Introduction

he Philippine Institute for Development Studies turned ten years old in 1988. It wasthus a time to look back and reflect on its _,ainsand inadequacies, its strategies and itsdirection. Responding to the observations and findings of a prominent scholar who

evaluated the Institute's performance, capabilities and its changing external environment, a theInstitute met the challenge by consolidating its resources, intensifying its efforts and building onwhat it has accomplished, and by being more sensitive and responsive to the increasingdemands of its clientele.

Significant increases in all major activities were registered as a result of this challenge. Inresearch, an increase of over 50 percent output was recorded in 1988. At the same time, newareas of concern, reflecting the emphasis of the government, were given priority. These includethe areas on health and nutrition, and natural resources. A new tack in research approach was

also noted. As an example, comparative studies of other countries' experiences in tariff pro-gram or fiscal policies were encouraged. In some of the research projects, a balance in the mixof macro- and micro-approachesto researchproblems was also provided.

The information and dissemination program also experienced an unprecedented increase inits publications, seminar and library activities. New mechanisms were also tried to more effec-tively reach intended audience in the government's policymaking set-up. By yearend, thegroundworks for new dissemination activities aimed to further increase the use and influence ofthe Institute's outputs were being put into place. Full implementation of many of these how-ever, are expected to take effect in the following year.

A noteworthy development was the institute's successat arresting further losses in its finan-cial resources (as experienced in the previous year) thereby making possible a turnaround in itsincome earnings for the year. This was chiefly done by shifting the Institute's financial strategyand by continuing the prudent management of its resources.

One significant approach adopted in 1988 was the increased emphasis on staff develop-ment, and interaction on a broader scale. More in-house training programs were developed andchannels of internal communication were increased. Staff members were also able to participatein decisionmaking either through membership or even chairmanship at times in various ad hoccommittees within the Institute.

Asthe Institute completes one decade of service through its research activities and preparesto enter into a new one, it looks forward with greater hope and confidence.

a. "The Philippine Institute for Development Studies: Perspectives on the Pastand Options for the Future,'_byGustav Ranis.

i. Research and Research.Related Aetivities

he momentum generatedin the previousyear in researchactivitieswas maintained in1988. To complementthis,programandprojectdevelopmentactivitieswerealso steppedup to ensurethat theacceleratedlevelof researchcouldbesustainedin the comingyears.

In 1988, 42 researchstudieswerecompleted,a significantincreaseof over 50 percentoverthe previousyear's output of 27. (SeeAnnexA). "ResourceMobilization" continuedto be thepriorityarea of research,with 24 studies completed,accountingfor more than half of the totalresearchoutput. Tenstudieswere completed in the area of "NaturalResourceand Environmen-tal Management"while four studies each were made in the areas of "Employment,HumanResourceMobilization and Technology,"and "Agriculturaland Industrial Development andTradePolicy."

At the end of the year, 34 studieswere ongoing. Of these, 13 were in the area of "Agricul-tural and IndustrialDevelopmentand Trade Policy'; nine in the area of "Employment,HumanResourceDevelopment,and Technology';five in "NaturalResourceand Environmental/Manage-ment'; four in "ResourceMobilization'; and two in "Regional,Rural,and Urban Development."In addition, two studieswhichcutacrossthe Institute'sbroadareasof researchwere being im-plemented, these are on the annual econometric model and the performanceof the Aquinogovernment.The list of ongoingstudiesby area of researchand their respectiveproponentsisshownin AnnexB.

PRIORITY AREASOF RESEARCH: A CLOSER LOOK

,4. Employmentj Human Resource Development, and Technology1. Completed

Three interrelatedstudieswere focusedon employment. Thefirst two studies,by Dr. EdnaA. Reyes, were "Employment,Wages, and Productivityin the PhilippineLabor Market"and"EmploymentStrategiesfor AcceleratedEconomicGrowth: The Philippine Experience." Theyprovidea comprehensivereviewof recenttrends in employment, unemployment,underemploy-ment, wages,and productivity,and reviewthe impact of governmentpolicies on employment.Generally,they showincreasingemploymentovertime; a structuralshift from the agriculturaltoservicessector;rapidly risingunderempIoymentrates; decliningproductivitystarting from thefirst half of the 198Os; and deterioratingreal wages. The evaluationof past and present in-dustrializationpoliciesshowedthat thoseimplementedduring the postwarperiod generallyin-creaseoutput and investmentsbut their inherentcapital bias resultedin a low rate of laborab-sorption. In addition, the adoption of an outward-lookingistrategyis hindered by the lack ofreciprocalresponsein the international settingdue to increasingprotectionismand stagnation

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in developedeconomies.Thestudies suggesta frameworkfor the formulationof policiesaimedat laborabsorption.

Thethird study"EmploymentEffectsof SelectedStructuralAdjustmentPoliciesin the Philip-pines"by Dr. RosarioG. Manasanprovidesa quantitativeassessmentof the impad of structuraladjustment measureson employment and wages within a general equilibrium framework.Counterfactualexperimentsusin8 the PIOS-NEDAeconometricmodel show positive effect ofoutput,employment,exports,and pricesand a positiveeffect of the removalof the exporttaxeson total employmentand output. Simulationswith a computable general equilibrium modelshowthat: the tariff reform programincreasedtotal output and averagewage, implyinga posi-tive effect on the labor market(particularlyfavoringthe middle-incomegroups);BOI incentives,decreasedtotal output,averagewage,and total employment,and hada regressiveeffect on realincomeacrosshouseholdgroups;and, the shift to a flexibleexchangerate regime hada positiveeffect on outputand prices.

The study "Scienceand Technologyand EconomicGrowth" by Dr. Mario B. Lamherteprovidesan overviewof scienceand technologyin the Philippines.It describesthe relationshipbetweentechnologicalcapabilityanddegreeof economicdevelopment;analyzesthestructureofthe Philippineeconomyand the structuralchangesthat have occurredsince 1970; looksintothe impact of economicdevelopmentsand technolo_cal advancesin other countries on thePhilippines;anddiscussesthe impactof macroeconomicpolicieson technologychoice.

2. ongoin8

Seven studies under the recently-launchedprogram of research-on health policy anddevelopmentwereongoingatthe endof theyear. Thestudieslook into variousbut interrelatedissuesand topicssuchas health maintenanceorganizations;factorsaffectingdemandfor healthcareservices;determinants of privatedrug consumptionbehaviour;impactof housingpolicieson health; costsand economiesof scaleand scope in the provisionof hospitalservices;andhealth manpowerand productivity.The other studies involve:an updateon Philippinehousingsituationandan analysisof trends,policies,and prospectsof the housingindustryfrom 1970-1988;and a reviewof the empiricalmagnitudesof laborsupplyand interregionalmigration.B. Resource Mobilization

1. Completed

Thestudiescompletedin thisarea can be grouped into three broad setsof research. Thefirst set involvesresearchon fiscal policyfocusingon the _ the public corporate sector,and tax incentives. The secondinvolvesmicro studies focusingon the formal and informalcreditmarkets.The third setdealswith interrelatedtopicsof monetary,fiscal,andexchangerate

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policies.

The firststudyon fiscal policy"The 1989 Programof GovernmentExpendituresin Perspec-tiven by Dr. RosarioG. Manasan reviewsthe 7989 national governmentbudget. The study"points out that the budget:a) projectsa high level of governmentexpenditures(particularlyinrelationto the historicalrevenueperformance)whichmay resultin a significantlybiggerand un-sustainablefiscal deficit; b) includesa largedebt servicewhich continuesto be a big drain onthe country'sbudgetaryresources;c) appears to favorthe socialsectors(particularlyeducation)than the economic sectors;d) providesgreater resourcesto the agriculture/ natural resour-ces/agrarianreform group;e) includesbiggerallocationsfor personalserviceswhichappear tobe highly unevenacrossthe sectors;f) provides significantincreases for maintenanceandoperatingexpendituresand for the capital outlayswhich augurs well for growth;.g) indicatessuccessin rationalizingthe governmentcorporatesector; and h) does not reflect revenuesforegone (and by implication, expended) due to investment incentivesand exemptionsanddeductionsprovidedto governmentcorporations.

The next two studies on fiscal policyby Dr. Manasan focus on the governmentcorporatesectorand the related privatizationprogram. The "ThePublic EnterpriseSectorin the Philip-pines: EconomicContributionand Performance,1975-1984,"points out that the contributionofthe publicenterprisesectorto grossvalueaddedandemploymenthasbeensmall. On theotherhand,capitalexpendituresof theseenterprisesconstitutea significantportionof grossdomestic_:apitalformation.However,their savingswere low resultingin a high investment-savingsgapand a higher burdenon the national budget.Performanceindicatorsfor the governmentcor-porate sectorin termsof profitabilityand productivityshowthat they are inefficientcomparedto the private enterprises.The study suggestsa number of recommendationson the publicenterprisesector which include privatization and greater accountability,control and super-vision. Thestudyon "Privatizationin the Philippines:CurrentSituation,Issues,and Prospects"providesan overview of the privatization experience in the Philippines. It reports that theprocessof privatizationhas proceededveryslowlyboth in the dispositionof non.performingas-setsand the privatizationof governmentcorporations. It identifiesa number of problemsandissuesrelatingto the continuedimplementationof the programwhich include: a) an apparentwaveringon the part of governmentregardingthe divestitureof the remainingcorporations;b)difficulties in the privatizationof somegovernmentcorporationsby the agenciesto which theyare assigned;c) distributionalimplications;d) difficulties in divestituredue to the financial na-ture of the assets;e) perceivedimpact of the debt-equity conversionschemeon moneysupply;andf) probableimpact of the programon employmentand foreigncontrolof activities.

The last study on fiscal policy entitled "A Review of Investment Incentives in ASEANCountries,' also by Dr. Manasan, reviewsthe investment incentiveschemesavailable in the

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ASEAN region. It assesses the impact of the incentive structure on the profitability ofenterprises and the user cost of capital. The study concludes that the investment incentives of-fered by the countries are equal in terms of their impact on the rate of return. The analysis sug-gests that the ASEAN countries are generally competitive before and after the incentives, imply-ing that the countries are throwing away precious revenues in exchange for a competitive edgewhich is largely illusory. The incentives are also seen to lower the user cost of capital which islikely to result in increased capital intensity. Given these findings, the study recommends thatthe ASEANcountries should promote economic cooperation instead of competition.

The second set include 17 studies on monetary and banking policy issues completed duringthe year. Most of the studies used a microeconomic approach to illustrate the impact of certainmacro policies. This approach enables one to see how policies filter down into the firm andhousehold level. It also provides an effective venue for a more fruitful dialogue between microand macroeconomic issues.

These 17 studies can be further grouped into two general categories. One group examinesthe formal financial markets (FFMs). This group include the following studies: "FundsTransferOperation: Bane or Boon to the Viability of Rural Financial Intermediaries," by Dr. Mario B. Lam-berte and Julius P. Relampagos; "The Role and Performance of Cooperative Credit Unions in theRural Financial Markets: Some Preliminary Results," by Dr. Mario B. Lamberte; "PoliticalEconomyof Credit Availability and Financial Liberalization: Notes on the Philippine Experience,'by Dr. V. Bruce J, Tolentino; "Rural Deposit Mobilization in the Philippines, 1977-1986," byRhenee Blanco and Dr. Richard Meyer; "Comparative Management Structure and InstitutionalPerformance in Rural Banking Institutions,' by Dr. Cesar 5aldaia; "Borrower TransactionsCosts and Credit Rationing in Rural Financial Markets : The Philippine Case," by Virginia Abiad,Dr. Douglas Graham, and Dr. Carlos Cuevas; "Transactions Costs and the Viability of RuralFinancial Intermediaries," by Teodoro Untalan and Dr. Carlos Cuevas; "Credit Rationing under aDeregulated Financial System,"by Lucila Lapar and Dr. Douglas Graham; "The Analysis of SavingBehavior: The Case of Rural Households in the Philippines,' byJocelyn Alma Rodriguez and Dr.Richard Meyer; "The Demand for Funds among Agricultural Households in the Philippines," byRaquel B. Clar de Jesus and Dr. Carlos Cuevas; and "Guarantee Schemes: An Alternative to Su-

pervised Credit Program," by Marlfe Magno and Dr. Richard Meyer.

The other group of studies delve into the workings of the informal financial markets (IFMs).This group include the following studies: "The Urban Informal Credit Markets: An IntegrativeReport," by Dr. Mario B. Lamberte; "A Review of Policies Impinging on the Informal CreditMarkets,' by Meliza Agabin; "AnAnalysis of the Role of Pawnshops in the Financial System," byDr. Mario B. Lamberte; "The Financial Markets in Low-Income Urban Communities: The Case of

Sapang Palay,"by Dr. Mario B. Lamberte and Ma, Theresa Bunda; "Informal Savings and Credit

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Institutions in the Urban Areas: The Case of Cooperative Credit Unions," by Dr. Mario B. Lam-berte and Joven Balbosa; and "The Manufacturing Sector and the Informal Credit Markets: TheCase of Trade Credits in the Footwear Industry," by Dr. Mario B. Lamberte and Anita AbaciJose.

The first group of studies looks into the extent of savings mobilization done by formalfinancial institutions, management structure and institutional performance of rural banking in-stitutions, transaction costs incurred by banks and borrowers, saving and borrowing behavior ofrural households, credit rationing and the effectiveness of risk-reducing programs of the govern-ment. The studies found that non-wealthy rural households do save, and they respond well toincentives, such as high interest rate on savings deposits. The studies also show that the ruralsector's financial savings grew more rapidly than that of the urban sector in the last few years,even during the crisis period. However, lending to the rural, agricultural sector did not keeppace with the growth in deposits of that sector. This is not without reason. Findings indicatethat the risk of loan default in this sector is still high, and banks will therefore continue to rationsuch sector, notwithstanding interest rate deregulation. As recommended, the governmentshould thus directly address the issue of risk. The existing risk-reducing programs of thegovernment did not perform as expected, as found out by the group of studies, it also showedthat the high transaction costs in rural areas have raised the effective lending rates to borrowers.Clearly, any effort to bring down the lending rate will not succeed if the non-interestltransactioncosts incurred by borrowers remain high. The study by Cuevas and Untalan, which specificallydeals with transaction costs, suggests that certain factors such as bad roads, lack of transporta-tion, inadequate communication system, and others, which were found to affect transactioncosts, need to be directly addressed by the government.

Glaring policy inconsistencies were also noted by the studies. For instance, the governmenthas been encouraging privately owned banks to extend banking services to rural areas. How-ever, there are regulations, such as deposit retention scheme and loan portfolio requirements,which have threatened the viability of rural financial institutions. The studies recommendationstried to bring home the point that if the government expects banks to perform a developmentalfunction, it must first recognize the need for banks to be viable.

The second group of studies examined the role of specific segments of the iFMs such ascredit unions, professional moneylenders and traders, rotating savings and credit associations(i.e., the paluwagan), and trade credits. The major issues addressed in these studies include sizeand trends in size of the various segments of the iFMs, extent of the efficiency of IFMs inmobilizing funds and allocating credit, interest rate formation and trends, competition betweenFFMs and IFMs and interlinkages of credit with transactions in other markets. These studiesyielded interesting results. For instance, informal institutions have successfully mobilized sig-

7

nificant amounts of deposits from non-wealthy individuals/ households. Loan repaymentschemes devised by the IFMstake into consideration the cash flow pattern of borrowers. Thishelps ensure high repayment rates. The findings invariably suggest some means by which theformal banking system can mimic the IFMs,and also point out some direction for relaxing bank-ing regulations. For instance, the interlinking of credit with other markets is one way of allow-ing banks tO enjoy economies of scope. Strengthening the linkages between FFMs and IFMs,which could reduce transaction costs in lending, is another point stressed by the studies.

The third set of studies deals with deficit financing, the effect of an exchange rate devalua-tion on an economy with a debt overhang" and Japan's official development assistance to Asia,specifically the ASEANnations. The first study, "Financing the Budget Deficit in a Small OpenEconomy: The Case of the Philippines," by Dr. Maria socorro Gochoco seeks to determinewhether there is a rule for financing the public debt that the public can discern, and to empiri-cally determine its impact on nominal and real interest rates. The findings indicate that financ-ing rules, though discernible, do matter in the case of the Philippines, meaning that the pursuitof various liberalization schemes may be hampered not only by the size of the deficit but also bythe adverse effects of financing these deficits through bond issuances. There appears to be a sig-nificant crowding out effect, but it is apparently a shortlived phenomenon. The second study•The Effect of an Exchange Rate Devaluation on a Small Econo_fiywith an External Debt Over-hang' by Dr. Josef T. Yap provides a scheme for analyzing the impact of an exchange ratedevaluation, using the aggregate demand approach. The study concludes that while Internation-al Monetary Fund (IMF) prescriptions augur well in the long term, political conditions indeveloping countries dictate that the short term be of utmost priority. Prescriptions for adevaluation that lead to a fall in real output and a rise in the price level may have disastrous eiF-fects on the political stability of democratic governments such as the Philippines. in order toavoid a stagflationary situation without exceeding the limit on the budget deficit, the onlyrecourse is to increase productive government spending while reducing debt service payments.The third study "Japan's Aid to ASEAN:Present Realities and Future Prospects" by Dr. FilologoPante, Jr. examines the trend by which japan has disbursed her official development assistance(OOA) contribution to the developing countries, in particular ASEAN, in response to the un-precedented levels of current account surpluses which she has been experiencing for years. Itshows that while Asia has remained as the major recipient region of Japanese bilateral ODA, theshares of other regions, particularly Africa, the Middle East and Central and South America, haverisen tremendously in recent years. In Asia, the study notes that accounting for an increasingimportance in Japan's aid is China. Although it is unlikely that the emphasis of Japan's ODAprograms on Asia and on ASEANwill change in the foreseeable future, the question remains asto whether the recent emphasis given to China and Africawill be made at the expense of ASEANcountries. The study, however, observes that there need not be a question of tradeoffs, if only

8

Japan's overall ODA volume is substantially raised in the coming years. This will depend,though, on whether japan will accept a leadership role in the international assistanceeffort and,to a large extent, on how Japan redressesthe many problems and inadequacies facing her ODAprogram.

2. Ongoing

Four studies were ongoing in the area of resource mobilization at the end of the year.These studies deal with rural, agriculturebased development strategy and the aggregate savingsrate; export finance; regional government expenditures; and informal credit markets.

C. Agricultural and Industrial Development and Trade Policy

1. Completed

Four studies were completed in this area. Three studies dealt with trade policy while onewas on food and agriculture.

The first study on trade policy "Foreign Trade Barriers to Philippine Exports," by Dr. ErlindaM. Medalla, presents an inventory of non-tariff barriers imposed on Philippine exports by thecountry's three major trading partners, namely, US, Japan, and the European Community (EC).The study indicates that the top Philippine exports are subject to some form of non-tariffmeasures (NTMs) (at least 19 types of better known NTMs) by these countries. Estimates of theoverall index of NTM coverage show that 48 percent of Philippine exports to the US are coveredby some form of NTM, 47 percent in Japan, and 75 percent in the EC countries. Although com-parison among them, using the index, should be done with some reservation, the indices showthal the ECcountries impose the most prevalent NTMs.

The secondstudy on trade policy entitled "Philippine Trade Policy Option," by Dr. Florian A.Album, Dr. Erlinda M. Medalla, and Dr. Filologo Pante, Jr., explores the trade options for thePhilippines in the forthcoming Uruguay Round of Multilateral Trade Negotiations. it suggestspriorities for the Philippines for the negotiations, such as seeking tighter rules in terms oflimiting restriction to imports; putting a premium to the reduction or elimination of non-tariffmeasures and seeking of rollback commitments; specific requests on GATT trading partners foreither tariff" reduction or removal of non-tariff barriers; and seeking credit for the unilateraltrade liberalization measures which the country has undergone. The study then outlines theagenda for the Philippine position on the general issues and proposes a number of strategies.The study concludes by pointing out that the country's short, and long-term interests would bebetter served through active involvement in the formulation and negotiation of rules and codesthat will become the sustainable framework in the conduct of world trade.

The third study "The Impact of Trade, Trade Policy, and External Shocks on the Philippine

9

Economy,"by Dr. JosefT. Yap, seeksto determinethe effectsof changesin the externalsectoron the country'seconomicperformance.The analysisis facilitated by the simulationanalyseswhich were conductedusingthe PIDS-NFDAmacroeconometricmodel. Variablesthat were af-focted are the exchangerate, growth rate of the world economy,export and import prices,andexportsof manufacturedgoods.The mainsimulationresultsshowthat: 1) a devaluationis con-tractionary;2) growth in manufacturedexports will exert its greatestimpactif it is accompaniedby a moneysupplyaccommodationand a simultaneous restrictionin imports; and 3) an ex-port subsidyis highlyinflationary.

The laststudyin this area "FoodConsumptionParameters,Nutritional Impact, and Philip-pineAgriculturalDevelopment,"by Dr. AgnesQuisumbin_ attemptsto makea contributiontodemand analysis and nutrition policy by estimating income-stratum-specific demand elas-ticities. The estimatesarethen usedin a model simulatingthe potential nutritionaleffects ofmarket interventionpolicy. The study points out that the geographicand occupational dis-tribution of gainsand lossesfrom nutrition policy revealsthat general or nationwidepoliciesmay onlyserveto reinforceexistingbiases--- e.g.,for Luzonurbanworkers. While the sourceofsuchbiasesmay be traced to policy interventionsto achieveothergoals, interventionsthat arereflectedin marketstructuresmay onlyserveto exacerbatesuchbiases. The insignificantresultof market interventionpolicies in the nutrient consumptionof Mindanao consumersindicatesthat moredirector geographicallytargetted interventionsmaybe pursuedin theshort run.

2. OngoingAtthe endof the year,13 studiesin this areawereongoin8, Most of thesestudiesdeal with

the trade liberalizationprogramof the government,includinganalyses of industry-specificim-plications of the program. Theotherstudiesdealwith theASEAN-USinitiative, reestimationofshadowprices,and policysimulationsin agriculturethrougha computablegeneralequilibriummodel.

D. RegionalpRuralt and Urban DevelopmentNo studieswere completed in this area, althoughtwo were being done during the year.

Bothstudiesdocumentthe Philippineexperiencein regionaldevelopmentplanningas viewedfrom differentperspectives.

E. Natural Resource and Environmental Management

1. CompletedTen studieswere completed in the area of natural resourceand environmentalmanage-

ment. Of theseten, eight were partof the upland resourcespolicyresearchprogramwhichtheInstituteinitiated in the previousyears.These studies look into the variousaspectsand issues

affecling Philippine forestry resources.

The first study, "Assessmentof the Costs and Benefits in Commercial Forestry Management"by Dr. Cerenilla A. Cruz and Ms. Virginia D. Tolentino, attempts to estimate the benefits andcosts in the manageme.nt of natural forests and plantation forests, and to determine additionalgovernment revenues that may be earned from timber and plantation licensing, Another study,"Assessment of the Distribution of Costs and Benefits of Selected Communal Tree Farm Projectsin the Philippines" by Ms. Eumelia B. Corpuz, et alp makes an in-depth economic evaluation ofcommunal tree farm projects to determine the sharing of costs and benefits among the ownersof the factors of production, and how much of the income of communal tree farm projects ischanneled back to forest developmenL

The next three studies by Dr. Wilfrido David attempt to formulate more rational policiesand programs for watershed resources development, control and management. They are:"Hydrologic Validation of the Panlabangan Watershed Management and Erosion ControlProject;" "Erosion and Sediment Transport;" and 'An Assessment of the Land and Water Resour-ces: Present Management Practices and Problems, and Future Management Plans and Programsfor the Magat Watershed." Case studies involving the Magat and Pantabangan watersheds wereconducted. In the process, the studies revealed that approximately 30 percent of the total landarea of the country may be considered as badly disturbed, with an erosion rate exceeding 25tons per hectare per year. A number of interrelated issues and problems on land use and water-shed management were also revealed, including inadequate, unrealistic policies and re_ula-tions; ineffective planning and execution of action programs that place too much focus on mar-ginal lands; rural poverty; ineffective land use planning and allocation; poor delivery of socialand agricultural support services; and critical gaps in technology and technical manpower. Amajor recommendation of the studies is the launching of concerted efforts on erosion, sedimenttransport, and conservation planning,

The sixth study, 'The On._;ite and Downstream Costs of Soil Erosion"by Dr. Wiifrido Cruz,Herminia A. Francisco, and Zenaida T. Conway, presents a practical methodolo_/for the assess-ment of the economic impact of soil erosion; illustrates the methodolo_/with results fromrecently completed case studies; and proposes a framework for incorporating this methodologyinto the upland resource policy and management programs. On the basis of valuation results,the study provides policy recommendations for commercial and social forestry and suggestsways of watershed assessment and land classification.

The seventh study, "Private Costs of CommerciaiForestry, Reforestation, and CommunalTree-_Farmingin the Philippines" by Dr. Marian S. de los Angeles, Dr. Cerenilla/L Cruz, andEumelia B. Corpuz, integrates the first two studies earlier discussed. For private usersof natural

11

stands and industrial tree plantations, the study concludes that forest management is aworthwhile undertaking, in fact, the study suggeststhat there is room for the public to increaseits share from the monetary benefits of such use, in the form of higher forest charges and landrent from natural stands and tree plantations, respectively. This would reduce wasteful use oftimber in the uplands and minimize the potential for rent-seeking activities. There is also roomfor allocating both natural and industrial forests. The final allocation between the two types ofcommercial activities should be determined by their economic returns and other criteria suchas links with wood processing, ecological aspects and the like. For social forestry, the studypoints out that participation in the government's Integrated Social Forestry Program through theCommunal Tree Farming Project does not seem to have resulted in marked increases in incomeof the beneficiaries. Reliance on other income sources was evident. Revenue from the tree

farming component of the project however, has yet to be documented. The benefits of stabi-lized uplands occupancy also accrue to societ) in the form of soil erosion control and its othereffects. Thus, upland farmers are, in effect, conducting upland resource renewal with minimumcompensation from the general public who also benefits from such renewal. It is, therefore,doubtful that such resource renewal efforts are sustainable given the more urgent needs of poor,upland farmers.

The last study under the upland resources research program entitled 'Forest and UplandResources Management: A Policy Framework" by Dr. Marian S. de los Angeles and Dr. WilfridoD. Cruz integrates the results of the component studies and addresses policy issues in forestryand upland resource management. The study discusses the interrelated problems of a) exces-Sive logging and forest destruction, and b) the continuing conversion of forest lands into landuses that are prone to soil erosion. The recognition that wanton exploitation of the uplandnatural resource systems has substantial effects on other individuals in society justifies govern-

ment intervention in their use. In behalf of society, the government must therefore managethese resources and impose a social price for their exploitation. The study makes two recom-mendations: One, a price reform in the environmental services and commercial value of forestresources; and two, the allocation of secure claims over the land to ensure the adoption of con-servation practices in upland farming by the upland farmer beneficiaries and in the processmake a contribution to the government's land reform program.

Another related study in the area of natural resource and environmental management is"Economicsof Upland Resource Depletion: Shifting Cultivation in the Philippines" by Dr. MarianS. de los Angeles. This study makes a systematic investigation of agricultural systems practicedin the uplands by starting with a formal treatment of the shifting cultivation problem. The op-timum rate of use of forested land, given traditional choices between timber production oragricultural production through slash-and-burn farming, from society's viewpoint and from the

12

uplander's viewpoint, is likewise investigated. The study explains swidden farming in the con-text of a standard resource economic model on open access exploitation, the discounting bias,and zero valuation of the externalities involved, including constraints to upland resource use.

The last study, "Protection and Comparative Advantage: Commercial Fisheries"by Fe FidelisG. Seligman, discusses the relationship between protection and efficiency in the fishing in-dustry in light of the recent government move to liberalize imports, including those of frozenfish. The study tries to determine the role of protection on the expansion, growth, and develop-ment of the industry, particularly that of commercial fishing. The ultimate objective is to findout whether government protection policies in the past had improved this sector. Using thecriteria of domestic resource cost and nominal/effective protection rate, results of the studyshow that commercial fisheries have been the most protected sector in the fishing industry andyet the most inefficient due to high protection of the inputs used like fishing vessels. The strongprotective measures, the study su_ests, must have shielded the commercial fisheries sectorfrom competition, thereby inhibiting its growth and expansion. The move to liberalize importsof fish is a revolutionary step in the right direction if the expansion of the local commercialfisheries sector is to be allowed.

•2. Ongoing

At the end of the year, five studies were being carried out in this area. These studies lookinto the economics of the environment; economic and social perspectives of soil and water con-

servation in the Philippine uplands; growth, productivity, and technological change in Philip-pine aquaculture; natural resource-based industries; and the economics of Philippine fisheriesand aquatic resources.

F. Others

At the end of 1988, two studies which cut across the Institute's priority areas of researchwere being implemented. The first study, "An Assessment of the Performance of the AquinoGovernment," reviews the achievements of the Aquino government in key areas such asmonetary and banking policy, fiscal policy, trade and industrial policy, labor and employment,natural resource policy and management, development administration t external debb and thesocial sectors. The second studyr "Expansion and Refinement of the Annual Econometric Modelof the Philippines," involves the continuing work on the macroeconometric model for thecountry focused on updating and further expanding the model.

RESEARCH-RELATED ACTIVITIES: THRUSTS AND INITIATIVES

In an effort to further enchance its capacity to do research, the Institute pursued several

13

initiatives during the year.

First, several programs and projects were drawn to expand its current research program andto raise the necessary financial resources to carry it out. In the important area of science andtechnology, discussionswere made with the Department of Scienceand Technology (DOS/T) offi-cials to explore the possibility of a collaborative research effort. This is the first step towardsthe formulation of a research program in this area. At the same time, meetings were made withthe Development Research Institute at Tilborg, the Netherlands, to secure technical assistancefor the proposed program. A study team was also organized to design a policy research programon Housing and Urban Development which the institute will carry out jointly with the Housing

and Urban Development Coordinating Council (HUOCC). The team wiii draw up the agendaand priorities for research in "this area. To address other important issues on health policy anddevelopment, an expanded program of research was prepared during the year, which was ap-proved for implementation by a steering committee of the Joint PiDS-Department of Health Re-search Project using funds from the International Health Policy Program (IHPP) based inWashington, D.C.

Meetings were also held with officials of the United States Agency for InternationalDevelopment (USAID) to secure financial support for the development of a researchprogram onfisheries Policy, and the proposed assessment of the performance of the Aquino governmenL inaddition, the joint PIDS-Ohio State University (OSU) research program was extended to includea study of credit unions in rural areas.

The institute also actively Participated in the design of the proposed Decentralization Sup-port Project of the National Economic and Development Authority (NEDA). Of particular inter-est was the research component of the Project wherein the Institute can have a key role in thestrengthening of the country's regional research institutes by setting up mechanisms for policylinkages. Discussionswere likewise made with the International Development Research Centre(iDRC) for collaborative research in the field of rural development. At the end of the year,project proposals for studies on rural industrialization and transport policy were being prepared.

Proposals were similarly prepared for a study on the impact of Central Bank policies andregulation on the money market and on the rural labor market, and for the preparation of asemestral outlook of the Philippine economy. These proposals were submitted to the Trainingand Development issues Project of the NEDA for possible support.

,_ondp the minicomputer facilities of the institute were completely installed during theyear and a powerful statistical software was installed. The procurement of the hardware wasmade possible through the institutional support project of the United Nations Development

14

Programme(UNDP) to PIDS. The Institutealsoacquiredadditionalmicrocomputerunitsto beefup its stableof existingones.

To complementthis expansion in its computerfacilities, the Institute also endeavoredtoupgradeitsstaff's capabilitybyconductingvarioustraining programson the use of relevantandlatestsoftwarepackages.

With thesetwin moves,the capabilityof the Instituteto undertakemore researchactivitieswas enhanced.The Institute also provided its researchstaff with increasedtrainin8 oppor-tunities. At the end of the year, two staff membersWereacceptedfor graduate studiesat theAustralian National University (ANU). The fellowshipswere made possiblethrough grantsprovided by the Australian International Development AssistanceBureau (AIDAB). Suchdevelopmentisa welcometrend inasmuchas it expandsthe Institute'sinteractionwith scholarsfrom other regionsoutside the United States.Atthe same time, a post-doctoralfellowshipforstudyandresearchin the areaof healthpolicyand economicswasawardedby the Institute.

In general,the researchactivitiescarriedout bythe Institute in 1988 representedsignificantgrowthover the previousyear. Also, the initiatives being pursued in the developmentof newprogramsand projectsaugurwell for the Institute'sresearchin the comin8 years.

II. Information anG Dissemination Activities 1

In orKanizations, the tenth of existence seems to be an opportune time to lookmany year

back and review its accomplishments.

At the Institute, there is perhaps no better gauge of its achievements than an assessment ofits usefulnessas a research baseior national planning and policymakin_ And there is perhapsno better way than to focus the assessment on whether its research findings and recommenda-tions have been in the mainstream of decisionmaking process.

Records show that for the past ten years, many of the Institute's research findings andrecommendations markedly guided the direction of government policy. One can cite the in-dustrial promotion policy studies and agricultural policy reviews which were extensively usedin the industrial and agricultural restructuring program of the country; the economic recoveryagenda initiated and coordinated by the Institute to aid the newly-installed Aquino governmentin drawing up the current Medium-Term Philippine Development Plan; the annual econometricmodel prepared by the Institute which provides the framework in the planning and forecastingprocess of the country's central planning office; and the joint PIDS-Tariff Commission studieswhich provided valuable inputs to the ongoing Tariff Reform Program. Despite these efforts, theInstitute feels that there remains certain avenues that can yet be tapped for stronger dissemina-tion and promotion efforts. In his evaluation of the Institute, Dr. Gustav Ranis noted, amongothers, a "perceived lack of visibility of the Institute's outputs" b especially among the frequentusers of research results, notably those in government.

Accordingly, the Institute has now forked the direction of its dissemination efforts towards atwo-pronged approach of ensuring efficient diffusion of its outputs to wider audiences whileadopting a more selective method of reaching its clientele, especially those within the govern-ment policymaking machinery. Specifically, efforts are being geared to improve certain sectionsof its more popularly-read newsletter, the Development Research News (DRN); to fashion acloser working relationship with the working media for a wider dissemination of its studies; tobring in a broader mix of policy issuesfor discussion with and among its staff; and to advance ascheme that will assure higher visibility of research outputs among government offices and theresearch community in the regions. All these have been designed to strengthen the Institute'sdissemination and research utilization scheme. While much of the actual implementation ofthese efforts are to take effect in 1989, the mechanisms for pursuing them have started to be putinto place in 1988.

A. Publications Program

In line with the adoption of a two-pronged approach to reach more audiences while fashion-ing a selective dissemination strategy for each type of audience, the Publications Program of the

b, Ibid.

16

Institute concentrated on improving and promoting its regular publications as well as on in-creasing its outputs. Thus, the bi- monthly newsletter, (DR�V), came out with two new sections,namely: a) the ResearchFolio Series, and b) the listing of bills on economic affairs filed in boththe House of Senate and the House of Representatives.

The Research Folio Series consistsof loose 2- or 4-page summaries of PIDS research studiesaccompanied by visual presentations like flow charts and diagrams which capture, at oneglance, the essence of the studies' findings. This new section is intended for those who do not

have enough time to pore through voluminous and technical studies;thus they aim to provideeasier reading for busy policymakers both in the executive and the legislative branches of thegovernment.

The Bills on Economic Affairs, meanwhile, aims to update planners, members of the re-search community and the general public on the bills proposed and/or sponsored by membersof Congresswhich may have a direct bearing on their respective spheres of activity. The othersections of the DRN like the commentaries on policy issues by guest writers, the update on theInstitute's seminar and publications activities, and the occasional Clearinghouse Project: Listingof Policy Studies on the Economy have been retained and their format improved.

The Institute's technical journal, the journal of Philippine Development UPD), was likewisestrengthened through the constitution of an independent working Editorial Board whose mainresponsibility is to set the guidelines and determine the choice of articles for the various journalissues. Annex C lists the members of the JPD's Editorial Board. A more rigorous review of thearticles submitted for publication in the journal was put into place through the constitution of acore list of reviewers/referees in various fields of specialization. These moves were aimed atmaking the JPD competitive in the international market for journals.

The above efforts are being complemented by the streamlining of functions effectedthrough the recent reorganization of the Institute. For instance, the creation of the ResearchReview Committee (which reviews and approves all completed PIDS research studies) and of theResearch Dissemination Review Committee (which reviews and determines the "publishability_of studies [except papers for the JPD] and their appropriate dissemination outlets), assures amore coordinated review processof the studies.

The year also saw a record number of studies produced under the Institute's Working PaperSeries. By yearend, a total of 29 titles have been listed under the Series. The complete list isshown in Annex D. Meanwhile, highlights of some of the major seminars were recorded in sixissuancesof the ExecutiveMemoranda Series.

On specialpublications,the secondprintingof Gelia T. Castillo'sbookHow Part/c/paJoryisParticipatory Development?A Review of the Philippine F_xper/encewas releasedin early 1988.Towardstheendof the year,the third volumeof the Surveyof Philippine Development Research(SPDIO,whichfocusedon state-of-the-artreview paperson health policies,wasset for release.Oetalis of the materials/documentsproducedunder thePublications Prosram are shown inAnnexD.

B. Public Affairs Program

Aspartof the institute'srecentreorganization,the SeminarProgramwasmade into a PublicAffairsProgramand expandedto includenot only the Institute'sseminaractivitiesbut also itsextensionservices. These include networkingand link-up activities with various institutionsboth here and abroad,technicalassistanceand supportto otheragencies,liaison with varioussectorslike the technicalstaffs of Congressand the media, and participation of the staff invariouslocalandinternationalsymposiaL

In 1988, the Institutelaunched its ResourceSpeakers'ForumSeriesthus addingone moreset to its categoriesof seminarseries. This serieswill enable PIDS to invite resourcepersonsfrom outsidethe Instituteto speakon topicswhich are not necessarilya part of the Institute'sresearchagendabut which nevertbelessrelate to the work being done by the Institute'sre-searchstaff. One thing distinguishesthisseriesfrom the others:insteadof the Instituto'sstableof researcherspresentingresearchresults,others nowdo the presentingwhile the PIDSstaff lis-ten. As such,a larger mix of subjectmatters is offered to the staff thereby broadeningtheirPerspectivesand insights. Originally intendedas an in-houseactivity,the series hadto he ex-panded to includestaff members from other agenciesso that the polio/implications arisingfrom the discussionsmay likewisehe disseminatedto a biggergroup. Started in September,theserieshad a total of fivesessionsin 1988.

The Institutealso remainedactive in pursuingjoint sponsorshipof seminar-workshopswithotheragencies. Forthe joint workshopseries,six activitieswere conducted. The UNDP-PiDSIn-CountryWorkshopson "PrivateSectorDevelopment"involveda seriesof four sessionscon-ducted in variouscitiesof thecountry.

Forin-housestaff seminars,five were held while four more seminarssponsoredsolely bythe Instituteand openedto a widergroup,wereorganized.Thedetailsof these various fora isfound in AnnexE.

Other mechanismsfor reachingmore people were also explored. Initial negotiationsforjoint sponsorshipof a seminar serieswith the EconomicJournalists'Associationof the Philip-pines (EJAP)and the technicalstaffsof certain Senatorsand Representativesin Congresswere

18

initiated. Plans for a series of regional seminars on agricultural statistics were also drawn up.Implementation of these activities is expected to take place in 1989.

The Institute's senior research staff were also active, participating in various fora here andabroad where they were invited to either present a paper or serve as discussant/commentator,and providing technical assi_stanceto various agencies. Among these include: Dr. Mario B.Lamberte's participation a) in the seminar on "Survey on Mobilization of Rural Savings, Phase I"held in Tokyo, Japan on December 13-17, 1988, b) in the workshop,on "Agricultural Policy Re-search Program" held in Los Ba_os, Laguna on March 29-30, 1988, and c) in the PIDS-UNDP in-Country Workshop on "Private Sector Development" held in Cebu on July 8-9, 1988; Mr. MarioC. Feranil's participation a) in the conference on "Implications of Technology Choice onEconomic Developmentn held in Pattaya, Thailand on March 21-24, 1988, and b) in the interna-tional seminar on "Technology and Agriculture" sponsored by the Development Research ins-titute in the Netherlands on June 20-26, 1988; Dr. Rosario G. Manasan's a) presentation of apaper on the comparative analysis of ASEAN investments incentives during the 13th FAEAAn-nual Conference in Malaysia on November 17-19, 1988, and b) participation in the 50th AnnualConference of the Western Governmental Research Association in San Francisco, California on

March 16-19, 1988; Dr. Edna A_ Reyes' a) attendance in the APDC-sponsored Policymakers'Roundtable Conference on "Employment Strategies for Accelerated Economic Growth in Asia" inKuala Lumpur on December 1-2, 1988, and b) lecture on nEmployment in Manufacturing" duringthe 3rd regional training course on an integrated approach to HRD planning, held at QuezonCity on October 17-28, 1988; Dr. Josef T. Yap's a) participation in the LINK fall meeting inSeoul, Korea on November 7-11, 1988, b) attendance in a workshop sponsored by the HarvardInstitute for International Development on the study of financial markets, together with Dr.Mario B. Lamberte, on August 19-21 in Singapore, and c) regular consultative and technical as-sistance to the NEDA on the use of the econometric model; Dr. Erlinda M. Medalla's researchand consultation assistance to the Tariff Commission by way of, for instance, the preparation ofa position paper on protection policies for the Philippine manufacturing and agricultural sectors,and a primer on tariff policy and the Import Liberalization Program, and the refinement of theguidelines for tariff adjustments/setting; and Dr. Marian S. delos Angeles' a) participation in theThird Asia-Pacific Marine Resources and Development Conference sponsored by the East-WestCenter on January 4-8, 1988, b) in the technical workshop on integrated areas systems of thePhilippines sponsored by the Haribon Foundation for Conservation of Natural Resources at LosBa6os on March 15-17, 1988, c) in the regional workshop on applied social science researchforfarm and village forestry held in Kathmandu, Nepal on April 25-29, 1988, and d) in the back-ground work for the conduct of environmental orientation seminars nationwide.

In addition to the above activities, the senior research staff were also asked to comment onvarious Senate and House Bills on areas like natural resour¢_, fiscal policies, and money andbanking,

19

C Library Development

The library playsa pivotal role in strengtheningPIDS' disseminationefforts, both in termsof its data base and seducesoffered. It acts as the repository of all the Institutes researchprojectsandstudiesas wellas othervaluableresourcematerials.

Library Collection. At the end of 1988, the total librarycollectionstoodat 4,536 volumesand titles focusingon economicdevelopment,agriculture,finance, rural and urban develop-ment,energy,industry,trade,population/howing, publicpolicy,natural resources,environment,scienceand technolo_/, health,and laborand employment. The2,165 volumesof serialeollec-tions includejournals,magazines,bulletins,reviewsand newsleltem. The librarysubscribesto20 serial titles,including daily newspapersand has compiled47 issuesof the nmnthly CurrentAwarenessServices(CAS)listin_

Library Services. In additionto the regularserviceswhich_ has peovidedthroughtheyears,the library was tasked to prepare the newly-introducedinter-staff informMion/activityupdate.The update is a regularbulletin which containsinformationon managementdecisions,officepolicies,staffactivitiesandsometimessocial news. Bythe natureof itscontents,the updatebpurely an in-housepublicaliou. Inputs are provided by representativesof the variousstaffsofthe institute.

Theexpansionof the inter-library loanarr_ and institutionalexchanp agreementsis alsoseenin the increaseddemandfor copiesof the CurrentAumrenessServices(CAS)listingwhich it regularlycirculates. Froman initial 20 copies,the number hasrisento 100 copiesanddistributedto variouslibraries,institutionsand organizalJons.TheCASupdatesreaderson thelibrary's acquisitions. To date, the library has establishedarr_ for publicationse_c.changewith 49 local and 51 foreign universities,researchinstitutions,librariesand otheror-genizations.AnnexFcontainsa listingof theseinstitutions.

Durin8 the year, planswere made to make the library a regular memberof the NationalLaborInformation Network (NATLINE)which is a network of imtJtutJonsinvolved in humanresourcedevelopment(HRD) studiesand basedat the Instituteof LaborStudies.Asa member,the libraryis to keepa separatecollectionof all HRD inaterialsthat havebeenacquiredthroughexchangeswith and amongotherNATLINEmembers.

The librarydid not only caterto the informationneedsof the staff, but it also servicedre.searchersfrom other institutionsand studentsfrom different collegesand universities. It hasalsoassisted/respondedto queriesfrom visiting staffs of localand foreip researchinstitutionsandmembersof the technicalstaffsof severalSenalmsand Congressmen.

The libraryendeavorsto continuouslyimproveand expandits collectionand servicesincomingyears.

IlL Human Resouree Development Activities

rograms and activities aimed at enhancing PIDSPersonnelDistributionin 1988the professional growth and development of .,._?_;_,:.._.:._..:_:_.:,,.• "-":;..'::'.. ,.PIDS staff and at maintaining esprit de corps ',:._':',','.'::_.

among them was also undertaken. _:.';__,

Its growing personnel complement reached 74 :,._by yearend, 46 or 62 percent of which represented :_::i:

the Research Staff, 17 or 23 percent make up the _ _ zz._/_/o _::_::;,._Operations and Finance Staff, and 11 or 15 percent I_ E,_ !i_;

,.,ormation,. \ \/.stitute thus supported activities that not only of-feted a promising career path for many of its staff _ 1486_ _but also endeavored to provide an attractive andconducive environment they can work in. Legend:62, 16 % ResearchStaff

14.86% Rese-_rchInformation Staff

A. Staff Development Activities 22.97% Operations and Finance Staff

During the year, two of the Institute's Research Assistants were accepted in the MasteraiProgram in Development Economicsat the Australian National University, under the auspices ofthe Australian International Development Assistance Bureau (AIDAB). The fellowships ex-tended to these staff members are considered significant since it marked the first time thatgraduate scholarships outside of the United States were awarded to the PIDS staff.

In addition, five personnel from the Research Staff were able to solicit graduate scholar-ship in their personal capacities in various universities in the United States. Three of themwere enrolled in masteral studies in economics, one in masteral studies in business administra-tion, and the other one in a doctorate program in economics. It may be noted that two of themopted to maintain their formal employment link with the Institute by going on study leave forthe duration of their studies. It is expected that they will return to work at the Institute oncethey finish their graduate studies.

Meanwhile, in support of the installation of the minicomputer facilities at the Institute, andof the various statistical software packages, seminars and training programs on their use wereconducted. For details of the seminar, see the table in the following page.

The first two seminars were conducted by the EDP Unit of the Institute while the last twowere conducted by Personnel from the SAS Institute of Hong Kong and Decision Systems Cor-poration, respectively. (SeeAnnex E).

The Institute has also been active in sending its staff members to various seminars,workshops, symposia, conventions, and others that enable them to further improve their

2:1

knowledge and skills and be updated on the developments in their respective fields ofspecialization. Some of these activities are:

1. Symposium on Government Procurement of BPS-Certified Products conducted by theDepartment of Budget and Management;

2. Fifth National Congress of the Philippine Library Association;3. Training on Appointments Preparation conducted by the Civil Service Commission;4. Seminar-Workshop on Classification and Cataloguing of Books, Serials and Non-Book

Materials conducted by the Associationof _pecial Libraries in the Philippines;5. 30th Regional Seminar-Workshop on Records Management sponsored by the Records

Management and Archives Office;6. Seminar-Workshop on Leave Lawsand Benefits conducted by the Civil Service

Commission;7. Seminar-Workshop on Trends in Small Library Management sponsored by the

Association of Special Libraries in the Philippines;8. 1988 Year-End EconomicBriefing conducted by the Center for Researchand

Communication; and the9. 26th Annual Meeting of the Philippine EconomicSociety.

_.i

Seminar/Course Title Objective

introduction to the VAXNMS To teach the manner of performing non-privilegedOperating System user tasks under the VAX/VMS operating system

Short Introduction to Computer To introduce first-timers to EDP concepts and serveConcepts, the VAX/VMS Operating as a refresher course for old users. The course in-System,and the SASSystem troduces users to the VAX/VMS operating system in

preparation for the course on the SASsystem by theSASinstitute of Hong Kong

Introduction to SAS Basics To introduce users to SAS Basics, FSP and GRAPH

and to give an overview of the systems capabilities

Introduction to VAX RDB/VMS To provide users with fundamental knowledge andskills to utilize VAX RDB/VMS, a relational database

management system

22

B. Promotions

Fivestaff memberswere promotedto higherpositionsduringthe year. Fourof them camefrom the ResearchStaffwhile one came from the Operationsand FinanceStaff. Of these five,three were promotedto higher positionsas the), were able to complete higherstudies. Theothertwo were promoted in viewof theexemplarybrandof servicethe,/have performed intheirpreviousjobs.C. Channels of Communication and Interaction

Severalactivitieswere also implemented to enable the staff to interactmore openly withone anotherandto improvethe existinglines of communicationwithin the Institute. Thesein-cludedthe following:

1. Inter-Stafflnformation/Actlvity Update - This update,which is being preparedby thelibrary, is a reguhir bulletin of the latest managementdecisionsand official policies,and newson staff activities. It keeps the staff updated and acquaintedwith the ac-tivities of eachdepartment.

2. ResourceSpeakers"Forum Series - The objectiveof this seriesis to deepen the staff'sunderstanding/insightson issueswhich may havea bearingon their work. Scholarsandexpertson variousfieldsare invited to speakandacquaintthe staffon the developmentsin suchfields. Topicsdo not only includecurrentnationalissuesbut alsoon subjectsforthe upgradingof technicalskills. Theserieswasformally launchedin September1988.

3. Creation of Standin8 and Ad-Hoc Working Committees - The Institutemade extensiveuseof ad hoc workingcommitteesin practicallyall aspectsof itsday-to-dayoperations.Thesecommittees'functionsrangedfrom the reviewof researchproposalsand outputs,to the improvementinthe managementof the Institute'srecordssystem,andothers. Be-sidesprovidinga broaderbaseof participationin planning and assistanceto decision-making, these different committees provided an additional venue for the sharing, ex-changeof viewsand interactionamongthe staff. AnnexG lists the namesandmember-shipof thesead hoc andstandingcommittees.

D. Future Plans and Programs

In general,the Instituteintendsto continuewith the same basic thrust it has made in thedevelopmentof its human resources. It will also continueto encourageits staff members tosolicitscholarshipseven in their personalcapacitiesso that they may be giventhe opportunityto pursuefurther studies either locally or abroad. Likewise,the Institute will continue toupgradethe skillsof its peoplethrough in-housetraining, especially in computer application.Towardthisend,the EDPUnit haslinedup severaltrainingprogramsfor the nextcalendaryear.

Finally,the practiceof activelyinvolvingthe staff membersin standingand ad hoc commit-tee workwould be continued,as this providesa forum wherethey candiscusstheir ideasabouta particular task and thus able to participate in decisionmaking,and therefore enhancetheirwork effectiveness.

Iv. n,==,==o =uo. 23

C Y 1988 was an important year for the Institute for it demonstrate(I its ability to bounceback from the financial loss it suffered in the previous year. This turnaround was madepossible through a shift in the Institute's financial strategy,as well as through the impost-

tion of financial controls which enabled it to closely monitor the different major expense ac-counts and discourage unnecessaryexpenses.

There were several notable shifts in the Institute's financial stratel_', in response to the

financial loss incurred in the previous year. One was the active solicitation of financial grantsfrom collaborating research agencies, both local and foreign, to finance its various projects.This enabled the Institute to be less dependent on the earnings of its Endowment Fund forfinancing purposes. This move also enabled the Institute to conserve its internally,generatedresources. During the year, the Institute also started converting its dollar holdings into pesosand. investing the proceeds in government securities. This was made after a thorough studywhich showed that the Institute would be maximizing its earnings if it converted its dollar hoM-ings inl_ pesos,since the interest rate on Treasury Bills (where the institute's peso investmentsare made) gives a higher yield than dollar certificates of time deposits after adjusting for ex-changeYate changes.

In addition, the Institute also implemented several financial control measures whichenabled it to : a) constantly monitor its different expense accounts by project and by program;b) cut down and/or discourage unnecessary costs; and c) provide the necessary informationwhich were used in decisionmakin8,

Thus, while total assets of the Institute amounted to P 54.741 million as of 31 December1987, it reached _P59.875 million as of 31 December 1988, representing an increase of 9.4 Per-cent. The bulk of the Institute's assets, i.e., _ 53.33 million, are in the form of "quick assets',

e.g., cash in bank, time deposits, government securities, etc., thereby making it very liquid (SeeAnnex H).

For CY 1988, total income realized by the Institute from its operations amounted to1='9.787million (Annex I). The bulk of these, i.e., _ 6.716 million or 68.62 percent came from interest

earnings. Meanwhile, the amount of _ 2.919 million (29.82 percent of the total) came fromdonations/financial grants, 1P0.069 million (0.71 percent) from sales of PIDS publlcations,-P0.007 million (0.08 percent) from other income/receipts, while 1P0.074 million (0.77 Percent)represents the gain from foreign exchange transactions.

The total expenses of PIDS for CY 1988 amounted to1 _ 8.281 million. Of this amount,-P-5.616 million (67.81 percent) was spent for the Research Program, 1_ 1.041 million (12.57 per-cent) for the General Administration and Support Services Program, P 1.342 million (16.20 per-

24

cent) for the Publications Program, 1>0.136 million (1.64 percent) for the Seminar Program, and1.0.148 million (1.78 percent) represents depreciation charges.

The Institute's net income before tax for CY 1988 amounted to P 1.505 million. After

deducting the income tax, however, which represents the 20 Percent final tax or 1>1.291 millionpaid by the Institute on its investment earnings, net income becomes1>0.214 million.

The net income after tax realized by PIDS for CY 1988 may be considered significant be-cause it represents, as previously mentioned, a complete turnaround from the financial loss itsuffered in CY 1987. it also shows the successof the various measures instituted by manage-

ment during the year for the purpose of negating the loss suffered in the previous year and ofcontrolling costs.

The principal of the PIDS Endowment Fund which stood at 1>47.603 million as of 1 January1988, amounted to 1-49.272 million by 31 December 1988, representing an increase of 3.39 Per-cent (Please see Annex J). During the year, the total earnings of the Fund amounted to 1>6.708million while net income after tax amounted to1-5.417 million (Annex 10. This represents an in-ternal rate of return of 11 Percent for the year. The Gross Return on A_veragePrincipal Con-tribution for the year amounted to 13.60 Percent while the Net Return on Average Principal Con-tribution amounted to 10.99 percent.

The financial gains made by the Institute in 1988 need to be consolidated to prevent therepetition of the loss incurred in 1987. The strategy of tapping external sources to finance theInstitute's various projects will be continued to enable PIDS to continue conserving its resourcesand at the same time to build up its financial base. Close monitoring of costs will he under-taken at all times. Cost-cutting measures will be designed and implemented in order to reduceexpenses. Finally, studies will he made to determine how to further maximize the earnings ofthe Institute.

25

Studies Completed in 1988

Employment Effects of Selected Structural MarioB. LamberteandAdjustment Policies in the Philippines Ma. Theresa Bunda

Rosario G. Manasan Informal Savings and Credit Institutions in theEmployment Strategies for Accelerated Urban Areas: The Case of Cooperative CreditEconomicGrowth: The Philippine .Experience Unions

Edna A_ Reyes Mario g. Lamberte and Joven 7_BalbosaEmployment, Wages, and Productivity in the The Manufacturing Sector and the InformalPhilippine Labor Market Credit Markets: The Case of Trade Credits in

Edna A. Reyes the Footwear IndustryScienceand Technology and Economic Growth Mario B. Lamberte and Anita Abad Jose

Mario 13.Lamberte Funds Transfer Operation: Boon or Bane toThe 1989 Program of Government the Viability of Rural Financial IntermediariesExpenditures in Perspective Julius P. Relampagos and

Rosario G. Manasan Mario B. LamberteA Review of Investment Incentives in ASEAN The Role and the Performance of

Countries Cooperative Credit Unions in the Rural Finan-Rosario G. Manasan cial Markets: Some Preliminary Results

The Public Enterprise Sector in the Mario B. LambertePhilippines: Economic Contribution and The Urban Informal Credit Markets: AnPerformance, 1975-1984 Integrative Report

Rosario G. Manasan Mario B. Lamberte

Privatization in the Philippines: Current A Review of Policies Impinging on theSituation, Issues, and Prospects Informal Credit Markets

Rosario G. Manasan Meliza H. AgabinThe Effectof an ExchangeRate Devaluation on Political Economy of Credit Availability anda Small Economy with an External Debt Financial Liberalization: Notes on theOverhang Philippine Experience

_/ josef T. Yap V. Bruce J. TolentinoFinancing the Budget Deficit in a Small Open Rural Deposit Mobilization in the Philippines,Economy: The Caseof the Philippines 1977-1986

Ma. Socorro H. Gochoco Rhenee Blanco and Richard MeyerAn Analysis of the Role of Pawnshops in the Comparative Management Structure andFinancial System Institutional Performance in Rural Banking

Mario B. Lamberte InstitutionsThe Financial Markets in Low-Income Urban Cesar Salda_a

Communities: The Case of Sapang Palay Borrower Transactions Costs and Credit

26

Rationing in Rural Financial Markets: The PhilippinesPhilippine Case Marian S. de los Angeles,

Virginia Abiad, Douglas Graham, and Cerenilla A. Cruz, and Eumelia B. CorpuzCarlos Cuevas Forest and Upland Resources Management: A

Transactions Costs and the Viability of Rural Policy FrameworkFinancial Intermediaries Marian S. de los Angeles and

Teodoro Untalan and Carlos Cuevas Wilfrido D. Cruz

Credit Rationing under a Deregulated Finan- Protection and Comparative Advantage: Com-cial System mercial Fisheries

tucila Lapar and Douglas Graham Fe G. SeligmanThe Analysis of Saving Behavior: The Case of Economics of Upland Resource Depletion:Rural Households in the Philippines Shifting Cultivation in the Philippines

Joce_n Alma Rodriguez and Marian S. de los AngelesRichard Meyer The On-Site and Downstream Costs of Soil

The Demand for Funds Among Agricultural ErosionHouseholds in the Philippines Wiffrido D. Cruz, Herminia A. Francisco,

Raquel B. Clar de Jesus and Carlos Cuevas and Zenaida T. ConwayGuarantee Schemes: An Alternative to the Su- Assessment of the Costs and Benefits in Com-

pervised Credit Program mercial Forestry ManagementMarife Magno and Richard Meyer Cerenilla A. Cruz and Virginia D.

The Impact of Trade, Trade Policy, and Exter- Tolentinonal Shockson the Philippine Economy Assessment of the Distribution of Costs and

JosefT. Yap Benefits of Selected Communal Tree FarmForeignTrade Barriers to Philippine Exports Projects in the Philippines

Erlinda M. Medalla Eumelia B. Corpuz, et al.

Philippine Trade Policy Options Erosion and Sediment TransportFlorian Alburo, Erlinda Medalla, and WilfredoP. DavidFilologoPante, Jr. Hydrologic Validatlon of the Pantabangan

Japan's Aid to ASEAN: Present Realities and Watershed Management and Erosion ControlFuture Challenges Project

Filologo Pante, Jr. Wilfredo P. David : iFood Consumption Parameters, Nutritional An Assessment of the Land and Water Resour-Impact, and Philippine Agricultural Develop- ces, Present Management Practices andment Problems, and Future Management Plans and

Agnes Quisumbing Programs for the Magat WatershedPrivate Costs of Commercial Forestry, Refores- Wilfredo P. David and C.U. Colladoration, and Communal Tree Farming in the

A..uB 27

Ongoing Projects in 1988

I. Employment, Human Resource Mario B. Lamberte, Romeo M. Bautistaand Marion Alicando

Development, and Technology Export Financing StudyAn Update on the Philippine Housing: MarioB. LambertepMarket Trends, Policies, and Prospects, Rosario G. Manasanp1970-1988 Erlinda M. Medallap

Edna ,4. Reyes Josef T. Yap andHealth Maintenance Organizations as Teodoro Untalan

Alternative Financing Schemes in the An Analysis of the Regional Expenditures inPhilippines: An Analysis of Polio/Options the Philippines: 1978-1985

Ma. Concepcion P. Alfiler Anicia SayosDeterminants and Polio/ Imperatives of Informal Credit Markets in the PhilippinesPrivate Drug Consumption Behavior in the Social Weather Stations, Inc.Philippines

Ma. Cristina G. Bautista Iii. Agricultural and Industrial

Factors Affecting the Demand for Health Development and Trade PolicyServices in the Philippines ASEAN-US Initiative Study: The

Panfila Ching PhilippinePerspectiveCost Comparisons of Selected Metro Manila Erlinda M. MedallaHospitals Re-estimation of Shadow Pr'ces for the

Ruben N. Caragay and Minda P. Mella Philippines: The Shadow Exchange Rate,The Impact of Housing Policies on the the Shadow Wage Ratepand the Social RateHealth Status of the Urban Poor of Discount

Orville Jose C Solon Erlinda M. Medalla

Health, Manpower, Employment and Impact Effect of the Recent ImportProductivity in the Philippines Liberalization Program

Edna A. Reyes Erlinda M. Medalla

Economies of Scale and Scope in Hospital Agricultural Development in theOperations Philippines: Policy Modelling and Analysis

Oscar Picazo Cielito F. Habito

The Empirical Magnitudes of Labor Supply The Agricultural Producer: Response toand Interregional Migration Price and Environment

Cayetano W. Paderangap Jr. Cynthia $. BantilanII. Resource Mobilization A Study of the Philippine Wood Industry

Rural, Agriculture-Based Development Virginia S. PinedaStrategyand the Aggregate SavingsRate A Study of Paint Manufactures

28

Cecilia M. del Rosario Marian S. de los AngelesA Study of the Consumer Electronic Economic and Social Perspectives of SoilProducts Industry and Water Conservation in the Philippine

Elizabeth S. Tan UplandsA Studyof the Car Industry Marian S. de los Angeles

ElizabethS. Tan Growth, Productivity, and TechnologicalA Studyof the Truck Industry Change in Philippine Aquaculture

Elizabeth S. Tan Lota A. YgrubayQuantification of the Effects of Non-Tariff Natural Resource-Based Industries in the

Measures of Philippine Exports, GNP, and Philippines: Issues in Growth andTrade Development Strategies

Rafaelita A. Mercado Marian S. de los AngelesEstimation of the Elasticity of Import Economics of Philippine Fisheries andDemand Aquatic Resources:A Literature Survey

Rosario G. Querubin Marian S. de los Angeles

Assessment of the Effects of Tariff VI. OthersEscalation Imposed by Major TradingPartners to Philippine Exports Expansion and Improvement of the Annual

Rosario G. Querubin Econometric ModelWinifrida M. Constantino,

IV. Regional, Rural, and Urban Roberto S. Mariano, andDevelopment Josef T. YapEvolution of the Regional Development An Assessment of the Performance of thePlanning System from a Cabinet-Level Aquiu.oGovernmentPerspective Marian S. de los Angeles,

Manuel SoAlba Ledivina Cari_o,Institutional Development Planning System Alejandro Herrin,from a Regional Perspective Mario 13.Lamberte,

Joseph M. Alabanza Rosario G. Manasan,

V. Natural Resource and Environmental Erlinda M. Medalla,

Edna A. Reyes, tManagement Josef T. Yap andEconomicsof the Environment: Issues in the Julius RelampagosManagement of Pollution of the Philippines

c 29

Members of the Editorial Board of the

Journal of Philippine Developmentfor 1988-1990

Chairman : Dr. Florian A. Alburo

National Economic and Development Authority

Members : Dr. Cynthia BantilanCollege of Economicsand ManagementUniversity of the Philippinesat LosBafios

Dr. tedivina V. Cari_o

College of PublicAdministrationUniversity of the Philippines at Manila

Dr. Ponciano S. Intal, Jr.

National Economic and Development Authority

Dr. Rosario G. Manasan

Philippine institute for Developmer_tStudies

Dr. Ernesto M. Pernia

Asian Development Bank

Dr. Emmanuel T. Velasco

SGV Development Center

30 /Mnma D

PIDS Publications

A. JOURNAL OF PHILIPPINE DEVELOPMENT (JPD), 1988'

1. Firstsemestral issue Volume XV, No.12. Secondsemestral issue Volume XV, No.2

B. DEVELOPMENT RESEARCH NEWS (DRN), 1988

Issue Article Guestwriter

1. January-February "The Implications of the Stock Dr. Manuel F. Montes, SchoolMarket Crash and the Philippine of Economics, University theEconomy' Philippines

2.March-April Research Folio Series on WP No.88-01 (Trade Barriers), WP No. 88-03 (Public Sector Deficit) and WPNo. 88-05 (Financial Markets)

3. May-June "ASEAN : Prospects for Regional Dr. Florian A. Alburo, NationalEconomic Cooperation." Economic and Development

Authority

4.July-August Research Folio Series on WP No.

88-04 (Pawnshops), WP No. 88-06 (Cooperative Credit Unions)and WP No. 88-08 (Japan's Aid toASEAN).

5. September-October "The Philippine Tariff Reform Pro- Dr. Erlinda M. Medalla, Philip-gram: Is a Policy Reversal on pine Institute for DevelopmentHandP Studies

6.November-December 'Economic and Environmental Dr. Metodio A. Palaypay, In-Aspects of Public Health" stitute of Public Health, Univer-

sity of the Philippines; SixthListing of the Clearinghouse

Project; Bills on Economic Af-fairs (First of a Series)

31

C. WORKING PAPER SERIES

1. WP #88-01 - A General Assessment of Foreign Trade Barriers to Philippine ExportsDr. EHinda M. Meclalla (February)

2. WP #88-02 . Economics of Upland Resource Depletion: Shifting Cultivation in thePhilippines

Dr. Marian $. Delos Angeles (February)3. WP #88-03 - The Size, Financing and Impact of the Public Sector Deficit, 1975-1984

Dr. Rosario G. Manasan (April)4. WP #88-04 - An Analysis of the Role of Pawnshops in the Financial System

Dr. Mario B. Lamberte (February)5. WP #88-05 - The Financial Markets in Low-Income Urban Communities: The Case of

Sapang PalayDr. Mario B. Lamberte and Ma. Theresa Bunda (March)

6. WP #88-06 - Informal Savings and Credit Institutions in the Urban Areas: The Caseof Cooperative Credit UnionsDr. Mario B. Lamberte and Joven Z. Balbosa (April)

7. WP #88-07 - The Manufacturing Sector and the Informal Credit Markets: The Case ofTrade Credits in the Footwear IndustryDr. Mario B. Lamberte and Anita Abad Jose (May)

8. WP #88-08 - Japan's Aid to ASEAN- Present Realities and Future ChallengeDr. Filologo Pante, jr. (june)

9. WP #88-09 - The Effect of an Exchange Rate Devaluation on a Small Open Economywith an External Debt OverhangDr. Josef T. Yap (july)

10. WP #88-10 . Financing the Budget Deficit in a Small Open Economy: The Case of thePhilippines, 1981-1986

Dr. Ma. $ocorro H. Gochoco (september)11. WP #88-11 The On-site and Downstream Costsof Soil Erosion

Dr. Wilfriclo D. Cruz/Herminia ,4. Francisco/

Zenaida Tapawan-Conway (September)12. WP #88-12 - A Review of Policies Impinging on the Informal CbeclitMarkets

Meliza H. Agabin (September)

13. WP #88-13 . Flexible Functional Form Estimates of Philippine Dema_:,d Elasticitiesfor Nutrition Policy Simulation

Dr. Agnes Quisumbing (September)14. WP #88-14 - Political Economy of Credit Availability and Financial Liberalization:

32

Notes on the Philippine ExperienceDr. V. Bruce J. Tolentino (October)

15. WP #88-15 - Rural Deposit Mobilization in the Philippines, 1977-1986Rhenee Blanco and Dr. Richard L Meyer (Oclober)

16. WP #88.16 - Comparative Management Structure and Institutional Performance inRural Banking InstitutionsDr. Cesar G. Salda_a (Oclober)

17. WP #88-17 - Borrbwer Transactions Costs and Credit Rationing in Rural FinancialMarkets: The Philippine CaseVirginia G. Abi,-d, Dr. Douglas H. Graham and Dr. Carlos E. Cuevas (C)c.tober)

18. WP #88-18 - Transactions Costs and the Viability of Rural Financial IntermediariesTeodoro $. Untalan and Dr. Carlos E. Cuevas (October)

19. WP #8_-19 - Credit Rationing Under a DeregulatedFinancialSystemMa. Lucila A. Lapar and Dr. Douglas H. Graham (Oclober)

20. WP #88-20 - The Analysis of Savings Behaviour: The Case of Rural Households inthe PhilippinesJocelyn Alma Rodriguez and Dr. Richard L Meyer (October)

21. WP#88-21 - The Demand for Funds Among Agricultural Households in the

PhilippinesRaquel Clar de Jesus and Dr. Carlos E. Cuevas (October)

22. WP #88-22 - Funds Transfer Operation: Boon or Bane to the Viability of RuralFinancial Intermediaries

Julius P. Relam_ and Dr. A4ario B. Lamberte (October)23. WP #88-23 - Guarantee Schemes: An Alternative to the SupervisedCredit Program

Marife Magno and Dr. Richard L. Meyer (October)24. WP #88-24 - The Role and Performance of Cooperative Credit Unions in the Rural

Financial Markets: Some Preliminary ResultsDr. Mario B. Lamberte (October)

25. WP #88-25 - The Urban Informal Credit Markets: An Integrative ReportDr. Mario B. Lamberte (December)

26. WP #88-26 - The 1989 Program of Government Expenditures in PerspectiveRosario G. Manasan (December)

27. WP #88-27 - A Review of Investment Incentives in ASEAN Countries

Rosario G. Manasan (December)

28. WP #88-28 - Science and Technology and EconomicDevelopment

33

Mario B. Lamberte (December)

29. WP#88-29- The Impact of Trade, Trade Policy and External Shocks on thePhilippine Ecoromy Based on the PIDS-NEDA Macroeconomic ModelDr. Winifrida M. Constantino and Dr. Josef T. Yap (December)

D. EXECUTIVE MEMORANDA

1. SS#88-01 "IMPORT LIBERALIZATION: A CRITICAL STARTING POINT FOR

STABLEINDUSTRIALIZATION.' Resource Speakers' Forum.2. SS# 88-02 "ASEAN COOPERATION IN THE CONTEXT OF THE DEVELOPMENT

THRUSTS OF SOME OF ITS MEMBERS.' ResourceSpeakers' Forum.3. SS# 88-03 "THE ECONOMICS OF PUBLIC HEALTH.' Resource Speakers' Forum.4. SS# 88-04 "PRIVATE SECTOR DEVELOPMENT.' UNDP-PIDS Series of In-Country

Workshop.5. SS# 88-05 "HEALTH FOR ALL BYYEAR 2000 THROUGH PRIMARY HEALTH CARE."

Resource Speakers' Forum.6. SS# 88-06 "POLICY ISSUES IN PHILIPPINE FISHERY RESOURCE-BASED

DEVELOPMENT.' PIDS-UST Graduate SchoolJoint Seminar.

E. SPECIAL PUBLICATIONS

1. How Participatory is Participatory Development?A Review of the Philippine Experience (second printing)by Gelia T. Castillo

2. Survey of Philippine Development Research (SPDR), Volume III. Contains state-of-the-artreview papers on health policies and issues.

3. PIDS Annual Report, 19874. PIDS Brochure,August 19885. PIDS Publications Poster, December 1988

34 .,etmaa E

PIDS Seminars

1. "The Effect of an ExchangeRate Devaluation on a Small Open Economy with an ExternalDebt Overhang";February5, NEDAsaMakati Building(solesponsorship).Theseminardiscussedthe paper written by Dr. JosefT. Yap,ResearchFellow at the Institute,which focusedon the ag-gregatedemand approach in addressingthe effects of an exchange rate devaluation on adevelopingcountry with an externaldebt burden. Dealingonly with the casewhere the externaldebt is owed by the governmentor isgovernment-guaranteed,Dr. Yapshowed that a devalua-tion amidstan external debt problem will lead to a heavy decline in real output and a rise inprices.

2. PIDS-DENRSeminaron "UplandResourcesPolicyConference';March 14, NEDA Sa MakatiBuilding(jointsponsorship).

Theone-daypolicyseminar,co-sponsoredby PIDSandthe Departmentof EnvironmentandNatural Resources(DENR),focusedon the theme "Towardsa Frameworkfor Uplanc_ResourcesPolicy" and featured the issues,methodologies,and policy recommendationsof the studiesproducedunder the UplandResourcePolicyResearchProgram. Presentorswere Dr. Ma. Con-cepcionJ. Cruz, Dr. Wilfredo P. David, Dr. Wilfrido Cruz, Dr. Marian S. delosAngeles,Dr.CerenillaCruz andMs. EumeliaCorpuz.

3. PIDS-ISEASWorkshop-Discussionon "Philippine Trade Policy Options'; April 14, ManilaMandarinBallroom(jointsponsorship).

The PIDS,together with the Instituteof SoutheastAsianStudies(ISEAS),sponsoredthisthird sessionof a 3- part seriesof seminar-workshopson "ASEANTradePolicyOptions." Theses-sion highlightedthe studyon "PhilippineTrade PolicyOptions"which was conductedby Dr.FlorianA. Alburo of the NationalEconomicand DevelopmentAuthority(NEDA)and Dr. ErlindaM. Medallaand Dr. FilologoPante,Jr. of the Institute. The discussionscenteredon the varioustrade issuespertainingto the Philippineparticipationin the UruguayRoundof GATT-MTNTalks.Itwasarguedthatsincethe Philippines'economicstructureisquitedependenton trade,itwouldbe beneficialfor the country to activelyparticipatein the roundof talks,especiallyin formulatingcodesand negotiationrulesin theconductof world trade.

4. Seminar-Workshopon 'AgriculturalStatistics';April 19, NEDAsa Makati Building(solespon-sorship).

Theworkshopaimedto determinethe requirementsof usersfor agriculturalstatisticsandtoidentifythe problemsand issuesrelatedto thegenerationanddisseminationof saidstatistics.TheSecretary-Generalof the NationalStatisticalCoordinationBoard(NSCB),Mr. PabloQ. Samson,presentedan overviewof surveysconductedby the Bureauof AgriculturalStatistics(BAS)and theNationalStatisticsOffice (NSO).

5. UNDP-PIDS In-CountryWorkshopSerieson "PrivateSectorDevelopment'; June 3-4 (Hyatt

85

Terraces, Baguio City), July 8-9 (Montebello Hotel, Cebu City), July 14-1S (Davao Insular Hotel,Davao City), and August 12-13 -(Agoo Playa, La Union) (joint sponsorship).

The series of four-(4) in-country workshops on private sector development jointly sponsoredby the Institute and the United Nations Development Programme (UNDP) were held to serve asfora for direct consultations among representatives from the government, private sector, academeand research institutions, and corporate executives with international experience. The objectivewas to bring together policymakers and implementors of policy in government, on the one hand,and the private sector, on the other, for them to discuss ways and means by which the privatesector's role in socioeconomic development may be enhanced.

Five agenda items were discussed, namely: a) conceptual issues; b) macroeconomicpolicies; c) small- and medium-scale enterprises; d) role of non-governmental, organizations(NGOs) and women; and e) role of UNDP.

6. "Financing Decisions, Rational Expectations and the 'Crowding-Out' Effect: The Case of thePhilippines'; June 28, NEDA sa Makati Building (sole sponsorship),

Dr. Ma. Socorro H. Gochoco, Visiting Research Fellow at the Institute, presented the findingsof her study wherein the validity of the traditional "crowding-out`' effect vis-a-vis the RicardianEquivalence Theorem in the case of a lessdeveloping country like the Philippines was tested. Dr.Gochoco's study sought to determine whether there is a rule for financing the public debt whichthe public can discern, and to empirically determine its impact on nominal and real interest rates.According to Dr. Gochoco, the "crowding- out" effect existed in the Philippines though only ofshort- run duration. It arose primarily because of certain structural features present in the marketsof developing countries which allow bonds to add to net wealth.

7. "Agricultural and Rural Development in the Philippines', July 4, NEDA saMakati Building (in-house),

The workshopdiscussedthe initialresultsof the outputs produced under the PIDS-sponsoredresearch project with the same title. It aimed to subject the results/findingsto peer evaluation inan effort to integrate them in a consolidated/unified research report. Among the papersdiscussedand evaluated were: "Rice Farmer's Responseto Prices and Environment: Lagunaand CentralLuzon, Philippines"; "Production Analysis and Econometric Issues";"A Comparison of FlexibleFunctional Form Estimates:AnApplication to PhilippineAgricultural Data"; "lntersectoral Linkagesand Agricultural Policies: A General EquilibriumAnalysis"; "RegionalConsumption Differences,Marginal Consumersand Nutrition Policy in the Philippines";and "Issuesin Modelling SectoralMigration in the Philippines."

8. "Protection and Comparative Advantage in Commercial Fisheries'; August 1, NEDA sa MakatiBuilding (in-housestaff seminar).

Ms. Fe G. Seligman, ResearchAssociate at the Institute, presented the initial findings andrecommendations of her study on the commercial fisheries. She discussedthe relationship be-tween protection and efficiency in the fishing industry in light of the recent government move to

36

liberalize imports, including those of frozen fish, and the issuesinvolved in determining the roleof protectiontowardsthe growth and development of the commercial fishingindustry. She foundout that commercial fisherieshave been the most protected sector in the fishing industryas wellas the most inefficient in view of the high protection given to inputs like fishing vessels. Shetherefore concluded that the strongprotective measuresmust have inhibited the sector'sgrowthsince it was not exposedto competition.

9. "Import Liberalization: A Critical Starting Point for Stable Industrialization'; September 9,NEDA saMakati Building(ResourceSpeakers'Forum).

The firstof the seriesof the newly-launched PIDS ResourceSpeakers'Forum, thissessionhadMr. Wilhelm C. Ortaliz, Executive-Directorof the Philippine Council f