Despite the staggering impact from Typhoon Haiyan (Yolanda) that ravaged across the central Philippines in November 2013 and the 7.2 magnitude Bohol Earthquake just weeks before that, the country managed to sustain its economic momentum as its Growth Domestic Product (GDP) finished the year up by a rate of 7.2 percent. Fully expecting the impact of the severe disasters to be felt more intensely in the year ahead, the Moody’s March 2014 upward revision from a rate of 5.4 to 5.8 percent of annual GDP for the year is a welcome indicator. The solid economic growth trajectory combined with critical domestic reform efforts and energetic diplomacy continues to strengthen the outlook for the Philippines.
Growth and Recovery
As the Government of the Philippines and numerous relief organizations work together to move beyond the immediate response to the disaster-stricken areas and embark on the longer-term recovery process, the challenge will be how well they can realize the vision of “building back better” in order to have communities in a stronger position to withstand the unforgiving nature of these disasters. This approach to humanitarian assistance has grown as best practices have been captured during other disaster relief operations, from carrying out reconstruction that properly accounts for future hazards and addressing the urgent need to restore livelihoods. Being situated in the “Pacific Ring of Fire” and expecting future natural calamities, the approach of managing disaster risk reduction has been embraced from national authorities down to many local government units.
A leading voice on this matter has been Senator Loren Legarda, a long-time advocate for adapting to the impact of climate change who addressed the matter at the East Asia Summit Leadership Panel on Climate Change and Rural Livelihoods. Speaking on the diverse funding sources allotted to related programs including the National Disaster Risk Reduction Management Fund, she emphatically stated, “I am pushing for an environmental audit that will measure the level of compliance with the country’s environmental laws. Where policy is lacking or absent, I will introduce them.”
Such an approach is essential as a “building back better” method demands that those providing aid be ultimately accountable to the people they seek to assist. The Philippine Bureau of Fisheries and Aquatic Resources is moving forward on its objective to build and provide 10,000 wooden fishing boats to those who survived Typhoon Haiyan; by late February nearly 4,000 of those boats had been built, with work ongoing to reach the 10,000 boats mark. Working cooperatively in this area is the World Wide Fund for Nature, leveraging their Earth Hour Campaign to raise funds to build 600 new fiberglass boats to supply fisherman in Palawan and Leyte seeking to recover their livelihood in Typhoon Haiyan impacted areas.
As the Philippines has averaged growth of around 5 percent since 2002, a significant increase from the preceding two decades, private sector firms are more and more an important partner in moving the country forward. In December 2013 the United States Agency for International Development (USAID) signed a Memoranda of Understanding (MOU) with Procter & Gamble (P&G) and Coca-Cola creating a public-private partnership that will help over 2,000 sari-sari stores (small neighborhood shops), rehabilitating those that are salvageable and building new ones where needed. This effort will also facilitate access to needed funds through micro-finance to sustain these enterprises. The finance industry has been a sector of important growth within the country. In December 2010 Citigroup announced the establishment of a research platform in Manila in order to support growth in its capital markets activities and in 2013 Citi was awarded Best Foreign Bank in the Philippines for the fifth consecutive year at the Alpha Southeast Asia Best Financial Institution Awards that began in 2009. Just weeks after Haiyan struck, the Citi Foundation stepped up delivering over $1 million for the recovery effort to address immediate needs.
Diplomacy and Statecraft
The beginning of the year brought a feeling of hope as negotiators for the Government of the Philippines and the Moro Islamic Liberation Front (MILF) agreed to terms for the Bangsamoro Framework Agreement with the final annex signed on January 25, 2014. Certainly considerable efforts remain if the vision is to be realized, with challenges such as providing security in the autonomous Muslim-majority areas, but this agreement reflects the will of both sides to bring about an end to a conflict that has plagued the Southern Philippines for decades. Malaysia played a constructive role facilitating the peace talks between the two sides, which remained focused during the late stages of a 17-year negotiation despite the Lahad Datu incident where armed militants traveled from Mindanao to Sabah to stake a claim to territory in East Malaysia during March of 2013. The MILF distanced itself from those militants as political leaders in Kuala Lumpur and Manila weathered this crisis at a time where they both were approaching crucial elections, keeping negotiations on track.
Optimism continues to grow following the March 27, 2014 signing of the Comprehensive Agreement on the Bangsamoro, sensing increased prospects for prosperity with this critical step towards a more peaceful Southern Philippines. However, it’s important to keep in mind that areas across Mindanao have been registering positive economic results such as the rapidly expanding information communication technology sector with Davao City recognized by global real estate firm Cushman&Wakefield as the most viable city for business process outsourcing (BPO) growth. Agricultural production in Northern Mindanao has increased, highlighting the resource potential this part of the country possesses. Realizing the elusive peace in Mindanao could bring about needed investment in sectors such as agriculture and energy that would support more widespread prosperity. Maybank Philippines has indicated that it is studying the prospects for Islamic banking in response to progress on the peace process with the MILF, but this would require addressing a law seen as dated that only allows Al-Amanah, a subsidiary fully owned by the Development Bank of the Philippines to provide Islamic banking services in the country. Maybank has judged the growth potential in the country quite positively, reflected in its January 2013 $100 million capital infusion to support plans to quadruple its network of branches by 2018 along with the opening of a new headquarters in Bonifacio Global City.
While sustained negotiations have yielded a breakthrough in peace talks with the MILF, the Administration of President Benigno Aquino III remains in a tense standoff over territorial issues in the South China Sea (West Philippines Sea) with China. Despite being dramatically overmatched with respect to maritime assets it can employ, the Philippines has found various diplomatic channels to affirm what it deems as sovereign rights over territory in disputed areas such as the islands, reefs and atolls in the Kalayaan Island Group that includes the Second Thomas Shoal located just 105 nautical miles from the Philippines Palawan Island. In January 2013 the Aquino Administration informed the Chinese Embassy in Manila that it had instituted arbitral proceedings against China under Annex VII of the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The Philippines legal challenge is unfolding as an arbitration case before the International Tribunal for the Law of the Sea (ITLOS). United States (U.S.) Navy Captain Stuart Bell, Deputy Assistant Judge Advocate General for International and Operations Law addressed this ongoing effort at a February 2014 U.S. Naval Institute Conference in San Diego. He explained that “one of the bright spots in international law jurisprudence is the ongoing arbitration between the Philippines and China” where the Philippines “seek to challenge China’s nine-dashed line as well as China’s claim to maritime entitlements from mere rocks or low-tide elevations.” On March 30, 2014 the Philippines submitted its nearly 4,000 page Memorial, complying with the Rules of Procedure of the Tribunal. While China has refused to participate in the proceedings, at this point a ruling is expected in mid-2015.
As the ITLOS process unfolds the Philippines will continue to pursue a rules-based approach to these maritime disputes. Utilizing mechanisms in place, such an approach can also be carried out in institutional bodies including the Association of Southeast Asian States (ASEAN). After more effective management within ASEAN under Brunei’s Chairmanship in 2013 following the fallout from the failure of the July 2012 Foreign Ministers Meeting in Cambodia to release a Joint Communiqué for the first time in ASEAN’s 45-year history over a lack of consensus on language over the South China Sea, the Philippines will seek to keep the issue on the agenda. Important transitions taking place in 2014, including key personnel assuming new posts within the Department of Foreign Affairs (DFA) and the ASEAN Chair being assumed by Myanmar will be areas to watch. Ambassador Luis T. Cruz returns to Manila from serving as the Philippine Ambassador to the Republic of Korea where he will head up the Office of ASEAN Affairs that serves as the ASEAN National Secretariat. He should have no problem coordinating ASEAN issues within broader regional policy as his wife, Ambassador Minda Calaguian Cruz, wraps up ten years of serving in the Philippine Embassy in Singapore and returns to Manila to lead the Office of Asia-Pacific Affairs. She departs her post with rave reviews where the Filipino community fondly knows her as “Amba” as she ably addressed the needs of over 150,000 citizens based in Singapore while strengthening the bilateral relationship. Assistant Secretary Charles Jose has also returned to Manila after completing a three-year post leading the Philippine Consulate General in Shanghai to now head the Public Information and Services Unit. As the spokesperson for DFA, he will rely on that experience and past postings in Chongqing and Beijing as the Philippines continues to affirm its sovereign rights while managing these complex maritime issues within a broader bilateral relationship with China.
Education Progress
While perhaps garnering less attention than major diplomatic and economic matters, critical shifts in education policy will better prepare students in the Philippines to compete with their peers worldwide. In May 2013, President Aquino signed the Enhanced Basic Education Act (K-12) into law, establishing a universal Kindergarten and introducing Grades 11 and 12 to the High School level. The previous 10-year pre-university education cycle was deemed inadequate, as prior to this the Philippines had been the lone country in Asia that operated on a 10-year cycle. Expanding to the K-12 approach was not without its detractors, as the additional years in school will place an added burden on Filipino families. As the law was being formulated, one criticism that was made covered the overcrowding of schools. The Aquino Administration has focused intensely on this issue, including the development of the Department of Education’s Public Private Partnership for School Infrastructure Project (PSIP). In a February 2014 speech, President Aquino announced that the objective of 66,800 new classrooms that was the identified shortfall when he entered office in 2010 had been achieved. Over 35,000 classrooms were funded through appropriations in the national budget, 13,189 were built utilizing the funds of local government units, 14,886 were realized through support from local donors, 1,215 from foreign donations, and 2,242 under the PSIP I. Political and education leaders continue to work to actively recruit teachers to meet the needs of Filipino students. The “Fast-Tracked S&T Scholarship Act of 2013” incentivizes 3rd year college students taking math, engineering and science courses that meet rigorous academic standards to enter the program that will lead to them serving for a minimum of two years as science teachers in their hometowns, addressing a critical need to create an advanced workforce.
The overhaul of K-12 education is designed to have students in a stronger position to either enter the workforce with a technical-vocational track during the final two years of high school or further academic focus to prepare for tertiary education. Leading higher education institutions of the Philippines have announced their plans to transition from the June-March academic calendar to ones that begin in July-August that run until May. The majority of the University of the Philippines campuses and Ateneo De Manila University made the announcement in early February 2014, followed by the University of Santo Tomas the following week. While the phased-in transition over the next few years will be challenging and potentially disruptive, in the long-term it will have students better prepared to compete with their international peers. Having an academic calendar more common with partner institutions overseas will provide Filipino students better opportunities to take part in exchange programs. As regional countries work to realize the objectives of ASEAN Integration in 2015, more compatible academic calendars make this an even more viable avenue of cooperation. As the Philippines approaches its “demographic sweet-spot” in the coming years with its youthful workforce and a growing economy, key education reforms will place the country in a strong position to continue its forward progress.
Justin Goldman is an Associate Research Fellow in Military Studies at the S. Rajaratnam School of International Studies and a Non-Resident Fellow at Pacific Forum CSIS. He has previously been a Visiting Scholar in International Studies at De La Salle University in Manila.
This article was originally published in the Diplomatic Courier's May/June 2014 print edition. Subscribe here.
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Resilience in the Philippines in the Face of Natural Calamities
May 21, 2014
Despite the staggering impact from Typhoon Haiyan (Yolanda) that ravaged across the central Philippines in November 2013 and the 7.2 magnitude Bohol Earthquake just weeks before that, the country managed to sustain its economic momentum as its Growth Domestic Product (GDP) finished the year up by a rate of 7.2 percent. Fully expecting the impact of the severe disasters to be felt more intensely in the year ahead, the Moody’s March 2014 upward revision from a rate of 5.4 to 5.8 percent of annual GDP for the year is a welcome indicator. The solid economic growth trajectory combined with critical domestic reform efforts and energetic diplomacy continues to strengthen the outlook for the Philippines.
Growth and Recovery
As the Government of the Philippines and numerous relief organizations work together to move beyond the immediate response to the disaster-stricken areas and embark on the longer-term recovery process, the challenge will be how well they can realize the vision of “building back better” in order to have communities in a stronger position to withstand the unforgiving nature of these disasters. This approach to humanitarian assistance has grown as best practices have been captured during other disaster relief operations, from carrying out reconstruction that properly accounts for future hazards and addressing the urgent need to restore livelihoods. Being situated in the “Pacific Ring of Fire” and expecting future natural calamities, the approach of managing disaster risk reduction has been embraced from national authorities down to many local government units.
A leading voice on this matter has been Senator Loren Legarda, a long-time advocate for adapting to the impact of climate change who addressed the matter at the East Asia Summit Leadership Panel on Climate Change and Rural Livelihoods. Speaking on the diverse funding sources allotted to related programs including the National Disaster Risk Reduction Management Fund, she emphatically stated, “I am pushing for an environmental audit that will measure the level of compliance with the country’s environmental laws. Where policy is lacking or absent, I will introduce them.”
Such an approach is essential as a “building back better” method demands that those providing aid be ultimately accountable to the people they seek to assist. The Philippine Bureau of Fisheries and Aquatic Resources is moving forward on its objective to build and provide 10,000 wooden fishing boats to those who survived Typhoon Haiyan; by late February nearly 4,000 of those boats had been built, with work ongoing to reach the 10,000 boats mark. Working cooperatively in this area is the World Wide Fund for Nature, leveraging their Earth Hour Campaign to raise funds to build 600 new fiberglass boats to supply fisherman in Palawan and Leyte seeking to recover their livelihood in Typhoon Haiyan impacted areas.
As the Philippines has averaged growth of around 5 percent since 2002, a significant increase from the preceding two decades, private sector firms are more and more an important partner in moving the country forward. In December 2013 the United States Agency for International Development (USAID) signed a Memoranda of Understanding (MOU) with Procter & Gamble (P&G) and Coca-Cola creating a public-private partnership that will help over 2,000 sari-sari stores (small neighborhood shops), rehabilitating those that are salvageable and building new ones where needed. This effort will also facilitate access to needed funds through micro-finance to sustain these enterprises. The finance industry has been a sector of important growth within the country. In December 2010 Citigroup announced the establishment of a research platform in Manila in order to support growth in its capital markets activities and in 2013 Citi was awarded Best Foreign Bank in the Philippines for the fifth consecutive year at the Alpha Southeast Asia Best Financial Institution Awards that began in 2009. Just weeks after Haiyan struck, the Citi Foundation stepped up delivering over $1 million for the recovery effort to address immediate needs.
Diplomacy and Statecraft
The beginning of the year brought a feeling of hope as negotiators for the Government of the Philippines and the Moro Islamic Liberation Front (MILF) agreed to terms for the Bangsamoro Framework Agreement with the final annex signed on January 25, 2014. Certainly considerable efforts remain if the vision is to be realized, with challenges such as providing security in the autonomous Muslim-majority areas, but this agreement reflects the will of both sides to bring about an end to a conflict that has plagued the Southern Philippines for decades. Malaysia played a constructive role facilitating the peace talks between the two sides, which remained focused during the late stages of a 17-year negotiation despite the Lahad Datu incident where armed militants traveled from Mindanao to Sabah to stake a claim to territory in East Malaysia during March of 2013. The MILF distanced itself from those militants as political leaders in Kuala Lumpur and Manila weathered this crisis at a time where they both were approaching crucial elections, keeping negotiations on track.
Optimism continues to grow following the March 27, 2014 signing of the Comprehensive Agreement on the Bangsamoro, sensing increased prospects for prosperity with this critical step towards a more peaceful Southern Philippines. However, it’s important to keep in mind that areas across Mindanao have been registering positive economic results such as the rapidly expanding information communication technology sector with Davao City recognized by global real estate firm Cushman&Wakefield as the most viable city for business process outsourcing (BPO) growth. Agricultural production in Northern Mindanao has increased, highlighting the resource potential this part of the country possesses. Realizing the elusive peace in Mindanao could bring about needed investment in sectors such as agriculture and energy that would support more widespread prosperity. Maybank Philippines has indicated that it is studying the prospects for Islamic banking in response to progress on the peace process with the MILF, but this would require addressing a law seen as dated that only allows Al-Amanah, a subsidiary fully owned by the Development Bank of the Philippines to provide Islamic banking services in the country. Maybank has judged the growth potential in the country quite positively, reflected in its January 2013 $100 million capital infusion to support plans to quadruple its network of branches by 2018 along with the opening of a new headquarters in Bonifacio Global City.
While sustained negotiations have yielded a breakthrough in peace talks with the MILF, the Administration of President Benigno Aquino III remains in a tense standoff over territorial issues in the South China Sea (West Philippines Sea) with China. Despite being dramatically overmatched with respect to maritime assets it can employ, the Philippines has found various diplomatic channels to affirm what it deems as sovereign rights over territory in disputed areas such as the islands, reefs and atolls in the Kalayaan Island Group that includes the Second Thomas Shoal located just 105 nautical miles from the Philippines Palawan Island. In January 2013 the Aquino Administration informed the Chinese Embassy in Manila that it had instituted arbitral proceedings against China under Annex VII of the 1982 United Nations Convention on the Law of the Sea (UNCLOS). The Philippines legal challenge is unfolding as an arbitration case before the International Tribunal for the Law of the Sea (ITLOS). United States (U.S.) Navy Captain Stuart Bell, Deputy Assistant Judge Advocate General for International and Operations Law addressed this ongoing effort at a February 2014 U.S. Naval Institute Conference in San Diego. He explained that “one of the bright spots in international law jurisprudence is the ongoing arbitration between the Philippines and China” where the Philippines “seek to challenge China’s nine-dashed line as well as China’s claim to maritime entitlements from mere rocks or low-tide elevations.” On March 30, 2014 the Philippines submitted its nearly 4,000 page Memorial, complying with the Rules of Procedure of the Tribunal. While China has refused to participate in the proceedings, at this point a ruling is expected in mid-2015.
As the ITLOS process unfolds the Philippines will continue to pursue a rules-based approach to these maritime disputes. Utilizing mechanisms in place, such an approach can also be carried out in institutional bodies including the Association of Southeast Asian States (ASEAN). After more effective management within ASEAN under Brunei’s Chairmanship in 2013 following the fallout from the failure of the July 2012 Foreign Ministers Meeting in Cambodia to release a Joint Communiqué for the first time in ASEAN’s 45-year history over a lack of consensus on language over the South China Sea, the Philippines will seek to keep the issue on the agenda. Important transitions taking place in 2014, including key personnel assuming new posts within the Department of Foreign Affairs (DFA) and the ASEAN Chair being assumed by Myanmar will be areas to watch. Ambassador Luis T. Cruz returns to Manila from serving as the Philippine Ambassador to the Republic of Korea where he will head up the Office of ASEAN Affairs that serves as the ASEAN National Secretariat. He should have no problem coordinating ASEAN issues within broader regional policy as his wife, Ambassador Minda Calaguian Cruz, wraps up ten years of serving in the Philippine Embassy in Singapore and returns to Manila to lead the Office of Asia-Pacific Affairs. She departs her post with rave reviews where the Filipino community fondly knows her as “Amba” as she ably addressed the needs of over 150,000 citizens based in Singapore while strengthening the bilateral relationship. Assistant Secretary Charles Jose has also returned to Manila after completing a three-year post leading the Philippine Consulate General in Shanghai to now head the Public Information and Services Unit. As the spokesperson for DFA, he will rely on that experience and past postings in Chongqing and Beijing as the Philippines continues to affirm its sovereign rights while managing these complex maritime issues within a broader bilateral relationship with China.
Education Progress
While perhaps garnering less attention than major diplomatic and economic matters, critical shifts in education policy will better prepare students in the Philippines to compete with their peers worldwide. In May 2013, President Aquino signed the Enhanced Basic Education Act (K-12) into law, establishing a universal Kindergarten and introducing Grades 11 and 12 to the High School level. The previous 10-year pre-university education cycle was deemed inadequate, as prior to this the Philippines had been the lone country in Asia that operated on a 10-year cycle. Expanding to the K-12 approach was not without its detractors, as the additional years in school will place an added burden on Filipino families. As the law was being formulated, one criticism that was made covered the overcrowding of schools. The Aquino Administration has focused intensely on this issue, including the development of the Department of Education’s Public Private Partnership for School Infrastructure Project (PSIP). In a February 2014 speech, President Aquino announced that the objective of 66,800 new classrooms that was the identified shortfall when he entered office in 2010 had been achieved. Over 35,000 classrooms were funded through appropriations in the national budget, 13,189 were built utilizing the funds of local government units, 14,886 were realized through support from local donors, 1,215 from foreign donations, and 2,242 under the PSIP I. Political and education leaders continue to work to actively recruit teachers to meet the needs of Filipino students. The “Fast-Tracked S&T Scholarship Act of 2013” incentivizes 3rd year college students taking math, engineering and science courses that meet rigorous academic standards to enter the program that will lead to them serving for a minimum of two years as science teachers in their hometowns, addressing a critical need to create an advanced workforce.
The overhaul of K-12 education is designed to have students in a stronger position to either enter the workforce with a technical-vocational track during the final two years of high school or further academic focus to prepare for tertiary education. Leading higher education institutions of the Philippines have announced their plans to transition from the June-March academic calendar to ones that begin in July-August that run until May. The majority of the University of the Philippines campuses and Ateneo De Manila University made the announcement in early February 2014, followed by the University of Santo Tomas the following week. While the phased-in transition over the next few years will be challenging and potentially disruptive, in the long-term it will have students better prepared to compete with their international peers. Having an academic calendar more common with partner institutions overseas will provide Filipino students better opportunities to take part in exchange programs. As regional countries work to realize the objectives of ASEAN Integration in 2015, more compatible academic calendars make this an even more viable avenue of cooperation. As the Philippines approaches its “demographic sweet-spot” in the coming years with its youthful workforce and a growing economy, key education reforms will place the country in a strong position to continue its forward progress.
Justin Goldman is an Associate Research Fellow in Military Studies at the S. Rajaratnam School of International Studies and a Non-Resident Fellow at Pacific Forum CSIS. He has previously been a Visiting Scholar in International Studies at De La Salle University in Manila.
This article was originally published in the Diplomatic Courier's May/June 2014 print edition. Subscribe here.
