7)$0(39)V&Z('*+,&Y#%2#$,*$)&FGH&
Q''! A+3@$#+'=@!&)! A+3@$#+'=@!&)!
K2/12$.&$@!
A+3@$#+'=@! a/91)!Q/$1@! b3/1'!Q/$1@!
b$=3*$!1,+3)2!+5!5++=!*+)@3,(2&+)! :C7;! :C7H! :C7;!
b$('1*$!*+)@3,(2&+)!+5!5++=!&2$,@!0&2#!*#$1($/!1'2$/)12&4$! :!
K$$V!1==&2&+)1'!\+9@!+/!+2#$/!@+3/*$@!+5!&)*+,$! HH7C! HH7:! H:7X!
b$=3*$!$D($)@$@!+)!2/1)@(+/212&+)?!.1@?!'&.#2?!1)=!012$/! HH78! H878! >76!
S+//+0!,+)$-!5/+,!/$'12&4$@!1)=!5/&$)=@! 876! 67M! >7;!
b$=3*$!$D($)@$@!+)!#$1'2#!1)=!,$=&*1'!*1/$! X7H! ! H7>! !
Q''!#+3@$#+'=@!2#12!/$(+/2$=!*+(&).!@2/12$.&$@! H;;7;! H;;7;! H;;7;!
"#$%&'T!W+/'=!S1)V!F:;;M1I!!
&
The employment effects of the global economic crisis are having a particularly harmful impact on female workers.
M0$& $.'3(4.$+#& $""$-#)& ("& #0$& ,3(:23& $-(+(.*-& -%*)*)& 2%$& 021*+,& 2& '2%#*-732%34& 02%."73& *.'2-#& (+&
Export-oriented manufacturing industries in the Philippines such as &)! 2#$! %#&'&((&)$@! @3*#! 1@! $'$*2/+)&*@?!
"$.23$& /(%U$%);! ND(+/2E+/&$)2$=! ,1)351*23/&).! &)=3@2/&$@! electronics, garments, textiles, and footwear,
have a higher concentration of female workers than *+)*$)2/12&+)! +5! 5$,1'$! 0+/V$/@! predominate in auto
.1/,$)2@?! 2$D2&'$@?! 1)=! 5++20$1/?! #14$! 1! #&.#$/! male workers, whereas male workers 2#1)! ,1'$! 0+/V$/@?!
manufacturing 0+/V$/@! (/$=+,&)12$! &)! 132+! ,1)351*23/&).! female workers in these export-oriented
0#$/$1@! ,1'$!(Dejardin and Owens, 2009). The disproportionate share of FP$\1/=&)! 1)=! L0$)@?! :;;MI7! "#$!
industries suggests that the contraction of global &)! 2#$@$! $D(+/2E+/&$)2$=! &)=3@2/&$@! @3..$@2@! 2#12! 2#$!
=&@(/+(+/2&+)12$! @#1/$! +5! 5$,1'$! 0+/V$/@! markets in these sectors will negatively affect female workers.
*+)2/1*2&+)! +5! .'+91'! ,1/V$2@! &)! 2#$@$! @$*2+/@! 0&''! )$.12&4$'-! 155$*2! 5$,1'$! 0+/V$/@7! "#&@! @$$,@! 2+! 9$!
This seems to be borne out by the fact that unemployment rates for women workers increased from 6.6 percent in
9+/)$! +32! 9-! 2#$! 51*2! 2#12! 3)$,('+-,$)2! /12$@! 5+/! 0+,$)! 0+/V$/@! &)*/$1@$=! 5/+,! 878! ($/*$)2! &)!
October 2008 to 7.6 in July 2009, while unemployment rates for male workers increased only by 0.6 percentage 9-! ;78!
L*2+9$/! :;;C! 2+! >78! &)! U3'-! :;;M?! 0#&'$! 3)$,('+-,$)2! /12$@! 5+/! ,1'$! 0+/V$/@! &)*/$1@$=! +)'-!points
($/*$)21.$! (+&)2@! =3/&).! 2#$! @1,$! ($/&+=! FJKL?! :;;M=I7! Q@! ,+@2! =&@('1*$=! 0+/V$/@! *1))+2! 155+/=! 2+!
@21-!3)$,('+-$=?!$@($*&1''-!2#+@$!5/+,!(++/$/!#+3@$#+'=@?!5$,1'$!0+/V$/@!,1-!/$@+/2!2+!&)5+/,1'!(1&=!
7 World Bank staff estimates using the 2006 Family Income and Expenditures Survey (NSO, 2006)
+/!3)(1&=!0+/V!1)=!,1-!9$!0&''&).!2+!1**$(2!\+9@!2#12!+55$/!'+0$/!(1-!1)=!5$0$/!$,('+-$$@f!9$)$5&2@7!
&
& 5
during the same period (NSO, 2009d). As most displaced workers cannot afford to stay unemployed, especially
those from poorer households, female workers may resort to informal paid or unpaid work and may be willing to
accept jobs that offer lower pay and fewer employees’ benefits.
Government’s response
To respond to the crisis, in february 2009, the government introduced a p330 billion (Us$6.9 billion) stimulus
package, which is equivalent to around 4 percent of Gdp.8 The Economic Resiliency Plan (ERP) is the country’s
response to the global economic crisis. Almost half of the package (P160 billion) is accounted for by the nominal
increase in the government’s budget for 2009 over that of 2008. This amount is indicatively allocated for small
infrastructure projects and the expansion of selected social protection programmes (Figure 5). Another P40 billion
consists of tax adjustments, including a scheduled reduction of corporate income taxes from 35 to 30 percent that
will allow firms to spend about P20 billion more in investments and an increased exemption in personal income tax
that will empower individuals to the tune of an estimated P20 billion. Around P100 billion will be invested in large
infrastructure projects by the Government Service Insurance System (GSIS), the Social Security System (SSS),
and government-owned and controlled corporations. The remaining P30 billion will come from the additional social
security benefits provided by the GSIS, the SSS, and the Philippine Health Insurance Corporation (PhilHealth)
(NEDA, 2009a). However, the government created no special crisis institution to coordinate the implementation of
the stimulus package.
To provide immediate jobs for displaced workers, the government frontloaded the spending on infrastructure
projects in the first half of 2009. In early 2009, the government agencies that implement infrastructure projects
such as the Department of Public Works and Highways, the Department of Transportation and Communication,
the Department of Agriculture, and the Department of Education committed to frontload the spending of around
8 This report uses a currency conversion rate of US$1 = 48 Philippine pesos.
6
P95 billion (US$2 billion) worth of projects, which is equivalent to around 60 percent of the P160 billion (US$3.3
billion) component of the ERP. The construction of infrastructure projects was fast-tracked primarily to create jobs
for workers who were displaced as a result of the global economic crisis. These jobs include the construction,
repair, and rehabilitation of transport infrastructure such as highways and farm-to-market roads as well as school
buildings, including classrooms and school toilet facilities. By September 2009, 89 percent of the P95 billion had
been obligated, but only 46 percent has been disbursed.9
The government also allocated more funds for the expansion and strengthening of social protection programmes.
The P160 billion (US$3.3 billion) component of the ERP also included increases in the budget for some of the country’s
social protection programmes, including the conditional cash transfer programme, the conditional commodity-
based transfer programme, the insurance subsidy for the poor, and training and scholarships. The government also
allocated more funds to improve the delivery of social services by, for example, hiring nurses to work in rural areas
and to improve the facilities and increase the manpower of primary and secondary hospitals. Moreover, to improve
the targeting of poor households, the government increased the budget for implementing a national household
targeting system.
as the crisis necessitated an increase in government spending, the government decided to forego its plan to close
the national government budget deficit by 2010. While the significant fiscal consolidation and the fiscal reform
undertaken by the government between 2003 and 2007 had produced positive results, the gains were not sustained
over time due to the rise in spending pressures since 2008. For the first half of 2009, the national government has
recorded a deficit of 4.3 percent of GDP, which is higher than the average deficit-to-GDP ratio of 2.2 percent that
prevailed between 2003 and 2008. The slowing economy along with the sharp contraction in collections of import
taxes by the Bureau of Customs, the recent cuts in personal income tax in July 2008 and in corporate income tax
in January 2009 are all among the factors that have contributed to the slowdown in revenue generation (World
Bank, 2009b).
monitoring
monitoring the impact of the crisis has been a challenge because of a lack of up-to-date household survey data.
The National Statistics Office (NSO) conducts household surveys but only at long intervals, and the surveys do not
collect information on some of the best variables for evaluating the impact of the crisis.10 For instance, the NSO
conducts a quarterly Labor Force Survey (LFS), the preliminary aggregated results of which are published online
45 days after the data have been enumerated. The results of the LFS are generally not disaggregated by gender,
which makes it difficult to conduct deep analysis of the gender effects of the crisis. Data on unemployment are
also collected by several private companies such as Social Weather Stations (SWS) and Pulse Asia on a quarterly
basis. However, these numbers are only of limited use since they are not directly comparable with the official
LFS results for several reasons, among the most important of which is their limited sample sizes. Moreover, just
9 Calculated based on figures contained in NEDA (2009b).
10 Other data sources on employment other than the LFS include the following: (a) Survey on Overseas Filipinos, done every year (b) Labor Turnover Survey, every
quarter and (c) Bureau of Labor Employment Statistics Integrated Survey, every two years.
7
as in other countries, there is no single government agency that observes and monitors the social impact of the
economic and financial crisis, but the government is taking steps to strengthen this capacity.
II. socIal proTecTIon proGrammes aT The onseT of The crIsIs
The philippine government is implementing 66 different social protection programmes that exist to protect filipinos
against lifecycle, economic, social, and environmental risks. The government’s social protection programmes
aim to reduce poverty and vulnerability to risks and to enhance the social status and rights of the marginalized
by promoting and protecting their livelihoods, by protecting them against hazards and sudden losses of income,
and by increasing their capacity to manage risks.11 Since July 2009, the government has been implementing social
protection programmes that address four types of risk: (i) lifecycle risks, which include hunger and malnutrition,
illness, injury, disability, old age, and death; (ii) economic risks, which include the lack of a source of livelihood,
low income, unemployment, underemployment, economic crises or transitions, and the high prices of basic
goods; (iii) social risks arising from exclusion or marginalization, a lack of social investments, the loss of family
care, homelessness, and manmade disasters; and (iv) environmental risks, which pertain to natural calamities
(DAP, 2009).12
The social protection programmes are integrated into various sectors and are being implemented by 21 different
government agencies. However, as most social protection programmes are cross-sectoral (in other words,
cover, for example, labor, education, and health issues), several departments are involved in implementing those
programmes that address various types of risks. The 21 government agencies implement from as few as one to as
many as 15 social protection programmes, either alone or in partnership with other government agencies. While
most of the programmes are directly relevant to the agency’s mandate (core programmes), several are considered
as support (in that they complement or augment existing programmes) or peripheral (they make a minor contribution
to the agency’s mandate). Among these agencies, the Department of Social Welfare and Development (DSWD)
implements the highest number of social protection programmes (15 out of the 66). There are cases when several
agencies address one type of risk, which can result in an overlap of beneficiaries and a duplication of provision
of social protection services. For instance, there are about 12 agencies that implement programmes that address
the risks associated with the lack of a source of livelihood, low income, unemployment, and underemployment
(DAP, 2009).
social insurance programmes, which are meant to mitigate income shocks by pooling resources and spreading
risks across time and socioeconomic groups do not reach the majority of filipinos. The Social Security System
(SSS) and Government Service Insurance System (GSIS) are the two main agencies providing social insurance
in the Philippines. In addition, there are five other agencies implementing social insurance programmes covering
three major areas: (i) social security benefits and employees’ compensation (mainly provided for private and public
11 The official definition of social protection was adopted in 2007 by the National Economic and Development Authority’s Social Development Committee in
Resolution No. 1 Series of 2007.
12 Based on the Review and Strengthening of the National Social Protection and Welfare Programme, which is the government’s quick assessment of social
protection programmes in the Philippines undertaken by the Development Academy of the Philippines in collaboration with the National Economic and
Development Authority, the Department of Social Welfare and Development, and the National Social Welfare Programme.
8
sector workers by the SSS and the GSIS respectively); (ii) health insurance (mainly provided by PhilHealth); and
(iii) agricultural insurance (mainly provided by the Philippine Crop Insurance Corporation). Currently, there are
over 20 social insurance programmes, all of which are designed in such a way that beneficiaries pay a premium
over a given period of time to cover or protect themselves from loss of income due to health and employment or
livelihood-related hazards.13 Nevertheless, the coverage rate of these programmes is low. In 2008 the contributing
members of the SSS and the GSIS accounted for only 32.1 percent of the employed population while PhilHealth’s
contributory programmes covered only 40 percent of the total number of employed population (Manasan, 2009a).
Informal sector workers, who account for about one-third of the labor force, have little or no access to social
insurance programmes as most of them are excluded from many provisions (DAP, 2009).
social protection programmes in the philippines are inadequately funded, especially compared with other
developing countries. Government 60*3*''*+$)& 2%$& protection accounted for $)'$-*2334& -(.'2%$9& /*#0&
Y(-*23& '%(#$-#*(+& '%(,%2.)& *+& #0$&spending on social *+29$^72#$34& "7+9$95& 0.4 percent of GDP in 2007 and
(#0$%& 9$1$3('*+,& -(7+#%*$);& O+4$/),$)2! @($)=&).! +)!and fuel(/+2$*2&+)! 1**+3)2$=!share of this spending
went up to 1.1 percent of GDP in 2008 in response to food @+*&1'! crisis. However, a large 5+/! ;7X! ($/*$)2! +5!
OP%!&)!:;;>!1)=!0$)2!3(!2+!H7H!($/*$)2!+5!OP%!&)!:;;C!&)!/$@(+)@$!2+!5++=!1)=!53$'!*/&@&@7!A+0$4$/?!1!
was allocated to the operation of the rice price subsidy programme of the National Food Authority (NFA), which
'1/.$! @#1/$! +5! 2#&@! @($)=&).! 01@! 1''+*12$=! 2+! 2#$! +($/12&+)! +5! 2#$! /&*$! (/&*$! @39@&=-! (/+./1,! +5! 2#$!
accounted for 50 percent and 73 percent of government spending on social protection in 2007 and 2008 respectively
J12&+)1'!G++=!Q32#+/&2-!FJGQI?!0#&*#!1**+3)2$=!5+/!6;!($/*$)2!1)=!>!1)=!:;;C!/$@($*2&4$'-!FY1)1@1)?!:;;M9I7!B)!1!)+)E*/&@&@!-$1/!@3*#!1@!:;;>?!
is low compared with what is spent in other developing countries. Some Southeast Asian countries are estimated
.+4$/),$)2!@($)=&).!+5!;7X!($/*$)2!+5!OP%!+)!@+*&1'!(/+2$*2&+)!&@!'+0!*+,(1/$=!0&2#!0#12!&@!@($)2!&)!
to =$4$'+(&).! *+3)2/&$@7! K+,$! K+32#$1@2! Q@&1)! *+3)2/&$@! many Latin American and South Asian countries
+2#$/! spend about 0.5 to 1.2 percent of GDP on social protection, while 1/$! $@2&,12$=! 2+! @($)=! 19+32! ;76! 2+! H7:!
are estimated to spend 2.9 (/+2$*2&+)?! percent of their GDP Q,$/&*1)! 1)=! K+32#! Q@&1)! *+3)2/&$@! 1/$!
($/*$)2! +5! OP%! +)! @+*&1'!percent and 1.50#&'$! ,1)-! ]12&)!respectively (Besley et al, 2003) (Figure 6).14 Another
$@2&,12$=! 2+! @($)=! :7M! ($/*$)2! 1)=! H76! ($/*$)2! +5! 2#$&/! OP%! /$@($*2&4$'-! FS$@'$-! $2! 1'?! :;;! =$4$'+(&).! 1)=! 2/1)@&2&+)!
(Weigand and Grosh, 2008).
*+3)2/&$@!&@!H7M!($/*$)2!+5!OP%!FW$&.1)=!1)=!O/+@#?!:;;CI7!!!!!
!
&D)#*.2#$)&("&A(1$%+.$+#&Y'$+9*+,&(+&Y(-*23&6%(#$-#*(+&FG&("&AL6H&
I7H6!%/+./1,@!@3*#!1@!2#$!40.205)6!7$%+'.2'3!1!+)$E2&,$!*1@#!2/1)@5$/!5+/!
9
'&5$'&)$! (+0$/! *+)@3,$/@! =3/&).! 2#$! 53$'! */&@&@?! 2#$! G++=E5+/EK*#++'! %/+./1,! FGK%I?! 1! *+)=&2&+)1'!
despite the numerous programmes that are in place in the philippines, their effectiveness is compromised by poor
targeting, which results in high leakage rates. A number of social protection programmes, particularly those that
comprise the largest portion of government spending, are characterized by high leakage rates (the proportion of
programme beneficiaries that are classified as non-poor). The NFA rice price subsidy, which is still the programme
with the highest estimated costs even after the food crisis, is a universal consumer price subsidy that, by design,
also benefits the non-poor. It is estimated that 41 percent of the total NFA rice subsidy goes to non-poor and,
across income deciles, the poorest households consume only 14 percent while the wealthiest households consume
around 2 percent of NFA rice (Figure 7).15 Programmes such as the Pantawid Kuryente, a one-time cash transfer for
lifeline power consumers during the fuel crisis, the Food-for-School Program (FSP), a conditional commodity-based
transfer, and the insurance subsidy for the poor under the PhilHealth’s National Health Insurance Programme
(NHIP) also suffer from high leakage rates due to weaknesses in their targeting methodologies. However, recent
attempts to improve the targeting system have produced positive results. Reflecting the government’s commitment
to strengthening its social protection system, the Operational Guidelines for the FSP were revised in 2008 to
improve its geographic targeting of the poor. In the case of the conditional cash transfer programme, the Pantawid
Pamilyang Pilipino Programme (4Ps), a proxy means test (PMT) targeting methodology is now being used to select
its beneficiaries. From international experience, the PMT methodology has the benefits of being objectively based
and of having low inclusion error rates (in other words, the inclusion of the non-poor). Meanwhile, the government
has indicated that it plans to adopt the PMT-based targeting system to select the beneficiaries of the NHIP’s
insurance subsidy for the poor.
recently, there has been a gradual shift in the focus of social protection programmes – from subsidies and
commodity-based transfers to cash-based transfer programmes. For several decades, the NFA rice price
15 World Bank staff estimates based on the 2006 Family Income and Expenditure Survey (NSO, 2006).
10
subsidy has been the mainstay of the government’s portfolio of social protection interventions and has been
used to respond to crises such as the food price shock in 2008. Likewise, commodity-based transfers such as
the FSP have been used to mitigate the negative impact on welfare of the food crisis, particularly for the poor.
Recently, however, there has been an evident shift in focus in the range of social protection programmes
– from subsidies and commodity-based transfer programmes to cash-based transfers such as the 4Ps (Figure
8). While the NFA rice price subsidy remains significant in terms of government spending, the conditional cash
transfer programme has gained dramatic recognition as an effective mechanism to supplement the income of
the poorest households while also supporting their human capital development. Even at the height of the food
crisis, the government already recognized the cost-effectiveness and flexibility of cash for the quick delivery of
assistance to poorer households to cope with economic shocks. In addition to the 4Ps, the government introduced
several cash transfers during the food crisis including Pantawid Kuryente (the one-time cash transfer for
lifeline power consumers) and Tulong Para Kay Lolo and Lola (a P500 cash transfer for people aged 60 years
or older who do not receive old age benefits). Cash transfers are the most direct type of intervention designed
to support the poor and offer more advantages than food transfers. In particular, providing cash transfers
is a much less costly operation once the administrative system is in place than providing assistance in kind
(Grosh et al, 2008).
III. adjUsTmenTs made To socIal proTecTIon proGrammes In response To The crIsIs
The government has increased its budget for social protection programmes to cushion the effects of the global
economic crisis. Recognizing the need to protect the poor and the most vulnerable from the adverse effects of the
crisis, the government has made significant adjustments to its social protection programmes, particularly in terms
of budget. Funding support for the conditional cash transfer programme (the 4Ps) was significantly increased from
11
P1.3 billion in 2008 to P15 billion in 2009.16 Likewise, funding support for the conditional commodity-based transfer
(the FSP) was increased from P3.3 billion in 2008 to P4.8 billion in 2009.17 Among other increases in funding support
included the premium subsidy for the poor under the NHIP and the enhancement of health facilities programme
being undertaken by the Department of Health (DOH) (Figure 9).18 The allocated funds for NFA operations were also
increased from P2 billion in 2008 to P4 billion in 2009, but off-budget releases for the NFA to account for the implicit
&
cost of its operations decreased from an estimated amount of P58.9 billion in 2008 to P27.2 billion in 2009.
&
&
&T79,$#2%4&E+-%$2)$)&*+&Y$3$-#$9&Y(-*23&6%(#$-#*(+&6%(,%2.)&FE+&:*33*(+&'$)()H&
;! :! X! 8! C! H;! H:! HX! H8!
PKWP!%1)210&=!%1,&'-1).!%&'&(&)+!%/+./1,!
JAB%!B)=&.$)2!%/+./1,!
:;;C!!
PKWPdP$(N=!G++=E5+/EK*#++'!%/+./1,! :;;M!!
PLA!A$1'2#!G1*&'&Z$@!N)#1)*$,$)2!%/+./1,!
"#$%&',T!_1/&+3@!.+4$/),$)2!1.$)*&$@!
&
&
M0$&-(1$%2,$&("�$&-(+9*#*(+23&-2)0&#%2+)"$%&'%(,%2.&/2)&)*,+*"*-2+#34&$8'2+9$9&#(&-(1$%&.(%$&'((%&
The coverage of the conditional cash transfer programme was significantly expanded to cover more poor
0(7)$0(39);! Q@! =&@*3@@$=! &)! 2#$! (/$4&+3@! @$*2&+)?! 2#$! X%@! #1@! 9$$)! @&.)&5&*1)2'-! $D(1)=$=! 2+! ,&2&.12$!
households. As discussed 2#$! .'+91'! section, the 4Ps has been significantly expanded 2+! $'&.&9'$! negative
2#$! )$.12&4$! &,(1*2! +5!in the previous$*+)+,&*! */&@&@7! "#$! X%@! (/+4&=$@! ./1)2@! to mitigate the#+3@$#+'=!
impact of the global economic crisis. The 4Ps provides grants to eligible household beneficiaries to improve their
9$)$5&*&1/&$@!2+!&,(/+4$!2#$&/!#$1'2#?!)32/&2&+)?!1)=!$=3*12&+)?!(1/2&*3'1/'-!+5!*#&'=/$)!1.$=!;!2+!HX!-$1/@!
health, nutrition, and education, particularly of children aged 0 to 14 years old, as long as the households comply
+'=?!1@!'+).!1@!2#$!#+3@$#+'=@!*+,('-!0&2#!*$/21&)!*+)=&2&+)@7!"#$!(/+./1,!@21/2$=!&)!:;;>!0&2#!:;?;;;!
#+3@$#+'=!9$)$5&*&1/&$@!1)=!93=.$21/-!@3((+/2!+5!%6;!,&''&+)7!B)!/$@(+)@$!2+!2#$!5++=!1)=!53$'!*/&@&@!&)!
with certain conditions. The programme started in 2007 with 20,000 household beneficiaries and budgetary support
,&=E:;;C! 1)=! 2#$! .'+91'! $*+)+,&*! */&@&@! 2#12! 155$*2$=! 2#$! =+,$@2&*! $*+)+,-! 2+01/=@! 2#$! $)=! +5! 2#$!
of P50 million. In response to the food and fuel crisis in mid-2008 and the global economic crisis that affected
-$1/?! 2#$! .+4$/),$)2! @&.)&5&*1)2'-! $D(1)=$=! 2#$! (/+./1,! 2+! *+4$/! 8?;;;! #+3@$#+'=@! 1)=! (/+4&=$=!
the
9&''&+)! 2+! 2#$! (/+./1,7! the end 2#$! .+4$/),$)2! =$*&=$=! 2+! &)*/$1@$! 2#$! )3,9$/! +5! #+3@$#+'=!
%H7&D8'2+)*(+&("�$&Z(+9*#*(+23&Z2)0&M%2+)"$%&6%(,%2.5&INNa@INN[&&
H87;!! H?:;;?;;;!!
G3)=&).!K3((+/2!FB)!9&''&+)!($@+@I!
J+7!+5!21/.$2$=!9$)$i*&1/&$@!
HX7;!! G3)=&).!@3((+/2!
H?;;;?;;;!!
H:7;!! J+7!+5!21/.$2$=!9$)$i*&1/&$@!
C;;?;;;!!
H;7;!!
C7;!! 8;;?;;;!!
87;!!
16 Under the General Appropriations Act (GAA), the government allocated P298.6 million for the 4Ps in 2008 and P5 billion in 2009. In addition, the government
X;;?;;;!!
million
provided an additional P998.6 X7;!! for the expansion of the programme in 2008, and P10 billion additional funds are expected to be provided to the
programme to cover 1 million households in 2009. :;;?;;;!!
17 The allocated amount for the :7;!!in 2008 was P766 million for the DSWD component and P2.5 billion for the DepEd component under the GAA. In 2009, it
FSP
was increased to P1.8 billion for the DSWD component and P3 billion for the DepEd component (which refers to the rice component of the Malusog na Simula
;7;!! ;!!
Yaman ng Bansa Programme under the National Nutrition Council).
:;;>! :;;M!
18 As reflected in the budgets in the General Appropriations Act of 2008 and :;;C! the NHIP, the DOH,, and the Department of Budget and Management
2009 for K+3/*$T!PKWP!
(DBM) (DBM, 2009).
&
&
12
Y(.$&'%(,%2.)#&/$%$&(%*,*+2334&-%$2#$9&#(&'%(1*9$&-2)0&%$3*$"&#(&0(7)$0(39)&#(&.*#*,2#$�$&)02%'&
*+-%$2)$)&%$)73#*+,&"%(.�$&"((9&2+9&"7$3&-%*)*)&/$%$&$8#$+9$9&#(&-(1$%�()$&2""$-#$9&:4�$&,3(:23&
9$)$5&*&1/&$@!2+!&,(/+4$!2#$&/!#$1'2#?!)32/&2&+)?!1)=!$=3*12&+)?!(1/2&*3'1/'-!+5!*#&'=/$)!1.$=!;!2+!HX!-$1/@!
+'=?!1@!'+).!1@!2#$!#+3@$#+'=@!*+,('-!0&2#!*$/21&)!*+)=&2&+)@7!"#$!(/+./1,!@21/2$=!&)!:;;>!0&2#!:;?;;;!
#+3@$#+'=!9$)$5&*&1/&$@!1)=!93=.$21/-!@3((+/2!+5!%6;!,&''&+)7!B)!/$@(+)@$!2+!2#$!5++=!1)=!53$'!*/&@&@!&)!
,&=E:;;C! 1)=! 2#$! .'+91'! $*+)+,&*! */&@&@! 2#12! 155$*2$=! 2#$! =+,$@2&*! $*+)+,-! 2+01/=@! 2#$! $)=! +5! 2#$!
-$1/?! 2#$! .+4$/),$)2! @&.)&5&*1)2'-! $D(1)=$=! 2#$! (/+./1,! 2+! *+4$/! 8?;;;! #+3@$#+'=@! 1)=! (/+4&=$=!
%H7&D8'2+)*(+&("�$&Z(+9*#*(+23&Z2)0&M%2+)"$%&6%(,%2.5&INNa@INN[&&
H87;!! H?:;;?;;;!!
G3)=&).!K3((+/2!FB)!9&''&+)!($@+@I!
J+7!+5!21/.$2$=!9$)$i*&1/&$@!
HX7;!! G3)=&).!@3((+/2!
H?;;;?;;;!!
H:7;!! J+7!+5!21/.$2$=!9$)$i*&1/&$@!
C;;?;;;!!
H;7;!!
C7;!! 8;;?;;;!!
87;!!
X;;?;;;!!
X7;!!
:;;?;;;!!
:7;!!
;7;!! ;!!
:;;>! :;;C! :;;M! K+3/*$T!PKWP!
&
&
some programmes that were originally created to provide cash relief to households to mitigate the sharp increases
Y(.$&'%(,%2.)#&/$%$&(%*,*+2334&-%$2#$9&#(&'%(1*9$&-2)0&%$3*$"&#(&0(7)$0(39)&#(&.*#*,2#$�$&)02%'&
resulting from the food and fuel crisis were extended to cover those affected by the global economic crisis. One
*+-%$2)$)&%$)73#*+,&"%(.�$&"((9&2+9&"7$3&-%*)*)&/$%$&$8#$+9$9&#(&-(1$%�()$&2""$-#$9&:4�$&,3(:23&
of the programmes created in (/+./1,@! */$12$=! &)! :;;C! &)! /$@(+)@$! 2+! 2#$! 5++=! 1)=! 53$'! */&@&@! 01@! 2#$!
$-(+(.*-& -%*)*);! L)$! +5! 2#$!2008 in response to the food and fuel crisis was the cash transfer, Tulong Para Kay
Lolo and Lola, :$(#.8! 40%0! 70+! to provide cash 0#&*#! qualified senior citizens (aged 70 and over) who had
*1@#! 2/1)@5$/?!which was intended ;#(#! 0.6! ;#(0?! relief to 01@! &)2$)=$=! 2+! (/+4&=$! *1@#! /$'&$5! 2+! c31'&5&$=!
no regular income and were not covered by social security or any other government benefit. Funded from oil VAT
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receipts, the program was implemented nationwide to meet the needs of poor senior citizens and to recognize their
contribution to the country. The programme initially targeted 1 million beneficiaries but was expanded to reach as
many as 1.37 million senior citizens by the end of 2009. Some of the funding support to expand the programme was
taken from the excess funds allotted for the Pantawid Kuryente, which ended in December 2008.
expanding the social protection system also involved introducing interventions to mitigate the employment effects
of the global economic crisis. To create more jobs and, at the same time, to improve the delivery of health care
services, in February 2009, the government launched the Nurses Assigned in Rural Service (NARS) Programme
to create jobs for unemployed nurses and improve health service delivery in rural areas. The NARS Programme,
which employs about 10 registered nurses to be deployed in each of the 1,000 poorest municipalities for a period of
six months, is estimated to cost P480 million.19 By June 2009, the government had deployed 4,046 registered nurses
in the selected municipalities. The programme, while creating jobs for a large number of unemployed nurses, also
aims to accelerate progress towards meeting the Millennium Development Goals, which has been slow so far
given the high maternal mortality rate in the country and the low proportion of births that are attended by skilled
health personnel.20
In addition, the government has coordinated all emergency employment and livelihood programmes that would
generate jobs for displaced workers. Recognizing the need to generate emergency employment, in October
19 World Bank staff estimates based on the P8,000 per nurse per month honorarium provided by the government.
20 The number of maternal deaths per 100,000 live births was 162 in 2006, while the proportion of births attended by skilled health personnel was 72.9 percent
in 2007. Both of these statistics are behind the MDG targets of 52.3 maternal deaths per 100,000 live births and 100 percent respectively (NSCB, 2009b).
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2008 the government launched the Comprehensive Livelihood and Emergency Employment Programme (CLEEP),
which consolidated about 35 existing government programmes and projects that required immediate manpower.
The agencies involved in the implementation of the CLEEP allocated a total of about P13.7 billion (US$285 million),
of which 59 percent had been obligated by September 2009. The jobs generated under the CLEEP include the
construction and maintenance of farm-to-market roads and the repair and rehabilitation of irrigation facilities,
among others. In 2009, CLEEP is expected to generate as many as 251,017 jobs and employ as many as 465,945
individuals. By September 2009, the programme had already created 197,435 jobs and employed 328,262 individuals
(NAPC, 2009).
cleep also includes some of the government’s pre-existing social protection programmes, particularly those
that generate employment and provide livelihoods. For instance, the Self-Employment Assistance - Kaunlaran
(SEA-K) Programme, a community-based microfinance project aimed at building the capacity of community level
organizations to self-administer the provision of socialized credit, which is an existing social protection programme,
is also one the programmes under CLEEP. Another is the Out-of-School Youth Serving towards Economic Recovery
(OYSTER) project, which aims to provide employment to young people who are both out of school and out of work
to work on the maintenance of roadsides and carriageways of national roads and highways, bridges, and other
transport infrastructure projects.
Iv. polIcy IssUes
for several years, the government has put a high priority on protecting the poor but the recent crises have compelled
it to accelerate its efforts to strengthen the social protection system. Even before the onset of the recent crises,
pro-poor programmes have been deeply embedded in the administration’s development plans. The Philippines has
succeeded in reducing poverty from almost half of the population in 1991 (45.3 percent) to about one-third in 2006
(32.9 percent), although this performance is quite weak compared to other countries in the region (NSCB, 2009b and
Balisacan, 2009). In recent years, the government has given increased attention to reforming the social protection
system. In 2007, the government, through the DSWD, put in place the four main building blocks for developing
a sound social protection programme in the Philippines: (i) develop a social protection strategy; (ii) develop an
accurate mechanism for targeting the poor; (iii) pilot a strategy for conditional cash transfer programmes; and
(iv) ensure the systems and infrastructure have the capacity and flexibility to respond quickly to disasters. Just
when the government was initiating these reforms, the food and fuel crisis and the global economic crisis hit
the Philippines, which made it imperative for the government to re-double its efforts and accelerate its reforms.
In 2008, the government created the inter-agency National Social Welfare and Protection Cluster to consolidate
programmes of various government agencies into a single, national social welfare strategy.21 Over the longer term,
this inter-agency programme is expected to reallocate resources from less effective programmes to more effective
social protection programmes.
21 The Administrative Order (AO) No. 232 was issued by the President on July 8, 2008, which brought together the government agencies dealing with social
welfare into a National Social Welfare Programme. The President later issued another AO on July 28, 2008 (AO No. 232-A), which strengthened the cluster by
including more agencies and assigning the responsibility for coordination to the DSWD.
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one of the key issues that the government plans to address in its reform is the fragmented and uncoordinated
delivery of social protection programmes. The various reviews and assessments of social protection programmes
in the Philippines have highlighted the lack of policy and institutional coordination in the broad area of social
protection. Because each government ministry operates under its own mandate, social protection programmes
tend to be uncoordinated and are often implemented in an ad hoc manner. Some social protection programmes
are short-lived as they are contingent on the priorities of whatever administration happens to be in office. As there
are several interventions that address the same risks, it is very likely that there is some overlapping of benefits
and double-counting of beneficiaries (DAP, 2009 and ADB, 2007). With a view to improving the delivery of social
protection services, the government has now created a social protection framework that lays out the strategies
for enhancing coordination among programmes and improving the delivery of social protection services. In
addition, it has conducted an assessment of its existing social protection programmes with a view to scaling up
and reallocating resources to the most effective and efficient ones. It is crucial that the government follow through
with the implementation of this effort.
The government recognizes that the benefits from social protection programmes are not being fully realized
because of the absence of a legitimate and functional system for targeting the poorest households. As discussed
in Section II, some of the country’s major social protection programmes suffer from high leakage rates. In
recognition of this issue, the government has established a National Household Targeting System for Poverty
Reduction (NHTS-PR), which is a systematic and objective targeting system (using the PMT methodology) that
includes a standardized database of poor households. The NHTS-PR is expected to target only poor households,
thus enhancing the poverty-reducing impact of its social protection programmes. In the case of the NFA rice price
subsidy, estimates have shown that the poverty reduction impact of this programme during the food crisis could
have been more significant if the rice had been made available only to poor households (targeted) rather than
to all households (untargeted). Given the same programme budget, the NFA rice price subsidy would reduced
poverty incidence by 4.7 percentage points, the income gap by 3.1 percentage points, and poverty severity by 1.3
percentage points if only poor households benefitted from the programme (Figure 11). It would be beneficial if all
government agencies that implement social protection programmes use the targeting database to select their
beneficiaries. In July 2009, the DSWD endorsed a draft Executive Order to the Office of the President asking for
the NHTS-PR to be adopted as a mechanism for identifying those eligible to benefit from government programmes
and services to reduce leakages. Currently, the Department of Health is considering using the NHTS-PR poverty
database to target its health insurance programme for the poor. This would be an important positive step forward
in improving the targeting of national programmes.
15
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