MACROECONOMIC FRAMEWORK AND
DEVELOPMENT FINANCING
VI. PRIORITY SUBSECTOR ACTIVITIES
A. Ensuring macroeconomic stability
1. Bangko Sentral ng Pilipinas
a. Maintain and refine a system to ensure that the growth of monetary aggregates are
consistent with the output growth targets;
b. Espouse market-determined interest rate; and
c. Support a flexible, market-determined peso-dollar exchange rate, with the BSP intervening
in the market only to smoothen wild fluctuations in the exchange rate.
2. National Economic and Development Authority
a. Facilitate interagency coordination of macroeconomic policies towards the achievement
of medium-term targets;
b. Conduct regular monitoring, analyses and forecasts of relevant macroeconomic indicators;
c. Conduct an annual monitoring of the MTPDP 1999-2004 and coordinate the updating of
the Plan;
d. Refine existing models and/or develop new ones to accurately track the economy;
e. Develop new models and database consistent with the 1993 System of National
Accounts (SNA); and
f. Pursue capacity-building programs particularly in areas related to the analyses of
international and monetary economics, population and employment, public finance and the real sector.
3. Department of Finance
a. Maintain an expansionary fiscal stance that will spur economic growth in 1999.
Improved revenue collections due to strengthening economic growth and collection efficiency
should turn the deficit to a fiscal balance by 2002 and to surpluses by 2003 and beyond; and
b. Tap external sources of funds to finance the deficit.
4. Bureau of the Treasury
a. Monitor closely debt obligations of NG through a computer-based Debt Monitoring
and Financial Analysis Systems (DMFAS);
b. Pursue an appropriate domestic and external financing mix by gradually limiting foreign loans; and
c. Lengthen the maturity profile of government securities by issuing 2, 5, 7, 10, and
20-year fixed term treasury bonds and reduce short-term treasury bills offerings.
5. National Statistical Coordination Board
a. Implement the 1993 System of National Accounts;
b. Enhance Foreign Investment Information System on: (i) foreign direct investment stocks,
exports and employment; and (ii) database subsystem on portfolio investments;
c. Generate a leading indicators system;
d. Integrate an indicator system on measuring the impact of trade liberalization;
e. Generate benchmark data for overseas workers;
f. Strengthen the generation of industry, infrastructure, and environment statistics;
g. Institutionalize environment, economic, and natural resource accounting;
h. Create human resource accounts; and
i. Provide an updated social accounting matrix and input-output tables.
6. National Statistics Office
a. Improve the methodology for estimating the consumer price index, and re-base it to 1997
and to 2000;
b. Improve the methodology for the generation of foreign trade
indexes;
c. Enhance the database support for the adoption of the 1993 System of National
Accounts particularly in the areas of enterprise statistics and statistics on the economic activities of
the household sector through appropriate data collection and data compilation;
d. Provide the database support for leading indicators through enhancement of scope and
coverage of the Quarterly Survey of Establishments (QSE) and the Monthly Integrated Survey of
Selected Industries (MISSI); and
e. Enhance the database support for investment statistics (construction) and statistics on
capital stock through appropriate data collection and identification of indicators.
7. Statistical Research and Training Center
a. Improve/update methodology for generating trade and other related indices;
b. Develop a scheme to use financial records to generate data on establishment; and
c. Develop systems and procedures for generating statistics from administrative records to
come up with needed macroeconomic indicators.
B. Promoting sustained development of the financial sector
1. Bangko Sentral ng Pilipinas
a. Increase penalties for noncompliance with prudential rules;
b. Improve disclosure and transparency requirements for banks;
c. Continue the capacity building programs for bank examiners and regulators;
d. Continue adoption of internationally-accepted banking standards and supervisory practices;
e. Support the Securitization Program;
f. Advocate passage of the Revised General Banking Act;
g. Advocate the passage of the New Central Bank Act;
h. Support the passage of the Securities Act of 1999;
i. Support the passage of Revised Investment Company Act;
j. Support the passage of the Omnibus Investment Code;
k. Support the passage of amendments to the Philippine Deposit Insurance Corporation Act;
l. Support the rationalization of taxation on the financial sector; and
m. Review and overhaul the systems of guarantee institutions.
2. National Economic and Development Authority
a. Support the passage of legislative agenda to strengthen the financial sector (e.g.
Banking Sector Reforms and Securities Act of 1999); and
b. Participate in interagency formulation and monitoring of financial sector policies.
3. National Statistical Coordination Board
a Update series on loans and credits by the financial system based on the latest
Philippine Standard of Industry Classification (PSIC);
b. Conduct a comprehensive monitoring of external debt; and
c. Strengthen the generation of financial statistics and institutionalize financial accounts.
4. Securities and Exchange Commission
a. Advocate the passage of the Securities Act of 1999;
b. Advocate the passage of the Revised Investment Company Act;
c. Advocate the passage of the Pre-Need Plan Securities Code; and
d. Advocate the passage of the Amended Corporation Code of the Philippines.
C. Promote capital market development
1. Securities and Exchange Commission
a. Promote the Small Investors Program (SIP) nationwide;
b. Facilitate the establishment of the secondary bond market in the Philippines;
c. Facilitate the operationalization of the Small and Medium Enterprises Board through
the Philippine Stock Exchange with the rules for approval by SEC;
d. Expand the Small Investors Base Program;
e. Expand oversight on regulated industries;
f. Link electronically with other financial regulators on data/information exchange;
g. Pursue Association of South East Asian Nation-General Agreement on Trade and Services
_ World Trade Organization (ASEAN/GATS WTO) policies on market liberalization of
financial services;
h. Strengthen structural changes in line with capital market reforms and the vision of SEC;
i. Formulate manual of SEC Administrative Procedures;
j. Formulate Rules on Summary Proceedings on the Hearing of Cases and Guidelines on
the Postponement of Hearings; and
k. Codify SEC Manual of Operations.
2. Bureau of the Treasury
a. Lengthen the maturity profile of government securities by issuing long-term treasury bonds;
and
b. Broaden the investor base through the issuance of small-denominated government securities.
D. Improving fiscal discipline, prioritization of government resources and operating
efficiencies in agencies
1. Department of Budget and Management
a. Install a medium-term expenditure framework and strengthen performance management
through the budgeting process;
b. Forge a Budget Accord with Congress on the medium term expenditure framework; and
c. Establish a budget Dialogue Group consisting of key Cabinet officials, LGU officials and
key officials of private sector groups to recommend comprehensive budget reforms and
other measures to ensure fiscal integrity and efficiency.
2. Bureau of the Treasury
a. Monitor NG revenues, expenditure and cash balances to avoid borrowing in excess of
what is needed;
b. Invest excess funds in high-yielding instruments (i.e., overnight placements, fixed-term
deposits with banks offering higher interest rates); and
c. Reduce the documentation requirements and simplify the procedure for government
securities dealership application.
E. Preserve employment, and facilitate employment generation programs
1. Department of Labor and Employment
a. Facilitate forging of social accords;
b. Promote industrial harmony and stability at all levels;
c. Promote efficiency-enhancing measures that will reduce the cost of doing business;
d. Advocate appropriate incentives and support to promote viability and growth of industries;
e. Support the implementation of small scale and major infrastructure projects, trade
and investment promotion programs;
f. Support the implementation of trade and investment promotion programs;
g. Support the development of economic zones/growth centers, and small and medium
enterprise including promotion of rural industries and village enterprises;
h. Support agriculture and fisheries modernization;
i. Support the promotion of tourism and livelihood programs;
j. Support the government's thrust to provide safety-net programs in the form of training and
retraining programs, emergency employment programs including rural public works, access
to credit facilities and the unemployment assistance programs;
k. Advocate the institutionalization of the Public Employment Service Offices;
l. Operationalize fully the PHILJOBNET, a computerized system that matches vacancies in
local and overseas labor market, in private and public employment;
m. Conduct job fairs;
n. Provide vocational guidance and employment counseling;
o. Deliver employment and training programs in priority areas;
p. Establish a coordinating mechanism to make education and training responsive to the
requirements of the labor market;
q. Facilitate adoption of best practices by the private and public sectors to improve productivity
and competitiveness;
r. Review the Labor Code;
s. Review the Migrant Workers Act of 1995; and
t. Strengthen occupational safety and hazard administration.
F. Evolving a better tax system
1. Department of Finance
a. Advocate the passage of the following tax measures:
-
Rationalization of Fiscal Incentives
-
Tax Amnesty with Tax Census
-
Road User Fees
-
Idle Land Tax
-
Land Conversion Tax
-
Rationalization of the Taxation of Financial Sector
b. Review the CTRP provision on tax exemptions;
c. Improve tax administration through further computerization of the BIR and BOC;
d. Provide performance-based incentives and establishing sound audit standards;
e. Plug loopholes and leakage in the tax system;
f. Introduce taxation of electronic commerce;
g. Require the use of the TIN in transactions; and
h. Consider taxing consumption rather than income in order to tax the hard-to-tax groups.
The proposed changes should be revenue-neutral to the government.
G. Enhancing monitoring of and supporting policies toward poverty reduction and
income distribution
1. National Economic and Development Authority
a. Conduct analyses of the poverty alleviation implications of macroeconomic policies; and
b. Monitor the poverty situation using existing and new data bases/surveys.
2. National Statistics Office
a. Conduct the Annual Poverty Indicator Survey (APIS) to generate statistics on poverty
at least at the provincial level;
b. Conduct the 2001 Census of Agriculture;
c. Conduct the 2001 Census of Fisheries;
d. Conduct a census of population and housing by 2000; and
e. Conduct surveys on (a) national demography; (b) national health; (c) functional
literacy, education and mass media; and (d) national nutrition.
3. Statistical Research and Training Center
a. Conduct a study on nonfood basket of the poverty threshold;
b. Conduct a longitudinal analysis of the socioeconomic and demographic characteristics
or household heads based on the sample households of Labor
Force Survey;
c. Conduct a study to determine the profile of women with high-risk fertility behavior;
d. Conduct a study to estimate under-coverage of recorded vital events in a locality;
e. Conduct a study to identify and track the Philippine middle class;
f. Develop estimation techniques to generate small area statistics using data from surveys,
censuses and administrative records; and
g. Develop and install a food security monitoring and early warning system.
4. National Statistical Coordination Board
a. Provide statistical indicators useful in discerning opportunities for business or employment
by the government, private sector, and civic groups;
b. Initiate an incentive-based research program and research capacity build-up of
statistical agencies;
c. Create an integrated provincial, gender-based and sectoral database and indicator system
on population, housing, poverty, health, education, water facilities, communication, power
and infrastructure support facilities;
d. Generate subnational and gender disaggregated data on agriculture, fisheries and forestry;
e. Create an integrated poverty monitoring system; and
f. Conduct a regional updating of the nutritional status of Filipino children.
H. Improving the policy and legal framework for the maintenance of a more liberal
economic environment
1. Department of Finance
a. Support the tariff reduction program;
b. Promote greater competition in accordance with our commitments and obligations under
the AFTA and WTO;
c. Advocate liberalization of retail trade; and
d. Pursue privatization initiatives and fasttrack disposition of assets of Asset Privatization
Trust (APT) and Presidential Commission on Good Government (PCGG).
2. National Economic and Development Authority
a. Support the passage of reforms to further liberalize economic sectors such as shipping,
retail trade, port, and telecommunications and to put in place the appropriate regulatory
measures to enhance competition;
b. Support the sustained implementation of tariff reduction programs; and
c. Develop early-warning systems and strengthen monitoring of regional and global developments.
I. Enhancing greater savings mobilization and more efficient investments
1. National Economic and Development Authority
a. Formulate and implement the Medium-Term Philippine Investment Plan;
b. Facilitate the rationalization of incentives for investments; and
c. Participate in interagency formulation of policies and institutional savings schemes and
other policies to develop the capital market.
2. Securities and Exchange Commission
a. Expand the guidelines for Debt Suspension Petitions;
b. Formulate the Debt Suspension Procedures;
c. Issue the Rules on Covered Warrants;
d. Issue the Implementing Rules and Regulations on the Financing Company Act of 1998;
e. Issue the Amended Rules on Asset-Backed Securities, Tender Offer Rules, Proxy Rule,
Rules on Short and Long-Term Commercial Papers, Pre-Need Rules;
f. Issue of Pre-Need Industry Chart of Accounts; and
g. Enter into a Memorandum of Agreement with agencies of government with police and law
enforcement capabilities.
3. National Statistical Coordination Board
a. Create an integrated gender and industry database and indicator system on domestic
investments with provincial disaggregation; and
b. Improve family income and expenditure surveys.
J. Promoting the increase in productivity and competitiveness
1. National Economic and Development Authority
a. Facilitate the formulation of the National Action Agenda on Productivity;
b. Advocate and support the implementation of TFP-enhancing policies; and
c. Facilitate the institutionalization of a productivity indicators monitoring system.
2. National Statistical Coordination Board
a. Provide a computer-aided data collection, processing, storage, and networking among
data producers and users;
b. Support the construction of a government-owned building for major statistical agencies;
c. Create a state-of-the-art archive for the Philippine Statistical System; and
d. Generate public-use files for selected censuses and surveys;
e. Prepare online databases for key statistical information systems; and
f. Provide a one-stop statistical information centers in all regions with public internet access
facilities
3. National Statistics
Office
a. Institutionalize productivity indicators monitoring system, e.g. generation of total
factor productivity growth estimates;
b. Enhance the database on research and development, and technology adoption and
utilization in industry and services sectors, domestic trade and commodity flow;
c. Improve the statistical frame for the conduct of enterprise and establishment censuses
and surveys; and
d. Conduct census of establishments and enterprises.
4. Statistical Research and Training Center
a. Provide for automatic recording of information on business permits;
b. Develop an appropriate data archiving system to preserve census and survey data for
long-term use;
c. Develop agricultural statistical index areas as sampling domains for major
agricultural commodities;
d. Conduct statistical training to continuously upgrade the quality of statistical manpower in
national government offices;
e. Improve the facilities for the conduct of statistical training;
f. Support the statistical capacity building program for local government units;
g. Pilot the use of hand-held computers in gathering and generating agricultural data;
h. Computerize the data collection and other aspects of statistical work for Family Income
and Employment Survey, and Labor Force Survey;
i. Develop an alternative design for agricultural surveys through the use of area frame; and
j. Upgrade the statistical education program to improve overall statistical literacy.
5. Statistical Research and Training Center
a. Improve the sampling methodology for the 2001 Census of Agriculture and Fisheries; and
b. Conduct a study to determine work participation, earnings and labor supply of married
women in the Philippines.