PART I

INTRODUCTION
01 Overview
CHAPTER 1

Overview
The long-term vision remains the same, and has become
even more pronounced with the emergence of new threats

Every Filipino aspires to enjoy a “matatag, maginhawa, at panatag na buhay.” This is

AmBisyon Natin 2040. Sensitive to these aspirations, the Duterte administration has
embraced the mission to enable and empower every Filipino to achieve his or her AmBisyon.
The Philippine Development Plan (PDP) 2017-2022 has been formulated to lay down
the foundation for inclusive growth, a high-trust and resilient society, and a globally-
competitive knowledge economy. This foundation is intended to be strong enough for the
next three development plans to build on.

During the first three years, a number of needed reforms have been enacted. The reforms have
been game-changing and the desired social and economic outcomes were achieved, even
surpassing the targets at times. This primarily stems from the conscious effort to include
social protection components as part of the reform program. This was done to cushion
the expected adverse though temporary effects, thereby increasing support to the reform.

Almost four years in, the Philippines was on its way to becoming an upper-middle-
income country, until the once-in-a-century global pandemic, caused by COVID-19,
struck. The immediate response was to save lives by first restricting social and
economic activities to limit the spread of the virus, while improving the country’s
health system capacity.

The health system capacity has since been substantially improved. However, the social and
economic restrictions had adverse social and economic consequences. The challenge at hand
is to muster, as quick as possible, an economic turnaround. And much depends on being
able to manage the risks and transition to the “new normal.”

Even at this time of COVID-19 global pandemic, the country has been benefitting from the
reforms enacted and already implemented (e.g., Rice Tariffication Law [RTL Law], Sin Tax
Reform Law, Ease of Doing Business and Efficient Government Service Delivery [EODB-EGSD]
Act, Tax Reform for Acceleration and Inclusion [TRAIN] Law, Telecommuting Act, Social Security
Act of 2018, Balik Scientist Act, etc.). A more accelerated timeline concerning the other reforms
would have substantially built up the country’s resilience (e.g., PhilSys Act, Universal Health
Care [UHC] Act, Philippine Innovation Act, entry of a third telecommunications provider, Free
Internet in Public Spaces Act [PSA], etc.). This pandemic also lends urgency to crucial reform

Chapter 1 Overview | 5
initiatives that will encourage strategic industries to locate in the country (e.g., amendments
to the Foreign Investments Act [FIA], Public Service Act [PSA], Retail Trade Liberalization Act
[RTLA], and the Corporate Recovery and Tax Incentives for Enterprises [CREATE]). Over the
immediate term, there is a need to address financial risk that may have worsened because of
the mobility restrictions imposed to contain COVID-19. The proposed Financial Institutions
Strategic Transfer (FIST) and Government Financial Institutions Unified Initiatives to Distressed
Enterprises for Economic Recovery (GUIDE) laws are designed to manage such risks.

We are 20 years away from 2040. While there seems to be ample time to catch up on the
targets related to AmBisyon, recent developments have shown that social and economic gains
can easily be reversed. Hence, together with economic recovery, building resilience is now
the urgent and important development objective. Being resilient, after all, is an essential
component of the AmBisyon: having a secure future (panatag na buhay).

Embracing AmBisyon Natin 2040

Early into his administration, President Rodrigo AmBisyon Natin 2040 reveals the many dimensions
Roa Duterte issued Executive Order No. 5, s. 2016 of well-being that Filipinos value the most: strong
“approving and adopting the twenty five-year long- family and community ties, a comfortable lifestyle,
term vision entitled AmBisyon Natin 2040 as guide and a secure future. It should then be the mission
for development planning.” of government to steer development processes to
enable and empower every Filipino to achieve these
AmBisyon Natin 2040 represents the collective aspirations.
aspirations of Filipinos to enjoy a “matatag,
maginhawa at panatag na buhay.” This was the result The same EO adopted the following vision for the
of various focus group discussions and nationally- Philippines:
representative survey undertaken by the National
Economic and Development Authority (NEDA) in
early 2016. By 2040, the Philippines shall have been a
prosperous, predominantly middle-class society
where no one is poor; our peoples live long and
healthy lives, are smart and innovative, and live
in a high-trust society.

A Plan with a Vision:

The Philippine Development Plan 2017-2022
The strategic framework of the PDP 2017-2022 growth, a high-trust and resilient society, and a
(Figure 1.1) is guided by AmBisyon Natin 2040. globally-competitive knowledge economy.
The goal is to lay down the foundation for inclusive

6 | Updated Philippine Development Plan 2017-2022

Figure 1.1 The PDP Framework

The strategies to achieve this objective are organized The Patuloy na Pag-unlad pillar is about increasing
under the three major pillars of “Malasakit,” potential growth. It consists of strategies to enhance
“Pagbabago,” and “Patuloy na Pag-unlad.” the factors necessary to accelerate and sustain
growth and development through 2040. It is about
The Malasakit pillar is about enhancing the social promoting science, technology, and innovation.
fabric. The strategies aim to build the foundations It also covers strategies to reap the demographic
for a high-trust society by ensuring a clean, efficient, dividend.
and people-centered governance; guaranteeing swift
and fair administration of justice; and increasing Supporting these pillars are policies and programs
awareness of the different cultures and values across to ensure sound macroeconomic fundamentals
Philippine society. and promote healthy competition. Furthermore,
realizing the importance of rectifying or improving
The Pagbabago pillar is about effecting inequality- initial conditions that are the foundations for
reducing transformation. It consists of strategies to sustainable development, the PDP 2017-2022
expand economic opportunities, accelerate human contains policies and programs to ensure peace,
capital development, reduce vulnerability, and build security, and public order and safety; accelerate
safe and secure communities. infrastructure development; and address
environmental concerns.

Chapter 1 Overview | 7
This PDP also gives deliberate attention to the maginhawa, at panatag na buhay.” Special focus
special circumstances of overseas Filipinos (OFs) is given to their eventual reintegration and active
and their families, with the aim of empowering participation into the country’s development
them to achieve their aspirations for a “matatag, processes.

Reforms Instituted
Running on a platform of change, the Duterte given initial trade-offs. However, a feature of these
administration has introduced a number of much- reforms is the deliberate inclusion of safety nets to
needed and long-awaited reforms, some of which cushion the sectors that might be adversely affected,
have been institutionalized through legislation. though temporarily, by the reform.
These game-changing reforms are expected to
yield net benefits to society and even provide a Figure 1.2 re-draws the strategic framework of
robust foundation on which to build resiliency. the PDP 2017-2022, to indicate major reforms
Some reforms were admittedly radical and were undertaken. This is followed by a discussion of
expected to result in short-term negative effects the major reforms that can be used as basis for
greater resilience.

Figure 1.2 PDP 2017-2022 Reforms Instituted

8 | Updated Philippine Development Plan 2017-2022

The PhilSys Act establishes a national digital appropriation of PHP10 billion for six years to
ID system that will provide every Filipino with fund programs on farm mechanization, seed
proof of identity. This national ID will facilitate development, propagation and promotion, credit
transactions in business and with government assistance, and extension services, which were
by providing a credible but easily accessible specifically identified to improve the productivity
instrument for “know your customer” protocols. of rice farmers, reduce production cost, and link
This will also fast-track financial inclusion and them to the value chain. The excess from the
facilitate the provision of targeted transfers from PHP10 billion tariff revenue collection will still
government, as the need arises. be given to rice farmers and appropriated by
Congress the following year for the direct financial
The EODB-EGSD Act, meanwhile, directs all assistance to rice farmers, titling of agricultural
agencies in government to streamline government rice lands, expanded crop insurance program, and
processes, particularly those concerning business crop diversification program. The fund provides
to government (B2G) and consumers to government assistance to rice farmers in the form of farm
(C2G), and rationalize or even harmonize machinery and equipment, high-yielding seeds,
regulations. Under the “new normal,” businesses access to affordable credit, and skills training
need to reconfigure processes or change product programs on farm mechanization and modern
lines altogether, and these may require a new set farming techniques. The impact on consumers was
of permits. This law requires government to be evident – the retail price of rice went down by about
facilitative so that businesses can quickly undertake 9 percent in 2020 from its average in 2018, before
the changes and new investments required. the law was enacted. The impact on rice farmers,
on the other hand, will require a more extensive
Farmers and fisherfolk are expected to benefit impact evaluation. What is clear though, is that
from the Sagip Saka Act which provides various the palay subsector grew by 7.2 percent during
forms of assistance to improve (a) production the second quarter of 2020, amid the very strict
and productivity; (b) access to financing and economic lockdown, from the same period in 2019.
better technologies; and (c) business support
and development services. Access to finance is To further facilitate investments, the Revised
further increased with the Agricultural Free Corporation Code of the Philippines eliminates
Patent Reform Act which makes agricultural barriers to entry of both small and large
free patents tradable and bankable instruments. enterprises by permitting the formation of
one-person corporations and by allowing
A major reform in the agriculture sector stockholders or members to exercise their rights
is the RTL. This is a long-awaited reform through remote communication and in-absentia
designed to open the market for rice trade. The voting, among others. As remote communication
previous regime of quantitative restrictions on becomes part of the new normal, this amendment
imported rice provided price support to the rice of the Corporation Code will ensure that business
farmers but this made the retail price of rice meetings and voting can proceed.
expensive as a result. Despite the price support,
rice farming in the Philippines has been As part of human capital development, the
unprofitable, especially when compared to other Universal Access to Quality Tertiary Education
countries in Asia (Bourdey et. al., 2016). To balance Act provides free tuition in state universities and
the interests of farmers and those of consumers colleges, free technical and vocational education
toward overall efficiency and economic growth, and training, tertiary-education subsidy, and
the law (a) replaces the quantitative restrictions on student loans. On the other hand, the Philippine
imported rice with tariffs of 35 to 40 percent and Qualifications Framework Act reinforces and
(b) establishes the Rice Competitiveness strengthens the recognition of knowledge and skills
Enhancement Fund (RCEF) coming from the acquired outside the formal education systems
tariff revenues. The RCEF consists of an annual through a system of pathways, equivalencies, and

Chapter 1 Overview | 9
credit transfers. To further increase employability, governance, etc. Operationalizing these innovations
the Tulong Trabaho Act provides free training requires an ecosystem covering science,
fees and additional financial aid to qualified technology, and innovation (STI). Four landmark
beneficiaries enrolling in selected training laws were recently enacted to help establish
programs (STPs). These reforms ease the financial the ecosystem. These are (a) the Philippine
burden of acquiring tertiary education, reskilling, Innovation Act which establishes the National
and retooling programs, which the workforce Innovation Council (NIC), an inter-agency and
will also need to adjust to the new normal. multisectoral committee that effectively elevates
policy and planning on STI to the highest levels
The Pantawid Pamilyang Pilipino Act of government; (b) the Innovative Startup Act
institutionalizes the Pantawid Pamilyang Pilipino which provides incentives and monetary and
Program (4Ps) to reduce the vulnerabilities of operational support to innovative and technology
children in poor families. The program provides startups to foster an innovative entrepreneurial
cash transfers to family beneficiaries conditional culture; (c) the Philippine Space Act which
on health, nutrition, and education outcomes for a provides the institutional framework to enable the
maximum of seven years. Other features of the law country to reap the benefits from the development
also provide effective ways of engaging with poor and use of space technologies; and (d) the Balik
families even for information and communication Scientist Act which further encourages Filipino
campaigns, which will be useful to help them adjust experts, scientists, inventors, and engineers who
to the new normal, among others. are currently abroad to share their knowledge and
expertise in the country.
The UHC Act aims to provide health care
coverage to all Filipinos, when and where The entry of a third telecommunications player,
needed, without having to bear huge meanwhile, will create a more competitive
financial burden. It is a package of health care environment to help ensure affordable and
reforms centered around health care financing. reliable internet services in the country. This is
Among others, it replaces the fragmented system expected to accelerate digital transformation.
of health care provision with a network approach. Further reforms in the PSA and FIA will open the
This is to be funded by taxes on tobacco sector more.
and alcohol.
The TRAIN Law corrects the inequity of the tax
The Social Security Act of 2018 strengthens the system by reducing personal income taxes while
Social Security System (SSS), which is an important broadening the tax base. The resulting increase
institution in building resilience. It also provides in revenues allowed for the expansion of
economic support to workers who have been infrastructure and social services budget. Various
involuntarily displaced. expenditure management reforms have also
been introduced to address underspending while
The creation of the Department of Human ensuring the effective and efficient delivery of
Settlements and Urban Development (DHSUD) public services. These reforms were instrumental
reorients housing policies and programs towards in improving the country’s credit rating to BBB+,
building communities, in addition to building the highest rating it has achieved so far. In turn,
houses. These policies and programs must now this has enabled the government to mobilize
consider resiliency and sustainability conditions. resources for a massive social assistance package
during the COVID-19 pandemic.

The new normal will definitely require innovative The signing and subsequent ratification of the
ways of production, socialization, consumption, Bangsamoro Organic Law marks a historic and

10 | Updated Philippine Development Plan 2017-2022

significant milestone in the decades-long struggle Conservation Act establishes a framework
for self-governance and peace in Mindanao. for institutionalizing energy efficiency and
This has paved the way for lasting peace, which is conservation, and promoting the use of energy-
an essential pre-condition for building resilience. efficient technologies. All these are important in
encouraging investments in the new normal which
The government has embarked on the Build Build may require more geographically-dispersed areas
Build (BBB) program, which is an ambitious of production, including home-based production.
infrastructure program that increases spending
for infrastructure from 4 percent of gross The Free Internet in Public Places Act aims to
domestic product (GDP) in 2016, based on actual provide free, secure, and reliable internet service
disbursement, to 5.5 percent in 2021, and 4.3 in public places across the country. Prior to this,
percent in 2022. the National Broadband Plan (NBP) was
approved in 2017, which called for the government
A National Transport Policy (NTP), together to also initiate investments in broadband
with its implementing rules and regulations (IRR), infrastructure to complement private sector efforts
has also been adopted. Among others, the policy in the delivery of universal, fast, reliable broadband
prioritizes the movement of people, rather than internet services towards a digital economy.
of vehicles, and provides the basis for offering These are critical initiatives to bridge the digital
alternative means of mobility. divide in order to ensure that no one is left behind
even while we transition to the new normal.
In the energy sector, reforms have been
enacted to encourage investments and reduce The current pandemic has demonstrated the link
the electricity bills of consumers. To facilitate between ecological integrity and human health—
the processing of investment applications in from the need for better ventilation and sunlight,
the energy sector, EO 30, s. 2017 was created. to ensuring that human activities do not encroach
Another law, the Energy Virtual One-Stop Act, on animal habitats (as a means of preventing
was created to simplify and speed up permitting zoonotic diseases). The Expanded National
processes for new power generation, transmission, Integrated Protected Areas System (ENIPAS)
and distribution projects. The Murang Kuryente Act expands the coverage of the country’s national
Act was enacted in 2019 to help reduce consumers’ protected areas (3.1 million hectares), strengthens
monthly electricity bills and strengthen consumer institutional arrangements for the management of
welfare protection through the utilization of the protected areas, and streamlines the process for
government’s share from the Malampaya Fund accessing the Integrated Protected Area Fund
to pay for the National Power Corporation’s (IPAF) for additional financial resources and
(NPC) stranded contract costs and stranded economic opportunities in the sites.
debts. Furthermore, the Energy Efficiency and

Results Delivered
In addition to the reforms instituted, the Duterte competitive knowledge economy. Table 1.1 shows
administration has committed to a set of targets the headline outcome indicators, the targets, and
that indicate progress towards inclusive growth, the accomplishments during the first three years of
a high-trust and resilient society, and a globally- the administration.

Chapter 1 Overview | 11
Table 1.1 PDP 2017-2022 Headline Indicators: Targets vs. Accomplishments, 2017-2019

PLAN TARGETS ACCOMPLISHMENTS

BASELINE VALUE
INDICATOR
(YEAR) 2017 2018 2019 2017 2018 2019

GDP (growth rates [g.r.]) 7.1

6.5- 7.5 7.0- 8.0 7.0- 8.0 6.9 6.3 6.1
sustained (2016)r

Gross National Income

4.5
(GNI) per capita (g.r.) 4.5 5.0 5.0 5.2 4.3 3.9
(2015)
increased

Poverty Incidence 23.5

- 17.3-19.3 - N/A 16.7 N/A
(% of Population) reduced (2015)r

Rural Poverty Incidence 34.0

- 25.6 - N/A 24.5 N/A
(%) reduced (2015)r

Subsistence Incidence 9.1

- 6.8 - N/A 5.2 N/A
(%) reduced (2015)r

Food Inflation (%) 1.7

2.0 - 4.0 2.0 - 4.0 2.0 - 4.0 3.2 6.6 1.8
kept stable (2016)a

Human Development Index 0.701

Increasing Increasing Increasing 0.708 0.711 0.718
(HDI) improved (2015)

Unemployment Rate 5.4

5.1-5.4 4.7-5.3 4.3-5.3 5.7 5.3 5.1
(%) decreased (2016)r

Employment Generated n.a. 900,000- 900,000- 900,000-

-664,000 823,000 1.27 Mn
increased (2016) 1.1 Mn 1.1 Mn 1.1 Mn

Youth Unemployment Rate 11.5

11.0 10.4 9.8 11.9 13.3 12.9
(%) decreased (Oct 2016)

Underemployment Rate in
19.7
areas outside NCR 18.3-20.3 17.8-19.8 17.4-19.4 17.1 17.7 15.1
(2016)
(%) decreased

54 out
Global Innovation Index 74 out of 128 73 out of 127 73 out of 126
Increasing Increasing Increasing of 129
(GII) (rank) improved economies (2016) economies economies
economies

Note: r – revised; a – adjusted original target set in 2016 will be retained

On accelerating economic growth. GDP grew by On improving employment numbers. The

6.9 percent in 2017, well within the target growth Duterte administration has delivered on its
rate for the year. Consequently, GNI per capita rose promise of improving employment numbers. In
by 5.2 percent on the same year. Beginning 2018, 2017, unemployment rate increased, but has since
the target was to grow between 7 and 8 percent. declined. In 2018, unemployment rate is estimated
However, the country’s GDP growth moderated to at 5.3 percent; in 2019, it went down further to 5.1
6.3 percent in 2018, and 6.0 percent in 2019. This percent, both within target.
was due to global headwinds marked by increased
tendencies towards protectionism, especially The net job loss in 2017 can be explained by the
coming from the developed economies. The higher school participation rate among the youth
reenacted budget in 2019 also contributed to the aged 15-24 years, resulting from the required
less-than-targeted economic growth. additional two years of basic education and
further encouraged by the tuition fee assistance

12 | Updated Philippine Development Plan 2017-2022

for higher education. This also explains the increase in 2018, while rural poverty incidence declined
in youth unemployment rate from 11.9 percent dramatically from 34.0 percent in 2015 to 24.5
in 2017 to 13.3 percent in 2018. This, however, percent in 2018.
improved to 12.9 percent in 2019.
The reduction in poverty incidence in 2018 was
In 2018, net jobs generated reached almost achieved despite the high food inflation. This
900,000. This further increased to 1.27 million was because of the higher number of paid jobs
in 2019, which is more than the target, as the generated and a deliberate effort to cushion the
BBB program implementation gained traction. poor from the adverse, though temporary, effects
of the TRAIN law and infrastructure program.
Underemployment rate in areas outside the This was done by providing transfers to low-
National Capital Region (AONCR) reflected the income families (estimated at 10 million) through
increase in full-time jobs outside Metro Manila. the Unconditional Cash Transfer (UCT) program,
This remained within target, at 17.1 percent and which has been implemented for three years. In
15.1 percent in 2017 and 2019, respectively. addition, the HDI was estimated by the United
Nations Development Programme (UNDP) to
On ensuring that economic growth benefits the have increased from 0.699 to 0.712. This marks the
poor. Food inflation rate remained low in 2017 at first time that the country joined the category of
3.2 percent, but escalated to 6.6 percent in 2018 high-level HDI.
due to the mismanagement of the country’s rice
supply. Food inflation then dropped to 1.8 percent From a baseline ranking of 74 (out of 128
in 2019, primarily due to the implementation of the economies) in 2016 according to the GII, the
RTL. country jumped to rank 54 (out of 129 economies)
in 2019. The country is considered as among the
What would be considered a significant innovation achievers, having scored above average
accomplishment of the Duterte administration in most innovation dimensions relative to other
is the rapid decline in overall and rural poverty lower middle-income countries.
incidence beyond targets. Overall poverty incidence
declined from 23.5 percent in 2015 to 16.7 percent

Directive for the Next Two Years:

Focus on Recovery and Resilience
Further demonstrating the resolve to enable and Social Amelioration Program (SAP), respectively.
empower every Filipino to achieve his or her Meanwhile, the Small Business Wage Subsidy
Ambisyon, the government has implemented (SBWS) program benefitted 2.1 million workers
two major initiatives: Bayanihan to Heal as One employed by small businesses that were adversely
(Bayanihan 1) and Bayanihan to Recover as One affected by quarantine restrictions.
(Bayanihan 2).
Bayanihan 2 will sustain the efforts to improve
Bayanihan 1 provided funds to address the health system capacity, particularly on contact
requirements of COVID-19 for tracing, testing, and tracing, testing, and isolation protocols. It will also
treatment while assisting low-income families and provide financial assistance to the sectors that were
returning OFs who were economically displaced adversely affected by the pandemic – transportation,
because of the quarantine restrictions. Some tourism, education, and micro, small, and medium
17.6 million and 14 million low-income families enterprises (MSMEs). Assistance will also be given
received the first and second tranches of the to the agriculture sector, in the form of credit, farm

Chapter 1 Overview | 13
inputs, and training, and skills training, particularly To sustain this, the PDP has been updated to focus
on digital skills, to the displaced workers. Both its strategies towards having a healthy and resilient
initiatives include provisions to build resilience. Philippines while facilitating economic recovery
(see Figure 1.3).

Figure 1.3 Strategic Framework of the Updated PDP 2017-2022

The updated PDP presents a comprehensive These are integrated into the previous strategies,
environmental scan of the political, economic, as will be discussed in Chapter 4.
social, technological, ecological, and legal
dimensions under the new normal (Chapter 2). Health system improvement. The UHC Act
provides a comprehensive framework for health
The National Spatial Strategy (Chapter 3) is also system improvement. The reform calls for a
updated to meet the demands of the new normal. paradigm shift in the provision of care, from
being fragmented and facility-based, to having
Moreover, this updated PDP contains five major a network of care with primary care facilities
programs designed to build the resilience of acting as the gatekeeper. The lessons from
individuals, families, businesses, government, and the COVID-19 pandemic would then add
society under the new normal: (1) health system strengthening of health care outreach services and
improvement, (2) food security and resiliency, even home-based care. Health promotion also needs
(3) learning continuity, (4) digital transformation, to be a prominent feature of health care. More
and (5) regional development through the Balik importantly, there needs to be a careful assessment
Probinsya Bagong Pag-asa Program (BP2). of the current state of health care promotion and

14 | Updated Philippine Development Plan 2017-2022

provision in the country, and a plan and investment In parallel, government will ensure the safety and
program over the medium-term on how to improve security of digital transactions, including digital
it to become better prepared for any future health payments. The framework for consumer protection
crisis, which we hope does not come. will also be reviewed to encompass the new normal
way of transacting.
Food security and resiliency. Food security is about
access to safe and affordable food at all times. Regional development. While this has been the
Food resiliency is having food security during goal of the original PDP, the COVID-19 pandemic
times of crises or emergencies. During the has made regional development an urgent matter.
imposition of the enhanced community quarantine We have seen that the virus could be transmitted
(ECQ), data shows that while 86 percent of farmers rapidly in densely-populated areas. This has
were able to continue their agricultural work, only highlighted the need to have well-ventilated
65 percent were able to sell their produce. On living quarters, workspaces, and public spaces.
the other hand, people in the cities found it very It is also important to have more green outdoor
difficult to access fresh produce. Over the next two public spaces.
years, policies and programs will be guided by a
food value chain approach – from farm to plate. A major initiative to decongest urban areas is
In addition to programs to improve agricultural the BP2. The program encourages Metro Manila
productivity, there will be investments in storage residents, especially informal settlers, to return to
facilities, post-harvest, cold chain, and even their home provinces. BP2 will provide assistance for
technologies that prolong the shelf-life of food. transportation expenses, livelihood, housing, and
Urban residents also need to attain some level of education, among others. Over the medium-term,
food sufficiency. there will be various investments in infrastructure,
agriculture, business, transportation, and access to
Learning continuity. The big challenge under the health care. These investments will reduce inequality
new normal is to build 21st century knowledge, in the quality of life across the various regions.
skills, and competencies in a way that is safe for
learners and teachers as even modern pedagogical We have also seen the benefits of having well-
approaches are centered around participation, planned communities where people’s places of
teamwork, and collaboration. Added to this is the residence are close to where they work, where
problem of the digital divide that, if not addressed, there is nearby access to health care facilities and
will translate to inequality in access to education food, and so on. All these underscore a need
and may even worsen inequality in the longer to review the different Comprehensive Land
term. Education sector agencies will thus design Use Plans (CLUPs) and local development
inclusive mechanisms that deliver quality education. plans. At the same time, disaster risk reduction
Lifelong learning will remain a priority strategy, and management (DRRM) plans need to
but especially focusing on digital skills training. be revised to include the occurrence of
pandemics in the whole framework.
Digital transformation. Government will
accelerate its digital transformation agenda, The BBB program will remain a major strategy
beginning with the implementation of the National for economic recovery. The list of infrastructure
Broadband Plan (NBP) and the Free Wi-Fi program. flagship projects (IFP) has recently been
More government transactions will be enabled updated considering the new priorities listed
using the digital platform. Similarly, there will above. The foundational role of infrastructure
be technical and financial assistance programs to development in achieving the goal of having a
help businesses, especially MSMEs, to transition healthy and resilient Philippines is recognized. At
towards greater digitalization. the same time, the employment to be generated
by the implementation of BBB projects will be
instrumental in accelerating economic recovery.

Chapter 1 Overview | 15
Enact the Remaining Reforms
To ease financial capital demonstrated that there are limits to the country’s
infrastructure and investment capacities. Moreover,
constraints resulting from these limits may be due to restrictive policies
the pandemic that limited the entry of FDIs. Some of these
restrictions can be addressed by amending laws or
regulations such as the PSA, FIA, and the RTLA.
The restrictions on mobility and business
operations that were imposed to prevent the The CREATE will usher in a more competitive
spread of COVID-19 while health systems were tax and incentive regime for businesses –
being improved exacted pressure on the cash flow corporate income tax rate will be reduced
and financial position of businesses and families. (by 10 percentage points [ppts] for small businesses
An online survey conducted by NEDA in early and by 5 ppts for all others). The incentive
April 2020, three weeks into the imposition of ECQ structure can be nuanced depending on the type
in Luzon and other regions of the country, show of investment, location, and subject to agreed
that while about two-thirds of businesses did not performance targets. CREATE is expected to
operate during the ECQ, more than three-fourths encourage investments in strategic industries
continued to pay wages to their pre-ECQ pool of that are especially needed by the country to
workers. This cash flow problem could negatively build resilience.
affect significant portions of the business sector,
as payments to suppliers were being deferred, With respect to infrastructure provision, public-
and ultimately to financial institutions, as loan private partnerships (PPP) will remain an option
repayments were being postponed. This could lead to address infrastructure gaps in various social and
to a rise in nonperforming loans and a heightened economic sectors, while still recovering from the
reluctance of banks to extend credit. If the situation economic shock due to COVID-19.
is prolonged, this will delay economic recovery.

Two important pieces of legislation are being To ease human capital

proposed to address the aforementioned problem:
(a) the FIST bill, which seeks to create special
constraints
purpose vehicles to help financial institutions offload
their COVID-19-induced non-performing assets In addition to attracting additional external
and (b) the GUIDE, which creates a special investments, it is important to begin developing
investment vehicle that would infuse capital into the country’s knowledge economy. Related to this,
key enterprises while preserving employment (and the Philippines needs to improve its capacity for
talents) therein. intellectual property rights protection. In the next
two years, increasing knowledge and improving
the knowledge ecosystem to improve health
and building resilience should be prioritized to
To increase strategic improve education and health outcomes.
investments, including Foreign
Direct Investments (FDIs)

While the accomplishments with respect to

social, economic, and environmental outcomes
have been impressive, the past three years has

16 | Updated Philippine Development Plan 2017-2022

To improve governance over To improve the governance
the management of resources over the environment

As population increases, as the economy grows, and The more robust way to address environmental
as growth centers expand, there will be greater and degradation is to effect behavioral change. This
competing demand for land resources. A national becomes even more important as we see the
land use framework needs to be established to close links between human health and quality
define the indicative priorities for land utilization of the environment. To this end, NEDA has
and allocation across residential, infrastructure, formulated the Philippine Action Plan for
agricultural, and protective uses. The framework Sustainable Consumption and Production which
will also guide efforts, monitor developments consists of a package of actions with respect to
related to land use, and evolve policies, regulations, policy and regulation, research and innovation,
and directions of land use planning processes. infrastructure, and education and promotion.
It also encompasses the issues of waste
Another critical concern today, which is bound management, sustainable business and lifestyles,
to worsen over the immediate future, is the and efficient use of resources.
access to and quality of water supply. The NCR
and CALABARZON (Cavite, Laguna Batangas,
Rizal, and Quezon) are already under a state of To expand market linkages
absolute water scarcity; Ilocos Region, Central for MSMEs
Luzon, and Bicol Region are under water scarcity;
and MIMAROPA (Mindoro, Marinduque,
Romblon, and Palawan) and Central Visayas As MSMEs are encouraged to innovate and
are under water stress. New sources of drinking participate in the global market, they need to
water need to be developed. Equally important comply with international quality standards.
is to institute governance reforms in the sector, Currently, the need is to develop the personal
where the institutional set-up is weak and protective equipment (PPE) ecosystem to afford
fragmented. There is a need to create an apex the country’s health care system a reasonable level
body that will act as the single lead agency to of security over the supply of PPEs. Prescribing the
oversee/coordinate overall policy and project/ country’s National Quality Infrastructure covering
program implementation. The creation of a Water standardization, metrology, testing analysis, quality
Regulatory Commission is also proposed to management, certification, and accreditation
harmonize regulatory practices, processes, and fees is an important step to gain access to markets,
in the water sector. especially global markets. Beyond harmonized
rules and procedures, the testing laboratories need
to be strategically dispersed across the country
to provide MSMEs easy access to the facility.

Keeping the Long View

We now realize that twenty years until 2040 is a In the remaining Plan period, the Duterte
long time and many challenges may come at any administration is renewing its commitment to
time and place obstacles along the way. COVID-19 enable and empower every Filipino to enjoy each
may just be one of these. It is important to quickly and every one of his or her aspirations—a matatag,
recover lost ground, ensure sustainability of the maginhawa, at panatag na buhay.
gains by building resilience, then get back on track
towards AmBisyon Natin 2040.

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