PHILIPPI NE
INSTITUTE FOR
DEVELOPMENT
STUDIES
Surian sa mga Pag-aaral Pangkaunlaran ng Pilipinas
DEVELOPMENT
RESEARCH NEWS
Development
Research News
May - June 2009
Vol. XXVII No.3
ISSN 0115-9097
Editor's Notes
Poor incentive
Most countries generally equate development to eco-
structure drives quality of
nomic growth and vice versa. The Philippines is no
Philippine
exception. Years of economic growth, however, have
failed to uplift the lives of Filipinos, with most of the
population remaining poor. One may then ask if economic growth is the answer to the country’s develop-
bureaucracy down
ment or if there may be other factors that are critical
to achieve development?
In the 1990s, the United Nations Development
Programme advocated the concept of human development which does not solely rely on economic indicators but gives importance to longevity, access to
knowledge and achievement of a decent standard of
living. Human development does not rest solely on
incomes but on outcomes. Certain elements,however,
impinge on the attainment of positive human development outcomes. One of which is institutions such as
the government bureaucracy.
The 6th and latest 2008/2009 Philippine Human De-
velopment Report (PHDR), as prepared by the Human Development Network, focuses on the theme
“Institutions, Politics and Human Development in the
Philippines” . For the main feature in this issue, we
focus on the Report’s analysis and roots of the low
quality of the country’s bureaucracy. Inequities re-
12
What's Inside
5
National Launch of the PHDR 2008/2009
9
PHDR Mindanao Launch
T
he perception that corruption in the Philippines is getting worst has
been reflected in the 2008 corruption perception index (CPI) released by Transparency International, an independent global civil
society organization committed to the fight against corruption. Last year, the
country slipped to a CPI of 2.3, down from its score of 2.5 for three years in
a row since 2005.1
Between the public and private sectors, the public sector has always been perceived as the more corrupt. It is often said that the meager salaries and benefits
in government—or what can be collectively called as incentive structure—is
one of the reasons government workers are prone to corrupt practices.
While corruption in itself is of concern, the matter is even more compelling
in the face of cross-country evidence of a strong causal link from improved
‘governance’ to better development outcomes, including GDP per capita,
infant mortality and literacy. 2 With an established connection between governance and human development outcomes, the question then arises: how
about the link between incentive structures and governance?
To explore this link, Dr. Toby Monsod of the UP School of Economics undertook a study for the Philippine Human Development Network (HDN)
that explored whether and how the incentive structures embedded in the
Philippine bureaucracy have affected agency performance, particularly in
the human services sector. Titled “The Philippine Bureaucracy: incentive
structures and implications for performance,” Monsod’s piece is featured
1
The CPI ranks 180 countries by their perceived levels of corruption based on expert assessments and
opinion surveys. The index is between 10 and 1 wherein a high CPI means a country is perceived to be less
corrupt relative to others.
2
Using world governance indicators they developed, Kaufman, D., A. Kraay, and M. Mastruzzi of the World
Bank estimate a “development dividend” for good governance of about a 300% increase in incomes per
capita in the long run and that the same improvement lowers infant mortality 2.5 to 4 times, and raises
literacy by 15 to 25 percent.
DEVELOPMENT RESEARCH NEWS
2
in the Philippine Human Development Report
2008/2009. This article summarizes some
key points in Monsod’s paper.
Inequities in the incentive structure
For many years now, the monetary incentive
structure has been marred by both external
and internal inequities. External inequities
refer to how government salaries compare
with equivalent jobs in the private sector and
other competing markets. The results of a
compensation and benefits study conducted
by the Civil Service Commission (CSC) from
2002 to 2006 confirmed that jobs in the public sector were compensated at lower rates
than their private sector counterparts. For
instance, senior managers and highly technical personnel in government — such as
directors, school superintendents, district
engineers, prosecutors, assistant secretaries,
and the like — were receiving 74 percent
less; subprofessional and professional technical personnel — including division chiefs,
public attorneys, school principals, public
health nurses, and others — 40 percent less.
The structure of wages and other incentives in
government are prescribed by Republic Act
6758, or the Salary Standardization Law (SSL)
of 1997, as well as by Joint Resolution No. 01, s.
1994 of the Senate and the House of Representatives.
Internal inequities, meanwhile, refer to distortions across comparable jobs within and
among government agencies. One source is
the congressionally approved exemption
from the SSL enjoyed by a select group of
public sector agencies and corporations. The
exemptions allow employees to receive compensation that is much higher than what is
mandated under the SSL, regardless of
agency performance. As of April 2008, a total
of 20 government-owned or controlled corporations (GOCCs) and three national government agencies enjoyed SSL exemption. Other
special laws which favor specific occupational
groups such as the Magna Carta for Public
Health Workers (Republic Act No. 7305) which
entitles public health workers to receive special benefits not granted to other government
personnel, likewise create internal distortions.
Internal inequities also arise from job classification distortions such as when the same
job is ranked differently across agencies. A
clear example cited by Monsod is the Economist III position of the National Economic
and Development Authority (NEDA) which
May - June 2009
is one salary grade lower than the Budget
and Management Specialist III of the Department of Budget and Management
(DBM) even though the job qualifications
and scope of work of both positions are comparable. Salary grade refers to how a job is
valued within the salary schedule which in
turn depends on a job classification framework; a lower grade is equivalent to a lower
base pay. In addition, the government’s compressed salary schedule and longevity policy
tends to, perversely, discourage per formance. Monsod explained:
“The SSL schedule contains 33 salary grades,
each with 8 steps. This results in very narrow
bands that overlap at the 4th step. Longevity
in turn is rewarded with a permanent step
increment in base pay (rather than a onetime bonus). These two policies combined
can create a situation where a long-serving
subordinate receives a higher salary than
his/her newly appointed supervisor. This
distortion also gives rational employees a
greater incentive to stay in a position and
underachieve or underper form, since
added responsibilities and longer hours resulting from a promotion will likely outweigh
any incremental gains in compensation from
superior performance.”
Nonmonetary disincentives
Nonmonetary incentives include a sense of
mission, professional pride, or ideology
which motivate agents to pursue organizational goals. Since there are no high-powered legal monetary incentives in government service, the relative significance of nonmonetary incentives becomes magnified.
Monsod points out that successfully creating a
sense of mission depends on how well managers can define and protect the organization’s
core tasks and boundaries. A number of practices have made this difficult, however, particularly in recent years. One instance is the practice of creating ad hoc bodies and presidential consultants/advisers, whose mandates, in
many cases, overlap with that of regular agencies and officials. This muddling of jurisdictions and accountabilities not only creates discord across offices but tends to diminish the
sense of duty and professional status within
the ranks of civil servants.
For example, aside from official cabinet secretaries for foreign affairs, energy, and education, there is also a Presidential Adviser
DEVELOPMENT RESEARCH NEWS
on Foreign Affairs, a Special Adviser for Energy Affairs, and two Presidential Assistants
for Education. A Philippine Strategic Oil, Gas,
Energy Resources, and Power Infrastructure
Office, a Minerals Development Council, and
a National Organic Agriculture Board were also
created which stand apart from each of the
departments of Energy, Environment and
Natural Resources, and Agriculture.
Monsod observed a net decrease in the number of offices and agencies attached to the
Office of the President between 1993 and
2007 (Figure 1). This was due to a sharp
decline in the number of agencies during
the period 2001–2003 resulting from the
work of the Presidential Commission on Effective Governance (PCEG) which was mandated to streamline the number of agencies
in the Executive. However, when the PCEG
was abruptly abolished in 2004, the number
of agencies again began to increase.
3
Figure 1. Flow in the number of government agencies
under the Office of the President, by Administration.
Base data: DBM, 2007. Computations author’s own.
Figure 2. Number of presidential appointments (1994–2008, with
five missing years)
After a steady decline in 1994 to 1998, the
number of presidential consultants/advisers has also been growing steadily since 2001,
tapering off a bit in 2005, before peaking in
2008 (Figure 2). Presidential appointments
enjoy title and authority sans the accountability. This situation sows confusion and diminishes morale across the ranks.
There is also the issue of political appointments into formal plantilla positions which,
as Monsod emphasizes, violates the constitutionally mandated notion of ‘merit and fitness’ in the bureaucracy. Approximately
10,000 positions, including those at the highest level career posts as well as highly technical posts, are subject to presidential prerogative. The CSC has no power, whether to veto
or protect, when the subject is a “presidential appointee.”
Salient findings of the study
Monsod finds evidence that, in general, the
disincentives from a 20-year old compensation
structure as well as from the increasing political intervention into the bureaucracy over the
last few years had taken a toll on the quality of
the career service. At the same time, she notes
that a better quality of bureaucracy is associated with better agency performance, at least
in the human development services sector.
These are shown in the following:
First, the study looked at trends in the numbers of career service personnel across the
May - June 2009
Source: Directory of Government Officials, DBM,
first, second, and third levels of the corps
and in the share of eligible people occupying third-level career executive services
(CES)positions and found a stagnant or decreasing quality at all levels of the corps in
recent years. It is assumed that higher numbers of career service personnel and a greater
share of eligible people occupying CES posts
would be associated with greater quality of
the bureaucracy.
Contrasting patterns were obtained for the
first (clerical, trade, crafts, custodial) and
second levels (subprofessional, professional,
and technical positions). In the first level, a
decrease in the number of career service
personnel was evident while at the second
level, the opposite trend was found. This increasing trend at the second level, however,
was likely driven by public school teacher
hires, which merely reflects the increasing
DEVELOPMENT RESEARCH NEWS
4
population of schoolchildren rather than an
improvement in the quality of personnel in
previously existing positions.
At the third level, meanwhile, there is a decreasing number of career personnel in nonexecutive service (NEC) positions, indicating that the corps may be losing quality
among highly technical positions. There is
also a decreasing trend in the share of Career
Executive Service Officer (CESO) eligibles
occupying CES positions starting around 2004
across all national government agencies (Figure 3) which cannot be attributed to a lack of
supply of CESO eligibles. According to
Monsod, this indicates that the share of political appointments (read: ineligible personnel)
is increasing and/or that CESO eligibles are
leaving voluntarily. A decreasing trend of
CESO eligibles is also apparent even in
GOCCs (Figure 4).
May - June 2009
Second, the study has analyzed the correlation between the quality of the bureaucracy
and agency per formance. Monsod explained that the impact of incentives on the
quality of the bureaucracy should ideally be
measured through job satisfaction surveys
and through flow data of personnel in and
out of agencies. However, since these data
are not available, the percentage of CES positions occupied by CES or CESO eligibles is
used as a proxy variable. CES refers to third
level positions (salary grade 25 and up), excluding NEC positions. To be eligible to occupy said positions, one must pass a stringent set of tests administered by the Career
Executive Service Board (CESB) or the CSC.
Agency performance in turn is measured by a
subjective, “user satisfaction” measure, specifically, agency public approval ratings, in lieu of
objective measures which are unavailable.
12
Figure 3. Percentage of CESOs and CES eligibles occupying CES positions at the
executive branches of national government agencies
Base data: CESB, various years.
Figure 4. Percentage of CESOs/CES eligibles occupying CES positions in GOCCs: SSL exempt
Base data: CESB, various years.
DEVELOPMENT RESEARCH NEWS
5
May - June 2009
National Launch of the PHDR 2008/2009
G
overnment institutions are linked to
and shape human development. Being so, the government should therefore always aim to deliver better quality public goods and services so that human development goals can be achieved. However, to
have this, the current formal rules, informal
norms, and enforcement features of the government institutions need to be changed.
This was among the topics discussed in the
latest (2008/2009) Philippine Human Development Report (PHDR) whose theme is “Institutions, politics, and human development”
and which was presented during its national
launch at the Crowne Plaza Galleria in
Mandaluyong on May 20, 2009. As Dr. Toby
Monsod of the Human Development Network (HDN) noted in her presentation of
the key findings of the Report, there is a need
to update the government compensation system, professionalize and protect the career
executive and managerial corps, and ensure
transparency in the budget implementation
and other government transactions.
From its first publication in 1994, there has
since been six issues of the Report focusing
on certain aspects of human development.
These reports have acquired a reputation for
having factually based, insightful, and wellwritten analyses of human development issues in the Philippines. The PHDR is today a
highly respected publication not just in the
Philippines but also in the community of nations.
This latest PHDR, prepared by the HDN, with
support and collaboration from the United
Nations Development Programme (UNDP),
New Zealand’s International Aid and Development Agency (NZAID), and the Philippine Institute for Development Studies
(PIDS), centers on the effects of institutions
and politics in the country to human development by looking into the aspects of health,
education, and per capita income. It looks
into critical institutions in the Philippines—
the Civil Service Commission (CSC), the
Department of Budget and Management
(DBM), and the Department of Education
(DepEd)—to provide understanding of
these institutions’ performance in the context of human development.
Dr. Arsenio Balisacan, president of the HDN,
welcomed participants from national government agencies, the diplomatic community,
academe, and nongovernment organizations
who witnessed the launching of the 6th and
latest PHDR. The event was graced, among
others, by UNDP Country Director Mr.
Renaud Meyer; New Zealand Ambassador to
the Philippines Andrew Matheson; and
HDN Founding President Prof. Solita CollasMonsod. The discussions benefitted from
the reactions of Senator Edgardo Angara,
DepEd Secretary Jesli Lapuz, Civil Service
Commission Chair Ricardo Saludo, and
former Associate Justice of the Supreme
Court of the Philippines Adolfo Azcuna; and
from the insightful words of wisdom of National Scientist Dr. Gelia T. Castillo who gave
the closing remarks.
The Philippine institutions
The PHDR argues that it is the institutions
that structure behavior which matter deeply
on whether human development advances
or not. In this way, the human capabilities
are determined by the level and quality of
private and public goods and services being
consumed. The public goods are produced
by the government organizations and are
expected to promote human development.
However, the PHDR emphasized that the
quality of inputs into human development
will suffer if the combination of formal and
informal rules hampers rather than enables
the agencies’ fulfillment of their tasks. The
most controls affecting government agencies, according to the PHDR, are those that
directly motivate government employees, determine the level and management of agency
funds, and exact accountability.
Perverse incentives in the civil service, both
monetary and nonmonetary, have taken their
toll on the bureaucracy as indicated by the
stagnant or decreasing trend in quality at all
levels of the corps. In addition, data showed
that salaries can be as much as 74 percent
DEVELOPMENT RESEARCH NEWS
6
below comparable jobs in the private sector
and are not always uniform across agencies
or jobs of the same nature.
Moreover, the number of ad hoc bodies,
presidential consultants and advisers, and
political appointees to plantilla positions
has been increasing in recent years, resulting in further demoralization. The PHDR
therefore suggests that the existing rules
and practices that are impinging the civil
service need to be reformed or, at the very
least, contained in order to enable human
development outcomes.
Another major point presented is the budget. The Report notes that the budget, as a
whole, constrains, rather than enables, the
government. Mandatory government obligations already comprise an average of 80 percent of the total annual budget, leaving little
headroom to increase spending on basic services or fund innovations. This leads to overdependence on official development assistance (ODA) for critical projects and reforms.
The PHDR stated that such dependence,
combined with weak congressional oversight, has created room for leakages and
corruption.
On the part of the judiciary and other special offices, it was reported that the issue of
partisan political appointments has seriously
affected such institutions that are meant to
enforce and safeguard the rules themselves.
The performance of the Civil Service Commission, the Office of the Ombudsman, and
the Courts, in particular, has been affected
in varying degrees by the direct and indirect
interference, or circumvention of rules, from
the appointing authority. Exacting public
accountability will only be realized if the autonomy of the enforcement bodies is protected and consistently observed.
The PHDR outlined some specific formal
institutional changes such as the enactment
of a new Government Classification and Compensation System and Career Executive System to reestablish professionalism and
meritocracy in the civil service corps; the
Budget Reform Act, Budget Impoundment
Control and Regulation, and Intelligence
and Oversight Act to restore Congress’ power
of the purse; and the Freedom of Information Act to implement the constitutional
guarantee of access by the people to information on matters of public concern.
May - June 2009
Particularly in the education sector, there is
a need to review the Magna Carta for Public
School Teachers to guarantee provision for
a one-year probationary period for newly
hired teachers to assess if they possess the
necessary qualities before being permanently hired, appropriate multiyear budgeting rules, and the changing of qualification
standards for principals and school superintendents. The judiciary, on the other hand,
can design and adopt for itself an independent search mechanism for qualified candidates that would do away with the influence
of recommendations from politicians.
Reactions
Civil Service Commission (CSC) Chair
Ricardo Saludo particularly agreed on the
PHDR’s recommendation to improve the government compensation system, referring to
the Salary Standardization Law III that is already in the process. Sec. Saludo added that
the CSC is pushing for the strict implementation of the Performance Management System–Office Performance Evaluation System
(PMS-OPES), which is a new strategy that will
establish a culture of performance and accountability in the bureaucracy. The PMSOPES evaluates office performance or the collective performance of individuals within the
smallest operating unit of an organization.
Likewise, DepEd Secretary Jesli Lapus
agreed with the need to review the Magna
Carta for Public School Teachers and appropriate multi-year financial system, saying that
“if education is important, money should be
put in it.” However, Sec. Lapus countered a
statement in the Report which says that teachers opting to stay long years in position receive higher incentives. He explained that
most, if not all DepEd teachers, could not
wait to be promoted to managerial positions.
This is because the only way for them to increase their salaries and their professional
standing is to be a school administrator. The
Secretary, however, emphasized that more
good teachers are needed than managers.
What is necessary, according to Sec. Lapus,
is to study an alternative salary scheme that
would keep the best and brightest teachers
that the country is continuously losing.
On the other hand, the implementation of
an open voting in the Judicial Bar Council is
a significant step in strengthening the independence of the judiciary and the Ombudsman, resulting in quality enforcement of pub-
7
DEVELOPMENT RESEARCH NEWS
lic accountability. According to former Supreme Court Associate Justice Adolfo
Azcuna, reforms such as the open voting system which assure monitoring and transparency have already been implemented by the
Judiciary. What matters, said Azcuna, is the
continuous monitoring of the performance
of justices after their appointment.
For his part, Senator Edgardo Angara
pointed out that the change the country
needs is a fundamental reform and that the
country falls behind due to lack of implementation. The Senator said that there is a
particular need for an established, transparent political party system in the Philippines.
This way, politicians would be trained to be
effective and good leaders who would serve
the country.
As the PHDR states, “deeper than policies
and larger than the individuals, it is the institutions that structure behavior which matter deeply on whether human development
advances or not.” In the end, however, the
road toward total human development lies
not on the hands of politicians and institu-
tions alone. In reality, it is the individual who
matters inasmuch as institutions are constituted by individuals. This was pointed out by
National Scientist Gelia Castillo in her closing
message during the Report’s national launch.
Dr. Castillo emphasized that when reforms
do not transform, it is important to have empowered individuals, both in the public and
private sectors, who will serve as watchdogs
to the institutions being created. “We cannot organize people power against institutions because institutions are us. Institutions
do not resign; they simply persist,” she said.
The lessons from the six provinces that won
awards for being the top and the most improved provinces on the measurement of the
Human Development Index (HDI), according to Dr. Castillo, is that it is not necessary to
be rich to progress in human development,
but for richer provinces, it is a “sin” not to
progress in human development. In a country like the Philippines wherein there are so
many reforms needed, the negatives are the
opportunities and the positives are bonuses.
APQ
Box 1. The provincial picture: who’s on top; who’s at the bottom? Who gained most; Who gained least?
T
he UNDP defines human development
as the process of enlarging people’s
choices and enhancing human capabilities and freedoms, and enabling them to live a
long and healthy life, have access to knowledge
and a decent standard of living, and participate in the life of their community and decisions affecting their lives.
Human development is measured by the Human Development Index or HDI, which is a
summary measure of human development. It
seeks to measure the average achievement of a
country in three basic dimensions of human
development: a long and healthy life, knowledge, and a decent standard of living.
Philippine Economic Society President and
Member of the Board of the Human Development Network Dr. Winfred Villamil, in his presentation of the provincial HDIs during the
national launch of the 2008/2009 Philippine Human Development Report, explained that the HDI,
as defined by the UNDP, is motivated by the
principle that income alone cannot faithfully
reflect the basic dimensions of human development. Income is a means toward human development, not an end. Therefore, it is “outcomes”
that matter from a human development perspective rather than incomes.
Global ranking
The UNDP publishes a global Human Development Report (HDR) that quantifies the three
dimensions of human development across countries, using life expectancy at birth, adult literacy and combined primary, secondary, and
tertiary enrolment rates, and adjusted per
capita gross domestic product (GDP) in purchasing power parity (PPP) in US dollars.
In its latest edition (2007/2008), the Philippines
ranked 90 th among 177 countries, down six
places since the preceding computation when
it was ranked 84th. Although its ranking dropped,
the country remained in the category of countries with “medium human development” and
its HDI maintained its upward trend from 0.758
in 2000 to 0.771 in 2005.
Functional literacy rates and gross enrolment
rates continued to be above that of the medium group average by 18.7 percent and 24.2
percent, respectively, an advantage that allowed
the country to rank much better in terms of
HDI than in terms of per capita GDP by 11
notches. Its GDP per capita relative to the
group average did improve, however, from a
level slightly below the group average in 2000
to a level 5 percent above it. The Philippines
also maintained its creditable record in the
May - June 2009
8
DEVELOPMENT RESEARCH NEWS
Gender related Development Index (GDI), a
measure that adjusts HDI for gender inequality. Among the 157 countries with a similar GDI
value, the Philippines’ rank was four notches
better than its HDI rank.
Its position among other countries notwithstanding, what is more useful for domestic policy purposes are the subnational disparities in the measured subcomponents of human development,
which are not revealed by the national averages.
Provincial picture
The 2008/2009 PHDR is the sixth in its series,
and the fifth update of the provincial HDIs. It
covers the period 2004 to 2006. Dr. Villamil presented subnational or interprovince measures
and identified which provinces have performed
better or worse across time in each component
of the HDI.
The top province on life expectancy is La Union
(74.6) while Tawi-Tawi (53.4) is in the bottom.
It is explained that the high disparity in life expectancy observed across provinces is due to
disparities in access to quality health care. The
largest gainer in life expectancy from the year
1980–2006 is Camarines Sur while the smallest
(negative) gainer is Tawi-Tawi.
Knowledge, on the other hand, is measured
through the high school graduate ratio and basic education enrolment rate. The top province in high school graduate ratio is Benguet
(76.6) while the bottom is Sulu (23.1). The largest gainer for this ratio, as compared to the
2003 data, is Abra while the smallest (negative)
May - June 2009
gainer is Batanes. For basic enrolment rate,
the top province is Batanes (100.0) and at the
bottom is Maguindanao (75.2). The largest
gainer for this rate is the Province of Western
Samar while the smallest (negative) gainer is
the Province of North Cotabato.
In the HDI, a decent standard of living is
proxied by an income measure, and ideally, a
decent standard of living per province would
be measured by provincial per capita GDP. Per
capita GDP data, however are disaggregated
up to the regional level only. Thus, estimates
for the provincial per capita income are based
on the Family Income and Expenditures Survey (FIES), albeit with adjustments. The top
province in real per capita income is Benguet
with P36, 355 while Tawi-Tawi is at the bottom
with P6, 664. On the other hand, Siquijor is
the largest gainer in real per capita income
with 43.6 percentage change from 2003 and
Antique is at the bottom with a -16.9 percentage change from 2003.
In terms of HDI levels, the top and bottom
ten provinces based on the HDI for 2006 are
shown in Box Table 1. The top HDI provinces are all in Luzon while seven out of the
bottom ten provinces in terms of HDI are
located in Mindanao. Benguet retained the
top rank with an HDI of 0.787, followed by
Rizal (0.725), Cavite (0.718), and Bataan
(0.716). The top three provinces with the
highest increase in HDI are Benguet, which
remains at Rank 1, Biliran, which leaps from
Rank 61 in 2003 to Rank 29 in 2006, and
Siquijor, from Rank 58 to Rank 31. APQ
Box Table 1. Human Development Index (2006)
Top Ten
Index
Benguet*
Rizal*
Cavite*
Bataan*
Laguna
Pampanga
Ilocos Norte
Batanes
Nueva Vizcaya
La Union
0.787
0.725
0.718
0.716
0.708
0.706
0.700
0.699
0.699
0.692
Per Capita Income
Rank minus HDI Rank
0
6
4
0
0
0
2
-5
-7
4
Bottom Ten
Index
Romblon
Zamboanga del Norte
Eastern Samar
Sarangani
Masbate
Lanao del Sur
Basilan
Maguindanao*
Tawi-Tawi*
Sulu*
0.487
0.487
0.484
0.475
0.457
0.445
0.434
0.430
0.332
0.326
Per Capita Income
Rank minus HDI Rank
2
2
-3
-3
2
0
1
-6
1
-1
*Rankings robust all trimming rules applied to 2006 FIES data shown in Statistical Annex 11 (Report). The other provinces are robust to other
rules’ top and bottom lists but without their rankings.
Note: Metro Manila .795
Source: PHDR 2008/09
DEVELOPMENT RESEARCH NEWS
9
PHDR Mindanao Launch
T
he Philippine Human Development
Network (HDN), the United Nations
Development Programme (UNDP),
New Zealand Agency for International Assistance (NZAID) and the Philippine Institute for Development Studies (PIDS), together with the Civil Service Commission
(CSC) Region Xl as local partner, launched
the Philippine Human Development Report
(PHDR) 2008/2009 in Mindanao last June 18
at the Grand Men Seng Hotel in Davao City
with the theme “Institutions, Politics and Human Development in the Philippines.”
CSC Regional Director Annabelle Rosell
and HDN President Dr. Arsenio Balisacan
welcomed the representatives from different
national government agencies, local government units, the academe, private sector, and
media to this Mindanao launch of the Report
that centers on how government institutions
function and affect the quality of human
development in the country.
Provincial HDIs
Dr. Clarissa David from the HDN presented
the state of human development in the country as well as the provincial Human Development Indices (HDIs) or the average achievement in three basic dimensions of human
development such as longevity, knowledge,
and standard of living. These dimensions
are measured through life expectancy at
birth, simple literacy and combined enrollment rates, and real per capita income, respectively.
The 2008/09 PHDR shows that the five lowest provinces in terms of HDI are from the
Autonomous Region in Muslim Mindanao
(ARMM). Sulu continued to record the lowest HDI (0.326), followed by Tawi-Tawi,
Maguindanao, Basilan, and Lanao del Sur.
Life expectancy is also low in four ARMM
provinces based on the 2000 census used by
the Report. Tawi-Tawi is at the bottom, registering only 53.4 years, together with Sulu
(55.5), Maguindanao (57.6), and Lanao del
Sur (58.7).
According to Dr. David, Tawi-Tawi and Sulu
are the only two provinces where life expectancy dropped over the last 26 years from 1980
to 2006. Life expectancy in Tawi-Tawi
dropped by 10.6 percent and in Sulu by 1
percent.
With an HDI of 0.645 and 0.570, respectively,
Davao del Sur ranks 14 while Davao del Norte
ranks 33 out of 77 provinces. Davao Oriental, meanwhile, has a very low HDI (0.497),
ranking 12th to the last.
It is interesting to note, Dr. David added, that
Davao Oriental, ranks lowest among the
Davao provinces in terms of HDI but highest
in life expectancy. Davao Oriental, Davao del
Sur, and Davao del Norte people are expected to live 69.9 (23rd), 69.4 (26th), and
66.3 (50th) years, gaining 10.1, 8.8, and 4.9
years in life expectancy, respectively.
As Benguet tops provinces in High School
Graduate Ratio (HSGR) with 76.6 percent,
Sulu (23.1), followed by Sarangani (28.4),
Davao Oriental (29.9), Masbate (32.3), and
Negros Oriental (33.6) comprise the Bottom
5. Davao del Sur and Davao del Norte are in
the middle of the rank with 56 percent (24th)
and 46.5 percent (50th). All Davao provinces
increased in HSGR, with Davao del Sur gaining 6.6 percentage points, Davao del Norte,
5.4, and Davao Oriental, 2.1 percentage
points.
In terms of Basic Enrollment Rates, Davao
del Norte ranks 39th at 89.1 percent, Davao
del Sur ,62nd at 87.1, and Davao Oriental at
72 nd (or one of the bottom 10 at 81.9
percent).The bottom list consists of
Maguinandao with the lowest at 75.2, followed by Sarangani, Zamboanga del Sur,
North Cotabato, Lanao del Sur, Bukidnon,
and Tawi-Tawi. The lone Visayan province in
the bottom 10 is Negros Oriental.
Dr. David noted that worrisome declines
were observed in North Cotabato, Kalinga,
Zamboanga del Norte, Tawi-Tawi, and Davao
May - June 2009
DEVELOPMENT RESEARCH NEWS
10
Oriental which all experienced a drop of 10
percentage points or more. Davao del Norte
and Davao del Sur, meanwhile, dropped by
0.9 and 3.4 percentage points, respectively.
For the third aspect, the Report revealed that
the Bottom 5 provinces are Tawi-Tawi, Sulu,
Basilan, Masbate, and Lanao del Sur. It was
also noted that Tawi-Tawi experienced the
sharpest decline in real per capita income,
with an almost 42 percent decrease. Lanao
del Sur (33%), Apayao (2%), and Abra
(24%) also registered dramatic declines.
Davao del Sur with P27, 998 (12th) and Davao
del Norte with P23, 396 (28th) have relatively
high real per capita incomes compared to
Davao Oriental with P17, 715 (62nd). Only
Davao del Sur gained in this aspect by 2.4
percent while Davao Oriental and Davao del
Norte lost 2.4 and 5.1 percent, respectively.
Overall, Davao del Sur improved by 5.57 percent and Davao del Norte by 1.38 percent,
closer to the perfect HDI score of 1 from
previous levels. Davao Oriental practically
stayed at the same level. Improvements in
Davao del Sur seem to have been driven by
gains in education (8.9%). Improvements
in Davao del Norte were likewise driven by
gains in education (7.8%) as well as in life
expectancy (5.2%), said Dr. David.
A reason for poor performance by most
Mindanao provinces, especially in the
ARMM, in terms of human development is
their being conflict-ridden areas. According to the 2005 PHDR that centered on
Peace, Human Security, and Human Development, open conflict in Mindanao has
prevented socioeconomic programs from
achieving their goals and instead exacted
heavy social and economic costs on affected communities.
Philippine institutions
Government institutions are linked to human development outcomes because human
capabilities depend on the level and quality
of private and public goods and services that
promote human development, Dr. Toby Melissa Monsod emphasized as she discussed
the highlights of the 2008/09 PHDR.
Monsod, author of a background paper “The
Philippine bureaucracy: incentive structures
and implications for performance” for the
May - June 2009
Report, stated that there is a need for a deeper
institutional view of the Department of Education (DepED) and of the government in
general to understand the culture of disinterest toward reforms. This is vital because institutions — formal rules, informal rules or “ways
of doing things,” and enforcement characteristics — shape behavior of people.
Dr. Monsod said that there is a limit to the
extent that formal political rules can compensate for bad norms. She pointed out that
informal rules like adhering to kinship and
personal relations must be realigned in order to reinforce formal rules. Realignment
of crooked informal rules can be achieved
through demand forces like constitutionalled movements that embody better norms
and, more importantly, are distinct from
and would not replace or capture formal
rules.
DepEd Region IX Director Teresa Estigoy,
as one of the panel of reactors, acclaimed
the enactment of RA 9155 or the Governance
of Basic Education Act of 2001, which is consistent with the Decentralization Policy and
would serve as a driving force for the central,
region, division, district, and school heads
to actualize DepEd’s reform package. Director Estigoy added that the law recognized the
basic education reform agenda that promotes collaboration among school management and empowered students to produce
and design projects for their respective
schools. Concurring with the Report, the director said that DepEd has to cope with pressures from politicians who hinder the
department’s drive to improve and advocate
change in the system for further educational
development of the Filipino children.
Davao del Norte Governor Rodolfo del
Rosario, also as a panel reactor, commended
the Report for capturing the minds of the readers beyond mere presentation of statistical
data. Governor del Rosario proudly shared
that holding a People’s Day every Monday is
his province's greatest institutional reform
and serves as a one-stop-shop public service
response to the public’s queries and requests. Project NOBLE (No Barangay Left
Behind) was also implemented, which ensures a P1 million allocation for each
barangay to ensure a fair share from the provincial budget.
11
DEVELOPMENT RESEARCH NEWS
May - June 2009
Governor del Rosario also seconded that
change in rules and norms leads to institutional change. This, however, depends on
the qualities, vision, and management of
leaders. The development of a nation or a
province is greatly affected by bad politics
which is the root cause of the problems as
compared to good politics which holds the
promise of reforms, added del Rosario.
Davao City Regional Trial Court Judge Virginia Europa, meanwhile, admitted that the
problems of corruption and congestion have
been around for a long time and have often
been integral on how to enforce of sanction.
The Supreme Court, said Judge Europa,
would like to adopt in the Philippine Judiciary all the inputs raised during the Convention of Chief Justices relative to the Norms
of Conduct for all judges worldwide to improve judicial conduct. This was the Judge’s
response to the Report that called on the Judiciary to adopt an independent search
mechanism for qualified candidates that
would do away from the influence of recommendations from politicians.
Dr. Ronnie Amorado, National Coordinator
of the Aha! Ehem!, a nongovernment organization that serves as a watchdog against
corruption, was the last to speak among the
panel of reactors. He called the Report a revelation on institutions and governance that
gave emphasis on DepEd. He also seconded
the Report, citing his experiences as an anticorruption advocate with Aha! Ehem!, a joint
anticorruption project of the Philippine
Province of the Society of Jesus and the Office of the Ombudsman. He also mentioned
that HDI and corruption are correlated
based on statistics wherein countries with
high HDI are low in corruption.
Meeting with the press
During the press conference that followed
the forum, CSC Regional Director Rosell
was asked about the statistiscs in the region relative to appointees who are not eligible. She clarified that the presence of
noneligibles is not much of a problem in
the local and national agencies in the region considering that most of these positions are in the first and second levels.
She added that looking at the number of
noneligibles, most of these positions are
personal and confidential staff of elective
A huge number of representatives from different national and local
government agencies, the academe, private sector, and media attended the 6th Philippine Human Development Report Mindanao
Forum launched at the Grand Men Seng in Davao City.
officials and these positions do not really require eligibility.
Dir. Rosell also said that for 3rd level positions
(CES-director positions) these are usually covered by the CSC-NCR but a rough estimate
would perhaps show about 50 percent eligibles
and 50 per cent noneligibles among the appointed incumbents in Region 11. Dr. Monsod
added that appointments at the local level comply with the eligibility requirement. But within
the third level positions, the trend shows that
the officials were appointed through political
accommodations.
As parting words, Dr. David expressed that the
desired objective of the Network is for the 2008/
09 PHDR to reach the public. It is very important, according to her, that the public demands
good service from its government. It is very important that the public understands what is
going on and knows the vital information that
is critical for decisionmaking. The Report is useful especially to the local media who can utilize
its contents and situate them in their areas. In
this way, the findings of the 2008/09 PHDR will
find their way to the public and inform them of
what is going on in the Philippine bureaucracy.
APQ
12
DEVELOPMENT RESEARCH NEWS
STAFF BOX
DEVELOPMENT RESEARCH NEWS
Vol. XXVII No. 3
Editorial Board: Dr. Josef T. Yap,
publication of the PHILIPPINE INSTITUTE FOR
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Vice-President and Director for Project
DEVELOPMENT RESEARCH NEWS is a bimonthly
DEVELOPMENT STUDIES (PIDS). It highlights the findings
May - June 2009
President; Mr. Mario C. Feranil, OIC
May - June 2009
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sulting from a poor incentive structure such as low salary compensation and benefits vis-a-vis the
private sector employees as well
as within various national agencies
because of certain “exemptions,”
affect the morale, and consequently, the performance of the civil
service corps.
A long overdue reform in the government incentive structure is
thereby warranted. It is a way to
fix inequities and improve government services that will produce a
new breed of civil servants with a
renewed pride and sense of mission in the conduct of their duties.
It is also something that has long
been awaited by many unheralded
hard-working and long-suffering
public servants.
DRN
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Poor incentive...from p. 4
Ed notes...from p. 1
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The public approval ratings of the Department of Education (DepEd), Department of
Social Welfare and Development (DSWD),
and Department of Health (DOH) from 1999
to 2007 were juxtaposed against the percentage of CESO occupying CES positions for
each agency. The results show a positive correlation for all three departments, indicating that bureaucratic quality does affect
agency performance in the Philippines.
Implications
As this study has underscored, both monetary
and nonmonetary incentive structures embedded in the bureaucracy critically impinge on quality and performance. It thus
suggests that if country shortcomings in development outcomes are to be addressed,
perverse incentives need to be reformed or,
at the very least, contained. Reforms in the
government compensation system ought to
be implemented once and for all. The current SSL is more than 20 years old. Until now,
however, a proposed Government Classification and Compensation Act (GCCA) designed by the CSC is still pending in Con-
gress. The GCCA hopes to fix current salary
distortions and better link employee effort and
performance to monetary rewards. Establishing a Career Executive System (House Bill No.
3956 or Senate Bill No. 270) is also proposed.
Such a system would help clarify parameters as
regards personnel hiring, particularly in the
third level executive levels, in order to reduce
or check ineligible political appointments. It
would require clarifying the extent of the Presidential prerogative – which positions are subject to it? which should be based solely on merit
and fitness? – as well as clarifying the role of
the CSC in enforcing the same.
Finally, an official policy of transparency as regards presidential consultants/advisers is
urged. Even if the appointment of advisers and
consultants is a presidential prerogative, the
question is what their terms of reference are
and how they are to be held accountable. While
regular Cabinet officials undergo a Congressional confirmation process and are subject to
administrative laws, presidential consultants/
advisers — who enjoy “cabinet-level” titles and
authorities — are not. SVS