Overseas Field Work Report 2000:

Laguna Province, The Philippines

Graduate School of International Development
Nagoya University

Overseas Fieldwork Report 2000:

Laguna Province, The Philippines

March 2001
Graduate School of International Development
Nagoya University, Nagoya, Japan

Overseas Fieldwork Report 2001

Laguna Province, The Philippines

Copyright©2001

Graduate School of International Development, Nagoya University
Furo-cho Chikusa-ku. Nagoya, Japan 464-8601
http://www.gsid.nagoya-u.ac.jp/

Introduction
It was in the evening of July 24, at a Hotel in Hokkaido , when I received the fax from Dr. Osada, Dean of
the Graduate School of International Development (GSID), Nagoya University, in which he proposed to change
the site for the ninth annual Overseas Fieldwork (OFW 2000). A t ravel advisory issued by Japan’s M inistry ofForeign Affairs covering Bohol province and other places in the Philippines , affected his final decision. As
program director, I accepted his judgment .

In January 2000, with a generous subsidy from the Foundation for Advanced Studies on International
Development (FACID), members from OFW Committee and professors from the University of the Philippines
Los Baños (UPLB) visited several places in Laguna Province and Bohol Province to look for suitable sites for
OFW 2000. After many heated discussions – both provinces were highly evaluated for their attractive sites andopen-minded municipal and provincial government officials, t hey eventually decided on Bohol. We unfortunately
gave up Bohol in July for security reasons, however, fortunately Laguna was still in our hands . Of course, thesudden change of locations from Bohol to Laguna added extra work for our colleagues from UPLB, even though
Laguna is their home province.

Students pa rticipated in weekly seminars to prepare for OFW 2000:
1) Using diverse approaches, the twenty-eight participants comprehensively studied the current situation in thePhilippines from May 17 to July 19. Professor Rufino S. Mananghaya, a visiting professor from UPLB, andseveral colleagues from GSID managed these seminars .
2) From August 28 to September 1, participants improved their discussion skills utilizing Project Cycle
Management (PCM) - a tool designed to moderate interactive discussion among stakeholders inparticipatory development projects. Ms. Yuriko Minamoto and staff from FACID, the creators of PCM,
moderated the seminars.
3) The participants were divided by their interests into four Working Groups and each group made up aninterim research plan during September 18 - 21.

OFW 2000 was conducted during October 9 - 27. The OFW Committee did not set specific methods orformats for group work; rather, we left a free hand to each working group. Groups organized their activit ies in
consultation with UPLB advis ers. Working Group 1 focused on small and medium enterprises in Laguna,identifying problems and proposing possible solutions; Working Group 2A took on the formal education in thePhilippines, observing bilingual education, health education and secondary education; Working Group 2B
surveyed technical/vocational education and training, and outlined labor markets in Laguna; Working Group 3
tackled water supply systems in the Philippines from the perspective of privatization , evaluating the merits anddemerits of privatization; Working Group 4 profiled tourism in Pagsanjan , measuring the impact of tourism on
the local community.

It is great pleasure for me to introduce Overseas Fieldwork Report 2000 , composed of four Group Reports andithirteen Individual Reports chosen by the OFW Committee .

Program Director
Kimiaki Takahashi

Acknowledgement
The Committee o f OFW2000 is indebted to many people and institutions both in the Philippines and Japanfor the successful completion of this year’s program.
Our thanks are first due to the people of Laguna Province. We are especially grateful to the Governor and all
the experts of the Provincial Government for their precious support and cordial hospitality. We also would liketo express our sincere gratitude to all of those who kindly gave us helpful information in the interviews.
Next our thanks are due to the advisors from UPLB : Professor Wilfredo B. Carada (Director), Professor
Constancia Z. Rosacia, Professor Romeo B. Obedoza , Professor Rufino S. Mananghaya and Profes sor Mimosa C.
Ocampo . Their close and dedicated collaboration was truly indispensable for the accomplishment of the whole
program. We should not forget to thank the students of UPLB who helped GSID students as translators andjoint researchers all through the period of the fieldwork.
Last but not least, we are very grateful to those who provided valuable instruction to our students in the PCM
Intensive Preparatory Course and the Weekly Seminar: Ms. Yu riko Minamoto, Ms. Akemi Ishikawa and several
students of GSID, who acted as moderators in the PCM course, and Professor Hirotsune Kimura, Professor
Hiroshi Osada of GSID, again Professor Rufino S. Mananghaya from UPLB, who gave lectures on the various
topics of the Philippines in the seminar, and finally Mr. Acosta Roberto Reyes in doctor program of GSID,
supported the Weekly Seminar and fieldwork in Laguna Province, and corrected four Group Reports and thirteen
Individual Reports in this volume.

Committee on OFW -2000
Kimiaki Takahashi, Professor and Project Director
Yutaka Otsuka, Professor
Tomoki Okuda, Associate Professor
Office of OFW
Etsuko Sugiyama, Research AssociateiiContents
Introduction..............................................................................................................................i
Acknowlegement .................................................................................................................... ii
OFW 2000 PHI Participants ............................................................................................... iii
Programs of OFW 2000-PHI ...............................................................................................vi
1. Preparatory Seminar .........................................................................................................................vi
2. Field research ....................................................................................................................................vii
Working group 1

Situation Analysis of Small and Medium Enterprises in Laguna .................................1
1. Introduction ......................................................................................................................................... 2
2. The Definition of SMEs ................................................................................................................... 3
3. SMEs in the Philippines ................................................................................................................... 4
4. SMEs in Laguna ................................................................................................................................. 7
5. Problem Analysis .............................................................................................................................16
6. Possible Solutions ............................................................................................................................18
7. Conclusion .........................................................................................................................................20
Working Group 2

A. The Current Situation of Formal Education in the Philippines ..............................27
0. Introduction .......................................................................................................................................28
1. The lack of textbooks ......................................................................................................................30
2. Bilingual Education .........................................................................................................................33
3. Influence of Health Education ......................................................................................................34
4. Secondary Education as a Pre-stage of Working .....................................................................38
5. Conclusion .........................................................................................................................................40

B. Technical/Vocational Education and Training in Laguna.........................................42
1. Introduction .......................................................................................................................................42
2. The Structure of Technical/Vocational Education and Training in the Philippines ........43
3. Technical Vocational Education and Training (TVET)
Programs in t he Province of Laguna ...........................................................................................46
4. The Labor Market Situation in the Province of Laguna ........................................................48
5. Conclusion .........................................................................................................................................50
Working Group 3

An Inquiry of the Water Supply Situation in The Philippines...................................57
1. Introduction .......................................................................................................................................58
2. Methodology and Case Description ............................................................................................60
3. Analysis ..............................................................................................................................................64
4. Conclusion .........................................................................................................................................69iii

Contents
Working Group 4

Tourism and Social Change ................................................................................................75
1. Introduction ........................................................................................................................................76
2. National profile of tourism in Philippine and profile of Laguna province .......................77
3. Tourism Sector of Pagsanjan .........................................................................................................79
4. Impact of Tourism in Pagsanjan ...................................................................................................84
5. Conclusion: Types of Tourism- community based tourism...................................................91
Individual Re ports
Non-Revenue Water Problems in Metro Manila...............................................................................................94
Asti Wijayanti (WG3)
Eradicating Adult Illiteracy in The Philippines ................................................................................................98
Patrícia Moutinho Brito (WG2)
The Role of Environmental User Fees in Improving Water Quality in the Philippines ...................103
Dyah Wahyu Ermawati (WG3)Heart and head policies in the Philippines ........................................................................................................109
Ingrid M. Fjeldsenden (WG3)
Lingua Franca Educational Project..................................................................................................................... 111
Mia Kim (WG2)
Gender, jobs and income levels in Pagsanjan...................................................................................................115
Kiyoko Naito (WG4)Managerial Analysis of the Tourism Industry in Pagsanjan ......................................................................120
Yoji Mizobe (WG4)Children in Payatas....................................................................................................................................................123
Koichi Motomura (WG2)The Entrepreneurship of Small and Medium Enterprises in Paete:
Towards Competitiveness of Handicraft Industry in the Global Market ....................................127
Roosiana (WG1)Labor Demand Seen in Some Philippine Mass Media− An Analysis of Want Ads ? ......................131
Masamichi Toyooka (WG2)The Issue of Pedophiles in Pagsanjan .................................................................................................................136
Mariko Ueda (WG4)
SMEs in Rural Area in Laguna .............................................................................................................................140
Tamako Watanabe (WG1)
Women’s Vocational Training in the Philippines− Empowerment through Non-formal Training− ...............................................................................144
Riai Yamashita (WG2)iv

OFW 2000-PHI Participants
Faculty members of GSID and University of the Philippines, Los Baños(UPLB)
Working
Group
WG1
WG2
WG3
WG4

GSID Advisor
Etsuko Sugiyama
Yutaka Otsuka
Tomoki Okuda
Kimiaki Takahashi

UPLB Advisors*

Research Associate
Professor
Associate Professor
Professor

Constancia Z. Rasacia
Romeo B. Obedoza, Jr.
Rufino S. Mananghaya
Mimosa C. Ocampo

Professor
Professor
Professor
Professor* All of the UPLB advisors belong to Institute of Development Management and Governance College of Public A ffairs (IDMG), UPLB.

Students of GSID and UPLB

WG1
EconomyWG2 a:
Formal Education

WG2b:
Nonformal Education
WG2:
Education

WG3:
Administration

iv

1

Dept.
DID

Grade
Name
M1 Hiroshi

Sex
M

Nationality Remarks
Japanese

2

DID

M1

Jaka Aminata

M

Indonesian

3

DID

M1

Heni Kartikawati

F

Indonesian

4
5

DID

M1

RoosianaF

Indonesian

DID

M1

TamakoWatanabe

F

Japanese

6

DICOS

M1

TakuyaMiyajima

M

Japanese

7

IDMG

Andre

Cutay

M

Filipino

8

IDMG

Rona

RosalesF

Filipino

9

IDMG

IsmaelSantillan

M

Filipino

Saito

Name

Moderator

Leader

Dept.

Grade

Sex

Nationality Remarks

1

DID

D1

Mia

Kim

F

Japanese

2
3

DID
DICOS

M1
M1

Tsunetaka
YoshikoTsuchiya
Ogura

M
F

JapaneseJapanese

4 DICOM
5 DICOS

M1
M1

Yumi
Masamichi

Kondo
ToyookaF
M

JapaneseJapanese

1

DID

M1

Patricia Nair Moutinho BritoF

Portuguese Moderator

2
3

DID
DID

M1
M1

Koichi
Gabriele

Motomura
Castaldi

M
M

Japanese
Italian

4
1

DID
IDMG

M1

Riai
Edit

Yamashita
Magtibay

F
F

Japanese
Filipino

2

IDMG

Celso

Maligalig

M

Filipino

Sub Leader

Leader

Dept.

Grade

Name

Sex

Nationality Remarks

1
2

DID
DID

M1
M1

Asti Wijayanti
Teni Widuriyanti

F
F

IndonesianIndonesianModerator

3

DID

M1

Ingrid Margrethe Fjeldsenden

F

Norwegian

Leader4

DID

M2

Dyah Wahyu Erumawat i

FIndonesian

5

DICOS

M1

Hitomi

KimuraF

Japanese

6

DICOS

M1

Akira

Kondo

M

Japanese

7

IDMG

Edna

Archillas

F

Filipino

8

IDMG

RichardYao

M

FilipinoWG4:
Social Change

1

Dept.
DID

Grade
Name
M1 Mariko

Ueda

Sex
F

Nationality Remarks
Japanese
Leader2

DID

M1

YumikoHayashiF

Japanese

3

DID

M1

Yoji

MizobeM

Japanese

4

DICOS

M1

Megumi

Arima

F

Japanese

5

DICOS

M1

KiyokoNaito

F

Japanese

6 DICOS
7 DICOM

M1
M1

Eiji
Naoto

Shinkai
Maeda

M
M

JapaneseJapanese

8

IDM G

Lea

AstreraF

Filipino

9

IDMG

Lorie

CajegasF

Filipino

Moderator*DID = Department of International Development,
DICOS = Department of International Corporation Studies,
DICOM = Department of International Communication.
IDMG = Institute of Development Management and Governance College of Public Affairs, UPLB

Programs of OFW 2000-PHI
1. Preparatory Seminar
1-1. Weekly Seminar
Class Schedule

Week 1: May 17

TOPIC
Introduction: Comprehensive Data and Informationon the Philippines

INSTRUCTOR
Prof. Kimiaki Takahashi (GSID)

Week 2: May 24

Agriculture and Natural Resources

Prof. Rufino S. Mananghaya(Guest professor from UPLB)

Week 3: May 31

Politics and Administration

Prof. Hirotsune Kimura (GSID)

Week 4: June 7

No class

Week 5: June 14

Infrastructure and Technology

Prof. Rufino S. Mananghaya

Week 6: June 21

Social Development

Prof. Rufino S. Mananghaya

Week 7: June28

Economy and Key Indicators

Prof. Hiroshi Osada (GSID)

Week 8: July 5

Development Aid

Prof. Rufino S. Mananghaya

Week 9: July 12

Education

Prof. Yutaka Otsuka (GSID)

Week 10: July19

Integration

Prof. Rufino S. Mananghaya

1-2. Intensive seminar
DATE

HOURS

CONTENTS

Aug. 28 (Mon) - Sept. 1 (Fri.)

9:00〜17:30

Project Cycle Management (PCM) Seminar Moderated by Ms. Yuriko
Minamoto (& FASID Staff)

Sept. 18 (Mon) – 21 (Thu)
Sept. 22 (Fri.)

Preparatory Group work for fieldwork
14:00〜17:00

Presentation (regarding a plan for site investigation) (25 minutes.)v

2. Field research
2-1. Schedule
Date: Oct. 9 (Mon) to Oct. 27 (Fri.), 19 days
DATE
9 (Mon)10 (Tues)

ACTIVITIES
3:00 Nagoya →(Bus)→ 7:00 Osaka
9:55 Osaka (PR 421)? 12:50 Manila, Manila ? (Bus)→ Los Baños, Laguna
Courtesy call at Laguna Provin cial Government / Intensive lectures about Laguna
Province by the officers of the provincial government

11 (Wed) ~ 14 (Sar)Field research

15 (Sun)Holiday

16 (Mon) ~ 20 (Fri)Field Research

21 (Sat)Report writing and additional field research if necessary
Preparation for presentation.

22 (Sun)Holiday

23 (Mon)~25(Wed)
26 (Thus)
27 (Fri.)

Report writing and additional field research if necessary
Preparation for presentation.
9:00 ~ 12:30 Presentation
12:30 ~ 14:00 Farewell party
14:30 Leave Los Baños to Manila, Arrive at Manila Air port.
0:55 Manila (PR 422) → 5:45 Osaka
7:00 Osaka →(Bus)→11:00 GSID, Nagoya

2-2. Research site: Laguna Province, the Philippines
Basic Information about Laguna Province
The province of Laguna was named after La guna de Bay, the body of water that forms the province’s
northern boundary (see Map of the next page). It is situated approximately 30kms. south of Manila so that it
takes about one and a half to two hours to drive from Manila. It is one of the 11 provinces of Region IV and isbounded on the north by the province of Rizal, on the east by Quezon, on the west by Cavite, and on the south by
Batangas. Laguna is composed of 29 municipalities and the city of San Pablo. Its provincial capital is themunicipality o f Sta. Cruz.
The terrain is mainly rolling along the shores of Laguna de Bay, but mountainous in some places especiallyalong the Sierra Madre mountains and the legendary Mt. Makiling. It is an inla nd province but has a big fresh
water lake (Laguna de Bay) in its midst. Approximately 80 percent of the land is agriculture, 18 percent aregovernment reservations, parks and forest reserves, more than one percent are residential and the rest arecommercial and industrial.
Laguna might just as well be dubbed as the "Resort Province of the Philippines" because of the abundanceof hot springs, lakes and waterfalls. This is attributable to the fact that Laguna is the only province with groundwater that flows at 300 million gallons a day. Indeed, so much water abounds. With Southeast Asia’s largest
fresh-water lake, the Laguna de Bay, plus innumerable springs, the seven lakes of San Pablo, the famous
Pagsanjan Falls and the regular blessings of rain showers, Laguna stays lush throughout the year. With its
proximity to Manila, Laguna easily lures the city dwellers who wish to "escape" from the chaos of the concrete
and asphalt jungle.
As for major industries, by and large, Laguna's economy is still based on agriculture. Its fertile landsviproduce millions of pesos worth of coconuts, rice, sugar, citrus fruits, lanzones, and other agricultural products.
However, in the recent years, agricultural development has been complemented by the proliferation of light tomedium scale industries. Before 1973, the processing of agricultural products and making light handicrafts werethe major manufacturing activities in Laguna. Today, textile spinning, weaving and finishing, chemical,
automotive parts, ceramics, wood and paper products industries have been established.
Quoted from http://www.philippine.org/01prov/laguna.html, presented by www.Philippine.org, European Philippine Services & MR -Services.

Table: Actual Population in each municipality in 1995
Growth Land Area Density perrate(sq.km.)sq.km.
1 st district
189,333
3.64
22.6
8,377.6
160,206
3.33
43.5
3,682.9
138,257
4.60
39.1
3,536.0
2 nd district
77,302
2.73
84.6
913.7
218,9514.46
144.8
1,512.1
71,683
1.50
56.5
1,268.7
37,563
2.73
46.9
800.9
3 rd district
36,677
2.15
66.4
552.4
25,424
2.88
33.1
768.1
183,757
2.43
214.0
858.7
31,442
2.61
54.7
574.8
24,434
2.06
39.1
624.9
11,537
3.71
27.9
413.5
43,679
2.80
78.1
559.3
Total

San Pedro
Biñan
Sta. Rosa
CabuyaoCalambaLos Baños
Bay
CalauanVictoria
San Pablo City
Alaminos
Liliw
Rizal
Nagcarlan

Total
Pila
Sta. Cruz
Pagsanjan
LumbanKalayaan
Paete
Pakil
PangilSiniloan
Famy
MabitacSta. Maria
Luisiana
Cavinti
Magdalena
Majayjay

31,251
86,97828,99921,996
16,95521,80915,663
17,664
26,914
9,661
13,30922,296
16,26916,157
15,927
18,989Growthrate
4 th district
2.45
2.13
2.80
2.02
4.93
1.09
2.91
2.84
2.22
3.80
2.87
1.56
2.53
1.24
3.22
3.42

Land Area Density per(sq.km.)sq.km.
31.2
38.6
26.4
96.8
46.6
32.4
13.0
23.4
41.1
19.4
73.3
128.4
63.4
70.4
34.4
69.6

1,001.6
2,253.3
1,098.4
227.2
363.8
673.1
1,204.8
754.9
654.8
498.0
181.6
173.6
256.6
229.5
463.0
272.8

Map of Lagunavii

Individual Reports

Non-Revenue Water Problems in Metro Manila ............................................................................... 94
Asti Wijayanti (WG3)

Eradicating Adult Illiteracy in The Philippines ................................................................................ 98
Patrícia Moutinho Brito (WG2)

The Role of Environmental User Fees in Improving Water Quality in the Philippines ....................103
Dyah Wahyu Ermawati (WG3)Heart and head policies in the Philippines .......................................................................................109
Ingrid M. Fjeldsenden (WG3)

Lingua Franca Educational Project ................................................................................................. 111
Mia Kim (WG2)

Gender, jobs and income levels in Pagsanjan ................................................................................... 115
Kiyoko Naito (WG4)Managerial Analysis of the Tourism Industry in Pagsanjan.............................................................120
Yoji Mizobe (WG4)Children in Payatas .........................................................................................................................123
Koichi Motomura (WG2)The Entrepreneurship of Small and Medium Enterprises in Paete: Towards Competitiveness of
Handicraft Industry in the Global Market..............................................................................127
Roosiana (WG1)Labor Demand Seen in Some Philippine Mass Media ? An Analysis of Want Ads ? .....................131
Masamichi Toyooka (WG2)The Issue of Pedophiles in Pagsanjan ..............................................................................................136
Mariko Ueda (WG4)

SMEs in Rural Area in Laguna ........................................................................................................140
Tamako Watanabe (WG1)

Women’s Vocational Training in the Philippines− Empowerment through Non-formal Training − ...............................................................144
Riai Yamashita (WG2)93Non-Revenue Water Problems in Metro Manila
Asti Wijayanti (WG3)
Background
One of the reasons the Metropolitan Waterworks and Sewerage System (MWSS) was privatized is theprevalence of high levels of non -revenue water (NRW) in the water utility’s operation. Among water
professionals, NRW is recognized as one of the indicators of the efficiency of a water utility. In the former
MWSS, almost sixty percent of the water produced by the utility was lost to both pipe leakages and theft/illegal
connections. However, it is not easy to attribute exactly how much of the water loss is due to leaks and how
much to theft. Nevertheless, it can be assumed that water theft is more dominant. Otherwise Metro Manila shouldhave been flooded by water coming from pipe leakages. On the other hand, since most of the MWSS pipelines
are old, it is brittle and prone to punctures.
By awarding 25-year concessions to two private concessionaires, the Maynilad and Manila Water owned by
the Lopez and Ayala groups respectively, it was expected that NRW would be reduced to 25 percent within 10
years. However, two years after privatization, there seems to be no considerable improvement in NRW reduction
especially in the Western Zone, the portion managed by Maynilad. Based on information obtained from thecompany, Maynilad’s NRW is at present 67 percent, almost double of Manila Water’s at 39 percent.1 The OFW
Administration Group found during the fieldwork that as of October 2000, NRW has even increased to as high as
47 percent in the Eastern Zone, the area managed by Manila Water, and about 69 percent in the Western Zone, theresponsibility of Maynilad. The deterioration in NRW in both areas, wh ich is contrary to the expected benefits
from privatization, brings us to the following questions: Why is the rate of NRW increasing and getting worse?;
Who are stealing water?; and How will the problems in water losses be overcome?
The purpose of this re port is three -fold. First, the article will define what is non -revenue water or NRW.
Second, it will analyze the water pilferage situation in Metro Manila. Third and last, it will discuss theconstraints being faced by the two private concessionaires in addressing the problem of high non -revenue waterand the possibilities to overcome the problems.

Non revenue water
Non-revenue water, or NRW in short, is water lost due to physical losses and commercial losses. Physicallosses commonly refer to leakages problem while commercial losses to illegal connections. In turn, physicallosses include poor maintenance of pipeline that leads to leakage and defective construction. On the other hand,commercial losses are those considered as revenues not received by the water utility due to illegal connections,pilferage, and errors in reading of water meters.
In general, non-revenue water ranges from a low of less than 10 percent to as high as 40 percent. NRW,
expressed in percent, indicates a water utility’s performanc e: the lower the NRW, the more efficient is water
service provision. As an illustration, in Asia, the water utility providing water services in Singapore has one of
the lowest NRW of about 8 percent. In contrast, in the Philippine capital, Metro Manila, NRW is measured as1

Most of the data in this paper is taken from: Philippine Center for Investigation, 6-7 March 2000 (http://www.pcij.org)

94

high as 60 percent, which is considered the highest in the continent.
At present it is arguable whether the high NRW in Metro Manila is caused by either water leakages or theft.
However, from the field research, I was able to gather the following reasons for the water leakages in Metro
Manila: (1) an aging pipe system: the MWSS, first known as Carriedo Waterworks, then National Water andSewerage Authority (NAWASA), began operations 120 years ago; (2) poor maintenance of pipes network whic hare susceptible to leakages; (3) illegal connections which can lead to problems in the existing pipe network that
not only cause the leakages but also affect the water quality due to the contamination of the water supply. In
terms of water theft, a research conducted at squatter colonies in Metro Manila by the Philippine Institute ofDevelopment Studies (PIDS) found that water coming from the former MWSS network is stolen through illegal
connections and meter tampering.

Current situation and problems of non revenue water in Metro Manila
In Metro Manila, customers are classified according to the size of their water connection. Those with large
connections are considered as commercial customers while those with small connections as non -commercial
customers. While population is growing at an annual rate of two percent, most of the customers of the water
utilities in Metro Manila are living in communities considered as non -commercial areas. Within these areas are
squatter colonies, where poor people live in slu m-like conditions, who in turn are being suspected as water
thieves. Customers in non -commercial areas in Metro Manila is estimated at more than 94 percent in the westzone and about 90 percent in the east zone. However, despite the huge number of non -commercial connections,these customers contribute less than 60 percent of the water utilities’ incomes.
There is a dominant perception that people living in Metro Manila’s squatter colonies are water thieves.
Radio and newspaper report usually feature these people stealing water through illegal connections. However,while it may be true that the number of illegal connections in these communities is high, the total volume ofwater they steal is still low since their connections are classified as small. In cont rast, the high volume of stolenwater is attributed to a small number of large-scale illegal connections.
From the interviews with the officers and staff of Maynilad and Manila Water, I got a strong impressionthat there is a higher risks of water theft in non -commercial areas, where squatter communities are located, thanin commercial areas where big companies run their business. However, we later found out that the biggest water
pilferers are large connections in commercial areas consuming huge volumes o f water everyday. Among these aresome big corporations, malls, hotels, motels, condominium owners, and real estate developers.
When Manila Water won the concession to take over the East Zone in August 1997, it discovered 11,000
illegal connections in its service area. In the West Zone, while Maynilad was able to disconnect 700 large andsmall connections up to December 1999, the number of illegal connections was later on found to have been
increasing everyday. As such, both Maynilad and Manila Water have been losing billions of pesos each year.
Maynilad’s NRW of as high as 67 percent translates to losses of two -thirds of potential revenue. 2 For us to havea better appreciation of the extent of the problem, presented in Table 1 is the amount of unpaid bills due to theillegal water connections by big corporations. The amount of unpaid water bills will increase substantially if thewater stolen in non -commercial areas is included.
2

Philippine Center for Investigative Journalismon, 6-7 March 2000 (http://www.pcij.org)

95

Table 1: Amount of water bills unpaid by big corporations, Metro Manila, Philippines
Name of Company
Coca Bottling Company
Unilever Philippines
Merville ParkSan Juan Slaugtherhouse
V.V. Soliven (developer of Loyola Grand Villas)
All Companies

Amount of unpaid water bills (in thousand pesos)
P 27,000.00
P 19,000.00
P 18,000.00
P 3,000.00
P 600.00
P 67,000.00

Source: Philippine Center for Investigative Journalism, 6-7 March 2000, http://www.pcij.org

To minimize the incidence of water theft, Maynilad and Manila Water have instituted several approaches.
These are as follows: (1) judicial approach: under Republic Act 8401, the existence of illegal connections
constitutes prima facie evidence of water pilferage. The cases are being settled amicably; (2) informal approach:
Manila Water slogan, “I scratch your back and you scratch mine which”, meaning the company will help people
especially those who faced difficulty in paying water bills through the bill dispensation program; and (3) rewardand punishment approach : Maynilad use the approach o force water thieves to pay the ir unpaid bills. However,even with these measures, the two companies still face a lot of constraints.

Problem constraints
While the two private concessionaires are trying to find solutions to many problems being faced in theprocess of privatization, they cannot at the same time escape from constraints which hamper their efforts to
reduce NRW. These are the following: (1) a large number of pilferage cases filed in court have been dismissed
for lack of evidence; (2) acts of corruption committed by the companies’ own employees; and (3) cases of bribery.
Each of these constraints will be explained in detail.
According to Republic Act 8401, the Maynilad and Manila Water can sue a corporation found stealingwater. However, a preponderance of evidence is needed in order for the cases to prosper and appropriate
remedies be given by the court, that is the act of stealing water must be proved beyond reasonable doubt. This iseasier said than done. As a result, a large number of the cases that have been filed in court ended up being
dismissed for lack of evidence In addition, the two private concessionaires file cases only as a last resort for fearof losing big customers from whom they get almost half of their income.
Second, since most of the Maynilad and Manila Water employ ees are former personnel of the MWSS, they
suffer from a corporate image tainted with corruption. This can be changed overnight. Cases of corrupt acts
happen in providing water service connections to customers, and in rehabilitation work such as repairs of leaks
and detection of illegal connections.
Finally, there are instances wherein Maynilad and Manila Water personnel who are try ing to get the culprits
are offered bribes instead. In one of the cases of Manila Water, one culprit tried to bribe P100,000 in exchange
for the unpaid bills of P3 million. Both Maynilad and Manila Water have hesitated to use the full force of RA
8401 to bring the pilferers to the court. The companies are faced with a dilemma of whether to get back thewhole unpaid bill through the court but at the risk of losing big customers, or to let the pilferers operate theirbusiness with impunity.

96

Discussion
From the foregoing discussion, it is obvious that aside from having to contend with water theft by squatter
communities, the two consortia also have to face problems posed by big customers . In such as situation,
consistent action and strategy to solve this problem is needed, otherwise the problems will get worse if not
become wors t given the larger share of the companies’ revenues coming from big connections. Notwithstanding
this issue, both concessionaires have to continue implementing their strategies in important areas of operationsuch as repairing leaks, rehabilitating and upgrading the water infrastructure, improving efforts of detect waterleakage, strengthening territorial units which directly link to the water distribution, and developing andimproving the capacities of the concessionaires’ human resources in particular combating corruption among
personnel. Furthermore, there is a need to prosecute big customers so as to prove that the concessionaires areserious in policing the water supply distribution system.

Conclusion
More than two years have passed since the provision of urban water supply services in Metro Manila has
been privatized. During this period, the two private concessionaires have faced many problems of which the most
crucial is the reduction of non-revenue water. Since NRW is an efficiency indicator directly related to a water
utility’s performance, the two Metro Manila concessionaires have exerted serious effort to minimize the problem.
While Manila Water has been more successful in reducing NRW to a low of 47 percent compared to Maynilad ’s
high of more than 67 percent , there is still so much room for improvement . As such it is strongly recommended
that both companies should strive to work more professionally, so that the target of reducing NRW to 25 percent
within 10 years can be achieved.
The Philippine experience of privatizing the water supply system of Metro Manila , the country’s capital,
can offer valuable lessons which other developing countries planning toward such direction can learn a lot.
However, while privatization of water supply provision has become a trend in many developing countries, wemust recognize that privatization may not at all times and circumstances offer the most appropriate solutions toprevailing water supply problems.

References
Kikeri, Sunita; John Nellis, and Mary Shirley, Mary. 1992. Privatization: the lessons of experience. Washington, D.C.: The
World Bank GroupWorld Bank. 1999, The private sector in water: competition and regulation. Washington, D.C.: The World Bank GroupInternet addresses
http://www.pcij.org/stories/2000/water.html
http://www.eepsea.org/publications/research1/A CF5D.html
http://www.csis.org/e4e/Mayor31Lazaro.html

97Eradicating Adult Illiteracy in The Philippines
Patrícia Moutinho Brito (WG2)Introduction
The achievements of the Philippines in terms of education are well-known. While being in the Philippines,
young generations strike you as being well educated. However, interacting with older people in the villages andtowns, be it in the shops or while riding a jeepney, it becomes apparent that, as in many other countries, the older
sectors of the population are less educated, and may even be illiterate.
My personal experiences in the Philippines, together with my study and work background, made me
wonder about what is being done in the Philippines regarding the problem of adult illiteracy. Providing education
to the children of today is very important, but the results can only be seen in the long -run. In order to achieve
more immediate development goals, societies need to develop their fully matured human resources, whichconstitute their working force. The reasons behind it are not only related to higher productivity of labor, although
we cannot disregard its importance. Providing literacy skills to the less educated adults has many positive effects
in social, political and human development aspects.
In this report, I will start by briefly introducing the problem of illiteracy, with a closer look into thePhilippines’ case. This will be followed by the description of the programs for literacy promotion implemented
by DECS in the Philippines. Information was gathered during an interview with the Director of the Bureau of
Non-Formal Education, one of DECS departments. Unfortunately these programs are not being held in theProvince of Laguna, so there was no opportunity to see them first hand.

The problem of illiteracy
At the end of the 1960s and in the 1970s, deep changes in the framework of development took place,influencing the views over the role of education. There was a shift in development thought and internationalorganizations started emphasizing the importance of satisfaction of basic human needs. Development came to beconsidered not only synonymous with economic growth but also with a better quality of life, the alleviation ofpoverty, better health and education for all, reduced inequalities and unemployment, reduced environmental
decay, and so forth.
These changes in developmental thought also brought about general recognition of the crucial role playedby basic education in economic development and marked the start of a period of growing world interest forpossible solutions to the problem of adult illiteracy. Since then, theoretical frameworks, as well as empiricalresearch, have provided a basis for intervention in the problem of illiteracy and various approaches to eradicate
illiteracy were tried in different countries. However, this research field is still far from being mature andprograms of literacy in any country constitute a constant experiment from which others can learn. This is why I
thought it could be beneficial to publish here information about the Philippines’ approach.

Defining Illiteracy
In theoretical terms, the designation of functional illiteracy was developed to differentiate it from the98

definition of traditional illiteracy. UNESCO’s definition of traditional illiteracy is widely accepted and taken
into account in most international statistics: “Illiterate is a person who cannot with understanding both read andwrite a short, simple statement on his everyday life” (in UNESCO, 1990a). Functional illiteracy is usually
defined as “a command of reading, writing and calculation which is insufficient for the complexity of a modern
society” (idem).
In the Philippines, the Literacy Coordinating Council has developed a new national definition of functional
literacy, “a range of skills and competencies which enables individuals to live and work as human persons,develop their potentials, make critical and informed decisions, function effectively in society within the context
of their environment and that of the wider community.”

Eradicating Illite racy
Some support the argument that teaching adults to read and write might not be very effective. They refer tothe high drop -out rate among adult learners and point out that the gains achieved in this kind of education do notjustify the financial cost involved. Others, however, hold that teaching adults – the active and productive part ofthe population – produces more immediate direct returns in economic, social and political terms and should
therefore be given greater priority than the education of children, which is more costly and only produces
long-term effects. Setting these objectives in opposition to each other appears unproductive, and such unilateralapproaches should be rejected in favor of an integrated dual strategy involving the coordination of the twopolicies.
In the Philippines, there has been an effort to eradicate illiteracy through a different set of measures.
Regarding the first part of this dual strategy , the Philippines seem to be doing well. Despite some limitations
pointed out in our group’s report in terms of quality of education, the Philippines have made great achievements
in terms of providing basic schooling for its population. However, regarding the second part of the suggested
strategy, the illiteracy rate in the Philippines is still an object of concern. According to DECS, in 1994 the adultliteracy rate in the Philippines, taken in its traditional definition, was 93%, while the functional literacy rate wasabout 83.8%. Clearly, it was a problem which needed to be addressed.
The World Bank provides more recent data on adult and youth illiteracy. Table 1 summarizes the data forsome of the ASEAN countries. As we can see, the Philippines have one of the lowest illiteracy rates amongst the
selected countries, and also the most equal distribution of literacy in terms of gender. Moreover, if we consider
only the age group of 15 to 24 ye ars old, we can see that youth illiteracy in the Philippines is even lower than
general adult illiteracy, excluding Singapore. This is usually a sign of a recent important improvement in accessto and attendance in school.
Table 1: Adult Illiteracy Rates by Age Group and Gender in Selected Countries.
1997%
Philippines
Malaysia
Indonesia
ThailandSingapore
Myanmar

Total
5.4
14.3
14.9
5.3
8.5
16.3

Age 15 and over
Male
5.2
9.7
9.4
3.3
4.1
11.5

Female
5.7
18.8
20.4
7.2
12.9
21.1

Total
1.7
3.2
2.9
1.3
0.4
9.8

Age 15-24
Male
1.9
3.2
2.1
0.8
0.6
9.0

Female
1.5
3.1
3.8
1.8
0.2
10.9

Source: World Bank (2000).

99

Despite this favorable position within ASEAN, the above functional literacy data shows that the proportionof people who are unable to function in their community is actually much higher than these international
statistics show. This can be related to the limitations in terms of the quality of education in the Philippines,
pointed out in our group’s report. Taking this into account, the need for intervention for promoting adult literacy
becomes more evident.

Programs for Adult Literacy Promotion in the Philippines
To address the problem of adult illiteracy, the Bureau of Non -Formal Education is coordinating two key
programs:
・Functional Education and Literacy Programs (FELP): Intended to help the poor cope with their basic survival
problems, it concentrates on providing basic literacy skills, thus addressing the problem of traditional
illiteracy .
・Non-Formal Education Accreditation and Equivalency (NFE A&E) System: This program is an alternative
learning system for out -o f-school youth and adults who are unable to make use of the educationa lopportunities of the formal elementary and secondary school system. It is also designed to serve the needs ofthe poor and under-served communities, and it addresses the problem of functional illiteracy.
The second program particularly caught my attention, as it actually constitutes a new system of educationand has many interesting characteristics. Moreover, it has recently been granted an important award, the
UNESCO Noma Literacy Prize.
The Non-Formal Education Accreditation and Equivalency System (NFE A&E)
This is basically a system of testing individuals’ skills and knowledge, by assessing levels of literacy andother non -formal learning achievements comparable to those of the formal school system. Once a learner
successfully completes the test, s/he will receive a certificate, elementary or secondary, which accredits his/herlearning achievements and certifies his/her knowledge as being equivalent to the one provided by the formal
system.
Attached to this system, a program for learning support was es tablished to help learners prepare for thetests: the NFE A&E Learning Support Delivery System (LSDS). This component is basically literacy education
program. The next section describes this programs’ main characteristics.
Start:

January 1999.

Goal:

It provides an alternative way for people to continue their learning outside of the formal school system
and upgrade their skills and competency in preparation for taking the NFE A&E tests.

Targets: Filipinos aged 15 years and above who are basically literate or have completed the FELP, unemployedelementary and secondary education drop -outs and industry -based workers. Most of them live below thepoverty line and come from the less developed communities.
Curriculum: Non -formal curriculum, containing essential skills, knowledge, attitudes and values which aredesigned to be comparable to the formal school system.
Skills: Five categories of skills are included, which are based on the Filipino definition of functional literacy,
mentioned above. These are communic ative skills, problem solving and critical thinking, sustainable use

100

of resources/productivity, development of self and a sense of community, expanding one’s world vision.
Materials: Materials provide learning support and consist of primers, facilitator’s guides, 152 learning modules,
10 audio tapes and print and non -print supplementary materials for elementary and secondary levels.
They offer a good basis as preparation for taking the National NFE Accreditation and Equivalency Test.
Delivery modes: Using the mentioned materials, delivery modes include instructional managers, learning groupsessions, peer learning, self -instructional modules, face-to -face learning sessions, one -on-one tutorials,
study circles, self-learning groups and audio -based instruction among others.
Providers: NGOs, state colleges and universities, private colleges, LGUs, People’s organizations, church -basedorganizations, and so forth.
Results: By August 2000 this program had served about 61,500 learners, of which about 2,000 passed theEquivalency tests. About 1,200 Instructional Managers had been trained, and there were a total of 74
service providers, of which 38 were NGOs. Some of those who passed were accepted in TESDA
Non-Formal Training Programs, a few are enrolled in college, and many used their certificate for
applying for a job.

Observations on key features of the program
Having been involved in the planning of an adult education program for literacy promotion in my homecountry, Portugal, I found it interesting to see that th is program in the Philippines seemed to be coping well withwhat I consider to be the two major difficulties we encountered in our experience:- on the one hand, it is often difficult to recruit and more so to keep the adult learners motivated during the
program, drop -out being an unfortunate common occurrence;- on the other hand, in terms of program design, it is often difficult to conceive a program that can be flexible
enough to include all the learners’ interests and backgrounds, and therefore to make it adapted and suitable tothe target population.
Naturally, these two problems are inter-related, and the less adapted the program is to its learners, thehigher the tendency for drop -outs. Adults are a much more complex learning subject than children, and adulteducation needs to be built up from their previous experiences and interests, which constitute their basis forlearning and determine their motivation.
The NFE A&E LSDS includes some key features that seem to be working well in coping with these twointer-related problems:
1. It uses key people from the community to recruit learners. For example, the NGO that is going to provide theprogram will contact the barangay capitan and ask his/her cooperation in disseminating information andgetting peop le to visit the NGO to find out more about the program.
2. It emphasizes “functionality”, not conforming to the subject -approach of the formal school system. It aims todevelop the basic skills adult learners need to function successfully in their roles as parents, workers orcommunity members. The materials reflect this functional focus, drawing on life experiences of typical NFE
learners in order to equip them with skills and knowledge useful for solving problems of daily life. The
emphasis of the curricu lum and of the materials is on providing learners opportunities for practical applicationof new knowledge and skills in order to facilitate immediate improvements in the quality of their lives. Thisfeature has obvious positive effects in terms of motivat ing learners and reducing drop -out.
101

3. The NFE A&E LSDS is a “flexible learning system” because it gives learners much more control over what,
when, where and how they learn, by using many innovative strategies designed to break down traditional
learning barriers of time, accessibility and resources. Learners are not passive recipients of knowledge, but
active agents of their own learning. Schedules are decided at the learner’s own convenience and pace.
Moreover, with the assistance of Instructional Managers, they are encouraged to define their own learningneeds and identify the most appropriate pathway for tackling them.
While first stage instruction is aided by a facilitator, this is followed by a transition to self-learning
strategies. By the end of the LSDS, learners are expected to have developed capabilities for self-instruction, theability to use a variety of learning resources to develop their skills and knowledge. They can increasingly study
and learn by themselves at their own pace. This approach aims to maximize learner’s control of the learning
process.
Another aspect of flexibility is that learners can enter and exit the program at any given time. Althoughlearners in this program can take the Accreditation & Equivalency test and thus receive their certificate, they are
not compelled to do so. They can take as many modules as they like, as they see fit for their needs, and they are
not required to take the tests if they do not wish to do so. This is why only about 2,000 of the 61,500 have passed
the test. They can decide to exit the program at any point, and counseling is offered for such decisions.
Although it is still early to evaluate the impact of this program in reducing illiteracy in the Philippines, it
seems that it is being accepted quite well by the population that it is trying to reach. One of the main reasons for
its success might exactly be its flexibility in the several aspects pointed out above, which makes the program
adapted and suited to each specific learner’s needs and interes ts.

Conclusion
Literacy and adult education do not provide a magic answer for any society, but they are part and parcel of
all aspects of national development. The Philippines seem to be addressing this problem very actively, and theresults expected from this new program are ambitious in reducing adult illiteracy.
However, as was said before, strategies to eradicate illiteracy need both to promote basic education andteach basic skills to illiterate adults. Otherwise, adult education will always be a predo minantly remedial strategy,
dominated by the need of providing alternatives to the students that the formal system rejects. Therefore, toreduce the need for this kind of program in the future, formal basic education needs to assume its responsibilities
in providing high quality basic education for all.

References
DECS, Bureau of Non-Formal Education. Various brochures and reports about NFE A&E System.
UNESCO (1990a). International Yearbook of Education . Paris: UNESCO. Vol. 42 (Prepared for the Internation al Bureau of
Education by Sema Tanguiane).
UNESCO (1990b). Compendium of Statistics on Illiteracy . Paris: UNESCO Office of Statistics.
UNESCO (1991). International Yearbook of Education . Paris: UNESCO. Vol. 43 (Prepared for the International Bureau of
Education by Daniel A. Wagner).
World Bank (2000). World Development Indicators 2000. Washington DC: World Bank.

102

The Role of Environmental User Fees in Improving Water Quality
in the Philippines
Dyah Wahyu Ermawati (WG3)

I. Introduction
In general, the domestic water supply provided by a water utility is taken either from surface water such as
springs, rivers, creeks and lakes and groundwater by tapping underground aquifer. In the case of Laguna de Bay,the largest body of freshwater in the Philippines, the la ke has important functions not only for fishery but also fordomestic and industrial uses. Given its importance, Philippine government, by virtue of Republic Act No. 4850,
created the Laguna Lake Development Authority (LLDA) in 1966 as a quasi-government agency with regulatory
and proprietary functions. In 1983, its powers and functions were further strengthened to include environmental
protection and jurisdiction over surface waters of the lake basin. In 1993, the administrative supervision over
LLDA was transferred to the Department of Environment and Natural Resources (DENR) through Executive
Order No. 149.
It is said that Laguna Lake has been identified as vital source of freshwater fish and possibly drinking
water for populous Metro Manila and the nearby provinces. Based on the interview with the general manager of
LLDA, Atty. Joaquin G. Mendoza, we learned that the Manila Water Inc. (Ayala group) the private concessionairefor Metro Manila’s western zone, buys water from LLDA so as to be able to addres s the increasing demand of its
customers. During the interview, he explained that one of the key issues and challenges that the LLDA faced is
scarcity of domestic water supply in Metro Manila and the adjoining provinces, and the vast potentials of the lake
as a raw water source.
Recently, industrial and urban activities taking place around the lake has increased tremendously. It cannot
be denied that the industrial activity discharges its effluent to the 21 major tributary river systems flowing to
Laguna de Bay. Given this situation, it is necessary that major steps be taken to protect the water quality of thelake. Thus, in 1997, the LLDA started the implementation of the Environmental User Fee System (EUFs) within
the Laguna de Bay Region. The objective of EUFs is to force polluters to reduce/abate water pollution by using
economic instruments. This paper will explain the definition of the Environmental User Fee System (EUFs) and
its role in reducing the effluent in Laguna de Bay Basin. Thus, I will give co mparison with regard to other typesof environmental policy such as command and control policy.

II. Environmental User Fees (EUFs)
A. Definition of Environmental User Fees
Environmental User Fee (EUF) is a fee paid for the amount of pollution that one dis charges into Laguna
Lake. The system is essentially a market -based instrument which applies the “Polluters Pay Principles” andserves as an economic means to force polluters to reduce/abate water pollution while instituting corrective
measures within their establishment. The authority to introduce such system in the region is drawn fromPresidential Decree 813 and executive Order 927.

103

Environmental User Fees (EUFs) are composed of a fixed fee and a variable fee. The fixed fee will cover
the administrative cost of implementing the environmental user fee system. The variable fee will depend on thevolume and concentration of effluent discharge. To understand more how the fee is computed, here is the EUFs
formula :Total Annual User’s fee = Fixe d fee +(variable fee x total annual BOD in kg).

The variable fee charged to an establishment is given in table 1.

Table 1: The variable fee.
FEE

VOLUME OF EFFLUENT DISCHARGE

P 15,000> 150 cubic meter/day

P 10,000

Between 30 and 150 cubic meter/day

P 5,000< 30 cubic meter/day

Note: P 5.00 per kilogram of total BOD, when the BOD concentration is < 50 mg/l.
P 30.00 per kilogram of total BOD, when the BOD concentration is >50 mg/l.
Source: DENR, Laguna Lake Development Authority.

Biochemical oxygen demand (BOD) is a conventional parameter, which is a measure of the oxygen
demanding capacity of a water or wastewater. BOD is an internationally accepted criterion for the definition ofwastewater quality. The BOD test is used extensively to measure waste/effluent strength and the treatment
efficiency of biological systems. The higher the effluent lo ad, the worse is the water quality. When water
discharges from industry were first regulated, most environmental control regulations were limited to BOD, totalsuspended solid (TSS) and chemical oxygen demand (COD) (Jardine, 1993).
B. The objectives of t he EUFs system
The implementation of the EUF system has significantly influenced the voluntary action of many industrial
firms towards sharing the burden of environmental trust fund. This fund is used to prevent the environmental
degradation and improve th e environment. People will more clearly see the direct connection between their daily
lives and their impact on the water quality of the lake. Because of the cost of discharging water into thelake,companies will be forced to minimize the level of pollutio n in their effluent discharge. Under the system
enforced by the government , the burden of proof is passed on to the discharger.
C. Coverage of the Environmental User Fees
Environmental User Fees (EUFs) system is applied to all areas covered by the Laguna de Bay watershed,which include all areas that discharge effluent into the lake and its feeder rivers and streams. As mentioned
earlier, there are 21 rivers, which are flowing into Laguna de Bay. The lake in turn is bound by the provinces of
Rizal, with 13 towns and Laguna, with 29 towns. In summary, the boundaries include 5 provinces, 52
municipalities and 8 cities of which 28 towns are lakeshore and 32 non -lakeshore towns, which in total covers
177 barangays. The system covers all industries with effluent discharge counting domestic effluent discharges
from subdivisions (industrial and residential estates) and commercial establishments as well as food chains andrestaurants discharging effluent, with firms practicing zero discharge scheme.

104

D. How the Environmental User Fees system is implemented
First, companies are required to apply for an effluent discharge permit, which authorizes the LLDA toorder eventually the construction and operation of effluent treatment units . This treatment is built in order toprocess their effluent before they discharge to the river. Based on an Industrial effluent Guide by LLDA’s
Environmental Protection Division, the load and concentration of the effluent discharged by a company will be
determined and assessed accordingly to determine its applicable fixed and variable discharge fees. For theamount of fees charged, please refer to Table 1. The effluent discharge permit is renewed annually.
The revenue from the user’s fee will be used for water quality management program and projects likeinvestments in infrastructure, technical assistance centers, trainings, and others. Moreover, 20 percent of therevenue collected will be shared with the LGU’s (Local Government Units) for their environmental projects,
especially the establish ment of sewage treatment system.
E. Effects of the Environmental User Fees system in Laguna de Bay
The implementation of the EUF’s resulted in a considerable reduction on BOD load from Industrial sources.
Using the 1997 and 1998 figures as shown in Table 2, we can see that there has a been a reduction of BOD by asmuch as 13.26 percent.

Table 2: BOD reduction from industrial sources with the EUFs.
Particulars

1997

1998

5,403.29

4,687

Number of firms under the system

275

368

34

Discharge Permits

109

213

94

Complete cessation of discharge (in tons)

188.4016.82

Voluntary closure (in tons)

2,826.43

10.43

BOD load (in tons)% Reduction % Increasing
13.29

Source : An Environmental User Fee to Protect Laguna de Bay, LLDA and Annual Report 1998, Laguna Lake Development Authority.

In 1998, the number of firms under the system increased by 34 percent from 275 firms earlier in 1997 to
368 firms in 1998. This led to a 94 percent increase in the number of Discharge Permits issued from 109 to 213.
The significant decrease of BOD load from 5,403.29 tons in 1997 to 4,687.00 tons in 1998 was due to thevoluntary closure of non -complying firms as well as upgrading of recycling of treated effluent by complying
firms.

III. Comparison of two types of pollution emissions control policy
Nowadays, two issues in environmental economics, which are the control of pollution emissions and thevaluation of the costs and benefits of reducing those emissions, have attracted most of the attention and research
effort. With regard to the control of pollution emissions, most of the environmental policy debate has centered on
the comparison of command -and -control (CAC) and economic instruments such as emission charges, tradable
permits and subsidies. Environmental User Fees system is one example of economic instruments that applies the“Polluters Pay Principles”.
Two types of Command and Control program are monitoring and enforcement (fines and penalties) and105

structured information programs (public disclosure programs) can be found in some developing countries such as
the Indonesia and the Philippines. In this article, I define monitoring as the process of verifying the firm’s statusof environmental performance (e.g. compliance with standards), and enforcement as the undertaking o f actions(e.g. fines and penalties) to bring the firm to improve its environmental performance. On the other hand,examples of public disclosure program now abound in both developed (e.g. the Toxics Release Inventory in the
United States) and developing countries (e.g. the ECOWATCH program in the Philippines and PROPER in theIndonesia). The public disclosure program is the process of verifying environmental performance of the plants byreleasing the information through mass media (Foulon, et al. 1999).

Table 3: Comparison between the Command and Control and Environmental User Fees systems
No

Command and Control

Market-based Instrument1.

Responsibility is on the government. The
regulators have weaknesses in enforcement
due to technical capability of the government

Responsibility is on the firms or industries themselves .
The firms consider the real incentive offered this
instrument. By minimizing their effluent, they paid small
amount of fee.

2.

Less willingness to build effluent treatment
units.
The firm tend to pay fine than set up treatment
unit, which result in polluted water that affects
production in other industries.

Awareness to build their effluent treatment units.
Real economic incentive to set up a treatment unit. To
avoid higher user’s fee, com panies may adopt waste
minimization strategies and new cleaner technologies.

3.

Domestic polluters were not considered forpollution

All polluters considered to pay for pollution.
The responsibility of environmental management is shared
among the government, industry and community

A comparison between the command and control and the Environmental User Fees systems is shown in
Table 3. There are some disadvantages of the command and control policy. First, in term of responsibility, theburden will be in government. In fact, lack of capability of government leads to weak enforcement ofenvironment regulation. In addition, they cannot give real incentive to the companies to strictly obey the effluent
standard. Second, the willingness to pay for the establish ment of effluent treatment is low. Because there are lackof direct impact of real incentive, the firm tends to pay fine or to be prosecuted than set up treatment unit. In thiscase, they do not think more about their pollutant affecting not only their pro duction in the future but also the
production of other industries. This policy cannot promote sustainable development by itself. Third and last, thepolicy covers only the industrial polluters and simply ignore domestic polluters. Domestic polluters should becovered because they also contribute to the water pollution by their daily waste and garbage as well.
Compared with the command and control system, the Environmental User Fees system offers a stronger
case of self-monitoring for the reduction of effluent level. First, the firms have their own responsibility in
reducing their effluent. The reason is the firms consider the real incentive offered by this instrument. This isunderstood since by minimizing their effluent, they pay smalle r amount of fee. If they establish a very good
effluent treatment unit, they can minimize effluent level, which means they only have to pay a small amount offee. Second, establishment of Environmental User Fees can promote the awareness of firms to build their effluent
treatment units. Since the system offers a real economic incentive, the firms prefer to adopt waste minimization
strategies and new cleaner technologies to avoid higher user fees. The government do es not have to make great
effort in enforc ing environmental market based instrument because the company will adopt this policy. If they106

will not adopt they have to pay huge amount of fees. Moreover, sustainable development will work effectively
because the firms have the awareness to reduce their pollutant. Third, this policy considers all polluters. Thismeans that both industrial and domestic polluters have to pay for the pollution they generate. Thus, theresponsibility of environmental management is shared among the government, industry and community. However,the EUF system also has disadvantages . First, since people as domestic polluters in developing countries have aproblem in paying the fees , one must be concerned with the willingness to pay. If the regulators would like toensure that the domestic polluters pay the fees, they have to set up an effective system. We should be are awarethat people in developing countries have problem in satisfying their basic needs, thus they will prioritize buying
basic needs first rather than paying the fees. For small areas , th is policy may be easy to be implemented .
However, if applied to a larger scale such as the whole country, regulators have a lot of work to do to ensure thatthe instruments are properly implemented.

IV. Concluding Remarks
It is too early to judge whether the implementation of the Environmental User Fees (EUFs) system will
have a successful impact. However, it is noteworthy to know that attitude of industries towards pollution
abatement has changed for the better. This article has shown that by using the BOD parameter, theimplementation of EUF system resulted into the reduction of pollution in Laguna de Bay. Polluting firms havebeen significantly reduced by as much as 34 percent. As a result, discharge permits issued also increased
drastically by 94 percent. These figures indicate that the firms have developed awareness on the need to set up
effluent treatment units in order to minimize their effluent load, thus BOD load was reduced by 13.3 percent
from the initial period. This BOD load reduction reflects the improvement of the water quality in Laguna de Bay
areas.
The Environmental User Fees (EUFs) system transfers the burden of water pollution regulation fromgovernment to the firms. The success of this system lies on the hands of the firms. Moreover, even without strong
enforcement by government, this system encourages a firm to set up and improve the quality of its effluent
treatment units. In addition, the government can earn revenues from the fees collected which can be used forwater quality management program and projects like investments in infrastructure, technical assistance centers,
trainings and others. Acco rding to Afsah (1995), recent experiments with economic instruments are most likely tobe efficient. Moreover, the combination of the control and command system and market-based instruments has
shown encouraging results in terms of improving industrial pollution control. This means that regulators cannot
simply leave the responsibility of reducing effluent level by transferring the responsibility to the firm’s hand.
Regulators also have to monitor and enforce the new strict regulation in order to improve environmental
management.

References
Afsah, S., B. Laplante and N. Makarim (1995). Program based pollution control: the Indonesia PROKASIH
program.Washington, D.C.: World Bank Policy Research Department for Environment and InfrastructureAfsah, Shakeb, B. Laplante and D. Wheeler.(1997). Controlling industrial pollution: a new paradigm. World Bank Policy
Research Working Paper Series. Washington, D.C.: The World Bank.
Department of Environment and Natural Resources and Laguna Lake Development Authority. (no date). The LLDA

107

experience in river basin management . Manila, Philippines: LLDA
Foulon, J., P. Lanoie, and B. Laplante (1999). Incentives for pollution control: regulation and /or information. New Ideas for
Pollution Regulation (NIPR), The World Bank, Development Research Group. Washington, D.C.: The World Bank.
Hettige, Hemamala, M. Mani and D. Wheeler (1997). Industrial pollution in economic development: Kuznet revisited .
Washington, D.C: The World Bank Development Research Group.
Jardine, C.G. (1993). Effluent discharges from bleached Kraft pulping operations : environmental concern from a regulatory
perspective. Kursus Pengelolaan Limbah C air, Badan Pengendalian Dampak Lingkungan Hidup June 7 – 17, 1993.
Laguna Lake Development Authority (1998), Annual Report 1998. Pasig City, Philippines: LLDA.
Laguna Lake Development Authority (LLDA). (no date). An environmental user fee to protect Laguna de Bay. Pasig City,
Philippines.
Oats, Wallace E. (1992),” The economics of environment . The International Library of Critical Writings in Economics,
Edward Elgar Publishers Limited.
Sawyer, David (1994). The development of an economic instruments program for industrial wastewater . Jakarta, Indonesia:
Environmental Management Development in Indonesia (EMDI) Program.
Tisdell, Clem (1993). Environmental economics policies for environmental management and sustainable development . New
Horizons in Environmental Economics, Edward Elgar Publishing Limited.
World Bank (1994) Indonesia: Environment and Development. Country Report 1994 . Washington,DC : The World Bank.

108

Heart and head policies in the Philippines
Ingrid M. Fjeldsenden (WG3)
Whenever I go travellin g, the people I meet, is by far the most important factor to judge whether I am
satisfied with the trip or not. If I meet many people with whom I feel I can have a decent conversation, I am
satisfied.
On the question of why the Philippines was not develop ing at a higher speed, the administration group of
the OFW-2000 worked on a hypothesis that there were severe inefficiencies in management, both in public andprivate sector. So what kind of factors were we looking for in order to analyse this hypothesis? Unprofessional
leadership : leaders who do not know their business well, and showed that they did not actually care how thecompany was run. We figured that we might “look through” them if they were not professionals. We also wanted
to check the degree of corruption. Though difficult to ask directly , we thought we might ask questions that would
reveal whether they are corrupt or not.
Rather than making a strictly scientific analysis , I will in this report describe my personal impression on
the people we met, as they were representatives of the private and public management of the Philippines. My
hypothesis was that there would be a lot of unprofessional persons in the public and private sector running thePhilippines.
The first day we had a meeting with diffe rent sections of the provincial authorities. The governor of theprovince, Jose Lina, paid us a 10 minutes visit during the meeting. He turned out to be a leader that is direct tothe point (shows intelligence), took time off from a busy schedule to greet us (shows politeness) and had a good
sense of humo u r. Wherever we went, most people spoke highly about him. The last person to speak was a little
woman, holding an important position as the head of the provincial office for trade and industry. She clearly
explained the role, policies and the projects of the office, and how her office closely worked with other related
offices and institutions when cooperation was beneficial. When her capacity was understood, questions kept
coming, and due to her broad overview of several fields of the work of the province, she explained and replied
impressively. Other persons who were especially impressive at the meeting were the person responsible for thetax collection as well as the head of the health section. They both showed that they did a thorough investigation
before carrying out their tasks with commitment.
At the first water supplier we visited, Laguna Water District (LWD), would possibly provide us with abenchmark. But being a small, rural, public water supplier we did not have too high expectations. We were metby the head of the LWD, Mr. Pabanao, a man in his 60s. He explained about his background as a university
professor at University of the Philippines in Los Baños. After having been in the private sector in the 80s, he was
asked to take over LWD in 1987. Without referring to any written material, he showed that he knew his wholewater district very well, as well as other water suppliers’ performance. He realised the importance of good humanresource policies : employees that understood and responded to his requirements about commitment and efforts,
were also rewarded as much as he was able to reward within the frames of the public employee regulations. He
also impressed us by showing that he was a good -hearted player in the local community, by advocating free watersupply to public primary schools as well as paying from his own pocket when poor families needed some few
pesos to pay for their water bill.
109

The team we met in Magdalena municipality, particularly mayo r Pablo Agapay and Mr. Francisco del Valle,
Municipal Administrator and Municipal Planning and Development Coordinator, also showed great commitment
and competence. This team had, on behalf of their municipality, convinced the World Bank in the end of the 90s
that they were worth a loan, that in strong competition with other local governmental units (LGU). To illustratethat their efforts were geared towards the good of their citizens, I will refer to what the team leader told us. It is
common practice in the Philippines that the chosen corporation rewards the concession giver with a gift worth
around 10% of the value of the concession 1 . This is not accounted for in any budget, so often it is considered as apersonal gift to the involved actors. This gift wa s also given in Magdalena, but the team leadership decided
to ”close our pockets ” 2 and instead buy a garbage truck for the municipality. Mayor Agapay showed great
generosity by spending his valuable time with us the whole afternoon, as well as offering us delicious lunch,cooked by his mother, in his private residence.
So is my hypothesis supported by my experience of the human capital in the Philippines? The answer isdefinitely no. The people we met showed all a high degree of professionalism, as well as usage of a human face,in other words a heart and head policy approach.
So far the discussion is quite simple, several critical questions could be raised against the simple
conclusion. I will mention one and that is on representability : We visited only so me few companies. If weexamined others a totally different picture might be revealed. Even if there are some shortcomings to mymethods, still the positive impression and the absolute rejection of the hypothesis, remain strongly in myconsciousness. So ne xt hypothesis might be: Because of the high degree of competent management, what hinders
the Philippines from developing even more?

1

2

Often in the form of money.
By team leader in interview

110Lingua Franca Educational Project
Mia Kim (WG2)
1. Introduction
The Philippines consists of more than 7,100 islands, and there are more than 170 languages (including
dialects) in the country. Although all of the languages belong to the same language group, people cannot
understand each other when they speak their own languages (dialects). The national language of the Philippines
is “Filipino”, that is based on “Tagalog” which is the language spoken in central and southern Luzon (including
Metro Manila). The official languages of the Philippines is Filipino and English, but in the rural area, they still
use their own dialects ( figure 1).

Figure1 Percent distribution of household population by mother tongue
Maguindanao
1%
OthersMaranao14%
1%
Pangasinan
2%
Kapampangan
3%
Waray
4%
Bikol
6%

Tagalog
30%

Ilongo9%Ilocano9%

Cebuano21%
Source: 1995 Census of population

Since 1974, under the “Bilingual Educational Policy”, the medium of instruction is English (for the subject
like mathematics , science and English) and Filipino (for the other subjects). However, the students who live in
non-Tagalog regions, have to understand more than 3 languages (Filipino, English and their own language) andthat makes it difficult for them to understand contents and concepts of the different subject matter.
To solve this problem, DECS (Department of Education, Culture and Sports) launched a new project,which is called “Lingua Franca Educational Project ” in the school year 1999/2000. In this essay, I’d like todiscuss this particular project based on the data we obtained during our OFW survey.

2. Lingua Franca Educational ProjectIn the Philippines, one of the serious educational problems is high dropout rate among students. Moreover,students ’ academic performance is quite low compare d with other countries 1 . One of the reasons for these
problems is that teachers teach each subject in a language, which is different from students’ local language, and

1

The Philippines placing third to the last among 41 competing countries indicates that the average Filipino secondary school students
achieved very low mathematics result [PCER 1999].

111

students cannot catch up with the class. To solve this problem, DECS started a new project, which is called“Lingua Franca Educational Project” in 1999. Under this project, each of 16 regions all over the country has toselect two classes of Grade 1, one as an experimental class and the other as a control class. In the experimental
classes the local lingua franca is used as the language of instruction . The criteria for selecting the experimental
schools are as follow:
A) Schools should be located in a 5th or 6th class municipality 2 ;B) The lingua franca spoken in the area is either Tagalog, Ilocano or Cebuano;
C) Enrolment in Grade 1 is at least 40;
D) Peace and order condition is relatively stable and no disruption of classes is imminent due to heavy
flooding, etc.;
E) School is accessible for monitoring;F) Principal is progressible and dynamic; andG) Both experimental and control schools should have relatively similar conditions including capabilities ofteachers. [DECS Memorandum No.144, s.1999]

However, the so-called lingua franca languages are limited to Cebuano, Ilocano and Tagalog. Therefore, alanguage spoken by the majority of the people in some regions is not coincidental with the selected lingua franca
language (table 1). For instance, although almost 60% of the people in Region 11 use Cebuano as a local
language, the experimental school of Region 11 was chosen from Ilongo speaking area. Then teachers chose
Tagalog for their lingua franca language, because Filipino, which is medium of instruction in higher grade, isbased on Tagalog. From this reason, many regions where their local language is not coincident with lingua franca
languages choose Tagalog.

Table 1 Lingua Franca language and their actual local languages
CAR
Region 1
Region 2
Region 3
NCR
Region 4
Region 5
Region 6
Region 7
Region 8
Region 9
Region 10
Region 11
Region 12
CARAGA
ARMM

Lingua Franca
Ilocano34.83%
Ilocano65.84%
Ilocano68.05%
Tagalog
54.09%
Tagalog
75.02%
Tagalog
83.97%
Tagalog
8.26%
Tagalog
0.41%
Cebuano78.73%
Cebuano36.06%
Cebuano56.86%
Cebuano80.97%
Tagalog
Tagalog
1.98%
Cebuano43.79%
Tagalog
0.63%

Other Languages
Kankanai (11.81%) Ifugao (10.56%)

Bikol (75.98%)
Ilongo (76.65%)
Waray (62.17%)
Cebuano (59.05%)
Cebuano (35.28%)
Surigaonon (25.21%)
Tausug (27.94%) Maranao (20.98) etc

Source: DECS Memorandum No.144 s, 1999 and Census of Population 1995

3. Problems of the project
During the OFW, we had a chance to interview a DECS officer who is in charge of Lingua Franca Project,
2

Municipalities are classified into 6 classes based on average income. 5Th and 6th class means lower income municipalities.

112and we were provided with some monitoring reports of the project. Moreover, we were allowed to observe anexperimental class in Region 4 and interview the teachers who are in charge of this project and the school
principal.
A comprehensive monitoring and some achievement tests have been conducted in the experimental andcontrol classes of the project by DECS officers. From their reports, I find the following important problems toanalyze the effect of the project.
3-1. Disparity of the quality of students
The quality of students varies from school to school. For example, an experimental school of Region 7 has
the most number of over-aged students and repeaters. In that school, students are divided into 3 classes by ability
and educational experience and lowest class was chosen for the experimental class. However, the class has better
achievement compared with the other classes in that school, since they use the local language (Cebuano) as themedium of instruction (lingua franca).
3-2. Disparity of the quality of the teachers
Some of the teachers chosen by the school are newly employed and inexperienced, while some otherschools chose experienced teachers. From the DECS officers’ point of view, teachers for control classes have thebig edge over the experimental class teachers. Moreover, in the experimental class of CAR which performed least
among the 16 experimental schools, it was found that the teacher tra ined for the project did not teach the grade.
In addition , the experimental class teacher of Region 10 taught Grade 1 for the first time. Since she is one of thebest teachers of the school, she was chosen as the experimental class teacher even if she has no experience inteaching Grade 1.
3-3. Disparity of support from the regional office and school principal
Some schools can get better support from the DECS regional office and the principal, while other schools
receive no support from their principal, and district supervisor has never visited the class. Since this is a new
project and there are not enough teaching materials , teachers have to prepare all the materials by themselves.
Even in the normal classes, teachers have to prepare teaching materials be cause of the lack of textbooks .
However, under this project they have to translate all the textbooks into the lingua franca language. The DECS
monitors also believe that schools give their best performance when ably supported and monitored by school
managers.
3-4. Disparity of the way to do the test
Some schools did the test under a stiff competition, while the other school did in the usual condition. For
example , the control school of Region 10 was giving a stiff competition and got better score compared with theexperimental school of the same region.
DECS asked the regional offices to choose similar schools to be compared. Although it is difficult to findthe same type of school, other variables should be controlled so that the language of instruction b ecomes the only
experimental variable. Otherwise it is impossible to compare the result impartially.

113

4. Findings and Recommendations
Lingua Franca Educational Project just started last year and it is too early to evaluate the whole project
now. However, teachers in experimental class of region 4 commented that students could understand the classeasily and get better scores when the class is taught in Tagalog (lingua franca). The PCER (Presidential
Commission on Educational Reform) report said, there are studies which show positive result in learning in
general when a regional lingua franca or the vernacular is used as the medium of instruction [PCER 2000:65].
Although this is just an experimental project and practicing in some selected schools, hopefully all the schools
can adopt this project to real practice soon. In addition, since at present only 3 languages are allowed to be usedas the lingua franca, it is desired that teachers can use any languages, which suits their societies.
Moreover, it is important and necessary to have a strong support system from the government and regions
for the use of a regional lingua franca or vernacular. Especially, teachers ’ training and development of teachingmaterials are needed for successful implementation of the project.

Reference
DECS 1999a “DECS Memorandum No.144, s, 1999”
1999b “DECS Order No.80, s, 1999”
2000a “Conduct of the Silent and Oral Reading Test”
2000b “Initial Report on Comprehensive Monitoring of Lingua Franca Educational Pilot Project ”
National Statistic Office 1995 “1995 Census of Population”
PCER

1999 “CHRONICLE”
2000 “Philippine Agenda for Educational Reform”

Appendix 1 Lingua Franca Educational Project Class Program and using Language

Grade 1

1st semester
2nd semester
Time
Experimental Control
Time
Experimental Control(minutes) classclass(minutes) class
class
Good Manner and Right Conduct
20
Lingua Franca Filipino
20
Lingua Franca Filipino
Reading80
Lingua Franca Filipino
40
Lingua Franca Filipino
Social Science
40
Lingua Franca Filipino
40
Lingua Franca Filipino
Physical Education
20
Lingua Franca Filipino
20
Lingua Franca Filipino
Oral Filipino
40
Filipino
Filipino40
Filipino
Filipino
Oral English *40
EnglishEnglishMathematics
60
Lingua Franca English
60
Lingua Franca English
Science and Health
40
Lingua Franca English
40
Lingua Franca English
Grade 2

1st semester
2nd semester
Time
Experimental Control
Time
Experimental Control(minutes) classclass(minutes) class
class
Good Manner and Right Conduct
20
Lingua Franca Filipino
20
Lingua Franca Filipino
Reading40
Lingua Franca Filipino
40
Lingua Franca Filipino
Social Science
40
Lingua Franca Filipino
40
Lingua Franca Filipino
Physical Education
20
Lingua Franca Filipino
20
Lingua Franca Filipino
Oral Filipino
40
Filipino
Filipino40
Filipino
Filipino
Oral English
40
EnglishEnglishEnglish Reading **40
EnglishEnglishMathematics
60
Lingua Franca English
60
Lingua Franca English
Science and Health
40
Lingua Franca English
40
Lingua Franca English* English class starts from 2nd semester of Grade 1as oral subject.
** English Reading class starts from 2nd semester of Grade 2.
114

Gender, jobs and income levels in Pagsanjan
Kiyoko Naito (WG4)
1. Introduction
There are various notions o f social classes depending on age, gender, ethnicity, income, region, and otherfactors. Each of us belongs to one or more of these classes depending on the circumstance that we are in . In thisreport, I will focus on the relationship of gender and income classification in Pagsanjan and find out whether
there is job mobility among these classes and why. I will limit my analysis to the situation of workers in
Pagsanjan with ages ranging from early teens to the 50s. The purpose of my report is four folds. First, I will
characterize the workers in the town. Second, I will analyze the relationship of gender and income levels within
particular types of jobs in the local economy. Third, I will present an analysis of the role of gender in the Filipino
family. Fourth and last, I will explore the reasons behind the emergence of various job classifications. The
analysis is based on results of interviews conducted and personal observations from eleven days of field work in
Pagsanjan during the first and second week of October 2000.
Before proceeding to the next section, I would like to propose my own definition of the term ‘tourism
sector’. In the context of Pagsanjan’s economy, I define tourism sector as consisting of jobs directly or indirectly
related to the tourism industry, in particular those involving opportunity to have direct contact with tourists, orjobs that produce commodities intended for tourists.

2. Characteristics of workers in Pagsanjan
In this section, I will present the characteristics of workers in Pagsanjan. This is to have a better
appreciation of the job classifications. Through the discussion, I will show the relationship between tourism
development and population movement in Pagsanjan.
As I gathered from the interviews, population growth in Pagsanjan started to grow rapidly around 1970s
coinciding with the period when the number of tourist arrivals was also increasing. The influx of foreigners
created a demand for new types of services unobserved in the local economy before. Thus, new job opportunities
became available. Since the residents cannot satisfy the demand, a significant number of people living in andaround Pagsanjan moved in to fill the gap. This trend continued even in the early 80s as exemp lified by thisexample: “There are more jobs for earning money here, so I moved.” These were the words of a 39-year-old
woman who migrated from Quezon City, Metro Manila to Pagsanjan in 1984. Prior to her decision to come, he r
sister had already lived in the town and thus moving in was not a difficult experience.
My earlier hypothesis is that at present, most of the people engag ed in the tourism sector are migrants.
However, my interview results indicate the opposite. I found that most of the workers were born in Pagsanjan.
Case 1: 36 years old male tricycle driver
While he was born in Pagsanjan , his father is from Quezon City, Metro Manila. At present, he lives withhis wife and children. His wife is a domestic worker. He has been in his present job for t he last three years. Prior
to this, he was a carpenter and air conditioning repair technician.
I think that people engaged in the tourism sector are children or grandchildren of people who moved here115

in the early 70s . On the other hand, there are also cas es where workers in the tourism sector are returne es to theirhometown from Metro Manila. They went to Manila for their studies and after graduation, worked there forseveral years . Attracted by the lure of better jobs or bound by the familial obligation o f taking care of their aging
or sick parents, they decided to leave the big city return to their own hometown. Most of them are now working
in hotels.

3. The role of gender as determinant of levels of income earned by type of job
3-1. Jobs dominated by a sex
In th is section, I will present the relationship between gender and level of income in the jobs related to thetourism industry. Based on my observations, men dominate jobs which require great physical strength such as
being boatmen and drivers of tricycles and jeepneys. Also included in this category are policemen and priests. On
the other hand, women dominate in domestic jobs such as housekeeping and washing which constitute theinformal sector. Based on what I observed, more than half of informal jo bs are dominated by women.
Case 2: woman, 39 years old, a washer
She started working as a washer since she was six years old. At present, she goes to her friend ’s houseeveryday to wash clothes of the family (Picture 1). In addition, she gets the chance to wash her children ’s clothes.
For all her efforts, s he earns a little amount of money.
In terms of educational attainment, I found that the most typical pattern for the types of jobs I presented isfor the workers to quit school as early as during the primary years. Thus, they do not have so much employableskills beyond their physical strength. Looking at differences by gender, I found that women suffer from moredisadvantages than men. In the job categories dominated by men, there are associations whic h provides safety net.
On the other hand, safety nets are not available for women.

Picture 1: Women washing her friend’s and their family clothes every morning.

116

3-2. Jobs open to both sexes
In this section, I will present an analysis of the relationship between gender and income level. The cases
are presented according to income level starting from the highest.
・ Municipal officer
This type of job is shared by both sexes. Those occupying municipal government positions are usuallyhighly educated. They hold bachelor degrees from universities since this is the minimum educational requirement
according to Philippine civil service laws . Some of them were born in Pagsanjan while others came from otherplaces outside of the town.
・ Hotel employees
In the hotel industry, there is no clear distinction as to the ro le of gender as determinant of the kind of job aperson has. I went to one of the most popular hotels in Pagsanjan and I was able to talk with the receptionists,
chefs, waiters, maintenance staff and other hotel employees . According to an employee, there are about the same
number of men and women working in the hotel. This claim was confirmed by my own observation. It seems tome that there is not much gender division except for the job of receptionist. I found that some of the receptionists
are women with college education at the very least.
Case 3: A woman receptionist in her 40s
She came the hotel after leaving her job at the Philippine government’s Department of Tourism (DOT). She
is well informed on the trends of about tourism in the country as well as about the hotel itself. She graduatedfrom a university of Manila. Now, she lives with her husband. She earns more than he does . Since she is busy
everyday, domestic work is shared equally between themselves.

Picture 2: A man cutting the bottom of shoes in a factory117

・Owners and managers of stores
The other type of job shared by men and women is ownership and management of stores. Most of therestaurants and candy shops in the town are run by women. This trend may indicate that women do moredomestic work than men. On the other hand, shoes store and souvenir shops are owned and managed by men.
・ Employees of domestic industries
Most manufacturing work is done by closely -knit family businesses. In here, both women and men are
engaged in production as well as management . For instance, in the shoe industry, cutting the sole of shoes is the
responsibility of men (Picture 2). On the other hand, the design and decoration are the women ’s job.
In all of types of jobs presented, I found that mobility among different income class hardly exists. Classdivision as measured by difference in income level seems to be relatively fixed. This situation, I believe, ismainly caused by the difference in educational attainment. Also, class division measured by gender seems to be
fixed. Here women are in disadvantaged position.

4. The role of gender in the family
In this section, I focus on the division of the role between a husband and a wife. In most of the families inPagsanjan, I found a clear division of responsibilities between the husband and the wife: the former takes care of
the economic side by being the breadwinner, while the latter takes charge of management of the home by doing
domestic work. However, compared with the situation in Japan, wives in the Philippines do not complain about
their role. I think this may be the incidental situation in developing economies. The division of family
responsibility by gender is the most effective way to earn much money. Women who only do domestic work often
do not have ability to get paid -jobs.

5. Concluding remarks
From the foregoing discussion, I found that the inequality between income classes is much wider than thatof gender. This situation prevents poorer people from getting or changing to better jobs. A lso, educational
attainment is most imp ortant explanatory factor behind this phenomenon. One of the main reasons is ‘ the lack of
information ’ which implies two matters. One is ‘education ’. As an example I take the case of a receptionist. For a
person to be considered for the job, s/he is required to be able to communicate in the English language. As such,it follows that those who went to college can easily get this job. A nother is availability of personal networks forchanging jobs. If one does not have this network, s/he will remain in his/her present job forever. And if one isdismissed from his/her present job, s/he cannot get another one .
A woman working as a cashier in a hotel told me: “The difference between a farmer and pe rson with a jobin the tourism sector is whether s/he has ‘power’ or not. If a farmer want to improve his/her life, s/he has to exert
effort to change the present job. If s/he cannot change, then s/he does not have power physically and mentally.”
While I agree to her point to a certain degree, I doubt that the situation of farmers will change even if they exert
effort. From what I have observed during the fieldwork, there seems to be a high wall between income classes.
Finally, I would like to bring out the issue of income level as a determinant of happiness in life. I
mentioned before that people engaged in the informal sector are economically poorer than paid -workers.
However, this does not mean that people in the informal sector are also poor in mentality. It is just that they do
not give so much attention to their income class. Of course, they also desire to increase their incomes as well as118

enjoy basic amenities in life such as a water supply system. While they may lack material wealth, they view theirpresent situation in life with a positive and optimistic outlook. Before going to the Philippines for the OFW 2000,
I thought that people there are suffering from severe deprivation and are feeling so sad about their situation.
However, I found the reality far from my initial thoughts. What I found are people who smiles a lot and havevarious ways of enjoying their lives. I was very impressed by their gestures and outlook in life. My experience in
the Philippines has provided me with the opportunity to rethink what is ‘poverty’ after all.

References:エリザベス・ウイ・エヴィオータ著、佐竹眞明 、稲垣紀代訳． 2000．『ジェンダーの政治経済学―フィリピンにおける女性と性的分業』明石書店
Ofreneo , Rosalinda P. 1997.Empowering women in the informal sector: the Philippine experience. 34-51.

119

Managerial Analysis of the Tourism Industry in Pagsanjan
Yoji Mizobe (WG4)Introduction
The OFW 2000 Social Change Group of which I belong, conducted a quantitative analysis of the social
impact of tourism to the people of Pagsanjan. From the result of the analysis, we found various impact of tourism.
However, not all of these findings were covered in our group report. Thus, I will personally try to combine theresidual observations by mainly focusing on the question of how the tourism industry in Pagsanjan can be
improved and suggest some proposal toward this end .

Basic features of the tourism sector in Pagsanjan
As mentioned in our group report, the tourism sector in Pagsanjan can be characterized by the following
features: (1) sole dependence on boat riding as a source of attraction; (2) most of the tourists come as group tours
visiting during the day and usually coming via Manila who generally do not stay long enough to penetrate thelocal community; (3) share of visiting tourist is gradually decreasing heightening an unhealthy competition
among boatmen which in turn produce unpleasant results; and (4) t here is a seasonal fluctuation on the number oftourist coming during the year resulting into an unstable income among boatmen and other people who derive
their income from the tourism industry.
In turn, the tourism industry is in itself labor intensive where a large number of unskilled, informal or
short-term unfixed workers can easily get in and out. Also, the industry requires different kinds of related
services. As such, if the tourism industry can be well integrated, there exists the possibility of a large untapped
employment opportunity which if realized will mean more income for a given locality especially if there is a highvalue added. Of course, as far as being a business activity, one should be eager to expand sales and optimize
profit optimization. However, to be able to realize these objectives, each business unit must strive to gaincustomers satisfaction .
From the foregoing, I will try to identify the problems faced by the tourism industry in Pagsanjan, analyze
the causes and propose alternatives to minimize the problems identified so that the demand of tourist customers
can be satisfied.

An analysis of the problems of the tourism industry in Pagsanjan
The tourism industry in Pagsanjan is faced with four main problems. These are: (1) dependence on boat
riding as a sole source of attraction; (2) weak coordination among the major players in the tourism industry; (3)lack of information for individual tourists; and (4) undesirable behavior of boatmen and vendors which keeps
tourists from returning given their unsatisfactory experience with them. Let me explain each problem in detail.
First, Pagsanjan’s attraction as a tourist destination is solely dependent on boat riding. There is no effort todevelop ancillary attractions to wean tourist outside of this activity. As such, the promotion of the attractions of
tourism in the municipality is highly dependent on the efforts of sales promotion offices in Manila, who target
foreign tourists interested to visit tourist spots near the country’s capital.
Second, which is corollary to the first problem, there is almost no close working relationship among120

promotion desks at Manila, the local hotels ’ reception desk and the individual boatmen and their association toassess customers’ satisfaction with their services . For instance, I observed that the management of the local hotel
are just interested to get their share from the income coming from the fees paid by tourists and would not careabout the guests ’ reaction. Also, even if the re are problems on the sett lement of obligations between the visiting
tourists and the boatmen, these are ignored by the hotel’s management. This uncaring behavior is a disincentive
to improve the quality of services provided. A systematic feedback to measure customers’ satisfaction is
non-existent.
Third, there is a lack of information available for individual tourist who go the municipality directly
outside of the guided tours organized by various promotions desks based in Manila. The lack of information
extends to basic information such as “where to get and how much fare would be appropriate to enter into thisattraction”. As a result, unscrupulous boatmen or their representatives at the town center take advantage of theindividual tourists lack of accurate information by quoting incredibly high prices for their services. This practicealso promotes cutthroat competition and disorderly act among the boatmen.
Fourth and last, undesirable behavior was observed among boatmen and vendors. For instance, in addition
to charging for the regular fare, instead of waiting for the tourists to give tips voluntarily, the boatmen ask theircustomers expensive amount of tips. Also, vendors of rest shops alongside the river force the guests to buy the
foods and drinks they sell. This unbecoming conduct among boatmen and vendors causes discomfort among theguests spoiling their objective of visiting the town in order to relax and enjoy the beautiful scenery while
experiencing the thrilling experiences of taking the boat ride .

Proposals to improve the existing situation
To minimize the problems identified, four proposals are outlined. These are: (1) evaluate the existing
situation of tourism in the municipality and identify alternative attractions in addition to boat riding; (2) establish
a customer s atisfaction feedback system; (3) improve the value added of existing services offered to tourists; and(4) the mindset of the various stakeholders in the tourism industry must be change to focus on customers’satisfaction. Each of these proposals will be e xplained.
First, I propose that the present state of tourism in the municipality must be evaluated towards finding
alternative tourists attraction in lieu of the present sole dependence on boat riding. As I understand, the municipa lgovernment has already recognized th is problem and has started to explore alternatives. An example is the“Bangkero Festival”, which involves canoe racing and float contest started two years ago. This is a good case ofcultivating new attract ion and being effective for promoting synergy on tourism. However, the festival takes
place in May, which is considered a high season for tourists. Thus, it might be better to shift this activity during
the lean season. Another possibility for attract ing visitors would be the setting up of ra in -proof “auto camp orbarbecue field” facilities alongside the river. Since the municipality is only one to two hours drive from Manila,
instead of just attracting foreign tourist, domestic tourists may also be targeted. The expansion to domestic
tourists will contribute towards easing the difficulties faced during the lean months and will contribute towards
improving local consumption.
Second, there must be a feedback system to evaluate customers ’ level of satisfaction with the services theyobtained during their visit to the municipality. This system can be set -up through the cooperation among
boatmen’s’ associations, local hotel receptions and promotion desk at Manila. In the case of unsatisfactory121feedback from visiting tourist, the above noted players can gather and discuss the problem, identify preventive
measures to prevent the problem happening in the future and focus on improv ing activities . As a start, the players
can focus on the most urgent matters of setting up rules , establish ment of public tou r desk for individual tourists ,and public relation promotion . Setting up this feedback system may minimize if not totally eradicate theundesirable behavior of boatmen and their agents, which is highly annoying to visitors. These covers demand fortips from boatmen and forced buying from vendors. However, a code of acceptable behavior may not be enforced
but adoption should be voluntary among those involved.
Third, there must be an effort to improve the value added of services offered to tourists. For exa mple,
services such as rental/selling of soft cushion on the bamboo seats on the boats, locker room services andlump-sum tour to include lunch may be introduced. These additional forms of services will be highly appreciatedand if the tourists are satisfied with the quality, then they would be willing to pay more as far as the price isappropriate. Also, a contest on the generation of good ideas for the promotion and improvement of tourism
services in the municipality may be held with prizes awarded to the chosen ideas. This might motivate boatmen
and other workers in related services. Also, the promotion of local industries such as “Barong” embroidery
textiles and the local brand coconut wine may be integrated into the tourism effort not only in major hotels but
also in the regularly held municipal trade fair.
Fourth and last, the most essential aspect in the effort to improve the quality of tourism services inPagsanjan is on changing the mindset of the various stakeholders in the tourism industry to focus on customers’satisfaction. I think that this is an indispensable component of every effort to improve the tourism industry in themunicipality. However, we experience an unfortunate experience in relation to this aspect: in a place not in
Pagsanjan, we lost something from the hotel’s safety box. The response of the hotel management is for them toinvestigate the loss with the help of the police and to reimburse the missing amount. This response wasregretfully unsatisfactory . The princip le of service cannot be bought with money and the staff and management
should recognize more seriously the loss of trust resulting from this unfortunate incident. The experience showsthat the appreciation of what consists of service is still at the immature level. To improve the industry, anindividual who is engaged or propose to be engaged in tourism services must undergo a comprehensive training
scheme.

122

Children in Payatas
Koichi Motomura (WG2)
1. Introduction
It is very noticeable that, in terms of economic status and human dignity, there is a considerable gap
between the rich and the poor in Philippine society. This disparity is more evident in Metro -Manila. Wh ile thewell-off population enjoy consuming plenty of commercial products at shopping malls which opened fo r the past
several years, the urban poor population, who are residing in desperate sites such as squatter1 and slum2 area,
suffers from a daily grind of poverty, hunger, and malnutrition. Moreover, within the urban poor population 3 , it is
the children who are most vulnerable and therefore are the first victims of urban poverty. They often have towork for many hours for self-survival and to help their families, sacrificing their precious time for other activities
such as amusing themselves, going to school, getting education and other.
Payatas, which is quite infamous as a gigantic dumping site, is a representative of these depressed areas forchildren in Quezon City, Metro Manila. In this paper, the situation of the depressed children in Payatas will be
described briefly by referring to findings during the author’s short visit.

2. Overview of Payatas
2-1 Life in Payatas
Payatas is one of the areas in Quezon City mainly covered by a 220 hectares dumpsite designated by thenational government. The dumpsite fo rms a gigantic heap of decomposing plastic, bottles, and scrap collected
and thrown away from Metro -Manila. Given the unthinkable volume of the dump and long-term accumulationand decay, it is inevitable that Payatas has become smelly and the toxic fume th at looks like smoke has
characterized its terrain . This is why the heap has been called Smokey Valley. There used to be another heap ofgarbage called Smokey Mountain that is similar to Smokey Valley in Tondo 4 area near Manila Bay, but the
Smokey Mountain was swept away by Government who created itself.
It is stunning to know that in Payatas, approximately 200,000 urban poor families live a life in shanties
built on or adjacent to old dump land. According to one survey, most of residents there migrated fro m several
rural areas of whole Philippines, especially around Metro Manila and Eastern Visayas seeking for employment
opportunities. A large portion of them earns lower money than minimum wage by mainly scavenging, sorting andselling the recyclable wastes 5 to junkshops that lined the ro ad to Payatas. These men, women, and even many
children are calledscavengers

who are deprived of their rights of living as human being without enough safe

water, electricity, sewerage, education, and assistance by government. This appalling environment results to theresidents ’ bad health condition, which further exacerbates into various diseases, high mortality rate and the like.
Smoky Valley had been mushrooming for accumulating of Metro -Manila ’s wastes day by day.
1

Squatter population is the people and families who occupy a certain area without legal permission and are suffering from poverty.
Slum population refers to people who dwell in desperate and concentrated resident environment such as house and shanties with legal
permission and are suffering from poverty.
3
Urban poor population is generally the term used to refer to residents in squatter and slum areas.
4
In 1954, the government reclaimed Tondo, one area near Manila Bay, and designated that area as dumpsite for Manila.
5
T hese include wastes such as cans, plastic, scrap metals, and bottles.
2123

2-2 Payatas Tragedy
In the morning of July 10th, 2000, the Payatas t ragedy happened abruptly. After a week of relentless rain
brought about by typhoons, the gigantic Smokey Valley collapsed and big trash-slide struck, burying a number ofshanties, semi -concrete houses, and hundreds of residents. It was reported that over 200 dwellers were victims ofthe disastrous avalanche, and that hundreds of bodies are still buried under the mountain heap. Even people who
were rescued from the hell under trash-slide could not get proper medical treatment due to lack of money, andthus had no choice but to quietly wait for their fate. Payatas B called phase II, with occupants estimated ataround 1000 families 6 or about 5000-6000 individuals, suffered the worst from the tragedy. A large number ofthe surviving families evacuated to the nearby primary school which is equally unequipped with the necessary
facilities. The call for assistance to the disaster victims was responded to both within and outside of the country
and rescue operation and relief goods have been gathered in order to contribute for the recovery of Payatas folksfrom their suffering. The fact that the resident-victims lost more than their loved ones and their homes is very
evident 7 .
The argument that the Payatas Tragedy occurred because of the negligence of the Quezon City local
government seems persuasive. This is because Payatas is originally a legal resettlement site that the government
offered to squatters living anywhere illegally. In other words, squatters from other places moved to Payatas
because they were encouraged by the local government itself.

3. Depressed Children8 in Payatas
3-1 Children’s life in Payatas
Foreigners visiting Payatas might be surprised to find and be surrounded by many children who are morecheerful, energetic, naughty, and curious than normally expected in such a depressed situation. They enjoy
themselves by dancing with music, playing basketball and card, or chatting. Judging from their appearance andsmile, they seem to be vigoro us and high -spirited. In squatter, slum and rural areas, it is said that parents tend tohave more children as guarantee for the future.
In general, it can be said that children in such an impoverished situation are deprived of their rights aschildren and as human beings. Because of their families’ financial constraints, these children often suffer frommalnutrition and severe diseases. In addition, their parents cannot afford to pay for their treatment and much
more for medicine. To make matters worse, they have to engage in menial activities not only within their home
but also in t h e in formal sector (mainly scavenging, at least in hazardous environment) for the purpose ofcontributing to the family income. As a result, they cannot invest their time in other activities such as going toschool and getting education, playing, and doing what they want to.
3-2 Education for children in Payatas
It should be highly emphasized that aside from being a basic human needs, education is one of the mosteffective tools in order to improve quality of life and get out of poverty. It has been proven that education can
6

It is said that 20-30% of them were scavengers.
Since Payatas Tragedy, the government has prohibited people to get into Smokey Valley for scavenging because of its danger. This meansthat scavengers lost their main source to earn money.
8
It is possible that, in Payatas, there are many street children who does not belong to families and live on the street by themselves rather
than live with their families. In this paper, this distinction is not taken into account.
7

124

generate huge impact on employment 9 , productivity, health, and empowerment of people. Amongst various kindsof education, one especially for children is one of the most important measures to empower themselves, andfurthermore, the whole societies they belong to.
In Payatas, the value of education seems to be broadly appreciated based on high awareness toward
education. However, it is considerably difficult for parents to let and keep their children enrolled not only insecondary schools but also in elementary schools . This is apparently due to financial constraints 10 . The parents
often cannot afford to pay for direct cost such as tuition, uniform, textbook, and transportation as well as indirect(opportunity) cost for schooling. This is happening even though primary education is compulsory and free ofcharge. In terms of access to schools, the number both of primary and secondary schools is limited compared to
the number of eligible children.
Since educational data such as enrollment, dropout, teacher-student ratio at schools in Payatas are notavailable , it is difficult to create a picture of how education go on inside schools. However, there are some points
to be argued based on the author’s observation. First, as already mentioned, because the number of schools is notenough for the number of eligible children, multiple -shift class has been carried out. Teacher-student ratio,
therefore, is likely to be relat ively high, and time for learning at these schools is less than that at normal schools.
Because of these, it is doubtful if teachers can pay enough attention to students in classrooms, and that students
can learn enough under effective instruction by teachers. Second, schools might not be well equipped due to lackof budget. The elementary school that the author visited does not have clean toilet, which might affect attendanceof girls and awareness to sanitary environment.

5. Concluding remarks
Squatter and slum areas like Payatas are not segregated places but for those who keep on making
considerable effort to acquire opportunities to improve their quality of life. Although children in Payatas are insuch depressed and severe situation and are suffering from poverty, they have been exerting effort as much as
they could to make themselves and their families survived.
On the other hand, it can be said that the government has controlled residents ’ life through policies and notby providing sufficient assistance for residents to recover from the tragedy. These policies are enforced to themand the government wants them to follow what government officials think as good for the residents. In one sense,
this uncaring attitude of the government resulted into a dis aster known as the Payatas Tragedy. Because mostpeople residing legally in Payatas do have right to get public service such as education, sanitation system, andhealth service, the government should face t he real problems of Payatas.
Especially in the education sector, educational policies should be reconsidered in terms of quantity andquality. Education is one of the requisites for population especially children in Payatas , to get employment,
empower themselves, and to improve their quality of life. The government can contribute facilities, educational
materials, teacher training, and scholarship programs in cooperation with NGOs who have been providing suchform of assistance.
Payatas is only one of the byproducts of population explosion in urban areas which in turn has been mainly
9

10

In the Philippine, a high school certificate is a minimum requirement for employment by companies. Elementary education is necessary
for construction work.
Some NGOs have provided scholarship programs to children who come from poor families and get high achievements at school.

125

attributed to rural poverty. Therefore, it is important for the government not only to cope with urban poverty but
also to attempt to reduce poverty in rural areas. These tasks are fairly difficult to handle for the Philippin egovernment for sure, but unless these issues can be dealt with and prevent the poor from getting mired into
deeper poverty, more children in the future would be derived o f human rights and free choices in life .

References
谷 勝英 ミネルヴァ書房 （2000 ）アジアの児童労働と貧困

Internet address:
http://www.jca.ax.apc.org/ican/
http://jinx.sistm.unsw.edu.au/~greenlft/1994/146/146p20.htm
http://philnavs.faithweb.com/newsletter/specialfeature_zeny.html
http://www.jca.ax.apc.org/ican/

126

The Entrepreneurship of Small and Medium Enterprises in Paete: Towards
Competitiveness of Handicraft Industry in the Global Market
Roosiana (WG1)
Introduction
Small and medium enterprises (SMEs) play important roles in the economy of most countries in the world.
Besides, in many developing countries, SMEs have become an important factor in the economy to generate more
employment and promote economic growth. Given the advantages of supporting SMEs, the Philippine
government has develop programs and policies to nurture the growth of this type of enterprises. One of thepolicies supporting SME development is to enhance the global competitiveness of Philippine products andservices with the main objective of opening to the new global market.
During our Overseas Fieldwork in La guna Province, it was very beneficial experience for us to observe theactivities of some SME. These in particular are the SMEs in Paete. Paete has been well known for its handicraft
industry not only domestically but in the international market as well. Since handicraft industry has become thebackbone of the people’s means of livelihood in the town, anything which occur in the market of this industry
would have a broad impact to many of the local people. Therefore, it is very important to maintain and exp andthis industry.
The town of Paete has been known for high quality woodcarving products since hundreds of years ago.
However, because of the recent shortage and high cost of raw materials for woodcarving, many firms havechanged their business into other handicraft industry, in particular the papeir-mache industry. In fact, thepapeir-mache industry in Paete has grown rapidly and has become as famous as the woodcarving industry. This ismainly due to the high sense of artistry of the products. Both industries are specialized in producing items forexport. The main products are wooden decorative goods , functional items, and novelty items, which usually arehighly demanded during the peak seasons, such as Christmas, New Year, and Easter.
Sustaining and developing the competitiveness of this industry has become very crucial because of theincreasing intensity of globalization in the recent years. Because most of the SMEs’ products are for export,
SMEs in Paete have to face global competition with producers from other countries. Chinese exporters, forexample, have become one of the toughest competitors of Paete SMEs. Thus, Paete’s industries should exert
more efforts to maintain and expand their market if they want to keep and improve their position in the world
market.
Given the prevailing situation, this paper will discuss from an entrepreneurial point of view, the business
management of SMEs in the handicraft industry in Paete. I suppose the following discussion will give us abroader perspective of the impo rtance of entrepreneurship in developing SMEs in general terms.

Current Business Management of SMEs in Paete
Most people engaged in the handicraft industry in Paete took over the business from their parents . This
inheritance has been kept from generation to generation. The Paete’s people or Paetenians learned their skills in
handicraft making from their own families. In addition, it is a common knowledge in the town that almost all ofPaetenians show talent for handicraft skill since childhood. It is the Paete’s advantage of possessing a unique127

ability to produce handicraft items with high artistic value. The Paetenians are very confident with the special
quality of their works. I suppose this characteristic may highly influence their business management such as inmarketing, production management, and human resources.
In the field of marketing, most of the SMEs in Paete have confined themselves to the existing market. Thisis shown by their dependence on regular consumers to buy their products. Many of them are not willing toenlarge their market and only a few of them are eager to get more consumers. Only a few venture businesses,
especially those who engage in Internet or IT business, and those who are active in participating in trade fairs or
exhibitions, could expand their business rapidly. It seems that in such a traditional industry, the smaller theenterprise, the less aggressive is an enterprise attitude toward business expansion. As such, small household
enterprises which act as suppliers of bigger enterprises, are not also fervent in increasing the volume of orders
and production. Since the industry has already matured, there is not much chance for smaller enterprises toexpand their markets. On the other hand, the bigger companies such as exporters have already played in theinternational market. However, if they are not aware of the importance of becoming more competitive in the
global market and if they fail to be so by expanding their market reach, they will be more vulnerable to global
market competition and be threatened by other competitors from outside of Paete. Since these exporters relate
and interact with many SME subcontractors in the business, their role of expanding to the world market isequally important for Paete ’s economy.
To obtain o rders from buyers, firms usually offer their design in accordance with every particular season orwith the buyers’ request. After the buyer has agreed with the designs, an agreement is reached covering the price ,make a contract , and finally start to produce the items. Some companies, which have access in e-commerce, canadvertise their products and may get new buyers. Trade exhibitions, both domestic and international, can be aneffective means for SMEs to promote their products. However, only a few SMEs have the opportunity to engage
in these alternative means of market promotion.
With regard to production management, many SMEs in Paete produce products according to orders fromtheir customers such as bigger enterprises, exporters and foreign customers. In addition, some of the SMEs also
create new products based on the most recent trends or on customers’ needs. The value of a new product depends
very much on the sense of the designers in the SMEs, who usually are the owners or managers of the enterprises.
This role of owners is so important that the capability of the owners to create new designs has a high influenceon carrying on the business and in supporting household suppliers to companies.
Besides producing the items by themselves, larger companies are used to giving the prototype of the new
design including raw materials to their suppliers (subcontractors) for them to be able to produce large amount of
products to fulfill the orders received. In order to maintain the quality, the items produced are sort out by thelarger compan ies before they are accepted. Generally, as the price usually includes the cost for product delivery,
every supplier always try to complete the orders before the deadline and send the finished products immediately.
Another issue in production management is the existence of middlemen in the Paete’s handicraft industry.
Usually middlemen are representatives of larger exporters or enterprises outside Paete, who collect thesemi-finished or finished products from SMEs and household in dustries. The middlemen also provide raw
materials for the items they ordered. The existence of middlemen seems to lower the opportunity for the SMEs togain more benefit since the middlemen have the power to decide the price. They, however, still play an essential
role in SMEs ’ activities because only a few companies in Paete can act as contractors to coordinate many128

suppliers of handicraft products. M oreover, only a few of them have direct access to the export market.
In human resource management , there is no specific recruitment system for workers. Well-built SMEs
usually have an average of ten regular workers plus some contractual workers during the peak season. Somefirms also provide lodging for their workers, especially for those who are living far from the workshop. In
determining the wages for the workers, the owner usually pays them based on the quantity of their work and thelevel of difficulty of each work. To develop the workers’ skills, no particular training is provided to them but theowners themselves will give instructions and further explanation if needed, to their employees or suppliers.
As mentioned before, Paete’s products already have a particular market in the world. However, sinceinternational trade has become more active and new competitors have entered the international handicraft market,
the Paetenian manufacturers need to improve their business management capabilities. While their products arestill preferred mainly because of the good quality, they need to demonstrate their ent repreneurship in order tokeep their position in the international market.

The Importance of Entrepreneurship Development
According to Forsyth et.al. (1993), an entrepreneur is one who undertakes to start or to conduct anenterprise usually assuming full control and risk. On the other hand, Camposano (1993) described anentrepreneur as a person who recognizes market opportunities and organizes the resources required to maximizethat opportunity for long -term personal and other gains. Therefore, an entrepre neur differs from a mere manager
for his /her approach in the business. The success or failure of a business venture depends on the rightcombination of entrepreneurial sense and managerial skills. In many cases, successful entrepreneurs not only
play a role as effective managers but also realize their entrepreneurial potential.
To succeed, entrepreneurs need to have an understanding of risks and risk-taking, and the willingness totake those risks, or encouraging their business partners to do so, when the returns can be anticipated.
Entrepreneurial firms exhibit ability for innovation through product diversification, a different production
process or a different way of marketing the existing products and services. In this paper, I would like to discuss
six characteristics of a successful entrepreneur: enthusiasms and endurance, conclusiveness, leadership, productpride, marketing skills, and courage and perceptive (Forsyth et.al, 1993).
First, enthusiasm and endurance become powerful principles because these would encourage confidence toeach part of the enterprise’s workers and partners —suppliers, lenders, and customers —who often keep loyal andsupportive attitude despite several reasons to desert the enterprise. The second characteristic, conclusiveness indecision -making, is also essential because the new venture has to move to keep up the business. Faced with anever changing market situation, they need to be able to decide and act in a quick and flexible manner. The third
characteristic is powerful leadership, which could inspire employees and followers to profess loyalty to theentrepreneur and to devote themselves to their jobs. Fourth, the entrepreneurs should have product pride and havean attitude totally devoted toward their own products such as self-satisfaction and interest. This kind of attitude
pushes the entrepreneurs to exert greate r effort for improvement and innovation, which, in turn, let them have agreater pride for their products . As to the fifth one, an entrepreneur needs marketing skills to seize a business
opportunity quickly since marketing and sales are the crucial functions of enterprises. Sixth and la st, theentrepreneur must show his/her courage and perception clearly to the people concerned such as employees,
suppliers and customers. As for the employees, they have to understand the entrepreneur’s vision to put the m129together for the overall goal of the enterprise. It is also important to interact actively with the people outside suchas suppliers and customers, since the enterprise must cope with them and they might have some hints for new
business.
Based on our observations during the field research, to some extent some of SMEs in Paete possess thecharacteristics of a successful entrepreneur mentioned earlier. This means that Paetenians have the capability tocompete with other countries’ enterprises. Nevertheless, in contrast with their strengths in being hardworking andtheir ability to survive, they are hampered by their weaknesses such as extreme personality, family -centeredness,passivity and lack of initiative. In other words, they seem to be content to remain in their present position overthe next one or two generations. Therefore, they should learn from the experiences of successful entrepreneurs
who were able to combin e t heir entrepreneurial skills with the virtue of hard work tempered by discipline.
Entrepreneurship development o f SMEs in Paete is needed to respond to the more stiff competition in theexport market. Aside from government efforts in SMEs development through some programs and projects, all of
the people, especially SMEs ’ managers and owners, should begin to be aware of the importance ofentrepreneurship and managerial skills development. To involve many SMEs in the process of entrepreneurshippromotion , the professional enterprises should assist the smaller and less active enterprises to improve their
weaknesses and to build a firm handicraft industry in Paete. These smaller enterprise in turn can be more active
and competitive in the global market. The establishment of the Paete Associated Enterprises for Trading, Export
and Manufacturing, Inc. (PAETEM), which is the incorporation of five large enterprises , is an example of such aneffort of Paetenians to gather their business in a cooperative and professional way in order to strengthen theexistence of Paete’s handicraft industry in the international market.
Certainly entrepreneurship is not the only means to sustain and develop SMEs in Paete. This is not only indealing with the hard competition in global handicraft industry, but it also relates very close to the humanresources that undoubtedly are the most influential factor in sustaining the business including SMEs. As a result,
entrepreneurship becomes the most essential thing in order to start or maintain any kind of business.

Conclusions
Increasing competition in the global trade market of handicraft products has raised the awareness ofPaetenians on the international competitiveness of their handicraft industry. In response, developing
entrepreneursh ip has become crucial as it plays an important role in building human resource capability. Given
the basic characteristics of Paete’s small and medium entrepreneurs and the current situation of their business
management, I think the Paetenians will be able to catch up or even surpass their competitors. This will continue
in the near future as long as they always strive on improving their entrepreneurial skills.

References
Camposano, J.A. 1993. Innovative Entrepreneurship: The Philippine Perspective. 1St edition. Quezon City, Philippines: J.A.
Camposano Press.
Forsyth, George R., Joan Mount and J. Terence Zinger. 1991. Entrepreneurship and Small Business Development. Ontario,
Ca: Prentice Hall Canada Inc.
Government of Paete Municipality. 2000. Comprehensive Development Plan of Paete. Paete, Laguna Province.
http://www.paete.org/abtpaete/ INTERNET

130

Labor Demand Seen in Some Philippine Mass Media― An Analysis of Want Ads ―Masamichi Toyooka (WG2)
1 Introduction
One of media ’s functions is to provide want ads to the people who are seeking a job. The higher theliteracy rate is, the bigger influence printed media have. In the Philippines, a country where the literacy rate wasabout 95 percent in 19951 , print media must be an effective means for unemployed people of around 10 percent
of total population 2 to get a job. Through media, job -finding information comes very speedy, cheaply andmassively.
But what kinds of job are mainly offered through the want ads in print media? If each medium has acharacter, are there any differences in the want ads among media? In order to see (1) the whole situation of labordemand in newspapers ’ want ads, (2) the difference of labor demand in want ads among newspapers, and (3) thelabor demand in a magazine specialized in job -offerings, I chose four daily newspapers and one weekly magazine.
These are PHILIPPINE DAILY INQUIRER, PEOPLE’S JOURNAL, Pilipino Star NGAYON, BULGAR and
THE JOB Finder. During the field research, I referred to four volumes of each newspaper issued weekdays andthree volumes of the magazine issued on October 13, 20 and 27. The details of each medium will be describedlater.

2 Types of Labor Demand Seen in Want Ads
2.1 Total labor demand in newspapers
In order to find out the whole situation of labor demand in Philippine newspapers, I counted job offers inwant ads of those four newspapers. I would like to explain that the number I counted is not that of want ads
Figure 1 Distribution of job -offers classified by type appearing in four Philippine newspapers,
October 2000
0%

5%

10%

15%

20%

25%

30%

Management/Supervisorial
Accounting/Auditing
General Office/Secretarial
Marketing/Sales
Production/Factory
Engineering/TechnicalComputerHotel and Restaurant
Education/Sports
MedicalPersonal Care
Arts and Entertainment
Security/Janitorial
Domestic HelpCreative/Media/Publishing
Driver/Gardener
Other Employment

1

2

Central Intelligence Age ncy, United States of America “The World Factbook 2000 ”(URL:http://www.odci.gov/cia/publications/factbook/index.html)
National Statistics Office, Republic of Philippines “Labor Force Survey” (URL: http://www.census.gov.ph/data/sectordata/datalfs.html)

131

Table 1: Detailed characteristics of four Philippine newspapers
3

Name

Price
(peso)

Characteristics

PHILIPPINEDAILYINQUIRER

15

English newspaper with much volume from about 40 pages to more than 100 pages.
The paper consists of several sections of main section, business, life style andregional one. There are political , social, international, sports articles and evenopinions (readers ’ columns) in the main section. It is fairly said that the readers are
educated people.

PEOPLE’SJOURNAL

6

English newspaper with about 20 pages . There are articles of domestic news,
opinions, entertainment, sports, etc. The paper has many want ads. Even if you findsome articles w ritten in Filipino, it is unusual.

6

Filipino newspaper with 16 to 20 pages . It seems there are less articles of generalnews than PEOPLE’S JOURNAL but more articles about entertainment than that.
4This paper has an internet homepage. The paper’s company publishes English
newspaper, too, called THE PHILIPPINE STAR.

5

Filipino newspaper with 12 pages weekday. There are a lot of readers ’ columns,
entertainment articles, essays, etc. But the percentage of general news is the least
among the four newspapers. It is fairly said that this newspaper is not a news
medium but rather, a kind of life information medium.

Pilipino StarNGAYONBULGAReither that of wanted personnel, but it is the number of demands for each job type. By referring to theclassification used by the magazine THE JOB Finder, I divided all of the 691 demands in the newspapers into 17
sets. The reason why I referred to that magazine is it has a detailed and clear classification.
Figure 1 shows the result of the tabulation. Assuming this result reflects the whole situation of labordemand in Philippine newspapers, the figure shows the probability distribution of jobs that a person who looks atwant ads in newspapers at random will find. “Domestic help” is the most demanded type of job. This is followedby jobs in the manufacturing sector classified as “ Production/Factory ” and “Engineering/Technical”.
2.2 Labor demand in each newspaper
The aforementioned result is the labor demand found in the four ne wspapers . I assume that to a certain
extent, the result reflects the whole labor demand appearing in Philippine newspapers. In this section, I will
examine the specific features of want ads in each of the newspapers . Before going into the results, I will describe
each newspaper in detail. This is shown in Table 1.
It is important to remember that the nature of a newspaper determines readership, which in turn affects thetypes of jobs advertised. This relationship may be shown by the number and percentage of the demand for 16
types of job which appeared in each of the newspapers examined. The results are presented in Table 2.
Of the four newspapers examined, the PHILIPPINE DAILY INQUIRER had the smallest number of jobs
advertised with only 33 in total. Of these, 72.7 percent we re for “General Office/Secretarial”. In contrast to theother three newspapers where demand for “Domestic Help” comprised more than 20 percent of the total numberof jobs advertised, it is highly noticeable that this newspaper only has 3 percent for this t ype of job.
For people who are serious in finding a job, it is highly advisable for them to look at the want ads of
PEOPLE’S JOURNAL. For the period under review, there were 434 jobs being offered in this newspaper. Asidefrom “Domestic Help”, the major demands were in “Production/Factory ” and “Engineering/Technical” and then3
4Newsstand price per issue in Metro Manila
URL: http://www.philstar.com/philstar/132

Table 2 Breakdown of job demands by type appearing in four Philippine newspapers, October 2000
PHILIPPINE D AILYINQUIRERPEOPLE’SJOURNAL

Pilipino StarNGAYONBULGAR

Number%Number%Number%Number%Management/Supervisorial
Accounting/Auditing
General Office/Secretarial
Marketing/Sales
Production/Factory5
Engineering/TechnicalComputer6
Hotel and Restaurant7
Education/Sports 8
Medical 9
Personal Care 10
Arts and Entertainment
Security/Janitorial
Domestic Help11
Creative/Media/Publishing
Driver/Gardener

0
1
24
0
1
0
0
2
0
2
0
0
0
1
0
0

0.0
3.0
72.7
0.0
3.0
0.0
0.0
6.1
0.0
6.1
0.0
0.0
0.0
3.0
0.0
0.0

2
1
11
30
110
75
3
17
0
6
2
2
13
101
5
20

0.5
0.2
2.5
6.9
25.3
17.3
0.7
3.9
0.0
1.4
0.5
0.5
3.0
23.3
1.2
4.6

18
0
26
16
7
3
5
2
2
3
1
0
1
46
4
1

11.5
0.0
16.7
10.3
4.5
1.9
3.2
1.3
1.3
1.9
0.6
0.0
0.6
29.5
2.6
0.6

3
0
2
3
1
2
0
4
0
2
0
4
1
39
0
2

4.4
0.0
2.9
4.4
1.5
2.9
0.0
5.9
0.0
2.9
0.0
5.9
1.5
57.4
0.0
2.9

Other Employment

2

6.1

36

8.2

21

13.5

5

7.4

Total

33

100.0

434

100.0

156

100.0

68

100.0

followed by “Management/Supervisorial”. From the results, it seems that want ads in this newspaper are mainly
for the middle class and is intended mainly for manufacturing.
In NGAYON, aside from “Domestic Help” which again topped the demand at about 30 percent, the other
top three demands were “General Office/Secretarial” at about 17 percent , “Management/Supervisorial” at 11.5
percent and “Marketing/Sales ” at 10 percent. With these res ults, we can say that newspaper’s want ads aretowards managerial work. And similar to the trend observed in PEOPLE’S JOURNAL, it seems the ads in thisnewspaper are also for the middle class.
In the case of BULGAR, the table shows strong bias towards “Do mestic Help”. It is fair to say that targetof this paper’s want ads are low income classes, because the wage of “Domestic Help ” is lower than that of otherjob types in which wages were specified .
2.3 Comparison of English newspapers and Filipino newspapers
In this section, I will present the newspapers ’ characteristics based on the language used in the media.
Dividing the four newspapers into two groups by language, the difference between English newspapers andFilipino newspapers is shown in Figure 2.
Figure 2 shows that if a person reads a newspaper written in Filipino newspaper, he will find that 40
percent of the job offers is for “Domestic Help”. This type of job commands the highest demand of all types of
5

The main component is sewer.
Demands a person who has high knowledge and skills about computer. For example, the ad which demands a secretary with computer
experience is classified in “General Office/Secretarial”.
7
Waiter, waitress, bellboy and cook but not hotel and restaurant manager or family cook. They are classified in “Manager/Supervisorial”
and “ Domestic Help”, respectively.
8
Most of them are private tutor s.
9
Most of them are nurses and midwives.
10
Hairdresser, beautician, manicurist, etc.
11
Maids, babysitters, family cook, etc.
6133Figure 2. Distribution of job -offers by type according to the language used by newspapers
0%

5%

10%

15%

20%

25%

30%

35%

40%

Management/Supervisorial
Accounting/Auditing
General Office/Secretarial
Marketing/Sales
Production/Factory
Engineering/TechnicalComputerHotel and Restaurant
Education/Sports
MedicalPersonal Care
Arts and Entertainment
Security/Janitorial
Domestic HelpCreative/Media/Publishing
Driver/Gardener

EnglishOther Employment

Filipino

Figure 3. Distribution of demand by type of job ,THE JOB Finder, October 13-27, 2000
0%

5%

10%

15%

20%

25%

30%

Management/Supervisorial
Accounting/Auditing
General Office/Secretarial
Marketing/Sales
Production/Factory
Engineering/TechnicalComputerHotel and Restaurant
Education/Sports
MedicalPersonal Care
Arts and Entertainment
Security/Janitorial
Domestic HelpCreative/Media/Publishing
Driver/Gardener
Other Employment

jobs advertised in the national language. On the other hand, if one reads an English newspaper, he will find thatthe highest demand will be on “Production/Factory ” followed by “Domestic Help ” at 25 percent and 20 percent
respectively.
2.4 Labor demand in a specialized magazine
THE JOB Finder is an English weekly magazine, specialized in job-offerings, which has hundreds of wantads in about 30 pages. People who are looking for a job can also advertise themselves in this magazine. There areversions for Metro Manila and for outside of Metro Manila, priced at 15 pesos and 10 pesos, respectively.
However, by closely examining the contents, I found little difference in the want ads between the two versions.
Compared to the prevailing trend of job demand in the other four newspapers, we can see that there is134smaller demand for domestic help and manufacturing work in this magazin e (Figure 312 ). The top demand is for“Marketing / Sales ”. It is also interesting to note the classification “Arts and Entertainment” which is classified
for overseas assignment. For this type of job, I found that 61 or 24 percent of the total 258 openings are boundfor Japan.13

3. Conclusion
From the four newspapers and the specialized magazine, it was found that highest demand was fordomestic help . While there is no single distinguishing feature of the trends of jobs as advertised for each of thenewspape rs, we can say that the medium used, and as a consequence the type of readers, determine what type ofjobs are demanded. I found there is a dynamics for labor demand in print media, which is held not only by thepeople who are seeking a job but also by the advertisers. That is why the nature of the want ads in the medium
reflects well the features of each medium.
As to the issue of OFWs, it is very interesting to find that a quarter of the “Arts and Entertainment” ads are
destined for Japan. Th is is the min imum figure since it is assumed that there were more ads which did not specify
the location of the job. In the Philippines, s ending of people to work abroad is not so special and the country has
the capacity to respond to the demands of foreign countries, especially those in Southeast Asia, the Middle Eastand Japan. This may indicate the advantage of English education, the adaptability by the country’s colonial
history, and domestic industries ’ small capacity for absorbing the labor force, for the time being.
The number of want ads in mass media is not small, thus it can be said that people in the Philippines caneasily get information on finding a job. But as far as my research results have revealed, it is fair to say that mass
media in the Philippines have not yet responded to local labor demands. If the media would be able to provide
different want ads in different regions effectively, it could have much more influence on the nationwide labormarket. When this is realized, it will follow that people have the sure means of finding a job in terms of speed,
price, quantity and locality.
While I referred to the job classification used by THE JOB Finder, there might be other ways by whichmore interesting findings might be discovered. In this research, I was able to find the relationship between types
of job and wages, as well as between types of want ads and the regions where the ads were placed. I am surethere are more worthwhile findings waiting to be unearthed. Furthermore, a comparison of broadcast media suchas television and radio vis -à-vis print media as an effective means of job advertisement would be anotherinteresting field of research 14 .

12There were 2,099 demands for various types of job in the three volumes.
Not all of the entertainers go to Japan. Other Overseas Filipino Workers (OFW s) bound for different countries were found in the four
newspapers. There were 41 OFW demands in total and the main destinations are Saudi Arabia, Singapore, Brunei, Taiwan and HongKong. The main job openings were “ Domestic Help ” and “ Engineering/Technical”.
14
About influence of mass media, see; National Statistics Office –Department of Education, Culture and Sports, Republic of Philippines“ 1994 Functional Literacy, Education and Mass Media (FLEM)” (URL: http://www.census.gov.ph/data/sectordata/dataedlit.html)
13

135

The Issue of Pedophiles in Pagsanjan
Mariko Ueda (WG4)
Background, Objectives and Methodology
The municipality of Pagsanjan has gained a notorious reputation as a haven for pedophiles. We learned thisbefore visiting the Philippines for the Overseas Field Work (OFW) 2000. Our group did a study on the impact of
tourism on s ocial change in Pagsanjan .
While gatherin g data for our analysis, we realized that the problem with pedophiles is one of the crucial
issues being faced by the local society. Also, since my main field of research is prostitution in Thailand, thepedophile issue is closely related to it. Thus I developed a keen interest to learn more about child prostitution in
Pagsanjan. However, my desire to learn has been hampered by availability of information. First, public
discussion of the problem of pedophilia occurring in one’s hometown, in particular with a group of foreign
researcher like me, hurts a person’s sense of morality. This is especially true in a country where people pride
themselves with their Catholic faith. Thus, it was sometimes difficult to make individuals speak about it. As aresult, the information I was able to gather was limited.
My report will focus mainly on what I obtained from the interviews with local people and from key
informants from the non-governmental organizations we visited during the field research. Before going to theinterview results, I will first explain the definition of a pedophile. Then I will present the experiences of two
non-governmental organizations (NGOs) fighting against pedophilia and sexual abuse of children. From thestories, I was able to obtain quite a lot of information on th e issue of pedophiles in Pagsanjan

What is a pedophile?
A pedophile has been defined as “a grown person who seeks gratification with a pre-pubescent or
pre -adolescent child and prefer the child as sexual object ”. Generally, people wh o are gratified by children are
categorized into two types. The first refers to people who are tenacious to have sex with children and are usuallycalled “pedophiles ”. On the other hand, the second refers to people who do not favor of children very much, butchoose children as sexual partners by chance and are categorized simply a ‘sex tourists ’ (O’Grady, 1994).
Pedophiles are mostly men . So me of them prefer to have children who are 10 to 12 years old, while others favor
13 to 15 years old children. Most pedophiles choose only boys as partners and are called “pederasts ”. In somecases , pedophiles mostly choose girls . However, it is rare to find a pedophile who takes both boys and girls as
partners.
In Pagsanjan, I was able to find a local term for a pedophile victim. The term used is “pom-pom” whichrefers to male child prostitute. The local people understand the term “pom-pom” easier than pedophile orprostitution .

People’s Perception and Origins of the Pedophile Issue
During the conduct of the research, I found that most people whom I interviewed in Pagsanjan recognized
the pedophile issue. I got the impression that it is a common knowledge among the people that the town isnotorious for pedophile s. From what I gathered from the literature and interviews, the problem of pedophiles in136

Pagsanjan traces its origin in the 60s. At the start, it was small and almost negligible . However, the local andinternational media got wind of the problem and blown it beyond manageable proportions in both national andinternational levels . Since then, the town of Pagsanjan has gained a notorious reputation as a haven for the gay
community.
As mentioned in our group report, the issue of pedophiles is related to the emergence of tourism as anindustry. While I am aware that the Philippines has become a famous destinations for sex tourism and a large
number of foreigners visit the country for this purpose, I could not find any obvious reasons why Pagsanjan
became famous for pedophile and not for prostitution or the sex industry in general. However, I heard someinteresting stories on pedophile from several people.

Council for the Protection of Children in Pagsanjan (CPCP)The Council for the Protection of Children in Pagsanjan, better known by its acronym CPCP, is one of theNGOs which used to work for the prevention of child prostitution in the municipality. During our field research,
we had an opportunity to talk to a key informant who was a former member of the NGO but is now working as ahome -economics teacher in a primary school. According to him, CPCP was established in 1957 by a gathering of
more than a hundred of group members. The age -range of the children they target for assistance was 7 to 13 years
old. I gathered that according to the Constitution of the Philippines, it is illegal for someone to have sexual
relationship with a child under the age of 12.
The key informant clarified that t he pedophile victims were usually pimped and taken from other areas like
Metro Manila before being brought to Pagsanjan. Thus , according to him, the child victims are not from the town.
He said th e issue was treated with a sensational tone by the media . This he attributed to the vested interests of big
businesses involved in the promotion of choice destinations among foreign touris ts. He also explained that thestory dished out by media was not always true and therefore should not be believed at all times.
The CPCP ceased its activities in 1980 since based on the collective judgment of the NGO’s members, theproblems of pedophile and child prostitution in the town has been stopped. Thus, there is no more reason for the
NGO to continue with its activities. The claim that problem of pedophiles in Pagsanjan has ceased to exists since
the 80s did not come only from the key informant but was further corroborated by the many people whom wehave interviewed in the town. They said that issue of pedophile is a thing of the past since it has been totallyeliminated . However, some people in adjoining municipalities claim that the problem of pedophile still exist
albeit in small scales. I do not have sufficient evidence to judge which of the competing claims of the town’s
residents and their neighbors from other towns is true. However, from the information that I gathered, I can saythat at least at pres ent, the people of Pagsanjan do not consider the issue of pedophile as a problem any more.

Pagsanjan Women’s Club
The Pagsanjan Women ’s Club is one of the many women ’s associations established in the town during the70s. The establishment of these women’s groups was mainly a byproduct of American influence wh ere women
were very active at that time. The purpose of th e association is to assist local people and the community. Amongothers, its activities includes provision of free medical services to the needy, free feeding of children from poorfamilies and the rehabilitation of old buildings with cultural significance. In addition, the NGO also supports
income-generating projects. For purposes of the research, we were able to talk with two members of the137association. According to the members , the association is faced with lack of funding . Given its financial
constraints, the association has reduced its activities to a smaller scale as compared before
From the interviews with the key informants from the associa tion, I found that contrary to the earlier
claims, the pedophile issue is still a problem in the municipality. The two key informants said persistence of the
problem is rooted in poverty. Poverty drives children to enter prostitution. Given the causality of poverty andchild prostitution, it is my opinion that this women ’s club plays a very important role in preventing childprostitution . This it can do so by helping the poor to generat e additional income. Of course, while I recognizethat helping raise poo r people’s income does not directly contribute to the organization’s objective of stoppingand or preventing child prostitution, I believe that its contribution must be reckoned in terms of its long -term
effect.
One of the key informants from the associat ion told us a lot of stories on the problem of pedophiles in thetown. She was really indignant at what had happened in Pagsanjan . She said that it was an English woman who
destroyed the image of the town by publish ing a very sensational newspaper article on the pedophile issue.
Because of this article, Pagsanjan became famous with its bad reputation as a haven for foreign pedophiles. I
tried to look for the article myself but I was unable to do so, thus I cannot form my own judgment as to how it
was written and whether it did damage the reputation of Pagsanjan as described by the informant. However, I do
understand how indignant the informant was since she said: “She (referring to the article’s author) did not careabout our feelings.” From what I heard fro m her, I learned how powerful media is for it can make or unmake theimage of a town and a country through the influence it has over readers and listeners.

Concluding Remarks
Since my research was mostly based on results of interviews, I could not obtain enough information toarrive at a general conclusion. From what I have gathered, I can say that almost all the people in Pagsanjan
recognize the issue of pedophiles as having lent a bad reputation to their hometown. However, while they
consider the issue as a thing of the past, people from neighboring towns claim that this remains as a problem in
Pagsanjan. I do not have sufficient evidence to support either of these claims and thus cannot conclude withutmost degree of confidence whether the problem has s topped. What I can say is, whether the problem still exist
or not, at least it has been minimized through the collective effort and contribution of the local people.
As to the claim that Pagsanjan is a pedophiles’ paradise, I can say from the results of our fieldwork that
this bad image was a media creation. While I do recognize that pedophilia may have exists in Pagsanjan during
the past, it was not at an alarming scale. It was the power of media which aggravated the issue.
Finally, I will compare my findings in the Philippines with that of Thailand. From my experience of having
stayed in Thailand for a longtime , I know it is a taboo to ask questions on the issue of child prostitution since thisis considered as a sensitive matter. I found the Thais, especially those in rural areas or those occupying
government positions, usually hesitant and even reluctant to answer questions pertaining to th is negative issue. In
contrast, my experience in the Philippines has shown the exact opposite: Filipinos have a little hesitation to speak
about pedophiles, prostitution, and other negative issues. Given the different findings between the Philippines
and Thailand, I can say that in terms of public discussion of negative societal issues, there is a sort of culturaldifference between t he two countries. However, I will qualify my statement: t he fact that the people of Pagsanjan
consider the issue of pedophiles as a problem of the past may have emboldened them to speak openly on the issue.
138

The big difference on how the Tha i and Filipino societies have approached a negative societal problem as a topic
for discussion is one of the most interesting findings that I learned from this field research.

References
松井やより . 1993. 『アジアの観光開発と日本』. 新幹社
Matsubara, Shigeo. 2000. Save the Children, Save the Children Japan Newsletter. No.25.
O’Grady, Ron. 1994. The Rape of the innocent. Bangkok. E.C.P.T.
Taranilla, Ryan Advian B. 1987. “Child Prostitution : A Study of Child Ab use in Pagsanjan, Laguna ”. Undergraduate Thesis.
Department of Social Sciences. College of Arts & Sciences. University of Philippines, Los Baños.

139

SMEs in Rural Area in Laguna
Tamako Watanabe (WG1)
1. Introduction
During OFW, Group Ⅰ visited several SMEs (small and medium enterprises) in Laguna province and heldinterviews with them. In the Philippines , SMEs make up over 99 percent of all enterprises in the country. And 95
percent of all manufacturing enterprises are SMEs, of which 70 percent of total comp anies registered with theBoard of Investments (BOI). SMEs account for over 50 percent of the country ’s job pool and contribute withmore than 28 percent of the value added in production (Perilla and Abarquez, 1998). SMEs are viewed as vital indispersing new industries to the countryside and stimulating gainful employment (BSMBD, 2000). It means that
SMEs ’ contribution to the income generation of local people is important, thus its impact on the local economy issignificant.
Most of the SMEs we visited in Lumban, Paete and Pangil are traditional industries such as barong,woodcraft and papier-mache industries, and their production is dependent on the traditional skills andtechnologies. Their products are provided not only to the domestic market, but also to international market,
mainly to EU, the U.S and Japan. However, the competition in the international market has become stiffer
recently, and demand for their products is decreasing. The SMEs are now facing some difficulties to promote or
maintain their profit.
Throughout the research, we found that the SMEs made efforts to get over the difficulties, although, they
still have problems in many fields such as finance, marketing, production, personnel management and supporting
system, and the problems intric ately intertwine. The purpose of this paper is to examine the problems faced by
the SMEs and to consider what is needed for getting over them. In the following sections, I divide the problems
into two categories, internal and external problems, and then, d iscuss some of the problems. As a conclusion, I
will consider what is the most favorable solution at the present condition.

2. Problems of SMEs in rural area
2-1 Internal Problems
In this section, I examine some problems, which exist inside the companies from the point of view of thecosts and quality of the products. Owing to the stiff competition in the international market, especially with
Chinese companies, and also owing to decreasing demand for the SMEs ’ products, it could not be denied thatkeeping o r reducing its costs and improving the quality are essential for the SMEs to maintain or promote theirprofit.
Regarding the costs, recently, the problems related to the raw materials are serious, especially in the
woodcraft industry. Wood is the main and indispensable material of the industry. However, the material has beenin short supply locally and also due to “the total log ban” 1 , the producers of woodcraft have difficulties inprocuring wood. They have to seek new places for supplies, change material or diversify their products such as1

Total log ban is the law against deforestation and for restoring woods implemented by the government in 1990s.

140ice carving. Now although some of the SMEs substitute imported wood and MDF (medium density fiber) for a
portion of the materials, the costs of these materials are expensive, as well as, it requires domestic transportat ion
fee. As a result, the total costs for the raw materials become much higher than those procured in the Philippines.
Another problem is the existence of middlemen and exporters. Most of the SMEs we visited provide theirproducts to the market through mi ddlemen and/or exporters. The roles of middlemen and exporters are to collectthe products together, to bring them to the market and to take the order to the SMEs from the customers, andsometimes they introduce new customers to the SMEs. Some of the SMEs determine the design and the quantityof products with the middlemen or exporters. The role of them might be important, however, on the other hand,
they hold a dominant bargaining position and take a high broker fee. In the end, the profit of the SMEs beco mes
unreasonably small in many cases.
In spite of increased costs, it is not so easy to raise the prices of the products, leading some of the
producers to shift their business to other businesses, for example, papier-mache.
In the research, we met a lot of people who emphasized the importance of quality improvement to promote
their profit. They said that SMEs needed to improve the quality of their products, diversify them and develop
new products to make new demand or needs and also to overcome reducing demand and stiffer competition in theinternational market.
All of the SMEs we visited are labor-intensive industries and most of the products are handmade. It meansthat the quality is depending highly on the workers. In traditional industries, generally, the skills andtechnologies are taken over from parents or senior workers, and most of the SMEs do not have a training system,
moreover they do not even take the necessity of it into account. Also, they do not have a concrete quality checksystem. In most cases, the owners check only the quality of the final products. Absence of training and quality
check system would lead to poor improvements of skills embodied in each worker and less acquirement of skills
and technologies. Meanwhile, the SMEs we visited in Calamba, a more urbanized area, have comprehensive
training and quality check system. One of the SMEs hires trainers and trains workers before the workers engage
in the jobs. In addition, they examine the skills of workers periodically to keep the high and regular quality of the
products. In terms of the quality checking, the senior or specialized workers check the quality in each process. If
people would like to achieve the improvement of quality as one of the objectives, it is necessary for the SMEs inthe traditional industries to make a concrete system of training and quality checking like the SMEs in Calamba.
In addition, throughout the research, we found most of the SMEs are lacking of R&D department , not only
for technology but also design of products. To diversify and develop the products, and also to improve the quality,
having or strengthen ing the R&D might be necessary.
In Paete, one association was established to get over these problems. PAETEM (Paete associatedenterprises for trading, export and manufacturing, Inc.) aims (1) to eliminate the middlemen, (2) to export
directly their products, (3) to have their own shops in Paete and (4) to provide training system for woodcarving
and paper-mache. PAETEM also has a plan to establish R&D center for d iversifying and developing the products
in woodcraft and papier-mache industries and training center for the workers engaged in the industries to provide
an opportunity to improve their skills. The activities of PAETEM can directly involve the SMEs in the area andare expected to promote the SMEs in the area, and to contribute to prosperity of the industries.

141

2-2 External Problems
In this section, I deal with the problems of the supporting system. Throughout the research, we found that a
supporting system is necessary for the SMEs in Laguna to get over internal problems and to promote their profit.
However, at the same time, we also found that the supporting system has some problems.
In terms of support from the government, central and local government recognize the importance ofpromoting SMEs, and have plans or programs for promoting them. For example, DTI (Department of Trade andIndustry) hold trade fairs in CITEM (Center for International Trade Expositions and Missions) to assist SMEs toexpand their market, and DTI also holds seminars for SMEs to develop the culture of entrepreneurship. The
government established training centers or vocational courses for people to acquire knowledge of technology,
management, finance and so on. However, SMEs said that they do not receive any support from the government
Despite of the existence of a supporting system, why do SMEs feel that they do not have support from thegovernment? One of the reasons would be that the target of the plans is so limited that all of SMEs do not havesuch support. Concerning the limitation of the target, three reasons can be considered. The first reason isrestriction of the governments ’ budget allocation. If the governments give less priority over the traditional
industries, fewer shares of the budgets would be allocated to the industries. Then, the SMEs in the industries
have problems with getting the benefit from the support. In addition, the SMEs we visited perform relatively wellin their businesses, therefore it is considered they are out of the targets of the plans. Secondly, according to oneof the government officers, SMEs that have registrations of business name, accreditations, and licenses are justthe tip of an iceberg. It means that it is so hard to grasp the actual situation o f SMEs that the targets of the plans
are likely to be one-sided. The third reason is lack of effectiveness of the supporting system. According to thesame officer, because of decentralization, the decisions between the central and local government are diff icult tobe synchronized . Also, corruption in the government makes the support unsustainable. These reasons cause thesupporting system to be less effective.
What kind of supports do SMEs need? First, financial support is necessary. It is important for SM Es to getfinancial support not only from the governments, but also from other financial institutions like banks. In thePhilippines, the banks generally do not have special windows for SMEs and it has often been said that it is hardfor SMEs to obtain adequate loans, because of high interest rates and high requirements. At one bank we visited,in terms of the number, the main borrowers of the loans are SMEs. However, most of the loans go to the SMEs in
an industrialized area near Metro Manila. In rural are as such as Paete, Pangil and Lumban, the bank has
difficulties with getting collateral securities, so that the bank does not give that many loans to the area.
Secondly, technical support is also needed to improve the quality of the products, and to divers ify them. As
I mentioned above, the governments have established vocational schools and training courses, and hold seminars
to acquire or to improve the skills and technologies . One of the workers we interviewed said he would like toreceive the training if possible, but indeed, it is not so easy because of school fee and time constraint. It can besaid that they need to have access to the support.
In addition to these kinds of support, information support is also important . Information, for example, on
the state-o f-the arts in the different sectors, the internal and external influencing factors, availability of therequired resources , forecasts of economic, political social technological and cultural trends; experiences in othercountries with similar environmental conditions and utilizing the same or similar technologies etc. help
determine the priorities for development vis -à-vis national development goals (Salazar, Jr. and Ticsay). These142

kinds of financial, technical and information support have the problem of accessibility and equal distribution.
Even if the governments and other institutions have special treatment for SMEs, without good conditions andequality in its accessibility and in distributing, the support system would not work well. That is, there is lack of acomprehensiveness of the supporting system for SMEs.

3. Conclusion
Taking into account the internal and external problems, we found there are still problems they have tosolve to promote their profit. As a conclusion to this report, I would like to discuss the promotion of associations
like PAETEM as one way of promoting SMEs. At the present situation, it is true that each SME does not haveenough foundation for operating the business to overcome the problem by itself. However, once they cometogether, for example, they could have collateral securities for loans, they could share the costs of transportationof their products to the market, that is, they do not need to use middlemen or exporters, and they could share
information and skills. These are expected to stimulate the activities of the SMEs more aggressively. In addition,
constructing and strengthening the relationship among such kind of associations over the area could help promote
the SMEs ’ activities. For example, in Paete and Pangil, there are similar industrial structures, so that if they havesome relationship, they can learn about their experiences and exchange information with each other. It could also
contribute to solve problems to some extent, and also to discover new ways of promoting the SMEs in the area.
Furthermore , the activities of the association involve the SMEs in the area, and aim for helping and supporting
them. Therefore it is considered that if the government supports the association, the benefit of the support will
easily to go to the SMEs.
Finally, whether the SMEs can be promoted, it depends highly on their effort. It means that they need someincentives to bring out their effort and also to raise the motivation when they try to change something for the
better. In terms of the supporting system, the whole system also has to promote SMEs ’ effort and motivation at
the same time.

References
BSMED. Present State of SMEs. Metro Manila. Bureau of Small and Midium Enterprises Development.
Institute For Small Scale Industries. 1999. Integrated Plant Survey At Rhema -J Handicrafts. Queszon City. University of thePhilippines Diliman, Quezon City.
Laguna Provincial Office. Comprehensive Development Program – 21pt. Agenda. Laguna. Laguna Provincial Office.
Laguna Provincial Office. Socio Economic Profile. Laguna. Laguna Provincial Office.
Mario V. Perilla and Laida J. Abarquez. 1998, Small and Medium Enterprises in the Philippines; Status and Prospects. UPLB
Agribusiness Review Vol. 1. Los Baños, Laguna. UPLB.
Melito S. Salazar, Jr. and Zeneida O. Ticsay. Small Scale Enterprises Development Information Support System. Regional
Seminar on Development Information .
Richard T. Yao. 1998, Small and Medium Enterprise Support in the Philippines . Research Paper. Los Baños, Laguna. UPLB.

143

Women’s Vocational Training in the Philippines− Empowerment through Non-formal Training −Riai Yamashita (WG2)
1. Introduction
In the era of globalization of the world economy and Asian economic crisis, there is an urgent need toempower women to contribute equally to various economic activities. This could be done by giving them accessto technical vocational education and training (TVET). In the Philippines, women’s access to TVET has been
limited because of the assumptions about what women can and should do. However, it is high time that women
gain access to training in order to improve their socio -economic status.
This paper focuses on three different levels of non -formal TVET, namely national, provincial and NGO
levels. It examines to what extent each TVET promotes women’s empowerment, especially t hat of the poor.

2. TESDA (Technical Education and Skill Development Authority) Women’s Center- National Level The TESDA Women’s Center was officially inaugurated on April 28, 1998. The government of Japan
provided a grant of Japanese Yen 2.6 billion for the creation of the center. This center aims to contribute to theimprovement of the socio -economic status of women through training, research and advocacy (see Figure1). It
seeks to develop highly skilled, globally competitive female workers and entrep reneurs and provide a conducive
environment that expands their economic choices.

Figure 1: Objectives of Women’s Center

Gender Advocacy andGender Research andCounseling andResource Center

Facilitation Service for

Networking

Working Women

ECONOMIC EMPOWERMENTOF WOMEN
Career Guidance andTechnology-Based

Job Placement
Non-Occupational

Skills Training
Empowerment Training

The center offers technology -based vocational training for women in traditional and non-traditional fields
in nine trade areas namely: automotive, agro -processing, craft -gifts and house wares, ceramics, electronics,
garments, hotel and restaurant management, jewelry, and metals (welding). The training courses include
Pre-Employment Training (4-6 months), Skills Upgrading Training (1-2 months), Comprehensive Trainers

Training (20 months) and Training Methodology (80 hours). The center also provides empowerment training in:
Gender Sensitivity, Entrepreneurship Development, Leadership Development, Work Ethics and Values
Development, Cooperative Development, Community Organizing, and Advocacy and Social Marketing.
The target clientele of the training programs are women in the urban and rural areas, female employees andprofessionals. Results of the questionnaire survey we adminis tered to the trainees show that they are at least highschool graduates and some of them are college graduates. Also, around 20 percent of them already have somework experiences before. In this sense, it can be said that the target population of this cent er are not the poorest
women living below subsistence levels, who cannot afford to access to secondary education and who do not haveany employment opportunities. This exclusion of the poor may be partly because the center is located very far
from the center of Metro Manila, so the trainees have to pay a lot to commute every day.

3. “Productivity Skills Capability Building for Disadvantaged Women” by DSWD
(Department of Social Welfare and Development) -Provincial LevelThe project called “Productivity Skills Capability Building for Disadvantaged Women” is reflective of thePhilippine government’s thrust on rural development as well as employment generation. It seeks to provide skills
training to disadvantaged women which will enable them to gain employment and thus to increase family income.
The five areas of specialization are sewing craft, toy craft, food processing / preservation, ceramics / pottery andrattan craft, utilizing hi-tech equipment donated by JICA. The priority targets of this project are thedisadvantaged women from depressed barangays. Their age ranges from 18-59 years old and at least elementary
school graduates. They belong to the subsistence level with an income of not less than P2,700 per month for afamily of six.
There are three main objectives of this project as follows:(1) To improve the status of disadvantaged women through provision of skills to enable them to become
productive, thus contributing to increased family income though self-employment, open employment or
sheltered workshop. It also provide them opportunity to improve their understanding and practice on maternaland child care, self-enhancement, community participation, livelihood as well as social communication andskills development;(2) To encourage women to remain in the rural areas thereby preventing out -migration either to urban centers or
abroad; and(3) To organize women’s groups to set up community production centers owned and operated by them utilizing
their newly acquired skills.
Based on the results of the interview we did during our visit to the training center in Santa Cruz, we foundthat on the basis of availability of funds, additional funding support may be extended to the trainees. For example,
the center provides subsistence and actual transportation t o and from residence to training site. This could enable
poor women who cannot afford to pay transportation fees to enter the courses. As we mentioned in our groupreport, 40 percent of the graduates of sewing craft get open employment in garment factory and the other 40
percent become self -employed. In the case of food processing, most graduates become self-employed. Here, we
realized it is almost impossible for the graduates to buy sewing machines or food processing machines, thus if
they do not get emplo yment in factory, they cannot utilize their acquired skills. Therefore, some improvements
are needed especially in relation to graduates’ follow-up. Moreover, the case where applicants would not be145accepted if they cannot present a written consent from the spouse remains. This implies that the mostdisadvantaged women who are strongly subordinated to their husband and do not have any decision -making
power cannot have access to this project.

4. Small Workshop in Payatas -NGO LevelThe Japanese NGO called ICAN provides women’s vocational training in Payatas, Quezon City. Payatas is
the famous place where “the smoky valley” (garbage mountain) is located. Unfortunately, the mountain suddenly
collapsed in the morning of July 10, because it became too high, and 234 people died. It is said that at present,
more than 100 people have not been recovered and remain buried under the rubble.
ICAN offered emergency support to the people who suffered from this calamity. At the same time, it
started a small workshop for poor women who urgently need income for their family’s survival. One of theparticipants is a graduate of TESDA’s training course and she teaches how to make a teddy bear to otherparticipants. ICAN supports the supply of materials and the sale of finished p roducts to Japan. This workshop
seems to be very successful and provides benefits to the poor women.

5. Conclusion
It is no doubt that TVET has a great possibility of improving the economic situation of women in thePhilippines. However, we also have to recognize that the provision of TVET does not automatically lead to
women’s empowerment, especially that of the poor. First, if we do not look at who really the target population of
the training is, it is often the case that the poorest people are excluded. There is also a tendency that as thetraining center becomes bigger and centralized, the number of the poor participants becomes smaller. Second, theacquired skills would not be utilized if there is no support for job acquisition after the completion of the training,such as career guidance, job placement assistance, and basic business management for self-employment. Thirdand last, it is important to pay much attention not only to the inequality among household s, but also to the issueof power distribut ion within the household. This is because gender relation within the family always affects
women’s empowerment.

Reference
Department of Social Welfare & Development, Bureau of Women’s Welfare, Guidelines in the Operation of the Productivity
Skills Capability Building for Disadvantaged WomenTESDA Women’s Center, Trainee’s Handbook

Working Group 1

Situation Analysis of Small and Medium
Enterprises in Laguna

Advisor
Etsuko Sugiyama, Research Associate
Members of Working Group 1
Heni Kartikawati

Hiroshi Saito

Jaka Aminata

Takuya Miyajima

Roosiana

Tamako Watanabe**Group Leader

11. Introduction
In both developed and developing countries, small and medium enterprises (hereafter SMEs) play a verysignificant role in economic growth. SMEs provide job opportunities , create wealth, and promote modernizationand contribute to technological changes . The Philippines is not an exception to this worldwide trend. About 98
percent of all business establishments in the country are classified as SMEs . Moreover, SMEs account for over
50 percent of employment and contribute to more than 28 percent of the value added in production . As such, it isexpected that SMEs play a very important role in regional economic development in particular in the rural areasof the count ry. The role of SMEs in the Philippines is not limited to the simple creation of wealth or capital.
These enterprises are also vital in correcting regional disparity by introducing new industries in the countrysideand stimulating the local labor market. SMEs are more likely to be labor-intensive and thus provide jobs towherever these are located. In this sense, they bring more balanced growth of the regional economy and equity inincome distribution. For these reasons, Working Group 1 decided to focus on SMEs as our research topic for theOverseas Fieldwork 2000 in Laguna province, Philippines.
The report is organized into six sections. In the first section, we will present our research objectives andthe methodology used during the research. The second section will explain the definition of SMEs in order for us
to identify the size of enterprises. In section three, we will provide an overview of the situation and context
surrounding SMEs in the Philippines . In section four, we will discuss about SMEs we visited during thefieldwork in some municipalities of Laguna . In section five, from the data gathered through the fieldwork, wewill analyze the problems being faced by SMEs in the Philippines in the form of a problem tree. Last, in section
six, we will conclude our re port by proposing possible solutions to the problems we have analyzed.

1-1. Research objectives
The main objectives of our group research are: (1) to analyze the current situation of SMEs in Laguna
province; and (2) to identify the problems faced by SMEs and propose some possible solutions.

1-2. Research methodology
In preparation for the fieldwork, we first identified the characteristics of SMEs in Laguna by gathering data
through the Internet. Based on the information gathered and through literature review, we decided that our
research hypothesis is as follows:

SMEs have big economic impact on the regional economy” . For us to be able

to test our hypothesis, we formulated several questions on various features of SMEs in Laguna province. These
include: ni come generation; employees ; investment; export and import; domestic and international market;
supporting organizations and policies including infrastructure; and impact of SMEs on other sectors .
For the gathering of primary data, we visited several SMEs in Laguna province. We then interviewed the
managers and/o r owners as well as workers of these enterprises. The findings from the interviews were validatedwith our own observations. The SMEs we visited during the fieldwo rk are shown in Table 1.
In addition, we also visited the following places and had interviews : (1) Laguna provincial government
office; (2) municipal offices of Paete, Pangil and Calamba; (3) Center for International Trade Exposition andMission (CITEM); (4) the Laguna branch of Land Bank of the Philippines ; (5) Bureau of Small and Medium SizeEnterprises Development (BSMSED); (6) Manila Office of the Japan Bank for International Cooperation (JBIC);
2

Table1: the List of SMEs and other institutions we visited in Laguna
Date
October 11

October 12

Place of Visit

Production items

Marcia’s Barong

Barong embroider

Eduviges Aquino Alunan Embroideries

Barong embroider

A small factory

Barong embroider (subcontractor)

Municipality
LumbanPaete Municipal Government
Lilok Paete Art Gallery and several small
Wood carvings and papier-machefactories
Elvis shop

Paete

Wood carvings and papier-mache shop

Pangil Municipal Government
October 13

October 14

Balasi Export

Papier-mache

KATABIL

Mineral water producing joint venture

Several small factories

Papier-mache (subcontractor)

A small jeepney factory

Jeepney

CITEM & the trade fair

ManilaDulay’s garden
October 16

PangilPlants and Gardening goods (wire works)

Land Bank of the Philippines

CalambaCalamba Municipal Government
October 17

C.E.R. Handicraft enterprises

Accessories

T.A.V.A. Enterprises

Ornaments (wire works)

A bamboo processor

Bamboo house

Calamba

October 18

Bureau of Small and Medium SizeEnterprises Development (BSMSED)

ManilaOctober 19

JICA and JBIC

ManilaOctober 21

PAETEM

Wood carvings and paiper-mache

Paete(7) Japan International Cooperation Agency (JICA) Philippine Representative Office; and (8) Paete AssociatedEnterprises for Trading, Export and Manufacturing, Inc. (PAETEM).
To analyze the current situation of SMEs in Laguna, we developed a problem tree and an objective tree byusing Project Cycle Management methods (FASID 1999) . The problem tree was developed using the results ofinterviews, secondary data from several literatures collected during OFW, and from our own observations.

2. The Definition of SMEs
In the Philippines small and mediu m enterprises are defined as any business activity or enterprise, engaged
in industry, agri-business and/or services, whether single proprietorship, partnership, cooperatives or corporation,
whose total assets (inclusive of thosearising from loans but exc lusive of the land

Table 2:Classification of SMEs in the Philippines

on which the particular business entity ’s

Category

Asset Size

No. of Employees

office) must have value falling under the

Micro

Below P*150,001

1〜4classification shown in Table 2 (DTI 1997).
Although there are three categories, Micro,
Cottage and Small, in this report we call all1

enterprises with total assets of P15,000,000
1

Cottage

P150,001 〜P1,500,000

5〜9

Small

P1,500,001〜15,000,000

10〜99Medium

P15,000,001〜P60,000,000

100〜199

Large

Greater than P60,000,000

200 and above*Note: “P” stands for Philippine peso.
Source: DTI, 1997 as cited in Perilla and Abarquez 1998

“P” stands for Philippine peso.

3and below as small enterprises . In fact, according to a professor of UPLB, the re are cases wherein the asset of thesmallest enterprise is only P 500.

3. SMEs in the Philippines
Following the period of economic and political turmoil in the 1990s, the Philippine national government
undertook a broad program of socio -economic reforms. These included an array of structural adjustment
including deregulation, privatization, and price, trade and investment liberalization with the overa ll objective offacilitating the country’s economic recovery.
The recovery was led by expansion of exports and foreign investments. In 1995, merchandise exports rose
29 percent, real Gross National Product (GNP) grew 9 percent and unemployment fell 9.5 percent. The
contribution of SMEs to this recovery cannot be overlooked since SMEs might be one of the economic vehicles
for growth, employment generation and social improvement.
As we observe in some of SMEs visited during OFW, the characteristics of SMEs in the Philippines are notdifferent from other countries. In small businesses, they employ one or more functional supervisors who takecare of production, sales or finance. The owner-manager is not actively engaged in production but performs tasks
related to the direction and leadership of the output without help from specialized staff. It is not rare that thesupervisor is also the business owner. A small firm also owns multi-functional technical tools and equipment
operated by workers with basic technical skills . In most cases, there is a single product line produced in small
quantity.
As to the problems encountered, we observed that almost all SMEs we visited have faced similar problems.
They have to face difficulties pertaining to market, technology, human resource development and financing
problems . The majority of SMEs is characterized by short supply in entrepreneurial and managerial skills . These
two factors are more often the main causes of business failure. However, the major problem is the lack of accessto adequate and low-cost sources of financing. In general, SMEs also lack access to information on areas which
could assist them in their operations such as market opportunities, technologies, business linkages, t raining
opportunities . These problems will be described in more detail in the following pages.
From the data we obtained from the DTI, the Internet and secondary literature, we were able to compile a
profile of SMEs in the Philippines.

3-1. The presence of SMEs
As of 1995, there were 494,974 business establishments , both in the manufacturing and service sectors ,operating in the Philippines,. Of these 2,487 were large firms and 2,712 were in the medium size category. The
rest consists of micro, cottage and small enterprises, which make up 99 percent of all Philippine businessestablishments (Figure 1).
As for jo b creation, in 1994, employment of SMEs in the manufacturing and service sector accounts for 66
percent and that of large firms is 34 percent (Figure 2) . Considering the fact that most of small enterprises
actually do not register business name to Department of Trade and Industry (DTI), we can say that SMEs
contribute more to job generation.
Although we were only able to visit few types of SMEs during the fieldwork, we can say that SMEs in thePhilippines engage in various industries . We estimate that more than 78 percent of SMEs are concentrated in4traditional product industries such as food processing, garments, gift, toys, handicrafts, metalworking, footwear,
leather goods, and wood and bamboo products.

3-2. The Philippine Government’s Policies for SMEs
The Philippine government regards SMEs as one of the vehicles of economic growth . Thus, in bothmanufacturing and service sectors, SMEs are supported by several laws and develop ment plans. In 1991,
Republic Act No. 6977 or the so called Magna Carta for Small and Medium Enterprises was enacted . The Magna
Carta consists of the general policies for the development of SMEs and provided for the creation of the Small andMedium Enterprise Development Council (SMEDC) and the Small Business Guarantee and Finance Corporation(SMGFC). SMEDC is supposed to act as government advisory body on SME policy and coordinate national
efforts to promote SME viability and growth. On the other hand, SMGFC is mandated to provide small firms
access to low-cost credit sources. The SMGFC isunder the supervision of SMEDC.

Figure1: Number of Philippine establishments

In addition, the Magna Carta required all(1995)

banks and other financing institutions to allocate a

Medium1%

portion of their loanable funds for exclusive use of
SMEs. The portion required to be set aside are

Large
1%

Small
18%

presented in Table 3. In consultation with thecouncil, the Central Bank was tasked to fo rmulate
rules for the effective implementation of thisprovision. In 1997, when the Magna Carta ’s

Cottage80%

financing support finished, Republic Act No. 8289,
which is a n amended version of RA 6977, came

Figure 2: Employment by scale classification

into force and obliged sanctioning banks to allocate
10 percent of their loanable funds to finance SMEs

34%

37%

until the year 2007 (Table 3).
Moreover, Proclamation No. 595 declared the
year

1996

as

Small

and

MediumBusiness

Enterprises Development (SMED) year. In 1998,
the “Philippine SME Development Strategy” wasmade kno wn and this development plan prioritize d29%
Small, Cottage & Micro

MediumLarge

Source: BSMED

the following five strategic in SME development,with corresponding programs and activities: (1)Table 3 Percentage of special allocation of

narrowing the focus by identifying priority sectors;

loanable fund to SMEs(2) promoting mutually beneficial linkages among

1991% of allocationfor SMEs5%

No. 6977

1992-1995

10%(Magna Carta)

1996

5%

1997

0%

up to 200710%

Republic Act

small and large firms; (3) strengthening technology
and R&D initiatives ; (4) bolstering human resource
development; and (5) improving access to finance.
To implement these plans, the Philippine
government established organizations related to

No. 8289

Year

5

SMEs development as described in the following pages.

3-3. Support Agencies/Organizations
The Philippines government has set up a number of agencies to implement those policies described above .
In addition, the government has linked up with industry associations and other private busin ess groups toimprove delivery of critical assistance and services to SMEs. Through our research, we found that there are manyorganizations aimed at support ing SMEs . However, the existence and effectiveness of these organizations inassisting SMEs are being questioned. Weak coordination among these organizations is also considered as aconstraint in SMEs operation . This aspect will be analyzed in detail in the later part of this paper.
Some of the organizations and supporting agencies we visited during the fieldwork, are as follows:
The Department of Trade and Industry (DTI) is the main umbrella organization of most government
agencies assisting the SMEs. The department exercises administrative and operational jurisdiction over SME
supporting agencies and councils which include the Bureau of Small and Medium Business Development(BSMBD), SME Development Council (SMEDC) and Bureau of Export Trade and Promotion.
BSMBD is mandated to promote the development of small businesses in the country with the help andsupport of local and international partners. The bureau is also mandated to initiate and implement SME programs
to address the needs in areas concerning entrepreneurship and enterprise development and institutional
development. On the other hand, SMEDC is authorized to ensure that the SME Development Plans are smoothly
carried out. There are provincial SMEDC that have activities in policy services and formulation, advocacy, SME
projects and services monitoring, and developing new SMEs strategies and approaches
Unfortunately, provincial SMEDC seems to be independent unit separated from national SMEDC. The
linkage between SMEDC in national and provincial level is weak. Thus the programs in national level may be notdistributed clearly and properly.
During OFW, our group was allowed to visit Center for International Trade Exposition and Mission(CITEM). The center is tasked with the responsibility of contributing to DTI’s export growth targets bypromoting the country ’s image as a reliable source of products in the international market . This objective isaccomplished through well-selected and professionally managed trade fairs, trade missions, and other export
promotion programs and activities held in the Philippines and abroad. During our visit, the CITEM wasconducting a big exposition in promoting Philippines ’ miscellaneous products such as novelty items, fancy goods,
wire works, papier-mache, furniture and others .
According to the presentation , CITEM has the following functions : (1) plan and implement trade andmissions; (2) implement industry development programs for emerging export products and services ; (3)coordinate merchandise and technical assistance programs; and (4) implement other programs and activities that
impact on exports.
From an interview with one of CITEM’s staff, we learned that although the center apparently has many
activities in developing SMEs, its activities have yet to reach “the lower layer” of SMEs. One of the reasons
given was because CITEM focuses on promoting SMEs to find new export markets for their products through
CITEM exhibitions. As for the training service held by CITEM, the staff said it is difficult to encourage small
enterprises to participate in the program since it requires high expenses.
With regard to financial support, we visited The Land Bank of Philippines in Laguna. We learned from the6

Land Bank’s staff that although financial problem is one of the main constraints for SMEs in operating
businesses, banks do not provide special loan windows for SMEs . Since SMEs are considered as regularbusinesses, the SME’s owners are expected to follow the same procedures just like a regular bank client. We
think that this bank policy contradicts the Philippine government polic y of provid ing financial support to theSMEs through th e banks. Th is might be due to the weak coordination between the government and the financial
institutions.
Besides the aforementioned organizations, there is also an increasing involvement of local government
units in SME assistance and development . This we found when we visited some municipalities. There areorganizations such as PAETEM and Laguna Chambers of Commerce and Industry that has been established by
local people who have become aware of the need to sustain SMEs.
During our fieldwork in the Philippines, our group also had a chance to visit the international organizations
such as JICA and JBIC. We thought these organizations could also provide support for the further development of
SMEs in the Philippines. However, contrary to our expectations, we found that in the recent years, JICA and
JBIC do not have any programs directly related to support SMEs in Laguna province. According to the officers
whom we interviewed, Laguna is not a priority and is ineligible for assistance because it is considered to beeconomically well off if compared with other Philippine provinces.

4. SMEs in Laguna
Laguna’s proximity to Metro Manila makes the province a strategic location for domestic and export

Table 4: Cottage and small -scale industries in Laguna ProvinceType of Industry

Product

City/Municipality

Food processing

Puto and ampaw
Buko pieNata de coco
Fruit candies
Arrow root and biscuits
Salted eggs and ballot
Cottage cheese
Halayan ube

Biñan
Los Baños
Alaminos
Rizal; Liliw; Nagcarlan
Liliw
Santa Cruz; Calamba; Los Baños
Santa Cruz; Pagsanjan
SiniloanCut-flowers and Ornamentals

Orchids, anthurium, gladiolus, ferns, palms,
pepperomia, calathea, crotons, etc.

Los Baños; Calamba; San Pedro

Woodcraft

Toys, furnitures, Christmas and wall decors,
religious statues, kitchen accessories,
wooden shoes, novelty items.

Paete; Pakil; Pangil; Famy;
Santa Cruz; San Pablo; Liliw.

Handicraft

Baskets, bags, hats, mats, kitchen
accessories, novelty items

Cabuyao; Santa Cruz; Caavinti; Luisiana;
Mabitac; Rizal; Los Baños; Pangil; Pakil;
Majayjay.

Papier- mache

Christmas decors, novelty items, toys, house Paete; Kalayaan; Pakil; Pangil; Siniloan;
decors, figurines.
Famy.

Stuffed Toys

Toys, wall decors, Christmas decors.

Paete; Pakil; Famy; Pangil;
Santa Cruz; Mabitac

Metalworking(Jeepney assembling)

Jeep bodies

Biñan; San Pablo.

Metalworking(Agri-machinery-farm implements)

Palay threshers, power tillers, foot pump,welders, seeders, dryers.

Los Baños; Biñan

Metalworking (Cutlery)

Nippers, scissors, balot,
Agri-tools

Santa Rosa; Lumban;
Calamba

Garment/EmbroideryChildren and women clothes, barong
tagalog, polo barong

Lumban; San Pedro; Calamba;
Alaminos; San Pablo City.

Metal craft
FootwearArchitectural products, Furniture
Slippers, bakya or wooden Shoes

Los Baños; Calamba
Biñan; Santa Rosa; Liliw

Source : Laguna Provincial Office(c).

7business. The province has been identified as the fastest growing industrial area in the Philippines. As a primary
growth center, Laguna, together with Cavite, Batangas, Rizal and Quezo n provinces, is included in the
CALABARZON development plan. With the establish ment of three industrial estates such as Laguna
International Industrial Park, Laguna Technopark, and Light Industry and Science Park of the Philippines , theprovince has experienced the influx of large -scale firms engaged in industries like textile production, electronics,
food processing, and industrial machine and car assembly. However, we found that the part of Laguna province
included in the CALABARZON plan is limited to the northwestern portion near Metro Manila . Municipalities inthe southeastern part of the province considered as rural areas are not included in the plan.
There are 27,045 major industry establishments in Laguna. Of these, 26,626 or 98.45 percent of theestablishment are classified as micro and cottage industries. Table 4 shows that most of establishments of microand cottage industries in Laguna are engaged in relatively low-tech industries . We were able to confirm this when
we requested one of the DTI staff to coordinate an interview with SMEs with working relationship with large
firms . The DTI staff declined our request since according to him, there are no SMEs of this nature. In Laguna
province, we were not able to find any relationship between large firms including foreign companies and SMEs .
As Table 4 shows, there is a dual economic structure in Laguna. On the one side, there is the enclave condition oflarge companies . On the other side, we find the SMEs in traditional industries. This means that SMEs in Laguna
do not make advantage of being near to the industrial estates .
In the following section, we will look at the present condition and the characteristics of SMEs in rural andurban municipalit ies we visited during our fieldwork. These include the mun icipalities of Paete, Pangil, Lumban
and Calamba. Paete, Pangil and Lumban are quite far from Metro Manila and are not big municipalities giventhat the population is around 20,000 (Table 5). On the other hand, Calamba is very close to Metro Manila and isdeveloping rapidly these days.

4-1. SMEs in Paete
Table 5: Estimated Population of 4 Municipaliti e s
4-1-1. Overview
Paete is about 113 kilometers southeast of
Manila. The town has a population of 23,024 in 2000
and is estimated to grow at an annual rate of 1.09
percent (Table 5). According to Paete’s history, theMunicipality
Paete
PangilLumbanCalamba

Population
23,024
20,31924,309272,331

Growth Rate
1.09%
2.84%
2.02%
4.46%

Source: NS.O. as sited from Laguna Provincial Office (b)name of the town was derived from a tool used in theart of carving or shaping figurines known as “paet ” in the local dialect or chisel in English. Due to the
Paetenians’ talent and skill in making sculptures, the industry has become well known not only in the Philippines
but also throughout the world.
4-1-2. The current condition
Paete is recognized as the handicraft center of the Philippines. This recognition refers in particular to thewoodcarving industry (Figure 3). Aside from woodcarving, papier-mache and resin -based handicrafts are also
produced by the towns artisans. For hundreds of years, the Paete’s handicraft products have been known in theworld because of excellent quality and high level of artistry. With these into account, it is understandable whymost of the Paetenians are engaged in handicraft industry as their main source of income. According to the most8

recent local governmental statistics, about 80 percent of the working -age population is engaged in handicraft
industries (Paete Municipality, 2000).
Most of the products of the companies we visited are destined for the international market, in particular theUnited States, some European countries, and Japan. Only a few of the products are for the domestic market. Bothraw materials and finished goods are h andled manually. Until now, high-tech handling equipment is not needed.
The SMEs we visited show a similar pattern of employment and wage systems. Average number of workers
in a factory is ten. Women work mostly on the finishing touches of the products. When orders exceed thecapacity of the regular workers, it is a common practice for a firm to employ temporary workers. Besides,
relatively large companies have many subcontractors, which are mostly household industries and supply
semi-finished or finished products. There is no formal requirement for Paetenians to land a job because all ofthem are considered to have talents and skills to work in the handicraft industry. The wages paid for the workers
depends mainly on the quality or level of difficulties and the amount of items they produced. For instance, in
Lilok woodcarving gallery, a worker involved in quite big and difficult items can earn P 2000 in five days.
SMEs owners and managers in Paete are faced with two major operational problems concerning productcost and price and shortage of raw materials. The first problem concerns difficulty in getting a competitive priceof the products for export. While production costs in the woodcarving industry have increased gradually, theprice of the finished product cannot be increased because of the competition . The majority of the owners andmanagers whom we interviewed said that the demand for some items has decreased since 1998. In addition,
Paetenian companies are gaining minimal profits because of the existence of middlemen. Since many of thecompanies do not have any contact with the export markets , the middlemen set the price and gain the margin for
their exporting services. Given these problems, the mayor of Paete suggested to the owners of the five large
enterprises for them to pool their efforts together
and form the Paete Associated Enterprises for
Trading,

Exportand

Manufacturing,

Figure 3: Woodcarving factory in Paete

Inc.

st

(PAETEM). Formally established on May 1 , 2000,
the objectives of the associa tion are as follows: (1)to achieve the prosperity of the town by promoting
Philippine handicraft industry; (2) to create a newcommunity where people will realize their wish tolive a life of quality; and (3) to help build a nation
by uplifting the lives of every worker to innovate
and ascend into greater heights. In the performanceof its tasks, the PAETEM has coordinative
relationship with the municipal government. For
example, the Paete municipal government lent
PAETEM a loan of P 1.2 million at low interest
rates.
PAETEM is expected to develop and widen
the international market for Paete’s products. As
part of this effort, the association has put up the9PAETEM gallery shop in the town center. The shop invites customers not only to see the products but also to feelthe atmosphere of the Paetenians’ arts. In the long term, the center can also help in promoting the tourism sector
by attracting more people to come to Paete. However, except for the common activities held in yearly weeklong
festivals, the local government has not planned any particular project to improve the tourism sector.

The second problem is the shortage of main raw material for woodcarving industry. Although we were notable to obtain exact information on the volume of wood consumed, we observed that the demand for wood as raw
material is quite high whereas. On the other hand, the supply is limited. This situation has been further
aggravated by the total log ban imposed by the Philippine government aimed at stopping deforestation and graveconsequences to the environment, in particular land degradation. With the total log ban strictly implemented, thePaete woodcarvers have been prohibited from using excellent wood species such as narra as raw materials fortheir craft.
Both the municipal government and the Paete artisans have exerted various efforts to cope with the scarcity
of raw material. Given the vital importance of the handicraft industry to the town’s economy, the Paete local
government with the cooperation of the private sector has started a wood plantation in a private land. This wasaimed not only for supporting the raw material required in production but also to manifesting a commitment toenvironment -friendly business. In addition, in order for the artisans to continue producin g wood carving goods,
some enterprises have started to use alternative materials such as medium density fiber (MDF) material orimported wood. However, since these materials are more expensive than local ones, production costs jumped up. .
Because of the s hortage of raw materials for wood carving, some enterprises including household industries haveshifted business from wood carving to papier-mache.
Considering that most of Paete’s people depend on handicraft industry as their main source of income, thelocal government developed programs and projects to sustain the competitiveness of handicraft industry.
According to the Ten-Year Comprehensive Development Plan of Paete 2000-2010 (Paete Municipality, 2000),
these programs and projects are:
• The establishment of a Paete website that serves as an effective link of the municipality to both local andforeign buyers. The web site should contain information such as municipal profile, summary of development
plan and programs, and business or investment opportunitie s that the town can offer to the world. To facilitatebusiness transactions among producers and buyers , the website should contain profiles and products of firms
and individuals as well as their e-mail addresses. This project can be undertaken by the private sector or intandem with the local government. Some large companies, such as PAETEM, already have access to thewebsite.
• The establishment of a training center to sustain and improve the skills of artisans. This training center will be
integrated within the 20 hectares industrial zone as part of the land use plan. Several years ago, some of theartisans volunteered to teach and impart their sense of community service. Implementing these practices of thedevelopment plan would facilitate these skills tra nsfer.
• The establishment of trading and marketing firm that would facilitate access of artisans and producers to local
and export markets. The firm may be able to present the Paete handicraft industry in trade fairs and exhibitions,
explore potential markets, and gather information about the latest trends in design and style in various nichemarkets. This firm, through the help of the local government, may establish working relationship with
10

Philippine embassies abroad , will be able to disseminate market information for various products of Paete.

4-2. SMEs in Pangil
4-2-1. Overview
The municipality of Pangil was founded on 1579. It is located in the southeastern part of Laguna province
and is only 5km north of Paete. The town is classified as a fifth class municipality with a population estimated at
20,319 in 2000 and is expected to grow at an annual rate of 2.84 percent (Table 5). While Pangil is known as an
agricultural municipality, it also has handicraft industries such as papier-mache and woodcraft.
4-2-2. The current situation
While SMEs in the handicraft industry do not comprise the largest part of Pangil’s economy, theircontribution cannot be underestimated. In addition to farming, most of the town’s households are also engage inhandicraft industry as suppliers of semi -finished products for larger enterprises and middlemen. During ourfieldwork in Pangil, we saw many households producing large volume of semi -finished and/or finishedpapier-mache products. Since the household based enterprises are as sured of the supply of necessary raw
materials by the large firms without the need to pay in advance, the owners -managers can earn additional income
without taking the necessary risk.
Papier-mache products are mainly for export (Figure 4 and 5). For instance, when we visited one of thecompanies of papier-mache, we saw a big carton box which was about to be exported directly to Japan. Largefirms employ use permanent workers and produce

Figure 4: Papier-mache shop in Pangil

items on their own . When customers’ demand exceeds
the capacity of in -house workers, the services ofsubcontractors are engaged. Thus, people employed inagriculture and fishery have the opportunity to
become suppliers of subcontractors by working at
home during nighttime.
Similar with Paete, almost all SMEs in Pangil
have a payment system based on the quality andquantity of the items produced. Wage level isdetermined by the extent of difficulties in finishing a
product: the more difficult the job is, the higher thewage

earned.

Asaworkerincreases

his/her

productivity, so does the money s/he earns. On the
average, permanent workers work from 8 to 10 hours
per day. During the peak season of orders, thecompanies recruit more people to work temporarily intheir workshop.
SMEs in Pang il also face problems similar to
those faced by SMEs in Paete. The stiff competitionin the world market, in particular to those posed by
11

Figure 5: Papier-mache factory in Pangil

China, has raised the attention ofPangil artisans on the need tomaintain high quality and create new
trends in each season.
Middlemen involved in export
are also found in Pangil’s handicraft
industry. The people whom weinterviewed complained that theycharge a high commission for theirintermediary services. Semi -finishedor finished product are taken by the
middlemen

directly

from

many

households or firms and then sell
these to companies outside Pangil.
For their efforts, the middlemen get a very high margin. While the presence of middlemen reduces the gain by
primary producers, they still play a significant role in the industry since there are many products from households
which cannot be absorbed by the Pangil-based export firms.
The municipal government of Pangil has realized the importance of the handicraft industry to the town’s
economy. Even with financial constraints as a fifth class municipality, the local government has formulated
programs aimed at improving the quality of life of the people. Although there is no particular program fordeveloping SMEs of handicraft industry, the local government is giving attention on support or services needed
to increase income generated from SMEs.

4-3. SMEs in Lumban
4-3-1. Overview
The municipality of Lumban was a principal mission station of Franciscans in the 16th and 17th centuries . It
was founded as a civil entity in 1590. The town is located about 104 kilometers away from Manila and is next toPagsanjan , one of the most popular tourist spots in Laguna Province. Population is estimated at 24,309 in 2000
and is expected to grow at an annual rate of 2.02 percent (Table 5). Lumban ’s business activities consist of manysmall cottage industries where most of the workers are women work. On the other hand, the men are engaged inother industries or some of them may go to other places to get job.
4-3-2. The current situation
Lumban is well known for it embroidery industry , especially that of “barong”, the Philippine formal wear2 .
The embroidery of barong is done by dexterous handwork. Clothes for the barong are made from plant fibers likebanana and pineapple, and also from silk, ramie linen, and synthetic fiber. The cloth of plant fibe rs comes mainly
from Cebu, and that of silk comes from Hong Kong. Before, th e embroiderers use only the clothes of natural
fibers for barong, but these clothes are not very strong and need a lot of care. In addition, there is a demand for2

At present, Philippine civil service rules require all government officers and employees to wear barong in their offices every Monday.

12

more elegant looking barongs. Thus they have Figure 6: Embroidery factory at Lumban
diversified the raw materials. Depending on what acustomer wants, the embroidery designs can beboth traditional and modern . Since cheap western
style clothes have dominated the Filipino people ’slife, demand for barong has been reduced. Thus,barong producers in Lumban have now diversified
to other embroidery products such as tissue box
cover, cushion cover, and coaster. As for the market,
only a few enterprises export their product to suchcountries as Europe. Most of the barong produced
is sold in the local market, especially in Manila.
This is because the barong is a traditional Filipino
wear and only a few people use it outs ide of thePhilippines . Moreover, it is very difficult to
produce a large amount of good quality barong as
production depends highly on handwork. However,the producers are trying to export more products.
The association of barong makers are promot ing
andsupport ing

theexportactivities

of

the

individual firms.
In terms of production process, the following are the necessary steps: first an under drawing on the clothes
is made; then they do embroidery by hand; and finally tailor the barong with sewing machines. There are several
relatively large firms which function as organizers of a series of the production procedures and engage in sales,
design, product development and sometimes export. They are also responsible fo r the quality of the products andcheck the quality of work when they receive the embroidered clothes. We visited two organizing firms during thefieldwork and both firms do not embroider in house and use subcontractors to minimize the cost of production.
The subcontractors are located in Lumban and as well as in other municipalities.
A lot of women are engaged in embroidery work in Lumban. By taking a walk around the town, we wereable to see many small factories where less than ten workers sit together and embroider under the eaves (Figure 6
and 7). Because of the characteristics of embroidery, female workers are dominant at factories. Most enterprises
do not provide any training program, the workers learn the skills of embroidery by observing and then ac tually
doing the job. We also saw women with their children at the working places , thus doing embroidery and taking
care of their children at the same time. The children have a lot of opportunity to observe their mothers ’ work
starting in early childhood . According to the workers we interviewed, the children can learn the embroidery workwithout any difficulty and some children start embroidery work at the age of ten.
We visited one subcontractor in the town and asked about working conditions. We found that the Ages ofworkers range from 10 to 60 years old. Average working hour is 10 hours per day and office hours is not fixedsince some of workers are students who co me to work after school. Wage is determined based on the skill of theworker and the quality of product . Average wage is P 15 to 20 per hour and the average income is P 1,000 to13

Figure 7: Embroidery factory at Lumban

2,000 per week. A special design needs more skillful work, thus the wage is higher than that of ordinary design.
Given the strong competition posed by other kinds of clo thes and the unpredictable demand, the overallsituation of the Lumban embroidery industry may be summed up as depressed. For the producers to survive, theyshould be able to offer high quality and well-designed products and sell these at an affordable price. Since there
is no government support for the industry at present, the producers have to survive on their own. To cope withthese problems, one of the firm owners said he had asked a Manila -based professional designer to design new
barong of more modern taste . He thinks that views this way as a means of keeping his business well. We are of
the same opinion that such efforts are needed to sustain this traditional industry.

4-4. SMEs in Calamba
4-4-1 Overview
Calamba is located in the western part of Laguna province and is very near to Metro Manila. If there is no
traffic jam, going to the town from Makati, Metro Manila takes only about one and half hour by car. Estimatedpopulation in 2000 is 272,331 with an annual growth rate of 4.46 percent (Table 5). Both the total population andthe growth rates are far bigger than those of Paete, Pangil and Lumban. The town has free trade zones where
many foreign and national factories are located . These factories provide many jobs to the local people of Laguna
province. During weekends, a lot of people from Manila come to Calamba to enjoy the town’s numerous resort
hotels with swimming pools of hot springs as main attractions.
4-4-2 The current situation
In Calamba, SMEs are engagde in various kinds of industries and unlike other three municipalities of Paete,
Pangil and Lumban , it is very difficult to point out one dominant industry. During the fieldwork, we were able tovisit a gardening wire goods factory, an accessory factory, a wire ornament firm, and a bamboo house maker.
Those four factories are varied not only in their product line but also in size and management strategy so that it isdifficult to generalize them as a whole. Thus, we will describe the present situation of two larger firms which areactively engaged in export and compare with SMEs in the other three municipalities.

14

Figure 8: Accessories factory at Calamba;

The largest company we visited isthe accessory factory which participatedin CITEM exposition held in Manila(Figure 8). During th e fair, th e manager
said they were able to solicit orders fromnew costumers from Hawaii, Saipan, andGuam. When we visited, we found thefactory’s

workers

were

producingearrings of ceramic hibiscus flower. Allof the products are for export. A designer
creates new designs every fifth monthbased on the costumers ’ needs.
There are about 90 workers in thefactory whose average age is 25 years .
Most of the workers, about 75 percent ofigure 9: Accessories factory at Calamba; checking thequality of products

the total, are women . Employees works 8hours per day and 6 days per week. Whenthe factory receives a lot of orders, theworkers have to do overtime work. Daily
wage per day is P 115 to 250 dependingon skills and the number of finishedproducts produced. There is a training
system for workers. Before starting towork, new employees have to undergo apreparatory seminar and learn all of theskills needed. Then every third month,
the employees are evaluated about theirperformance, knowledge, and skills.
The factory does not engage theservices of subcontractors. The whole
series of operation is done in house. Thisis because by using subcontractors , it isdifficult to satisfy the specifications required from the costumers. As for quality control, specialists are employed
to check quality at every stage (Figure 9).
The other firm we visited produces wire ornaments for export to Canada, Italia, and Japan. Only excess
products, about 1 to 3 percent of total production, are sold in the domestic market. The factory products consistsof Christmas decoration , candle holder, and photo frame. About 75 percent of products is related to Christmas
season. The firm was established in 1990 and started to exp ort in 1996 through exporters . Up to the present, thefirm engages the services of exporters for overseas transactions. To become a direct exporter, the firm
participated in CITEM exposition and was able to attract three potential customers. It takes about 3 months to15

negotiate with overseas buyers through exporters before the company can begin to produce the required products.
The firm does not produce the products it sells. What it does is to make prototypes which are passed on to
five subcontractors for mass production. The subcontractors are required to maintain high quality and it the
manager’s tasks to emphasize the importance of quality to them repeatedly.
Within the term, there are only 10 fulltime employees who develop the prototypes . The employees workfrom 8 a.m. to 8 p.m. for 6 days a week and sometimes do overtime work when needed. The wage is paid bypiece, for example, soldering one piece is P 13 and finishing one is P 29. When new employees come, the senior
workers teach them the necessary skills for one week.
The two firms are quite different from SMEs we visited in other municipalities . One of the most noticeable
difference is that the presence of a somehow systematic training system and quality check system. This meansthat the two firms have realized the importance of improving employees ’ skills and of keeping good quality ofthe products sold in the international market. As a result, the firms were able to export their products and to
expand the firm by themselves . One of the advantages is the short distance to Metro Manila which enabled thefirms to get more information about new trends and improved management skills.
To support micro industries, the Calamba municipal government started t h e “Livelihood Development
Fund” in 1994 with a total budget of P 200 million. A firm availing of loans from the fund is charged an annualinterest rate is 10 percent. During our visit, we were informed that the municipal government has lent about P 7
million from the fund . The target clientele are micro industries, mainly food processing and sarisari store , andaimed at uplifting the situation of poor people. In addition, the municipal government has set up the “Calamba
Manpower Training Center (CAMTRAC)” and “Youth center” which offers vocational trainin g program,
entrepreneur development course and other related activities .

5. Problem Analysis
Given our findings in each town and with the information we got from the offices we visited and from ourown observations, we conducted a problem analysis to pres ent the current situation of SMEs in Laguna. For theprocess, we followed the following steps. First, we identified several points considered as problem. Then, we
examined the causality and relationship among them. Afterwards, we categorized the problems into some aspects.
The result of the analysis is shown in flow chart 1.
From the analysis, we identified the core problem a s “SMEs in Laguna are performing below theirpotential”. In turn the core problem is caused by four direct factors classified into the aspects of finance,
marketing, product development and support system. The resulting effects are shown just on the right-hand sideof each cause correspondingly. The following discussion examines each aspect.

5-1. Financial Problem
One serious financial p roblem is the availability of affordable loans. As mentioned in section 3, banks
generally do not have a special window of favorable treatment for SMEs. One reason is that collection of loans
from SMEs , especially from small-scale enterprises , is difficult . Also, the banks require collateral and therequirement is very difficult to fulfill for potential borrowers from rural areas like Paete, Pangil and Lumban.
Furthermore , the unstable performance of SMEs and the resulting low repayment rates make borrowing money
more difficult. This in turn makes banks hesitant to lend. Moreover, the government does not have sufficient16

policies to provide financial support for SMEs,.
On the other hand, SMEs ’ financial management capability is not so high which in turn affect the stabilityof the firms’ income and the capacity to repay. Insufficient knowledge of financing is a big problems for the
SMEs. However, given their financial difficulties , what is a more serious is the lack of awareness on the value ofgetting such knowledge or skills of financial management. As a result, the financial base of SMEs in Laguna ishighly vulnerable to sudden changes in the operating environment .

5-2. Problems on Marketing
In marketing , the SMEs also face serious problems. One particular problem is high production costs
vis -à-vis foreign competitors especially from China. Given the presence of minimum wage law, labor cost in thePhilippines is higher than that in China. In relation to this, most of the SMEs rely on imported raw materials, andgiven the volatility of exchange rates in the country, the price of imported items inevitably rises . With
globalization, it is expected that imported materials should be cheaper than what the SMEs can buy domestically.
However, according to one of the producers, given that imported materials have to pass through Metro Manila
before reaching Laguna, the domestic transportation costs increases the price of the raw materials sourced fromoutside the country. As such, the SMEs in Laguna need to be highly competitive in relation to the fundamental
cost of sourcing raw materials.
Another problem is the existence of middlemen. Most of the SMEs export their products through theintermediation of middlemen who exercise substantial control on pricing. Given the high intermediation costs
posed by middlemen , any increase in price does translate into a real gain for the producers
Also, weak marketing strategy is an internal problem among SMEs in Laguna. This in turn is caused byunfavorable external condition surrounding SMEs, wherein they do not have adequate access to full informationfrom which to base strategy. For a firm to have an appropriate marketing strategy, it has to have information
about the market, especially foreign market. However, owners and managers of SMEs in Laguna do not haveenough tools to obtain adequate information and thus they have to contend with limited information to make theirdecisions. The government in turn does not offer sufficient help. While the concerned national government
offices have in their possession information about the market, trading, prices and sources of alternative raw
materials and others, these are not properly disseminated. Inadequate support from government leaves the SMEs
alone in their quest for better opportunities. The failure of the government to provide adequate, appropriate andtimely support to SMEs is one of the roots of the problem of SMEs on marketing
In addition, inadequate marketing knowledge is not the only problem. Failure to understand the value ofmarketing seems to be more fundamental. The SMEs marketing attitude is not aggressive enough and it seems theowners and managers are satisfied with the present condition even if this means that their market is not
expanding.

5-3. Problems on Product Development
To expand the market and to gain more profit, it is essential for a firm to develop new products . However,
we found that SMEs in Laguna are weak in product development. Possible reasons are the reliance on traditional
skills and technologies and small business size which does not allow flexibility for innovation. In addition,
except for relatively few active enterprises , many of the SMEs in Laguna seem not to have much interest on
17

research and development (R&D) . Thus the general level of R&D is not so high not only because SMEs cannot
afford to have a budget but also because they are not aware its value.
Another reason is low linkages among SMEs. Many SMEs do not have enough information on target
markets, which in turn prevents them from develop ing new products demanded by consumers . This unavailabilityof timely information on market demand is partly caused by the low linkages among SMEs . Information sharing
and cooperation among various companies are expected to activate R&D activities since such kind of cooperation
reduces the financial burden and managerial resources of R&D for each participating firm.

5-4. Problems on the Support System
As mentioned earlier in section 3, several organizations and agencies support SMEs in the Philippines.
Also, the government has systems for promoting SME activities. However, we found during our field researchthat many owners and managers of SMEs feel that they do not have any support from the government and the
public institutions. One of the reasons might be that while the Philippine government recognizes the importanceof developing SMEs, it has no comprehensive policy to translate vision into appropriate programs and projects.
As such, while there be projects identified at the national level, the benefits trickle only to limited geographicalcoverage and favored industries. The limited programs and projects of government fail to reach SMEs in rural
areas. This is caused by both the national government budget constraint and political instability. In addition ,decentralization of governmental functions and responsibilities has resulted into miscommunication and weaksynchronization between the central and the local governments which in turn lead to inappropriate andinsufficient supporting system. Also, according to JICA and JBIC officers, the income level of Region 4 which
includes Laguna province , is higher than other regions in the Philippines . As such, the region is not a preferred
destination for official development assistance. This means, Laguna cannot expect much foreign assistance topromote SMEs.

5-5. Effects of the core problem
Having identified and analyze the core problem of SMEs in Laguna, the next step is determine its overall
effects. The effects are as follows. First, the inadequate financial foundat ion results into the enterprises failure to
optimize operation, which means productivity remains low or cannot be increased. Second, difficulties in market
diversification and expansion are caused by weak market positioning. Third, low level of product development
leads to less diversification of products, thus it is hard for SMEs in Laguna to win in the highly competitivemarket. These problems are related to each other, meaning each one affects and complements the others.
These in turn reduce the income o f SMEs and at the same time narrow opportunities for business expansion.
These problems in turn affect SME workers ’ wages and skill formation. Government is also affected: if theincome of SMEs remains low, then it becomes difficult to collect sufficient tax from them. If tax revenue is notenough, the re is not enough budget to support SMEs. As a result, SMEs will have fewer opportunities to promote
their activities. The cause and effect relationship constitute a “vicious cycle”.

6. Possible Solutions
The final part of our research is a discussion of possible solutions to overcome the core problem identified
in the problem analysis. Herewith is the process we followed. First, we conducted an objective analysis wherein18

we replaced each problem in the problem analysis as objectives to be achieved. Through this process, weanalyzed what should be done to change the core problem for the better and as a result, what effects would be
gained. The result of the objective analysis is shown in Flow chart 2. The core ob jective of this analysis is that
SMEs in Laguna are performing according to their maximum potential. Second, we then try to propose possible
solutions in order to minimize if not totally eliminate the problems identified and analyzed in the aspects offinance, marketing, product development and support system.

6-1. Financial Foundation
Based on the problem analysis, we found that most of SMEs in Laguna are facing financial problems. The
financial foundation is weak because of three reasons. First, SMEs in Laguna have a difficulty to obtain loan.
Second, SMEs have difficult y in accessing other financial resources. Third and last, SMEs lack financial
management capabilities. These three reasons have a direct and serious effect on the financial foundation of
SM Es .
To improve th is situation, we propose the following. First, the national government has to allocate a special
budget for constructing a firm financial basis as well as special window or system by banking sector for SMEs.
In order to improve SMEs access to financial resources, measures may include lowering of interest rates andloosening the requirement for loan collateral. Second, on the side of SMEs, there must be a training program
aimed at building strong financial management skills. The training can be delivered by various organizations toinclude the local governments, non -governmental organizations (NGOs) and the private sector. However, for the
training program to be effective, excellent quality must be maintained at all times. Thus, training of the trainers isimportant. In addition, cooperative relationship among the various organizations or sectors is indispensable.
Third, the training program must be able to attract a substantial number of participants. Thus, it is worth while tothink about mas sive information system or giving incentives to SMEs for participating in the training program.

6-2. Market Position
Most of the SMEs in Laguna are weak in both local and international markets. This weakness is mainly due
to the SMEs lack of appreciation o f the value of marketing as part of an overall strategy to enhancecompetitiveness and improve weak market position. From the earlier discussion, it seems that from the problems
identified, this is the most significant. Even if the support system is good, the condition of SMEs will not
improve if the owners and managers do not wake up to the reality that an active marketing strategy is badly
needed by the industry. This lack of appreciation is partly the result of insufficient support from both the national
and the local government 3 .
To solve this problem, it is suggested that to hold seminars covering topics such as the target market,
marketing skills, exporting procedures, as well as developing marketing. By participating in seminars, owners
and managers of SMEs will be encouraged to become more aggressive in market expansion. Another means is toencourage SMEs to work together in order to get a bigger market share .
3

Based on the problem tree, lack of information, which plays a very important role in the market, is also the main reason for the weakmarket position of SMEs. It is possible that , to some extent, this is caused by the negative attitude of government or government staff. It
seems this is highly probable. However, it is difficult to discuss this matter since we do not have concrete and reliable evidence. Thus, it
becomes impossible to evaluate the extent by which government staff provide information support to SMEs as well as how far they haveachieved in developing an SME information support system. As such, this report will not provide a detailed discussion of this issue.

196-3. Product Development
SMEs in Laguna are confronted with a low level of product develop ment. This is mainly attributed to theweak linkages among the SMEs themselves. Ineffective coordination among SMEs hinders product development.
On the other hand, insufficient R&D also contributes to low level of product development. In turn insufficient
R&D efforts is due to a weak support system for technology promotion , insufficient budget for R&D, and failureof both the government and SMEs to recognize the value of R&D .
To achieve a high level of product development, SMEs need to have strong linkages among them. Thus, it
may be useful to dispatch coordinators r consultants from other organizations who will responsible for promoting
strong linkages among SMEs. Also, high level of R&D and its attendant technical advancement among SMEs
could be accelerated through the following means: (1) establishing a kind of the Department of R&D as agovernment organization, which covers all provinces ; (2) id entifying government anchors and other relevant
institutions that will assist SMEs; (3) influencing these ancho rs to boost their efforts in examining and promoting
technologies that would greatly benefit SMEs (this involves close and active coordination with national
government agencies such as the Department of Science and Technology, the Department of Agriculture , theDepartment of Environment and Natural Resources, LGUs and academe.); (4) fast-tracking the fulloperationalization of the Center for Technology Exchange and Training for SMEs. The Center is supposed toserve as a resource center with capabilities in information networking, increase of training opportunities for theabsorption and upgrading of technical know-how, and the organization of SME-targeted activities to syndicatedtechnology transfer projects.

6-4. Support System
The insufficient support system is caused by three main reasons. First , because of inadequate policies, thenational government does not have a comprehensive program to assist SMEs. Second , the national and local
governments’ programs to develop SMEs are not synchronized. It seems that the linkage and communication
between the national and the local government is weak. Third and last, the support programs of international
agencies to SMEs in Laguna is not strong enough because the province is not given high priority in terms ofbudget allocation.
As for recommended solutions, we suggest that the national government should have a comprehensive
support program to assist SMEs. While the national government has several support plans for SMEs, these are
not comprehensive enough . Concrete and operational action plans are not present . The government must integrate
the individual plans and implement a comprehensive one. A lso, both the national and the local government must
exert all efforts to develop strong linkages with each other aimed at synchronizing their separate efforts ofdeveloping SMEs. Finally, the Philippine government should request for assistance from international agencies
since such is needed before these agencies will move .

7. Conclusion
Given that a majority of Filipinos are in one way or another involved with SMEs, the development of
SMEs will undoubtedly bring not only economic growth but also the improvement of various social issues.
However, at present , SMEs in the Philippines are not performing based on their full potential. Our researchfindings show that there are four main problems faced by SMEs. These are weak financial foundation, weak20

market positioning, low level of product development, and insufficient support system. These problems are notseparate but are interre lated. As a result, it is difficult for SMEs to expand business. To minimize these problems,
we recommend that the government should do the following: (1) open seminars to improve managerial andtechnical skills ; (2) provid e preferential treatment for the financial needs of SMEs ; (3) strengthen relationships
and promote networking among SMEs ; and (4) improve the information service delivery in terms of quantity,
quality, and accessibility.
The national and the local government should lend an ear and extend a helping hand to SMEs. On the other
hand, individual SMEs also have to strive by themselves. It is important that every economic agent concernedwith SMEs should have a common awareness of the importance of SMEs development. Awareness in turn willserve as an encourage ment to do something decisive in order to solve the various problems as discussed in thisreport. Doing so may represent one of the most effective means by which long-term p rosperity can be achieved
for the Philippine economy and for the bene fit of the Filipino people.

References
BSMED. Present State of SMEs. Metro Manila. Bureau of Small and Midium Enterprises Development.
Calamba. 1999. Taunang Ulat . Calamba, Laguna. Calamba Municipality Office.
CITEM. 1999. Annual Report . Metro Manila. Cent er for International Trade Expositions and Missions (CITEM).
DBP. Industrial and Support Services Expansion Program (ISSEP) from Overseas Economic Cooperation Fund (OECF) .
Metro Manila. DBP
DBP. Industrial and Support Services Expansion Program (ISSEP Ⅱ). Metro Manila. Development Bank of the Philippines(DBP)
DBP. Overseas Economic Cooperation Fund ASEAN Japan Development Fund Loan (OECF-AJDF). Metro Manila. DBP
Institute For Small Scale Industries. 1999. Integrated Plant Survey At Rhema -J Handicrafts. Queszon City. University of thePhilippines Diliman, Quezon City.
Laguna Provincial Office (a) . Laguna’s Main Statistics. Laguna. Laguna Provincial Office.
Laguna Provincial Office (b). Comprehensive Development Program – 21pt. Agenda. Laguna. Laguna Provincial Office.
Laguna Provincial Office (c). Socio Economic Profile . Laguna. Laguna Provincial Office.
JBIC. 2000. Annual Report (Japanese). Metro Manila. JBIC.
JICA. 1999. JICA’s Activities in Philippines . Metro Manila. Japan International Cooperation Agency.
Paete. 2000. Comprehensive Development Plan of Paete 2000 -2001. Paete, Laguna. Paete Municipality Office.
PAETEM. 2000. Profile of PAETEM . Paete, Laguna. Paete Associated Enterprises for Trading, Export and Manufacturing,
Inc (PAETEM).
Pangil. 2000. 12 Point Program for the Year 2000. Pangil, Laguna. Pangil Municipality Office.
Perilla, Mario V. and Laida J. Abarquez. 1998, Small and Medium Enterprises in the Philippines; Status and Prospects. UPLB
Agribusiness Review Vol. 1. Los Baños, Laguna. UPLB.
Salazar, Melito S., Jr. and Zeneida O. Ticsay. Small Scale Enterprises Development Infrmation Support System. Regional
Seminar on Development Information .
Yao, Richard T. 1998, Small and Medium Enterprise Support in the Philippines . Research Paper. Los Baños, Laguna. UPLB.

21

Appendix: Flow Chart 1- Problem Analysis

Low profitability
Low
production
Low employment

Market displacement
Labor displacement
Difficulty in market expansion

Low
taxation

Low
Incomeof
SMEs

Low
marketshare

Difficulty tocompete inforeign market
Difficulty tocompete withother SMEs

Inability tocreateresponsive
marketSlow growth and development of SMEs

22

Financialfoundation of
SMEs is very
weak

Failure to
optimize
operation

SMEs IN LAGUNA ARE PERFORMING BELOW POTENTIAL

Low wages

Weak Market
Positioning

Low level ofproduct
development

Insufficient
supporting
systemLack of financial management
capabilities

Weak management
capability

There are inadequate policies forproviding financial support to SMEs

Limited financial support fromthe government

Difficulties of accessibility tofinancial resources

Lack of awareness on thevalue of management

Less effort of SMEs toimprove management

Inability to avail loans

High requirements to get loan

from banks
Unstable income of SME

SMEs have difficulty inloan repayment

Financial institutions don’t have special
window for SMEs

High interest rate

Dependency on imported raw materials

Stiff competition with China

Labor cost in Philippines is higher than in China

Unstable demand

SMEs depend their business on the limited busy season only

Lack of Control on Prices

Lack of bargaining powerPrice is fixed
Middlemen still dictate price

The access ofmarket information
Lack of marketingstrategy

Weak market
information

is limited

Lack of aggressive attitude forLack of commitment ofgovernment staff insupporting SMEs

Government is not active
in market providing
information

Lack of awareness ofgovernment staff toinvolve in program tofoster SMEs
development

Lack of awareness of the value ofmarketing strategy

developing new market
Lack of knowledge formarketing strategy
Low level of research anddevelopment

Lack of awareness about the value of R&D
Small budget for R&D
Technical supporting system is insufficient

Low linkages among SMEs to
support product development

Ineffective coordination among SMEs

Support from international agencies for development microenterprises is not accessible

Laguna is not a priority in terms of budget
allocation

Weak synchronization between national and local to development

National government does not have comprehensive

Inadequate policies toprograms to assist SMEs

support SMEs

Fast turn-over ofgovernment
leadership

Insufficient budget fromnational government

23

Appendix: Flow Chart 2: Objective Analysis

High profits
Operation
optimized

Maximum
production

High employment

SMEs is strong

Labor stability

High market share

Ease in market expansion

High
tax
revenueHigh
Incomeof
SMEs

Financialfoundation ofHighmarketAbility tocompetewith other
SMEs

share
Ease incompeting in

Ability tocreateresponsive
marketSMEs IN LAGUNA ARE PERFORMING AT POTENTIALHigh wages

Strong Market
Positioning

High level ofproduct
development

foreignmarketFast growth and development of SMEs

24

Sufficient
supporting system

High level of financial
management capabilities

Strong management
capability

Accessibility to financial resourcesHigh effort of SMEs toimprove management

Awareness on the value ofmanagement
Adequate policies providing financial support
to SMEs

Sufficient financial support from thegovernment
Ability to avail loans from banks

Less requirements to get loan

Stable income of SMEs
SMEs experience ease in loan repayment
Manageable interest rate

Financial institutions provide special window for SMEs

Less dependency on imported raw materials
Highly competitive with China
Philippines labors are more efficient than China

Demand stability

SMEs products are not limited to a single season
Price can be negotiatedHigh control of SMEs in prices

Lack of bargaining powerLess influence of middle man

Accessibility ofmarket information
Adequate marketingstrategy

Strong market
information

Government is
active in providing
market information

High commitment ofgovernment staff insupporting SMEs

Awareness ofgovernment staff toinvolve in program tofoster SMEs
development

Awareness of the value of marketing strategy

Aggressive attitude toward
developing new market

Sufficient knowledge for marketing strategy
Awareness about the value of R&D
High level of research anddevelopment

Full budget for R&D

Technical supporting system is sufficient
Strong linkages among SMEs to
support product development

Effective coordination among SMEs

Support from international agencies are accessiblefor development micro enterprises

SMEs in Laguna
attract investment

Strong synchronization between national andlocal to development
Sufficient budget from national government
National government hascomprehensive programs toassist SMEs

Institutionalize SMEs program planning body

Adequate policies to support SMEs

25

Working Group 2

A. The Current Situation ofFormal Education in the Philippines
B. Technical/Vocational Education andTraining in Laguna

AdvisorYutaka Otsuka, Professor
Members of Working Group 2-A
Masamichi Toyooka
Yoshiko Ogura

Mia KimYumi Kondo

Tsunetaka Tsuchiya **Members of Working Group 2-B
Patrícia Moutinho Brito

Gabriele Castaldi

Koichi Motomura*

Riai Yamashita*Group Leader**Sub Group Leader

27

A. The Current Situation of Formal Education in the Philippines

0. Introduction
Compared with other countries, the literacy rate in the Philippines is quite high . Moreover enrolment rate
is 99. 9% in primary level and 77. 8% in secondary level, which is higher than Singapore and the highest in
ASEAN countries (Figure 0-1). However while statistics on educational attainment may be high, the economic
situation in the Philippines is still not so good. The Philippines has succeeded in expanding its education inquantit ative terms, but now they have to think about “Quality of education”.

Figure 0-1 Literacy rate and enrolment ration in ASEAN countries
Adult literacy rate(% age 15 and above)

Youth literacy rate(% age 15-24)

1998
91. 8
90. 7
86. 4
95. 0
94. 8
92. 9
85. 7
84. 1
37. 4
46. 1

1998
99. 7
99. 3
97. 1
98. 8
98. 4
96. 7
97. 3
90. 5
56. 9
67. 5
85. 1

Singapore
BruneiMalaysia
Thai
Philippine
VietnamIndonesia
MyanmarCambodia
Laos
Total

Age grope enrolment rations (adjusted)
Primary age group
Secondary age grope(% of relevant age group) (% of relevant age grope)
1997
99. 4
87. 6
99. 9
88. 0
99. 9
99. 9
99. 2
99. 3
99. 9
73. 0
87. 6

1997
75. 6
81. 9
64. 0
47. 6
77. 8
55. 1
56. 1
54. 2
38. 8
63. 4
65. 4

Source: UNDP “ Human Development Report 2000 ”

People cannot develop theirskills.

Core Problem

Quality of education isinadequate.

Topic 4
Especially math and science
performance is poor

Students cannot understandwell.

Medium of instruction isdifferent from local language.

Topic 2

There are not enoughtextbooks for students.

Topic 1
There are many children in a
familyPeople lack awareness about
over-population.

Teacher cannot handle aclass well.
There are too many students
attending a class.

Number of classroom is not
sufficient.

Number of teacher is not
sufficient.

Topic 3Figure 0-2 Problem tree of the Philippine educational system28

We made a problem tree to diagnose the quality of education in the Philippines (Figure 0-2). Although thistree does not show all the problems of the Philippine educational system, we found some important topics tothink about this problem (topic 1 ~ 4). In this group report, we would like to discuss about these topics, based on
our own research in the Philippines . Our report is taking an omnibus style, which is written individually, yet ourframework is based on “Quality of Education in the Philippines”.
First, there are not enough teaching materia ls in the Philippines. For example, normally a few students
have to share a textbook and some of them cannot bring it home. On the basis of this condition, chapter 1 will be
discussing about “The Lack of Textbooks ” by Tsuchiya.
Second, in the Philippines , the medium of instruction is English (for subjects like math, science andEnglish) and Filipino (for the other subjects). However there are more than 100 local languages (including
dialect) used in the Philippines and the language used in classroom is s o metimes different from their local
language. In relation to this, chapter 2 is concentrating on “Bilingual Education” by Kondo.
Third , there are too many students per class in the Philippines. Although the reasons are varied, people ’s
lack of awareness about over population is also one of the reasons. So in chapter 3,we discuss “Influence of
Health Education” by Ogura.
Finally, after finishing their secondary education, many people go directly to work in the society. However,since most high school graduat es do not have much skill for work, chapter 4 is concentrated on “Secondary
Education as a Pre -stage of Working” and we will see how high school students perceive about their post-highschool education by Toyooka.

0-1. General information
Before going to discuss the individual topic, we would like to see the educational system of the Philippinesand overview of Laguna, where is our main research field.
0-1-1. Educational system in the Philippines
In the Philippines , educational system consists of 6 years elementary education, 4 years secondary
education and 4 years higher education (figure0-3). From 1994, educational administration is shouldered by 3
government agencies, i. e. DECS (Department of Educatio n, Culture and Sports), CHED (Commission on Higher
Age

Grade
20
19
18
17
16
15
14
13
12
11
10
9
8
7
6

14
13
12
11
10
9
8
7
6
5
4
3
2
1

TESDA

University
Collage

CHED
Higher
Education

Technical Vocational Courses
High School

Secondary
Education

DECS
Elementary School

Elementary
Education

Pre-School

Figure 0-3 Educational System in the Philippines
29

Education) and TESDA (Technical Education and Skills Development Authority ). DECS is in charge of basic
education in elementary and high school, and CHED is in charge of colleges and universities. On the o ther hand,
TESDA is in charge of technical and vocational sectors both in formal and non-formal systems.
0-1-2. Overview of Laguna
Through out the OFW period, our main research field was Laguna province, and we visited someelementary and high school as well as administrative offices. Laguna is in Region 4 (Southern Tagalog Region)and its local language is Tagalog. Laguna has the second largest population among provinces in Region 4, whichis estimated to be 1,903,684 in 2000. There are 562 elementary schools and 175 secondary schools in Laguna, as
well as 601 primary schools, 34 colleges and one university (U. P. L. B. = University of the Philippines, Los
Baños). Literacy rate is 93. 18% in 1995, which is almost same as the national average, i. e. 94. 1% in 1995.

1. The lack of textbooks
1-1. Introduction
At present, the lack of textbooks is a serious problem in the Philippines. When we visited elementary
schools, we observed that two or three, sometimes more than four students were sharing one old textbook. In
Japan, all students have their own textbooks, and of course they can bring them home. In addition, when they arepromoted to the upper grade, the ir old textbooks are not used by other students since they will be getting new
ones. The situations in these two countries are quite different. Therefore, we would like to discuss imbalanced
and insufficient distribution of textbooks in the Philippines.

1-2. Outline of the research
In this paper, what we try to show is how serious the lack of textbooks in t he Philippines ’ schools is. Threepoints seem to be helpful in attempting to outline this problem. The first point is the relationship between the size
or location of schools and the students / textbook ratio. 1 The second point is about the subject , that is to say,which subject has fewer textbooks than other subjects are in each school. The last point is grade levels. It refers
to which grade has the greater student / textbook ratio.
In order to conduct this research , we visited five elementary schools in Laguna Province. Two schools arelocated in San Pablo and Los Baños, which are urban areas. School A has 5377students and 123 teachers. School
B has 1389 students and 36 teachers. The other three schools are located in Sta. Maria, which is a rural area.
School C has 489 students and 15 teachers. School D has 388 students and 9 teachers. School E has 264 students
and 9 teachers.

1-3. Comparison of the number of students and the student / textbook ratio
First, we focused on the relationship between the size of schools and the student / textbook ratio. This ratio
is studied in four main subjects (English, Filipino, Mathematics and Science / Health). In school A, which is thebiggest school among 5 schools, 1. 44 students on the average share one textbook. Meanwhile, in school E,
1

The ratio of the number of students to the number of textbooks in one class. This is the number of students divided by the number oftextbooks in each grade and in each subject.

30

Figure 1-1: Number of students and Students / textbook ratio
2.50

6000

Textbook ratio

4000
1.50
3000
1.00
2000
0.50

No. of students

5000

2.00

1000

0.00

0
School A

School B

School C

Textbook ratio

School D

School E

No. of Students

Figure 1-2: Students / textbook ratio in each subject
4.00
3.50
3.00
English2.50
2.00

Filipino

1.50

Mathematics

1.00

Science and Health

0.50
0.00
School A

School B

School C

School D

School E

which is the smallest school, one textbook is shared by 2. 14 students. So, the more students the school has, thelower the student / textbook ratio become (Figure1-1). In addition, schools in urban areas are in a better situation
than in rural areas.
According to DECS, textbooks are supposed to be distributed in accordance with the number of enrolled
students. However the actual situation is different as this figure shows. If textbooks are distributed by theenrollment of students, the ratio should be same in every school. This is one of the gaps between the scheme of
DECS and the actual condition.

1-4. The Student / textbook ratio in each subject
Secondly, we looked into each subject. There is another gap between DECS’s scheme and the actual
condition in schools. DECS places a higher priority on language education than other subjects. If so, it is naturalto think that there are more textbooks for language subjects such as Filipino, which is the national language andEnglish, than for other subjects. But comparing with other main subjects such as Mathematics and Science /Health, language subjects have fewer textbooks than the others (Figure 1-2). Interestingly, the student / textbook
ratio for Filipino is the highest in three schools (B, D and E school). In E school, one Filipino textbook is sharedby more than three students. It is the same case for English. English has the highest rate in A school and second
highest in three schools (B, C, E school). If DECS wants to encourage language teaching, it is important toimprove this situation.
31

However, in these four subjects, one can see better condition in these four subjects than others. For
example, in Hekasi which is Social studies in 4-6 grades, students do not have any textbooks in school E. School
B is also facing serious problem of scarcity of textbooks in this subject. They do not have any textbooks in 4th
and 5th grades. In 6th grade, one textbook is shared by 20 students. Other subjects do not have enough as same as
Hekasi . But except for the main four subjects, there is no correlation between the number of students and thestudent / textbooks ratio. This is because it is better and easier for the teachers to prepare materials themselves
than to teach with textbooks that are shared by many students. But in the four main subjects, it is too difficult toteach them without textbooks . That's why textbooks for these subjects are more equally distributed than othersubjects.

1-5. The students / textbook ratio in grades
The last point that we would like to discuss about is grades. Tendency of the student / textbook ratio by
grade is very clear. Comparing former grades (1st - 3rd ) and latter grades (4th - 6th ), the ratio of the latter grade ishigher than the former one (Figure 1-3). It can be estimated from this fact that the former grades are given greaterpriority than the latter grades. The reason is considered to be that the older the students become, the easier for theteachers to handle.
Figure 1-3. Students / textbook ratio in each grade

2.50

2.23

2.00
1.50

1.38

1.31

2nd

3rd

1.19

1.80

1.90

4th

5th

1.00
0.50
0.00
1st

1

6th

1-6. Findings
From the aforementioned observations, the lack of textbooks in the Philippines can be summarized by thefollowing trends:
1. The more students the school has, the lower the student/ textbook ratio becomes ;2. Schools in rural areas have a higher ratio than urban areas;
3. The lack of Filipino textbooks is the most serious among the four major subjects; and4. Students in latter grades have to share textbooks , more than former grade students .
Also, it should be added that there are some gaps between DECS’s scheme and the present situation. We
may, therefore, reasonably conclude that, two tasks must be fulfilled by DECS urgently . First, they shouldallocate more budgets on textbooks. Second, they should perceive the conditions of each area to distributetextbooks properly. It is impossible to try to solve all of the educational problems because of budget constrain ts.
But even if they do not have sufficient budgets and capacity, higher priority should be given to these tasks whenpolicies are decided . This is so because distribution of textbooks is one of the most fundamental and important32

issue on school education. To say more, without textbooks, it is too difficult for the students to obtain a highquality of education.

2. Bilingual Education
2-1. Introduction
The Philippines is a multi-lingual country where more than 130 languages are spoken. It is very difficult tofigure out whether all these languages are independent languages or just dialects. So far, 70 of them have beenrecognized as different languages, and eight languages of them, which have the number of native speakers
reaching 800 thousand or more such as Tagalog, Sebuano, Iloko, Bikol, Hiligaynon, Waray, Pampanggo, andPangasinan, are called major languages. In such an environment, English is regarded as the most importantsecond language, the most versatile one in communicating with people who have differe nt language background.
In schools, English is not only taught and learnt as subject, but also used as a language of instruction due
to the bilingual education policy adopted at all levels of schooling. Another instruction language is Filipino, thenational language. Mathematics, science, and English lessons are instructed in English, and the rest in Filipino.
Though manuals and guidelines on the teaching of English in primary schools are provided, no prescribed
approach has been applied permanently. While people in the Philippines have channeled their energies into
English education, the Department of Education, Culture, and Sports adopted the Lingua Franca Policy last year.
Under this policy, only one language is used as medium of instruction. So far, major Lingua Franca are Tagalog,
Sebuano, and Iloko. There is one pilot school in every region now.
Thus, the Philippines is quite an interestingly diverse country to survey about languages. The author of thissection is particularly interested in such language condition in the Philippines and wrote this paper aboutbilingual education in primary schools particularly focusing on mathematics lessons.

2-2. Mathematics Classes
During the overseas fieldwork, we observed elementary school classes of grade one and grade two at threedifferent schools. School X is located in urban -rural area that there is one of the famous universities in that area.
Majority of pupils ’ parents have higher education and work at academic institutions. School Y and Z are locatedin ru ral area and have one or two sections of every grade. Besides, school Z is a pilot school of the Lingua Franca
Policy in Region Ⅳ. Therefore, all subjects are taught in Tagalog for grade 1 pupils at school Z. According to a
DECS officer, Lingua Franca school is chosen among lower income level areas.
School X (in urban-rural area)
Grade: 1st /Number of pupils: 53• Instruction is only in English. Tagalog, their native language, is not used in class.
• Pupils usually make responses to teacher’s instructions in their voices. For example, “thank you, teacher” isoften said by pupils when teacher admonishes them to be well behaved.
• Teacher adopts Audio -lingual Method.
• Almost all the pupils understand what their teacher says in English. It seems that there are no significant
language problems in this class.

33

• Pupils who have performed perfectly are usually “rewarded ” with their classmates ’ clapping hands. They may
clap their hands once, twice, or three times following their teacher’s dictate .
School Y (in rural are a)
Grade: 2nd /Number of pupils: 35• Pupils who are divided into three groups depending on their language ability sit together with their members inthree different groups.
• Instruction is often in Tagalog rather than in English.
• English instruction is always followed by its translation spoken in Tagalog.
• Most pupils could give no response to teacher’s question until their teacher repeated the same question in
Tagalog.
• According to teacher, one third of pupils cannot read and write Tagalog.
• It is explained that pupils who live in poverty have lower literacy.
School Z – Lingua Franca school (in rural area)
Grade: 2nd / Number of pupils: 42• Each pupil has his/her own small blackboard. Answers are written on this small blackboard .
• Together with the blackboard, each pupil has his/her own paper clock. Being asked the time written in Arabic
numerals, pupils show their clocks after setting the hands to the appropriate position.
• Pupils give quick responses to teacher’s prescription.
• It seems that none of the p upils have any language problems.

2-3. Findings
Estimating by pupils ’ performance, it seems that bilingual education has succeeded at school X while
school Y has some problems. Since we have only limited information on these schools, we cannot discuss the
problems at school Y in detail at the moment. However, there is considerable evidence to show that there is
ample scope for improvement in the present bilingual education. On the other hand, it seems that Lingua Franca
Project has succeeded. However, the project only started last year. Thus, it is too early to conclude whether the
project is successful or not.

3. Influence of Health Education
3-1. Introduction
To minimize overpopulation, fami ly plann ing is indispensable. As shown in Table 3-1, total fertility rate
(TFR) in the Philippines is very high compared with other Southeast Asian countries.
Table 3-1: Comparison of TFR, population growth rate and women’s literacy rate
Total Fertility Rate
Population Growth Rate

Philippines
3. 62
2. 1%

Thailand
1. 74
0. 9%

Indonesia
2. 58
1. 4%

Vietnam
2. 60
1. 6%

Malaysia
3. 18
2. 0%

Women’s Literacy Rate

94. 3%

91. 6%

78. 0%

91. 2%

78. 1%

Source: International Planned Parenthood Federation, Country Profile, http://www. ippf. org/regions/countries.
The Central Intelligence Agency, The World Factbook, http://www. odci. gov/cia/publications/factbook.
United Nations Population Fund, The State of World Population 2000.

34

In general, if women ’s literacy rate is high, TFR will decline. However this prevailing opinion does not fit
in the Philippines. This research is aimed at finding the causes of this phenomenon as well as determine theinfluence of health education. Information was collected from questionnaires and interviews. This paper is a
result of our field research on health education in formal schools.

3-2. The present condition of health education
DOH (Department of Health) is in charge of planning and implementation of health programs, such as
responsible parenthood (used as the same meaning as “family planning ” in the Philippines) plan. DOH central
office prescribes the outline of the national health programs, and provincial governments decide which topromote.
Also, DOH central office supports and gives advice to DECS for composing the curriculum of healtheducation. Since responsible parenthood plan is one of the main issues of DOH national policy, it is introduced inschool curriculum.
Health education concerning responsible parenthood starts from 5th grade of elementary school. They teachmale -female dif ferences in organs and basic mechanism of pregnancy in science class. Next step is in 3rd grade ofhigh school. Contents are concept of responsible parenthood and usage/effects of contraceptives, which is taught
in PHEM (physical health education and music ) class. In addition, municipality health educators , who areappointed by DOH provincial offices visit schools and give supplementary lectures . This is a casual lecture forhigh school students . They provide practical information according to the provincia l health programs.
Lack of teachers and classrooms leads to conduct a joint class where students are taught together without
reference to their sex. Though some high school teachers prefer to teach separately, most of them say that it isbetter to teach together, because students can feel closer to each other. And from another point of view, sincemore than 90% of schoolteachers are female, it might be quite difficult for them to handle a health education
class only for male students.
Compared with health education in Japan, the contents of the Philippines ’ curriculum are more detailed andpractical. In Japan, the quality of sex education is poor: it provides only basic information and classes are limited
to female students. But recently, it is changing to an equal education for both sexes .

3-3. Results of the questionnaire
A questionnaire was used to study the influence of health education for creating awareness ofoverpopulation. This was distributed to 4th grade students in two high schools. They have already finished theirlessons about responsible parenthood in the previous year. This research was conducted in schools. Besides the
specific questions, it asked their sex, age and religion. Their name was not required to write down. It took about
10 to 15 minutes for the students to fill out the questionnaire.
Two sites in Laguna Province were chosen for this research. One is San Pablo, the only city, and the otheris St. Maria, the farthest municipality from Metro Manila. Accord ing to the statistics, St. Maria has the lowest
Table 3-2: Sample data
Site name
San Pablo
Santa Maria

Total number
109
49

Male
48
20

Female
61
29

Age
14〜19
15〜19

35

literacy rate among Laguna Province.

Question 1. Did you know about responsible parenthood ( family planning) before you learned in school?
Figure 3-1: Result of Question 1
San.PabloYES
NOSt.Maria
0%

20%

40%

60%

80%

100%

Question 2. Was the information different from the one you had? (Question given only to the students who
answered YES in Q1)
Figure 3-2: Result of Question 2
YES

San.PabloNO
St.Maria0%

No Answer
20%

40%

60%

80%

100%

Most of the students who had information about responsible parenthood beforehand answered that theirparents had talked to them. And around 80% of the female students heard about it when they were in elementary
schools.
The difference between the information they heard from their parents and school education contents was
about the usage of contraceptives. Some parents had told their children about so-called “natural familyplanning”(NFP) 2 , which does not use contraceptives. However, this method has higher risk of failure and also it
is not an effective measure against AIDS or other STDs. It cannot be said that NFP is very effective method for
fertility control. (Effectiveness for preventing pregnancy: oral pills 97%, male condoms 90%, NFP 75%)
Question 3 asks whether they think it is important to teach responsible parenthood in school curriculum.
Approximately 90% of the students answered YES. Most of the reasons were to have proper information and to
be aware of overpopulation.

Question 4. Have you ever been to a lecture or a workshop ( outside school) concerning about this matter?
Figure 3-3: Result of Question 4
YES

San.PabloNO
St.Maria0%

No Answer
20%

40%

60%

80%

100%

Main reason for not attending these workshops was lack of opportunities. Expectation and the res ult turned
out to be opposite. Generally, cities have more opportunities, than rural areas. However from this result, in this2

Method to prevent pregnancy. Roughly classified into two types. 1) Avoid intercourse during fertile period. 2) Withdrawal.

36

city, there is less demand for these activities or are meeting some difficulties in conducting them.

Question 5. Do you think the government should enhance responsible parenthood plan?
Figure 3-4: Result of Question 5
YES

San.PabloNO
St.Maria0%

No Answer
20%

40%

60%

80%

100%

As mentioned earlier, DOH provincial offices are commissioned to implement responsible parenthood plan.
However, in Laguna Province, the local government does not put emphasis on the plan. Pressure from the churchand government executives’ beliefs influences the government policy.
It should be noted that, approximately 83% of the population in the Philippines are Christians (Roman
Catholic), which prohibits the use of contraceptives. This might not be the only reason, but prevalence rate offamily planning is low. (Table 3 -3) And in San Pablo 80%, and in S anta Maria 70% of the students who answered
the questionnaire were Catholic s.
Going back to the result of the previous question, it may be presumed that, the area where ratio of believersof religion , which does not adopt contraceptives, is lower, it becomes easier for the people to have informationand opportunities.
For these reasons, even if promotion of responsible parenthood plan is one of the main agenda of DOH,
there is a big gap of achievement between provinces. The biggest problem is that DOH central office does notdirect local offices , which have been devolved to local government units since 1991, to help them implement theplan. This means that even if Laguna Province is lagging behind in achieving responsible parenthood plan, there
is no immediate remedy in sight . As we can see from the interview results, the government polic y does not suit
students ’ concerns.
Students’ reason for answering YES in this question was to have a countermeasure for overpopulation
crisis. They realize that overpopulation is a big problem, which will be an obstruction for development of theircountry.

Table 3-3: Comparison of contraceptive prevalence rate
Modern Methods 3

Philippines
28%

Thailand72%

Indonesia
55%

Vietnam
56%

Malaysia
31%

All Methods 4

47%

74%

57%

75%

48%

Source: International Planned Parenthood Federation, Reproductive Rights 2000

3-4. Findings
Although responsible parenthood plan is introduced, so far, it is not very effective to reduce TFR. DOH
central office have set up a target of this plan, which aim to reduce TFR down to 2. 1 by 2005. Sorry to say, but
3
4

Condoms, oral pills, sterilization and others
All methods including NFP

37

judging from the pres ent situation, we cannot do other than doubt the achievement.
Through this research, we have found a point, which might corroborate the comment of DOH official. She
mentioned that one of the supposable obstacles to implement this plan is people ’s belief. As aforementioned, it isnatural to think that rural areas are more conservative and lack information about responsible parenthood.
However, from these results, we can say that it is not only the geographical area or literacy rate, which influencepeople ’s accessibility to information.
Though, religious belief is very sensitive issue to discuss in program implementation, government andchurch should think carefully to make a decision, which meets the needs of young generation, who are concerned
about this matter. Since teaching about responsible parenthood properly in school, students ’ awareness ofoverpopulation and other problems caused by high fertility rate, is growing even they are religious.
As far as we observed, we can conclude that health educatio n is effective to awake awareness of this matter,
and when this generation enter their productive age, we can expect that it would help them to practice responsible
parenthood plan.

4. Secondary Education as A Pre-stage of Working
4-1. Introduction
The Ph ilippines has high enrolment rates in primary and secondary education . According to interviews
with school staff from six elementary schools and three high schools conducted during October 2000, it wasestimated that around 90 % of elementary school students graduate and then continue their education at highschools. Teachers from the same high schools also estimated that around 50 % of graduates are enrolled at
tertiary institutions. Despite a lack of follow-up surveys on elementary and high school graduates, statistics andinterview results indicate that almost all children have access to a primary education, and a majority of children
have access to a secondary education. The percentage of high school graduates going on to tertiary education,
however, is approximately halved.
Then, what are high school graduates’ hopes for the post-high school? Some of them may pass the National
College Entrance Examination (NCEE) and then go to study at a college or university. Some may go to a private
institution, which provides technical/vocational training. And others enter the labor market and then startworking. But here for the third group, even if secondary education curriculum in the Philippines provides highschool students with basic job skills, knowledge and in formation for obtaining initial gainful employment 5 , howprepared are they for entering the labor market and working? Among 175 high schools in Laguna, there are only
several schools which have special technical/vocational curriculum. This means that only small percentage ofstudents can get technical/vocational education in secondary education. So the graduates from a general highschool, who do not go on to a college, university or technical/vocational institution, are the weakest in the labormarket. Referring to results of a questionnaire we provided to high school students, we shall see if they are readyto start working.

5

DECS “ Education in the Philippines”

38

4-2. Students’ post-high school preferences

Figure 4-1: High school students' preferred

In order to make clear how prepared students are

fields of specialization at a tertiary levelfor entering the labor market, 68 grade IV students froman urban high school, and 48 students of the same grade
Othersfrom a rural high school, were asked to complete aquestionnaire regarding options available to them at the
post-secondary education stage. When analyzing the
responses, no apparent disparity was found between the

Medicine
Tech. &
Home
Economics
Businessurban high school students and the rural school students.
Responses

tothequestionnaires

Science &ScienceTech.

Englishindicated,

however, that 90 % of the students hoped to enter

Math

Computer

university or college, with 62 % of them having clear
aims to study a specialized field and 25 % just hoping toobtain a degree. When one considers these figures, it becomes very evident that a majority of secondary school
students do hope to continue their education at a tertiary level. The following diagram displays what cou rses
students are interested in, and suggests that science and technology courses followed by computer and math are
the most sought-after courses for which the high school students would like to specialize.

4-3. Counseling for high school students
Although the Philippines can be considered a country which has a large enrolment in tertiary education, it
must be noted that a high percentage of high school graduates who hope to continue their education are notnecessarily able to enter tertiary institutions. More than half of the above 90 % students do not go on to auniversity or college, and their hopes of specialization are not realized so easily. One of reasons why t here is thisgap between students ’ preferences and the real situation is that high schools are not taking an active part ingiving students the advice about their next courses after high school. This is confirmed by the fact that theschools we visited did not have follow-up survey for their graduates and teachers did not know the exact
percentages of graduates in each post-high school course, as aforementioned.
The questionnaire results aforementioned show the amount of counseling that high school students receive.
6

It indicates that 76 % of students talked about their future options, regarding education, with other family

members, and 18 % with friends. An excessively low number of students talked about post-high school options
with their teachers, with a figure as low as only 4 %. It seems that if high schools provided counseling for theirstudents then a higher percentage of students who had hoped to enter a tertiary institution would be able to, orthat students would be made more aware of other options available, i. e. vocational courses, apprenticeships, etc.
The questionnaire results also demonstrated that 90 % of graduating secondary school students are anxious
about what they will do after completing their secondary education with 30 % of these students indicating astrong anxiety.

6

Any counseling the students ever had from grade I up to the 5th month of grade IV39

4-4. Findings
Research suggests that students may not be made aware of options available to them at the post-secondary
stage and hence are not prepared to enter the workforce. Figure 4-4, “Unemployed Persons by highest grade
completed in Region IV – Percentage Values”, in the education group B report, highlights this further with 45 %of the unemployed in region IV only having completed a secondary education. This high proportion also suggeststhat people who do not cont inue their education after high schools are more susceptible to future unemployment.
It could be argued that if a higher number of students received teacher’s counseling or professional advice
about post-high school options at the high school level, they would not only be made more aware of options
available to them, but that post-high school anxiety and possibly future unemployment, could be significantly
reduced.

5. Conclusion
Through our research, we could observe the existing condition of the Philippines ’ formal education. Since
we made a great point of interviewing teachers and students in the fields, we have picked out many problems,
which DECS and other government officials pay less attention or did not recognize. To improve the quality ofeducation, at least it might be better for DECS to look further a field and reflect on their current policies .
Also, alleviation of disparity between rural and urban areas might be one of their main tasks. The gap
between areas was bigger than we had imagined. Mas siveness of the education facilities such as teachingmaterials and other statistics 7 indicate the imbalance in areas. And it is not only the economic condition but also
parents ’ motivation for their children’s education influences their performance.
As aforementioned, in Laguna Province, Tagalog is spoken as their native language. Since Tagalog is thebase language of Filipino, students have no difficulty in understanding Filipino as a medium of instruction. It canbe supposed that in non -Tagalog speaking area, there would be more or other problems, which DECS might haveto work on.
Moreover, the relation with the society is another issue. For providing adequate education to help thestudents to enrich their life, such as skill training, reconsideration o f the school curriculum has a room to discuss.
In addition, school system to support students for their future consideration is needed.
Since the style, which we took for our group research was a rather daring plan, we cannot completely denythat the focus of this report is somewhat discursive. But observing the Philippines ’ education system fromvarious points of views , we have found diverse problems, which can be considered as a merit of our style.
As we just stayed in the Philippines for a short time, it is difficult to suggest a perfect remedy for an
overall improvement of education quality. However, we hope that our research results would be some help toanyone who is concerned with this topic.

Acknowledgment
We deeply appreciate all the students, teachers, government officials and organizations that accommodated
us, for the immeasurable cooperation and hospitality. We are also grateful to all the faculty members and staff of
UPLB and GSID, for supporting us. And most of all, our deepest gratitude is given to Edit, our counterpart from
7

Teacher/student ratio, size of one class etc.

40

UPLB. She organized our schedules and accompanied us during our stay. Without her wholehearted support,
advice and patience, we could not possibly accomplish our research.

Reference“The DECS Background”
Laguna’s Main Statistics

UNDP “Human Development Report 2000”
Maraldo Pamela Ph. D. , R. N & The People ’s Medical Society, Women ’s Health for Dummies, IDG Books
WORLDWIDE 1999
小野原 信善. 1998. 『フィリピンの言語政策と英語』 窓映社.
北村邦夫 編 「リプロダクティブ・ヘルス／ライツ」 ペリネイタルケア

９８夏期増刊 メディカ出版

Internet
International Planned Parenthood Federation, Country Profile, http://www. ippf. org/regions/countries, Reproductive Rights
2000
The Central Intelligence Agency, T he World Factbook 2000, http://www. odci. gov/cia/publications/factbook, United Nations
Population Fund, The State of World Population 2000

41

B. Technical/Vocational Education and Training in Laguna

1. Introduction
For some decades now, it is considered that the Philippines have been having a problem of educatedunemployment. In the 70s, many of th e university graduates were not being utilized in the labor force,
particularly those who undertook courses in the most popular areas, like teacher training, commerce and theliberal arts.
The government tried to solve this problem by using different measures. One of these was the reduction of
the supply of graduates, both by limiting the opening of new schools in these areas, and by introducing the
National College Entrance Examination. Another measure had to do with curricular reforms: the development o f
a technique -oriented curricula for those who did not pass that exam, the upgrading of vocational high schools totechnical colleges, among others. These changes made vocationally specific training even more skill-specific, theemphasis now being on applied, practical training to meet supposed labor market demand.
Another approach was to develop non-formal education. This was marked by the creation of the National
Manpower and Youth Council (NMYC), which coordinated many programs, offering shorter and more flexible
skills training courses. The clientele addressed was the majority of the educated labor force, from highschool-leavers and out -of-school youth to college graduates.
Today the situation in the Philippines still shows signs of unemployment amongst educated labor.
Graduates from universities and high schools have much difficulty in acquiring their job. In certain cases, they
are employed but their skills are not sufficiently utilized, due to over-qualification for the job or to a mismatch of
their skills with the skills required by the job.
Recently, many changes happened in terms of government policy towards approaching this problem. The
creation of the Technical Education and Skills Development Authority (TESDA) in 1994 is a proof of theattention that has been dedicated to this issue. TESDA is now the institution responsible for coordinating
Technical/Vocational Education and Training (TVET). For this reason, Education Group B became interested in
exploring the way in which such new measures were being implemented, analyzing present achievements andidentifying eventual shortcomings.
Another reason why we decided to focus our research in this topic is that TVET has been taking a verysignificant role in the recent setting of Laguna . This seems to be due to the fast pace of industrialization of thisarea. TVET is supposed to respond to these changes by generating and delivering an appropriate amount andquality of human resources for this increasing demand. In other words, TVET (supply side) would respond to theneeds of labor market (demand side) by providing technical skills to people who represent the potential future
employees of the growing sector of industrial companies.
In order to grasp the present situation of TVET in Laguna , we interviewed principals , teachers/trainers ofTechnical/Vocational Institutions (TVIs) and Training Centers (TCs), and directors of institutions such as TESDA,
the Department of Education Culture and Sports (DECS), the Department of Social Welfare and Development(DSWD), and NGOs. In addition, interviews and questionnaires exploring the perceptions of students/trainees
about TVET were conducted in the TVIs and TCs that we visited .
42

Meanwhile, we also looked at the demand side of human resources. The labor market in Laguna consists ofdemand from various private companies, especially from the industrial sector. Matters to clarify were how theemployment situation has been in Laguna, whether there is a demand for more graduates from TVET and the like.
The situation or trend of the labor market was analyzed through interviews and data acquired from someinstitutions, such as the Department of Labor and Employment (DOLE), Toyota Motor Corporation, local shops
and other sources.
In the following chapter 2, we begin by describing how TVET has been administrated, what kind ofprocedures are taken to implement TVET, and how several institutions coordinate to supply trained humanresources into the labor market of the Philippines. Chapter 3 begins by describing the main characteristics of the
TVIs and TCs that we visited. Then, on the basis of the results of the questionnaire research that we conductedwith students/trainees of TVIs and TCs, we attempt to analyze their opinions and perceptions regarding TVET. In
chapter 4, the present situation of the labor market in Laguna is mentioned by referring to basic statistics of theemployment context. In the conclusion part, our reflections about TVET provided by this field research will bepresented.

2. The Structure of Technical/Vocational Education and Training in thePhilippines
TVET includes a diversity of courses and programs and is put into practice through the coordination of amultitude of organizations, with distinct roles and contributions. This section presents a brief explanation of theexisting types of TVET in the Philippines and of the various institutions involved in its setting.

2-1. Different types of Technical Vocational Education and Training
The main distinction to be made is between formal and non -formal TVET. Formal TVET is establishedwithin the formal educational system, and exists both at the secondary and tertiary level. This kind of education
is mainly offered in Technical Vocational High Schools and in Polytechnic Colleges. At the secondary level, thecoord ination of TVET is done by DECS, while at the tertiary level it is done by TESDA and CHED. It basicallycombines the formal component of classroom learning with an extra component of skills training. This second
part would provide the students with the practical knowledge needed to engage in working life. The targeted
students are the poor youth who cannot afford to be enrolled in a university course.
Non-formal TVET refers to organized learning activities established outside the formal system andintended for a particular target population. This clientele is especially the out -o f-school youth and adult illiterates,
but some of the programs are specifically directed to the unemployed, disadvantaged women, and people withdisabilities, amongst other groups. Courses are skills -oriented and their duration can range from just a few days
to two years. This kind of education is offered at public and private Technical Vocational Institutions (TVIs) andTraining Centers (TCs). The Bureau of Non -Formal Education, part of DECS, is responsible for programs such as
Basic and Functional Literacy, which can go up to the secondary level of education. Above this level, non-formal
education programs are coordinated by TESDA.

2-2. Intuitions involved in the coordination of TVET
Until 1994, the Department of Education, Culture and Sports (DECS) was solely responsible for all levels
43and types of education in the Philippines. Since then, there are three main organizations responsible for education,
as was mentioned in the introductory part of this group’s report.
TESDA and its different roles
TESDA is one of the two newly created institutions. It is responsible for non-degree post-secondary
technical/vocational education. It was created to “mobilize the full participation of the industry, labor, technicaland vocational institutions, local government and the civil society for skilled manpower development programs”.
It integrated the former National Manpower & Youth Council (NMYC), the Bureau of Technical-Vocational
Education of DECS and the Office of Apprenticeship of the Department of Labor and Employment (DOLE).
Amongst its many goals, TESDA aims to develop quality middle -level manpower, which would be acontributing factor for the country to achieve international competitivenes s.
TESDA has many different responsibilities:
Definition of Programs
At a central level, TESDA defines the types of programs that can be offered nationwide at any given TVIor TC. There are many types of programs, and some of them are established in coord ination with otherinstitutions, like DECS (for secondary formal TVET), CHED (for tertiary formal TVET) and DSWD (for some
non-formal TVET), amongst others. A description of all these programs would become quite extensive, thus wechoose to only explain in more detail the programs we were able to observe directly, such as the “Dual Training
System” and the “Productivity Skills and Capability Building for Disadvantaged Women” projects (see chapter
2).
Trainers Training and CertificationTESDA’s National Institute for Technical Vocational and Education Training (NITVET) offers training for
TVET trainers. TESDA also has a system of testing and certifying people who, despite not having taken theircourses, possess enough knowledge to become TVET trainers.
Skills Standardization
The Skills Standards and Certification Office of TESDA is in charge of establishing a national system ofskills standardization, testing and certification. This system would allow people who did not undergo formal
education but acquired equivalent knowledge and skills through their life or work experience, to take tests and beaccredited with certificates of “competency equivalence”. Such a certificate of equivalency to secondary
education, for example, would make that person eligible fo r TVET courses, providing opportunities for thesepeople to engage in further education.
Accreditation of TVET providers
TESDA is also responsible for implementing a system of accreditation through which all TVIs and TCs
need a TESDA certification in orde r to provide TVET programs.
Curricula Development
In coordination with DOLE and with the private sector, TESDA has developed a study of “job analysis”: anextensive description of all tasks involved in a certain technical job and the skills needed to engage in suchprofessions. This study has been done for about ten occupational areas (making for a total of about one hundred44

occupations), and TESDA is in the process of extending this to other professions. The job analysis is the basis forthe crucial defin ition of the Training Regulations for TVET courses. The Training Regulations Manuals are theguides that should be followed by all TVIs and TCs throughout the country. TESDA will only give certification
to the courses if the curricula follow these regulations.
These are amongst the most important functions of TESDA. However, TESDA is also providing direct
training in the 64 “TESDA supervised schools”, which were recently assigned to them. It also coordinates the
TESDA Women’s Center, a project carried out with the support of JICA, amongst other projects.
TESDA has regional and provincial level offices, such as the Provincial office of Laguna, which also havetheir specific responsibilities.

2-3. Other Institutions
As was pointed out before, other institut ions are involved in the coordination of TVET. Their collaboration
creates a complexity of relations that we attempt to summarize in Figure 2-1.
T
V
I

Provision of Courses

T
C

TECHNICAL VOCATIONALEDUCATION

Definition of Programs
Skills Standardization
T
E
S
D
A

Trainers Training andCertification
Accreditation of TVET
providers

ABSORPTION BY
LABOR MARKETTARGET POPULATION

Facilities
TESD
Nat.Gov.
LGUs
DECS
CHED
DSWD
NGOs
Private inst's

Trainers

D
O
L
E

Monitoring System
for Job Placement(PESO)

Funds

Equipment & Material
Curricula Development
DOLE & Material

Figure 2-1: Representation of the institutions involved in TVET and of their several roles.

Looking at TVET through a simple perspective of input and output, the inputs to TVET come, on the one
hand, from the TVIs and TCs, which are the institutions providing the courses and programs. These can be public
institutions, but the majority is privately run, thus hav ing decision power over which courses they offer. On theother hand, there are supporting institutions which define the programs that these centers can offer, provide
trainers’ training and certification, establish skills standardization systems, provide accreditation to these TVIs
and TCs and establish the training regulations which guide the programs’ curricula development. As mentioned
above, these functions are basically provided by TESDA, although the last one is also supported by DOLE.
In order to provide this TVET to the target population, facilities, funds, trainers, equipment and materials
are the basic requirements. These can be provided by a variety of institutions, depending on the type of TVET
and on the type of program. Figure 2-1 lists some o f these institutions that assist the implementation of TVET.
45

Finally, in order to provide this target population with job information from the labor market, consequently,
in order for the trainees to be absorbed by the labor market, DOLE becomes a support ing institution: it offers amonitoring system for job placement, carried out by the Public Employment Service Offices (PESOs).

3. Technical Vocational Education and Training (TVET) Programs in theProvince of Laguna
In the province of Laguna, there are 61 technical vocational institutions (TVIs) and 11 training centers(TCs). A lmost all TVIs are private and independent from TESDA in terms of decision making. Recently, becauseof the globalization trend of the world economy, most TVIs and TCs give encouragement to computer (IT)courses, such as computer technology, computer programming, computer science, and telecommunication
technology.

3-1. The Characteristics of the TVIs and TCs Visited
We visited two formal and three non-formal TVIs and TCs. Here, we will briefly look at the main
characteristics of each of them. Fu rther details about them are provided in the appendix.
3-1-1. Formal TVET
The Laboratory High School of Laguna State Polytechnic College (LSPC) in San Pablo is a TVI which
offers formal cours es in areas such as welding, electricity, drafting, food technology and garments. Students are
required to have graduated from elementary schools. For the first two years, they receive traditional classroom
learning, but the last two years include practica l skills training as well. Mostly, students continue studying after
graduation.
The Secondary Education Department of Laguna State Polytechnic College (LSPC) in Santa Cruz is also a
TVI, providing formal courses to graduates from elementary schools. The courses are in various areas oftechnology, such as industrial, refrigeration and air conditioning, automotive, civil, electrical, electronics,
drafting, and home technology. Each course includes OJT (on the job training) of about 1,200 hours at privatecompanies. Most of graduates tend to continue studying at college or university.
3-1-2. Non -formal TVET
The Don Bosco College Manpower Training Center is a TC that offers non -formal courses . The trainees arehigh school graduates and they are 17-22 year-old males . The courses provided are industrial mechanics,
industrial electro -mechanics and wood technology. An interesting point is that this TC offers Dual Training
System that is recent program promoted by TESDA. It consists of a 15 months course, which is d ivided into ataught course for 10 months and OJT for 5 months. Notably, around 90% of trainees find employment after
graduation.
The Santa Cruz Provincial Compound of DSWD is a TC, which implements the project called“Productivity Skills Capability Build ing for Disadvantaged Women”. This project is financially supported by the
LGU (local government unit) and JICA. There are two courses: sewing craft and food processing andpreservation. The objective of this project is to improve the status of disadvantaged women through provision ofskills . This would enable them to become productive, thus, contributing to increased family income throughself-employment, open employment or sheltered workshop. The trainees are 18-59 year-old women from46

depressed barangays and they are at least elementary school graduates. After the completion of the courses, mostof the trainees of food processing become self -employed. In the case of sewing craft, 40 percent of graduates
engage in open -employment and 40 percent become self-employed.
The Laguna Training Center in San Pablo is a TC that offers non-formal courses . There are two courses:
auto-cad computer basics and industrial sewing machine operations. The trainees of computer basics are 18-35
years old and they have studied at least two years in college. They learn practical skills and theoretical schemes.
In case of sewing machine, the trainees are over 18 years old high school graduates. The course includes skill
training and “modular sessions”, such as self-enhancement and basic business management. Most of thegraduates become self-employed.

3-2. Results of Questionnaire Survey for Trainees of TVIs and TCs
When we visited the TVIs and TCs in the province of Laguna mentioned above, we conducted aquestionnaire survey for trainees. It mainly aimed to identify trainees ’ motivations, their opinions about thecourse and their future plans after completing the course. Here, we will look at the results of these three aspects.
The following data are the average figures of 90 trainees.
Figure 3-1 shows the trainees ’ main reasons for taking the courses. The strongest motivation is to obtainknowledge and skills necessary for a job, followed by to get a job. The third one is to get a high salary. It seems
that all these reasons are directly related to entering the labour market.

Figure 3-1: Why did you decide to take this course?
(0=no influence; 5=strong influence)
Members of company encouraged me
School teacher encouraged me
Family/friends encouraged me
Because I had no job
Get knowledge/skills for a job
Get a high salary
Get a job
0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

4.5

5

5

Figure 3-2: To which extent are you satisfied with :(0=not satisfi ed; 5=very satisfied)
The social atmosphere of the centre
The teaching methods of the trainers
The management of the centre
The written materials
The equipment
The facilities
The schedule of the course
The length of the course
0

0.5

1

1.5

2

2.5

3

3.5

4

47

Figure 3-3: What are your plans after completing this course?
(one choice only)

Go back to study in a school/university

19.0%

Enroll in another training course of this kind

1.3%

Become self-employed
Get a job in a field of work different from this course

6.3%
5.1%

Get a job in this field of work
Change jobs

36.7%
3.8%

Get a promotion in my company

11.4%

Continue in my present position at my company

16.5%
0%

10%

20%

30%

40%

Figure 3-2 shows the trainees ’ opinion about the courses and training centers. From the result, we can seethat the trainees ’ opinion is generally very good. Another question that we do not present here shows that theytend to feel that the courses are interesting.
The last figure shows the trainees ’ future plans for after completing the courses. From this, we can see thatthe majority of trainees intend to get a job in the same field of work as the course. One fifth of them are goingback to study in a school or university, and some of them are going to continue in their present position at thecompany. The reason why relatively large proportion of tra inees intend to go back to study is that half of the
trainees who answered the questionnaire are still at secondary level.
In summary, the trainees ’ opinions and attitudes towards TVET are fairly positive. Also, our impression
from the results of the questionnaire survey and interview is that the quality of TVET is quite high. However,some further improvements are needed. On the one hand, the funds for TVET are still not enough. Also, TVET isconsidered to be the education for the poor who cannot afford to go to college as a minor form of education. In
order to promote it, this image of TVET should be changed.

4. The Labor Market Situation in the Province of Laguna
4-1. Main Economic Activities in Laguna
The province of Laguna has vast prime agricultural areasand is richly endowed with natural resources. However, there
are discrepancies within the region. Its proximity to Metro

Figure 4-1: Employment by sector in
Laguna Province as of July 2000.

Manila has contributed positively to a faster pace of industrial

12%

development. The predominant activities in two of the four
districts of Laguna (1 and 2) are indeed industrial based , with amarkedpresenceofmulti-national

corporations

33%

(27

Agriculture
Serviceestablishments in district 1 alone ). Manufacturing , electronics,

Industry

food processing, machine and car assembly are the largest
activities in terms of employees and yearly turn over. By

55%

contrast, d istricts 3 and 4 are mostly agriculture oriented,
Source: DOLE, Calamba

48

producing a rich supply of rice, fruits, vegetables, fish and fo restry products . With this economic environment,
agri-based industries along with cottage and small-scale industries have long been established.
The role of the tertiary sector has also been gaining importance. The following figure displays employment
shares as of July 2000 in the province of Laguna as a whole, showing that this sector is the most important
employer. According to Region IV surveys provided by the regional office of DOLE, industry and service sectors
gained share continuously against a steady decrease in agriculture related activities.

4-2. Department of Labor and Employment (DOLE): Roles and Programs
DOLE looks upon its mission a s “(to) promote social justice and protect human rights and respect forhuman dignity through the assurance of workers’ protection and welfare, promotion of full employment andmanpo wer development, the maintenance of industrial peace and enhancement of workers participation in policy
making”.
The quoted ambitious mission is being implemented through a series of pro grams closely coordinated andmonitored together with other governmental agencies, such as DSWD, TESDA (which itself is part of DOLE),
LGUs , and sporadically with the private sector.
Through its regular survey on unemployment at provincial and local levels, DOLE plays a fundamentalrole in providing information on labor market trends. Labor demand and supply d iscordance and inappropriate
human resource development policies can thus be highlighted. Correspondingly , inputs can be implemented for aproper steering by the competent authorities . In this respect, the contribution of DOLE assumes a decisive role inthe design and setting of appropriate curricula for TVET, one that can meet the ever and swiftly changing
industries ’ requirements. Indeed , TESDA relies strongly on labor statistics and other information provided by
DOLE to identify new emerging trends from the demand side and create the adequate responses on the supply
side. That is, TESDA takes that information into account to create new programs and design the according
curricula.
The Public Employment Service Offices (PESOs), mentioned in chapter 2, are an example ofinstitutionalized offices aiming at employment facilitation through career and employment guidance. They offer ajob placement monitoring system that tries to match job seekers with job offer, by gathering information fromboth supply and demand sides.
DOLE recognizes the importance of education in future labor trends. While interviewing various officials,
the acknowledgment of the change of times seemed a common understanding: rapid technology changes andintense competition force employees to change their attitude towards learning and job tenure. The philosophy
behind every new program and activity emphasizes how important it is that education be continuously developed
not for its own sake, but for real and effective application purposes to pursue the overall goal of national
development.

4-3. Employment situation
According to various statements gathered during interviews with public officials at local, provincial andnational levels , the province of Laguna seems to be particularly blessed in terms of labor issues, unemployment
rates being relatively low.
Beyond a worrisome slump in 1991, the trend appears stable and surely one of the most successful in the49whole country. Even the strong crisis of 1997 that

92
91
90
89
88
87
86
85
84
83
82
81

hit the high -growth economies of South East Asia
did not have the devastating effects as was the casein other regions. The recent slump during this year
(July 2000), with employment down to 86.6%, is
explained by public officials as uncertainties
87

89

91

93

95

97

99

dominating Filipino politics and allegedly corrupt
Year

actions of the president.
Figure 4-2: Employment Rates in the Province of
Laguna in the time frame 1987 -2000

When looking at the data displa ying the
distribution of unemployed people by educational
level (see Figure 4-3 and 4-4), stunningly the groupwith the highest unemployment rate is that of high school graduates. A more detailed analysis shows that, in fact,
graduates from polytechnic hig h schools (e. g. San Pablo and Santa Cruz) transit smooth ly from school to firstjob. In other words, the worrisome 45% unemployment rate o f high school graduates probably reflects the realityof those who graduated from high schools of the formal educatio nal system. We realized a common consensus
among officials about the reason for this situation: it is due to poor curricula and curricula that do not meet labormarket demands. Some officials went even further and explained that most of the graduates from formal systemhigh schools were not able to pass companies` entrance examinations due to lack of satisfactory comprehension
capabilities, in particular, in sufficiently developed attitude towards problem solving in daily life .

5. Conclusion
Through our fie ldwork, we were able to conclude that there is still a certain level of unemployment among
educated people (mainly high school graduates). Because this problem is attributed to curricula inadequacy in the
Unemployed Persons By Highest Grade
Completed (%)

Unemployed Persons By Highest Grade
Completed (x1000)
0

50

100

150

200

250

300

No GradeCompleted
ElementaryHigh School

0.00 10.00 20.00 30.00 40.00 50.00 60.00
No GradeCompleted
Elementary

College
Undergraduates

College
Graduates

College
Graduates

Not Reported

Not Reported

Figure 4-3: Unemployed Persons by highest

50

21.42

High School

College
Undergraduates

Source: National Statistics Office

1.90

45.25

19.52

10.36

1.55

Source: National Statistics Office

Figure 4-4: Unemployed Persons by highest grade

grade completed in Region IV –completed in Region IV – Percentage

Absolute Values

Valuesformal educational system, it seems clear that either this curricula needs to be improved or the option for thesegraduates is to enroll in TVET courses after high school graduation. Either way, TVET seems to have an
important role in solving this problem.
TESDA has performed well in fulfilling its assigned tasks, in coordination with other organizations.
However, it seems that this institution is being faced with so many different tasks that its resources are notenough to respond to all the needs. But the mere fact that the central government keeps assig ning this institution
new roles is a sign of its good performance.
Through the questionnaire survey of trainees/students of TVIs and TCs and interviews with managers, it
was found that most of the trainees were satisfied with the quality of courses provid ed by TVIs and TCs.
However, the image of TVET is still anchored to the meaning of a “minor” level of education. In terms of
post-secondary courses, they are considered to be the alternative available for the less wealthy, who cannot afford
university. Other types of courses are less available and information about them is not easy to find. As an attempt
to promote the image of TVET, TESDA has created the “Skills Olympics”, a competition among graduates of
TESDA certified courses which has been widely advertised. Nevertheless, through street interviews with locals,
we realized that there are still many people who have no knowledge about the existence of TESDA and of thiskind of education. On the other hand, companies like Toyota Motor Corporation give great value to TVET, whichis reflected in their recruitment: about 80% of their employees in the Santa Rosa plant are graduates from TVET
courses.
We also realized that there is a certain mismatch between human resources produced by TVET and theabsorption by labor market. Whereas TVET has been offering IT-related courses and generating corresponding
human resources, labor market (in Laguna, specifically in the industrial sector) has been demanding people
trained in other fields, such as electronics. In trying to explain why this is happening, we arrived to theconclusion that, on the one hand, the population does not know which kind of jobs are in more demand, that is,they do not have information about what skills are being requested by the labor market. This lacking service
could perhaps be provided by DOLE. On the other hand, the TVIs and TCs are not willing to offer different
courses, even if they do receive this kind of information from TESDA. The problem seems to be that training inother fields, like ele ctronics, requires equipment that can be quite costly, as well as the trainers. Being profit
oriented, these centers are not willing to risk it, especially because the less-informed general population is moreinterested in the very fashionable IT-related courses.
TVET is certainly in demand and seems to be gaining a very important place in the educational scenario.
Improvements in TVET would require intervention in promoting TVET image among the general population,
providing TESDA with more control over th e TVIs and TCs decisions, and in disseminating more information
about the available courses and their advantages in terms of access to employment opportunities.

References
Department of Labor and Employment (DOLE) (2000) Employment Status, Region Ⅳ: July 1999-July 2000
Department of Labor and Employment (DOLE) (1998) Highlights of the Draft Medium Term, Comprehensive Employment
Plan, 1999-2004
Department of Labor and Employment (DOLE) (1999) Yearbook of Labor Statistics, 1998 (CD -ROM)
Department of Social Welfare & Development (DSWD)Brochure of Productivity skills Capability Building for51

Disadvantaged Women Phase Ⅰ&Ⅱ
M.D.Leonor (1985) Unemployment, Schooling and Training in Developing Countries
Technical Education and Skills Development Authority (TESDA) The Quality Assured Philippine TESD System
Technical Education and Skills Development Authority (TESDA) Brochure of Dual Training System
Technical Education and Skills Development Authority (TESDA) Brochure of TESDA Women’s Center
国際協力事業団 国際協力総合研修所 （1997）開発途上国技術情報データシート・フィリピン
国際協力事業団 国際協力総合研修所（1996）人作りプロジェクトのインパクト調査（フェーズⅡ）−タイ ウボン
職業訓練センター（UBISD ）における事例研究−
Internet address:
http://www.tesda.org/
http://www.census.gov.ph/
http://www.pids.gov.ph/52

Appendix: Characteristics of the Schools and Training Centers visited (1)Target population

Conditions for acceptanceType of Education provided

Goals

Courses

LSPC San Pablo
Laboratory HighSchoolGraduates fromelementary school

Elementary School
Diploma, entrance
examination

T-V High School Course (2 years
in classroom, 2 years classroom+ skills training)

Developing new methods ofteaching; providing pupils withmore specific skills to preparethem for working life

LPSC Santa Cruz
Secondary
Education
Department

Graduates fromelementary school

Elementary School
Diploma, entrance
examination

T-V High School Course(including OJT of about 1200
hours)

Providing pupils with more
specific skills to prepare themfor working life

Don Bosco
Manpower Training
Center

17-22 year old males
high school
graduates

High School Graduates
Low income level
Test & Interview
Screening by privatecompanies (sponsors)

Dual Training System
15 months (10 months taught
courses, 5 months OJT)

Offer the poor yet deserving
youth the chance of learning a
trade and getting a job;
Form good Christians

Industrial Mechanics
Industrial
Electro-Mechanics
Wood Technology

DSWD Provincial
Compound SantaCruz

18-59 years old
disadvantaged
women fromdepressed barangay

Elementary School
Graduates (at least)
Low income level
Consent from spouse
Highly motivated

Productivity Skills and Capability
Building Programs
10 to 18 days, including skills
training and modular sessions(self-enhancement, basic
business, etc.)

Enhance capability of income
generation by self, open or
sheltered workshop
employment;
Prevent out migration

Sewing Craft
Food Processing and
Preservation

18-35 years old, atleast 2 years inCollegeFirst come, first served

15 hours, 70% practical skills and
30% theoretical classes

Over 18 years old,
preferably HighSchool Graduates

Low income level
Willingness to learn

FORMAL
Welding
Electricity
Drafting
Food Technology
Garments
Industrial Technology
Refr. & Air Conditioning
Automotive Technology
Civil Technology
Electrical ,etc

NON-FORMAL

Laguna Training
Center San Pablo

120 hours, including skills
training and modular sessions(self-enhancement, basic
business, etc.)

Enhance their chances ofabsorption by the labormarketAuto-Cad
Computer Basics

Industrial Sewing
Machine Operations

Appendix: Characteristics of the Schools and Training Centers visited (2)Tuition Fees

Supporting Institutions

Absorption by labor market

Improvements needed (managers ’ opinion)

Free

National Government
DECS

Most of graduates continue
studying

Developing new methods of teaching; providing pupils withmore specific skills to prepare them for working life

Very low tuition fees

National Government
DECS
Private companies(OJT)

Most of graduates continue
studying

Providing pupils with more specific skills to prepare them forworking life

Don Bosco Manpower
Training Center

85% of students only
pay entrance fee(sponsored scheme)

Don Bosco College
TESDA
Private companies
NGOs

Around 90% of graduates are
employed(a monitoring system is provided)

Offer the poor yet deserving youth the chance of learning a
trade and getting a job;
Form good Christians

DSWD Provincial
Compound Santa Cruz

Free (trainees bringsome low costmaterials)

LGU
DSWD
JICA
TESDA
DOLE (PESO)For Sewing Craft:
40% self-employment
40% open employment
For Food Processing:
Mostly self-employment

Enhance capability of income generation by self, open or
sheltered workshop employment;
Prevent out migration

Laguna Training Center
San Pablo

Free (trainees bringsome low costmaterials)

LGU
TESDA
DOLE (PESO)
NGOs

Industrial Sewing Machines
Operations: mostly
self-employment

Enhance their chances of absorption by the labor market

FORMALLSPC San Pablo
Laboratory High School

LPSC Santa Cruz
Secondary Education
Department

NON-FORMAL

Other Collected Literatures
The name of the institution
The name of the literature
Challenges in the New Millennium 〜Journal of

WG2 -A
Provincial Treasurer of Laguna
Collection and Remedies of Taxes
Provincial Government of Laguna
Anti-Poverty Program in Laguna
Commission on Higher Education
Philippine Higher Education-A Brief Guide - CHED
Department of Education, Culture and Sports,
DECS

Southeast Asian Education
DECS (Division Office)Department of Education Culture and Sports Division
Office (Original Chart)
DECS (Division of Laguna, District of Santa Maria)
Consolidation of Performance Indicators for
Government Elementary SchoolsSecond Semester
SY. 1999-2000

Organization Chart

Department of Health (Central office)

Office of Planning Service

National Objectives for Health

Financial Management Service

Health Human Resource Development the Philippines

Administrative Service

Structure of Department of Health

Human Resource Development Service

Health Manpower Development and Training Service

Technical Service
Bureau of Elementary Education
DECS Regional Offices

Programs
Government Agencies Involved in Health-Related
Programs

Bureau of Secondary Education

Non-Government Health Or ganizations

Bureau of Nonformal Education

Manual on Environmental Health Impact Assessment

Bureau of Physical Education and School Sports

Department of Health (Provincial office)School Health and Nutrition Center

Health Profile 1999

National Education Testing and Research Center

Teaching materials

Education Development Project Implementing Task
Force
National Educators Academy of the Philippines
THE DECS BACKGROUNDGABAY PARA SA KALUSUGAN
Gabay sa Pagpapasuso ng Ina
Menstruation
Avoiding Pregnancy

The Philippine Educational System in Capsule

Cahbriba Alternative School Foundation(Inc.)

Overview of the Nonformal Education Accreditation

Cahbriba Achievers

and Equivalency (NFE A&E) System
Nonformal education accreditation and equivalency
system: 〜 The Philippine experience
Pathway to learning in NFE A&E system: 〜 Alearner's point of view
List of Provinces/Municipalities/Cities of the NFE
A&E system Project Sites
EDUKASYONG PANGMASAUP Open University
UPOU in the new millennium
Laguna Provincial office
Laguna's Main Statistics
San Pablo City National High School (Main)
Enrolment Report for Public Secondary School s .y.
2000-2001
San Pablo City National High School

55

San Pablo City National High School, Application for
Enrolment

Student’s Handbook of Tertiary Education
The GEARS (volume 36, 37, 39)
Laguna Training Center

WG2 -B

Broacher of Laguna Training Center

Commission on Higher Education (CHED)

Syllabus and curriculum outline in Basic Computer

A brief guide of Philippine Higher Education
Brochure of CHED
Fact sheet
DOLE, Laguna
Employment Status, Region Ⅳ: July 1999-July 2000
Magazine of Philippine Labor
DOLE, Manila
Briefing Notes on Alternative Education System and
HRD in the Philippines
Highlights of the Draft Medium Term, Comprehensive
Employment Plan, 1999-2004

course and industrial Sewing machine operation
RED Foundation
Aquaculture-Fisheries Progr am on Food Security andPoverty Alleviation
Production of Battered and Breaded Fish Products
from minced fish and surimi
Sustained and Integrated Support Services Training
course For the Agricultural MAKAMASA
Program, Region Ⅱ&Ⅲ, Bathes 4&5
TESDA, Laguna
Enhancing Rural Development through CBTED

The Philippine Educational System in CAPSILE

Guide in Career Planning and Selection

Yearbook of Labor Statistics, 1998 (CD-ROM)PESFA Grant Application Form

Don Bosco College
Broacher of Don Bosco College
DSWD, Laguna
Application form for the Productivity Skills

The Quality Assured Philippine TESD System
Technical Education and Skills Development Act of1994 (Public Act No. 7796)
TESDA, Manila

Capability Building for Disadvantaged

Brochure of Dual Training System

Women(English and Tagalog)

Brochure of JITCO scheme

Guidance in the operation of the Productivit y Skills
Capability Building for Disadvantaged Women
Materials for explanation of DSWD
DSWD, Manila

Broacher of TESDA Women’s Center
Materials for Conference on Development Financing
for Middle-Level Skills Development
TESDA Newsletter

Broacher of Productivity skills Capability Building

TESDA quarterly magazine, December 1999

for Disadvantaged Women Phase Ⅰ&Ⅱ

Trainees Handbook of TESDA Women’s Center

Laguna Provincial Office
Budget Process for Local Government Units
Comprehensive Development Program of Province of
Laguna 21-ph(?) Agenda
Collection and Remedies of Taxes, Manuel Nori E.
Leycano, JR.
Laguna’s main statistics
Laguna State Polytechnic College
Fact sheet
Student’s Handbook of Secondary Education

San Pablo City National School of Arts and Trade
Broacher of San Pablo City National School of Arts
and Trade
Fact sheet

Working Group 3

An Inquiry of the Water Supply Situationin The Philippines

AdvisorTomoki Okuda, Associate Professor
Members of Working Group 3
Asti Wijayanti

Dyah Wahyu Ermawati

Ingrid M. Fjeldsenden*

Hitomi Kimura

Akira Kondo

Teni Widuriyanti*Group Leader

57

1. Introduction
Water is a basic human need. It is a human right to have access to clean water. This is stated in the United
Nation’s Human Rights Declaration from 1947. But even today around the world these basic rights are vio lated.
Water is a necessity, but clean water is not always adequately supplied.
Countries differ with regard to water quantity and quality. Some countries are well endowed while others
have severe problems with locating water sources. The Philippines is o ne of the countries that are fortunate whenit comes to having abundant quality water. In spite of this, easily accessible water is far from the daily life
situation for a lot of Filipinos. With a population growing at 2% every year, access to water will b e even harderin the years to come. On this background we decided to look into the issue of water supply in the Philippines forour research topic in the Overseas Fieldwork 2000 organized as part of the Master program at GSID. Below is amore detailed description of our research object and analysis.

1-1. Background
When President Ferdinand Marcos was ousted from office by People’s Power in 1986, he left for the new
President Corazon Aquino a country in need of deep overhaul. One problem was the high foreign debt thatburdened the country’s economy. The need to service the debt and to make the economy strong called forshort-term measures as well as a more long -term sustainable policy measures. In addition, the strongly
centralized government owned and operated a vast number of public enterprises throughout the days when
President Marcos was leading the country. These were not only companies that provided public goods andservices but also companies of more private character1 . Several of these public companies were not able togenerate enough funds for their operations and thus are a drain to the public coffers by being heavily dependent
on public subsidies for their existence. As such, these public corporations were aptly called as non -performing
assets (NPAs).
Realizing the need to balance the national budget, the Aquino administration established the Committee on
Privatization (COP), which among other functions, was tasked to come up with a list of public enterprises that
could be privatized. This decision was partly motivated by the need to get rid of the NPAs as well as thepossibility of cashing in money to service debts and to finance necessary development tasks. Also, thesecompanies were notoriously inefficient and improvements were highly necessary.
Privatizing urban water supply services was not among the priorities of the COP. However, when President
Ramos took over in 1992 he became aware that the water supply situation in Metro Manila has highly
deteriorated and thus started to work on the process of having the Metropolitan Waterworks and Sewerage
System (MWSS) privatized 2 . In 1995, Republic Act No . 8041, otherwise known as the National Water Crisis Act ,was passed by the Philippine Congress, which among other important provisions, allow for a stronge r private
sector participation in the financing and operat ion of water supply services, in particular the Metro Manila area .
Seeing a substantial proportion of enterprises in the Philippines being privatized, led many to think that

1

Examples of companies of more private character are hotels, bus companies and an airline company. Several of these companies received
subsidies from the government.
2Mark Dumol. The Manila Water Concession: A Key Government Official’s Diary of the World’s Largest Privatization (Washington, D.C.:
The World Bank, 2000) p. 10

privatization would wo rk as a panacea for the problems that were facing the Philippines in the post-Marcos-era.
But would it be? The increasing number of privatized water supply services, not only in the Philippines but in thewhole world as well, made us to question whether water supply services can be provided more efficiently by theprivate sector than the public sector.
In order to provide an appropriate answer to this issue, it is important to recognize that private sector
participation in water supply can take place in va rious forms and can therefore be analyzed through several
models. Table 1 shows the various ways by which privatization can take place. In the upper left of the table, thepublic is responsible for ownership, financing and partly operation. Heading down to the lower right the public
responsibility will become less significant while the private sector will participate more strongly in provision ofwater services.

Table 1: Modes of private sector participation (PSP) in drinking water supply services by type ofownership, source of financing and mode of operation
PSP MODEL

Ownership of Facilities

FinancingOperation

Service Contract

PublicPublicPublic and Some Private

Management Contract

PublicPublicPrivateLease Contract

PublicPublicPrivateConcession Contract

Private for Contract Duration

PrivatePrivateBOOT

Private, the Public

PrivatePrivateReverse BOOT

Public, the Private

PublicPrivateJoint Ownership

Private and Public

Private and Public

Private and Public

Outright sale

PrivatePrivatePrivateSource; Water Sector Reform in the Philippines (1994) n.p.
Notes: BOOT stands for build, operate, own, transfer which means that a private company build an infrastructure facility, then after
completion operates and own the facilit y for some time until it can recover its initial investments and then transfer it s ownership to the
public sector which can decide whether it will operate the facility on its own or return it to private operation for a fee. On other hand, theownership sequence of reverse BOOT is public first then it is transferred to private.

1-2. Problem Description
At this outset, we will only provide a schematic outline of the problems since a detailed problem
description will be presented in the analysis. The identified problems are classified according to the users andproducers of water. The problems that users face are: (1) inadequate access to water; (2) water is often not ofgood quality, leading to inability to drink it; and (3) unsatisfactory service from company when repairs are
required. On the other hand, the problems linked to water suppliers are: (1) leakage of pipelines due to oldpipelines or thefts and pilferage of water leading to high Non Revenue Water (NRW) rates 3 ; (2) Unmotivatedemployees in a work environment that does not encourage commitment and efforts; and (3) Lack of capital for
maintenance and investment.
For us to be able to shed light on the issue of privatization of water supply services, we need to compare
the efficiency performance of companies that have been privatized. Moreover, there is a need to compare thewater supply situation before and after privatization. While the research area of the Overseas Field Work 2000 is
confined to the province of Laguna, we found that the number of cases that can be the subject of ourinvestigation in the province was limited. This situation led us to investigate the case of Metro Manila, where the59water supplier, MWSS, had been privatized in 1997. Furthermore, for us to be able to compare the water supply
situation befo re and after privatization, the two water supply concessionaires of the Metro Manila area, theManila Water Inc. and Maynilad Co., were included as case studies of our research.
Since the condition in Metro Manila, in particular the size of the service area and the water supply sources,
is significantly different from other parts of the country, we found it proper to include small rural water supply
services, the typical type of water services found outside the country’s capital, as additional cases for ou r
research. This is where the province of Laguna fits into the research design. Two case studies of municipal water
systems were studied: one managed through a water district and the other a system owned and operated by amunicipal government but which is in the process of being turned over for operation and management by a
private company. The first is the Laguna Water District which we found to be a good case for our researchbecause it is small and because it supplies water to rural areas. The second cas e is Magdalena, which serves as a
typical case for rural Philippine municipality with inadequate water supply and is one of the first ruralmunicipalities to receive a World Bank loan for a water supply project where one crucial condition is private
sector operation.

1-3. Hypothesis
The main hypothesis of our research is: “Water will be supplied more efficiently by the private sector
rather than the public sector.”

2. Methodology and Case Description
2-1. Methodology
For us to be able to prove our hypothesis, several methods have been used. The specific methodologies are
as follows: (1) key informant interview of various national and local government officials and officials in various
private institutions, including management and labor representatives; (2) random interviews with users in Manila
and Laguna Water District in Los Baños; (3) focus group discussion with 10 barangay officials andrepresentatives of various sectors in Magdalena; (4) field survey of water supply facilities in Manila andMagdalena; (5) analysis of secondary data obtained from related references on water supply situation in thePhilippines as well as other parts of the world.

2-2. Description of cases
2-2-1. Metropolitan Waterworks and Sewerage System (MWSS)
Until it was privatized in July 1997, MWSS was the government -owned water supply, treatment anddistribution utility serving over 11 million people in 37 cities and municipalities in the Metro Manila area andsome parts of the provinces of Cavite and Rizal. Using the proportion o f unpaid water, hours of availability, andthe ratio of people connections as indicators of efficiency, the performance record of MWSS of Metropolitan
Waterworks and Sewerage System was lagging behind other water systems in capital cities in South East Asia .

3

NRW is the difference in value between the water that is extracted from the water source and the value of water that is paid for.

Only two -thirds of the population (7.5 million people) had access to water for an average 16 hours per day, andover 56 percent of the water produced by the MWSS constituted non -revenue water, estimated to be lost throughleakages and theft. MWSS also charged one of the highest rates for water in the world at 8.78 pesos per cubic
meter4 .
In 1997 the privatization of the MWSS, dubbed as the largest water privatization project in the world, wascompleted. MWSS awarded 25-years period concessions to two consortia to assume full operational andinvestment responsibility for the city’s water and sewerage system. The two consortia, the Manila Water
Company, Inc. (MWC), became responsible for management and development of the water system in the easternpart of the city, and Maynilad Water Services, Inc. (MWS), was given the same responsibilities in the western
part. Under this concession agreement, the water concessionaires are supposed to bring NRW down to 25% in 10
years. Also, the concessionaires will pay the foreign debt obligation and other outstanding loans of the MWSS.
MWS will shoulder 90% of the total debt servicing, while MWC will shoulder 10%.
One of the most crucial issues resolved during the privatization process was the fate of the 5,400
employees whom the labor union fear of being dismissed. However, this did not materialize as 2,375 former
employees or about 44 percent of the total were transferred to Maynilad as it covers a bigger concession area. On
the other hand, Manila Water accepted 1,673 emp loyees or about 31 percent of the total. The remaining either
opted for early retirement or absorbed as employees of the residual MWSS.
As regulator, one of the most important roles of the residual MWSS is to ensure that the concessionagreement is followed, in particular keeping the water tariff reasonable and affordable. Water tariff is regulatedby the MWSS 5 through the mechanisms of: (a) Extraordinary Price Adjustment (EPA); (b) Currency Exchange
Rate Adjustment (CERA); and c) five years adjustment.
2-2-2. Manila Water Company, Inc.
Manila Water is a consortium composed of the Ayala Corporation (60%), United Utilities (20%), Bechtel
Corporation (10%) and Mitsubishi Corporation (10%). Manila Water delivers 1,600 million liters of potablewater everyday to over 4.7 million residents as well as thousands of industries and business in the Eastern zoneof Metro Manila.
Based on the company’s records, the Non Revenue Water showed a progressive decline from 60% before
privatization to 47% as of October 2000. Reduction of non-revenue water has been primarily attributed to thefour-pronged company’s strategy consisting of: (1) Customer Service Program through the introduction ofExpress Phone available 24-hours a day, Express Teller (easy to pay water bill), Express Online (get informationand pay water bill via internet); (2) Aggressive non-revenue water reduction, stressing an informal approach toencourage people awareness in paying water bill and to stop people to do an illegal connection; (3) Aggressive
expansion of coverage; and (4) Employees’ training program.
While the MWC won the bidding of the east concession primarily because of its lowest bid of P2.32 per
cubic meter, this has however increased in nominal terms by about 27 percent to the level of P2.94 per cubic
meter as of end of August 2000.

4
5

P8.78 per cubic meter is also written P8.78/m3.
MWSS through the regulatory office RO.

61

2-2-3. Maynilad Water Services, Inc. (MWSI)
Maynilad Water Services, Inc. is a consortium of two private companies: the Lopez led Benpres Holding
Corporation (Philippines, 60%) and Suez Lyonnaise des Eaux (French, 40%). The consortium’s concession area
covers the western zone of Metro Manila and Cavite Province with a total of more than 4.4 million people ascustomers. The winning bid in 1997 was priced was P4.96 per cubic meter of water consumed. However, becauseof the El Niño phenomenon and the Asian crisis, the water tariff has since then increased to P5.71 in 1999 andagain to P7.84 in 2000 6 or a total of 288 percent in nominal terms.
While the Maynilad was able to negotiate increases in the water tariff it charges to its customers, it was notable to bring down its Non Revenue Water rate, which, as of October 2000 stands at a high of 67 percent. The
increase in NRW since privatization has been primarily traced to leakage of old pipelines and huge number ofthefts. To minimize these problems, Maynilad has developed a reward and punishment approach consisting of:(1) Technical: immediate improvement of services, shift from waterworks to water services, development of an
Information Technology to support the busines s; (2) Customer service: new organization and customer approach;(3) Financial: raise funds and optimize investment; and (4) Human Resources: paradigm shift from public toprivate sector.
2-2-4. Laguna Water District (LWD)
Laguna Water District provides wa ter supply services to 14,000 households, or approximately 84,000
persons in the three adjoining municipalities of Los Baños, Bay and Calauan. There is a constant extension ofpipelines and digging of wells in order to provide a growing population with water. By the end of the year 2000,
there will be 9 wells, with attached treatment plants, from where water is pumped to provide the residents. The
LWD is considered as a quasi-public company since it has to follow government regulations, especially humanresource management (HRM) practices and employee compensation 7 , and at the same time generate its own
revenues. The water tariff is 90 pesos for the first 10 cubic meters (m3 ), the minimum monthly bill per connectionof water people are required to purchase. Of this amount, one -third goes to production costs (30 pesos) and theremaining two -thirds (60 pesos) covers the administration costs. Sectoral representatives, not politicians,
compose the five -member Board of Directors. Laguna Water District is under the overall supervision of the Local
Waterworks Utilities Administration (LWUA). Until 1993, LWD received loans from the LWUA which were used
for improvements in water infrastructure 8 .
As to efficiency performance, the company has a NRW -rate of 26%, and is working on reducing this figure
down to 20%. The number of employees is 100 per 1,000 connections, which is lower than the standard 140 per1000 connections.
2-2-5. Magdalena
In the municipality of Magdalena, communities at the town center and the barangays near to the center get
their water from the local government owned water system. Those not covered by the system get water fromdeepwells and shallow wells. The municipal water system is of gravity -type which sources its supply from theOple’s spring at Barangay Sungi in Liliw, 8 km from the town. It provides water to the town center and 6
6
7
8This information was collected at Maynilad when we visited them.
In 1991, the Philippine Supreme Court ruled that local water districts are government owned and controlled corporations.
In 1993 LWUA run out of capital for loan disbursements to its members.

barangays 9 of Magdalena as well as 4 barangays in Liliw.
As of September 1997, the total service connection of the existing water supply was 1,097 connections
wherein 1,060 were domestic connection, 8 for commercial purposes, 18 institutional connections and 11 publicfaucets. However, the demand has already outstripped the supply of water causing inconvenience to theconsumers. The water source is insufficient for domes tic household purposes such as washing and drinking.
Water is available only for 30 up to 45 minutes a day. With the unsatisfactory service, each household connection
is charged P8 per month. When people miss the schedule, they have to buy water from vendo rs at an additional
cost of P5 per water container. The inability of the water supply to cope with the increasing demand can be traced
to the deterioration of existing facilities which were built as early as 1926 and have been operated andmaintained by the municipal government since then.
With population growth estimated to increase to 26,470 in the year 2010, it is predicted that the watersupply from the spring sources in the neighboring town of Liliw will not be sufficient to meet the water demandof Magdalena. For this reason, the municipal government applied for and received a World Bank loan in 1997 forthe construction of a new municipal water system. The project includes digging three deep wells, construction ofan elevated reservoir and rehabilitation as well as improvement of the existing pipeline and reservoir.
Implementation of the new project was based on the population and the water demand projections for the service
area from 1997 to the year of 2010. For the water supply system to be able to meet the demand in the year 2010,
each deep well must have a yield of 10 liters per second. In terms of efficiency, the new system is expected tohave the following efficiency indicators: (1) water will be available 24 hours a day; (2) non revenue water(NRW) or unaccounted for water (UFW) will be at 20 percent; (3) employee per connection ratio will be at
1:130; and (4) collection efficiency will be at 97 percent. For the period 1999 to 2000 served population would
be 40% of target. These will then increase to 70 percent for the period 2001 to 2003 before reaching 100 percent
coverage by the year 2004.
While ownership of the new waterworks system will belong to the municipal government of Magdalena,
the operation and management of the system will be the responsibility of a private operator named Benpres, asubsidiary of the Lopez Group. Private operation and maintenance of the system is through a 15-year leaseagreement between the municipal government and the operator which is expected to commence in 2001.

2-3. Institutional structure
The provision of water supply in Metropolitan Manila is under the overall supervision of the Metropolitan
Waterworks and Sewerage System (MWSS). Outside of the country’s capital, responsibility is determined by theexistence or non -existence of an operational water district. In cities and municipalities where there is a water
district, responsibility for drinking water provision rests with the water district with overall supervision at thenational level by the Local Waterworks and Utilities Administration. In localities where there is no water district,responsibility for the provision of drinking water supply has been devolved to the concerned local government
unit. Overall coordination and management of the country’s water resources is the responsibility of the National
Water Resource Board (NWRB). The working relationship among the water supply providers included in ourcase studies vis -à-vis the country’s institutional structure in the drinking water supply sector is outlined in Figure
9

A municipality consists of several smaller units called baranga y.

63

MWSS
(Metropolitan
Waterworks andSewage System)

Maynilad

Manila Water

Magdalena

LWUA(Local Water
Utilities
Administration)

Benpress
Company

Laguna Water
DistrictFigure 1: Water supply institutions in the Philippines
1.

3. Analysis
3-1. Performance criteria
For us to be able to prove our hypothesis, we will discuss the cases against four performance criteria10 .
Through our interviews the chosen performance criteria came to stand out as indicators to tell us to what extent awater supplier is efficient. If a water supplier is able to perform efficiently according to these criteria, then it cansaid that it is an efficient water supplier. A summary of the performance indicators of the four case studies we
conducted is presented in Table 2. The results show that the four companies perform differently depending on
which performance criterion is used.

Table 2: Efficiency performance of providers of water supply services in the Philippines, resultsfrom the case studies
PerfORMANCE INDICATORS

MWSS

Maynilad

Manila Water

Laguna Water District

Water availability (hrs/day)17

24 (57%)24 (90%)24

Non-revenue water

56%

66%

47%

26%

Tariff (pesos/m )

8.78

7.84

2.94

5.5/9

Employees/connection

9/10004/10005/10007/10003

Source: Figures for Maynilad, Manila Water and Laguna Water District were obtained through interviews with officers the respective
companies and represent updates for the period August to September 2000. Those for MWSS were taken from the Manila
Bulletin (18.Feb 1999) and were for the year 1997.

3-1-1. Tariff
In general, low tariff indicates an efficient water supplier. From Table 2, we can see that Manila Water
charges the lowest tariff at P 2.94 pesos per cubic meter of water consumed. This is followed by Laguna Water
District, which offers water to its customers at a tariff of P 5.5 pesos per cubic meter. However, the figure for
Laguna Water District seems to be incorrect since its consumers are required to pay 90 pesos for the first 10
cubic meters of water consumed. Of this amount, P 5.50 pesos represents distribution costs such as water sources.
10

There are standard performance criteria for the water supply sector. See e.g. World Bank-assisted Local Government Units Water Supply
and Sanitation ProjectIn addition, consumers of the Laguna Water District’s water services have to pay additional P 3.5 per cubic meterfor operational costs. When distribution and operational costs are added, this leaves users to pay a minimum
charge of P 90 per month For the two cases in Metro Manila, costs of water source is not included. Thus, for us tobe able to co mpare the water suppliers appropriately, we have left this part out On the other hand, Maynilad
charges a water tariff of P 7.84 per cubic mete, slightly lower than the tariff MWSS charged its customers before
the privatization in 1997.
When ranked accord ing to performance criteria of water tariff charged, Manila Water is the most efficientwater supplier followed by the Laguna Water District. However, it should be noted that the companies compete
on quite different terms in the sense that the water suppliers in Manila have a much bigger market to cover andtherefore can enjoy benefits from economies of scale. Manila Water serves 3.112 million people while Maynilad
supplies 4.400 million. On the other hand, the old MWSS supplied water to 7.5 million people. In contrast
Laguna Water District serves only a total of 14,000 households or approximately 84,000 people.
Also, the difference in the water tariff charged by the Manila Water and Maynilad can be partly explainedby each company’s debt burden. When the M etro Manila area was split into two zones, MWSS’s debt was also
divided according to where the investment proceeds from the loans went. Ninety percent was spent in theWestern Zone, and only ten percent went to the Eastern Zone. Thus, Maynilad which won the West Zone has toshoulder 90 percent of MWSS’ debt. This higher share of the debt burden was reflected in their 4.54 Pesos/m3
winning bid in 1997 as against to Manila Water’s 2.32 P/m3 bid offer for the eastern side 11 which assumed only
ten percent of the former MWSS debts.
3-1-2. Non -revenue water (NRW)The lower the figure for Non -Revenue Water, the more efficient a water supplier is. From Table 2, we cansee that the Laguna Water District, with 26 percent NRW, is ranked first on this criterion. Manila Water ranks
second with 47 percent.
Part of the inefficiency the two concessionaires inherited from MWSS was an incredibly high NRW-figure.
Reducing this profit -reducing/ devastating figure was made one of the main targets of Manila Water. The
company engaged in a highly aggressive campaign and was successful in reducing NRW from 67 percent inAugust 1997 to a low of 47 percent by the end of October 2000. In contrast, we can see that the efforts ofMaynilad have been far from successful. The company is still fighting with NRW figures of around 65 percent
The company’s NRW even increased by 1.8 percent for the period July to September this year12 . Anotherpuzzling feature with this discrepancy between Manila Water and Maynilad is that the area under Maynilad’scontrol, the Western side, had a high number of new pipelines which logically would contribute to reduction in
NRW caused by leakage. However this is not the case. In contrast, Manila Water with few new pipelines in the
takeover period, has managed to reduce the NRW figure drastically. This calls for an explanation how Manila
Water has been able to reduce NRW.
One possible reason is the approach used by the company in addressing this problem. There seems to be

11

However it was expected that the eastern side would come up with a higher tariff than the western side due to huge investment needs. It
was even doubted whether the tariff was correct when the bids were opened. But the winning bidder, Ayala, defended their relatively low
bid. The conglomerate owns substantial real estate properties in the eastern part of Manila so in the overall calculations, this factor
allowed the offering of such a low bid so as to win the concession.
12
Maynilad lahad, Sept. 2000

65

two different approaches: cooperative and threatening . The Manila Water and Laguna Water District’s
approaches represent the first while Maynilad the second. The cooperative approach recognizes that people wantto pay as little as possible for their water so they might even buy water from illegally tapped sources. But both
the Manila Water and Laguna Water District understand people’s desire for easily accessible water. As Joel,
Manila Water’s information officer, explained during the interview: “We use the -“we scratch your back, and you
scratch mine”-strategy. “ This means that Manila Water provides water to even poor areas wherein pipelines haveto be shared by several households which in turn reduces the fixed installation cost. But in return, the people
have to pay religiously, or scratch the back of Manila Water.
On the other hand, Maynilad has taken a threatening strategy: people who do not follow the laws andregulations will be persecuted. In the distributed material from the company they triumphantly mention the cases
where they have had people caught of having illegal connections prosecuted in court. This approach is further
illustrated by the internal communication from the Chief Executive Officer (CEO) Rafael M. Alunan to theemployees which conveys a threatening tone. “There are those that are not listening, do not struggle, do notexert their effort and do not care about what is happening to Maynilad. We are discovering them little by little.
We also have people in the company that apprehend you and hold you up and those who take bribes from
customers. There are also those who sleep on their jobs and lie on their accomplishments. There are those whoare involved in syndicates and those that do it themselves. There are also those that are watching, they justtolerate this. … So in this case even if they are not doing anything themselves, they become accessories of crime.
There is no place for them in Maynilad. I will weed them out in the exercise of my duties and responsibilities tothe companies’ stockholders and stakeholders” 13 .
3-1-3. Employees per connection
The harder each employee works, the more connections the company is able to cover and thus the more
efficient the company becomes. From Table 2, we can see that Maynilad managed to reduce the employees to aratio of 4 per 1000 connectio ns and thus is the most efficient water supplier based on this criterion. Ranked
second is Manila Water with a ratio of 5 employees per 1000 connections. Figures from Table 2 show that
Laguna Water District and MWSS, have employee -connections ratios of 7 and 9 employees per 1000 connections,
respectively. In terms of this criterion, the water suppliers in Manila will benefit from advantages of large scale
operations. Therefore, the relative difference in efficiency might not be as high as the absolute diffe rence might
indicate.
3-1-4. Water availability
From Table 2, we can see that only Laguna Water District provide round the clock services to all its
customers, and is ranked first in terms of this criterion 14 . Ranked second is Manila Water which provides 24
hrs/day services to only 90 percent of its customers. Ranked 3 rd and 4th are Maynilad and MWSS, respectively.
Clarification needs to be made in this ranking as well. The two Manila water suppliers are in the midst ofinvesting for the improvement of the old water infrastructure as well as installing new ones and therefore are not

13
14

Maynilad lahad, Sept 2000. Part of the text is translated by own resources from Tagalog.
There are some few areas that suffer from not receiving water throughout the whole day. But this is a very limited number as well as it isa maximum of a couple of hours per day. Therefore we consider almost 100% of the users of Laguna Water District to receive water 24
hrs/day.

fully prepared to make water available throughout the whole day and night. However, by the year 2001, the twoconcessionaires are expected to be able to provide round the clock w ater services to 87 percent of Metro Manila’s
population. By 2006, this is expected to increase further to as high as 98 percent. 15 .
In the case of Laguna Water District the company has gradually taken up loans to finance improvements in
the infrastructure. The company’s prudent leadership did this in their long -term strategy.
3-1-5. Summary of efficiency performance
From the foregoing discussion, we have seen that the companies perform differently depending on theperformance criterion used. We found that Laguna Water District is ranked first on two of our four performance
criteria, i.e. NRW and water availability. Ranked 2nd is Manila Water which ranks first on water tariff charged tocustomers. The company has also performed well in reducing non -revenue water and in improving accessibility
to its water services. On the other hand, Maynilad ranks first in terms of employee as measured by the number of
employees per thousand of connection criterion. However, in the overall, the company only ranks 3rd because of
its unsuccessful effort in NRW reduction, increased tariff and still low water availability. The lowest rating goesto MWSS which ranks very low in all the performance criteria, and is thus can be said be a very inefficient water
services provider.

3-2. Explanatory Factors behind the differences in performance
The varying results obtained by each company in each of the criterion used to measure performance lead us
to our next question: what do the well-performing companies do in order to become efficient? If we can provide
satisfactory answers to this question, we will be able to draw valuable lessons. For us to be able to determine thefactors which explain the differences in efficiency performance, we examine the following dimensions of thecompanies: (1) human resource management; (2) capital infusion; and (3) community relation.
3-2-1. Human Resources Management
3-2-1 -1. Performance Evaluation and reward system
In the three cases of Manila Water, Maynilad and Laguna Water District, we found that the companies’
performance is regularly evaluated by both the water users and the organizations’ leaders. When leakage andother problems are discovered in the pipelines, users have a hotline they can call 24 hours a day. This is also true
for the Metro Manila area prior to privatization. However, when customers call MWSS to report their watersupply problems, they often experienced lack of commitment from the company to provide solution to thecomplaints. Thus, the customers’ grievances were not often taken in to consideration. In contrasts, at present, thetwo private concessionaires take customers’ complaints seriously. This is also true for the Laguna Water District.
Once complaints are received, the companies send staff to look into and fix the problem immediately. In
particular, the Manila Water strongly encourages customers to report whether they are satisfied with the response
provided by the company. The result of this feedback system is then used to reward employees’ performance.
Employees are rewarded in different ways. One reward is the “Employee of the Year” which is awarded to theemployee that most often gets good feedback.
In Laguna Water District the leadership is also very conscious about rewarding employees with excellent
15

See concession agreement.

67

work performance. Also, the management values employees’ opinions. Through the two discussions held every
year, each employee can voice opinion on his/her contribution at the office and in the field. To the degree that
remunerative reward and promotion can be given this is done. In addition free health insurance, as well as cheapcollege loans for the children of employees are provided 16 .
In the course of our research, we found that there are restriction son the means by which public companies
can provide performance incentives to employees. The amount of employees’ compensation and benefits isregulated by civil service regulations. While this might be the case, we found that the Laguna Water District,being a government corporation, has more room for flexibility. On the other hand, the private companies have all
the flexibility that is needed to motivate their employees in terms of monetary compensation.
3-2-1 -2. “Upskilling” and Organizational Development
Manila Water Company is a subsidiary of the Ayala Group, a diversified conglomerate with businessinterests in telecommunications, real estate, banking and other sectors. The group is reputed to be awell-managed organization in the Philippines which constantly strive to develop a common corporate strategy for
all its business interests. When a new company is included, the group transfer the corporate strategy to the newcompany. Thus, Manila Water was able to benefit from this transfer of corporate strategy in 1997. Employeestransferring from MWSS to the company were trained in order to be equipped with the right corporate skills
through the so-called “Training Program”. Retraining of the employees was one of the negotiation claims fromthe labor union during the time of privatization.
3-2-1 -3. Degree of politics in appointment of leaders
In the former MWSS, top leaders were politically appointed by the President. They were appointed moreon their background as friends and cronies of the President rather than their qualifications as competent leadersof a public water supply company. In Tagalog the term for this recruitment system is “palakasan” which means
nepotism or patronage. With privatization, the politically appointed leaders were replaced with competent leadersfrom the private sector who turn the organization into an efficient business unit.
In the case of the Laguna Water District, the Board of Directors consists of five persons. The director
emphasized that politically related members were not desirable. In contrast, professionals would not be prone tocontribute with a biased view and rather provide the organization with decisions that would be beneficial.
3-2-2. Infusion of Capital
3-2-2 -1. Adequate infrastructure and maintenanceWithout adequate capital investment in required infrastructure, there is a natural limit to how efficient awater supplier can be. This was the case of the former MWSS. The efficiency performance of the organization
was hampered by its failure to regularly improve its infrastructure. While MWSS was able to take up loans, thesewere either insufficient or mismanaged.
3-2-2 -2. Greater fund allocation for human resource development
In the absence of investment funds for the company’s human resource development, employees’
development potential cannot be maximized. In the case of the Metro Manila concessionaires, there is a bigger
16

Loans are given at 6-7% interest rate while in the market equivalent loans would be paid back with 25% interest rate.

chance for the employees to develop and improve their capacities given the input of capital. Manila Water choseto retain a large number of former MWSS employees. Misconception on their motivation as former government
emp loyees has been remedied by the company’s human resource development program. In this program, evenlower ranked employees were given the chance to improve themselves and advance in the company’s hierarchy.
Employees were also given training with the addit ional resources provided by the private company.
3-2-3. Community relations
When the former MWSS was still the water supply provider for the Metro Manila area, customers were notsatisfied with the quality of the service being provided. Dissatisfaction can be partly traced to the weak
information channels in and out of the company. Information on water service interruption was not properly
disseminated. The hotline system for reports of leakage and other problems was not functioning properly. The
two privat e concessionaires aptly recognized the communication problem and instituted the necessary remedies.
Thus at present, both concessionaires in the Metro Manila area have drastically improved information channels inand out of the company. This was confirmed through our interviews with people in Manila 17 . In the case of the
Laguna Water District we found through our interviews that all of our respondents were very satisfied with theinformation relations of the water supplier.
3-2-4. Lessons learned and implications to the case of Magdalena
From the foregoing discussion, we have seen what the well-performing companies do in order to become
efficient. What then are the implications of these findings to the currently ongoing privatization of the municipal
water system in Magdalena? We can draw three lessons. First, to ensure that the operation of the Magdalena
water supply project will be efficient, we suggest that the utility’s management should institute a human resource
development program which provides an app ropriate incentive system for its employees. Employees who
contribute to the growth of the company should be adequately rewarded. In this manner, the employees will havean incentive to commit themselves to their job. Second, to maintain an appropriate level of non-revenue water,
proper maintenance of the water infrastructure should be a priority of the utility’s management. Third and last,
the water utility should adequately communicate with its customers whether it be in terms of addressing
complaints or on issues of water tariff as well as other matters deemed important for the well functioning of thewater system.

4. Conclusion
We started with the hypothesis that water supply can be more efficiently provided by the private sector
than the public sector. Based on the results of the case studies, we found that the answer to our hypothesis is “no”.
However, the probative value of the conclusion is constrained by our limitations in terms of the duration of theresearch, availability of supporting data and the coverage of each of the case studies.
Using our efficiency performance indicators, we arrived at two “best performers” which is equally shared
between a private and a public water supply provider. Laguna Water District, a government corporation, and theManila Water, one of the private concessionaires of the Metro Manila area, are the best performers. Thus, wecannot categorically say that a private water provider is better over a public provider or the other way around. As
17

For a detailed result of the customers’ level of satisfaction on the quality of water services received, refer to appendix.

69

to the factors which determine performance efficiency, we found that water supply providers, whether private or
public in nature, with well-functioning human resource policies deliver efficient water supply services tocustomers. To achieve companies’ objectives different approaches we re used. In the case of Manila Water, a morecooperative approach was used as compared to Maynilad. This shows to us that a cooperative approach is more
effective in achieving objectives.
We also found that the availability of adequate capital is an important factor for the maintenance of aquality water infrastructure. This deserves further elaboration: In the case of water districts, up to 1993, the
LWUA was able to provide highly subsidized loans to its member water districts. However, after that period its
capital was depleted and thus was unable to sustain its lending efforts. The unavailability of publicly subsidizedloans made the need for private capital considerably more urgent and important than before. This is one reason
why the number of privatized water suppliers in the Philippines has increased for the past 7 years 18 . However,will all public companies become efficient if only they had capital for water infrastructure investment and had awell-functioning employees evaluation and reward system? It is obvious that the answer to this question is not
simple.
We arrived at the conclusion that private provision of water supply services is not necessarily more
efficient than provision by the public sector. However, we need to qualify our answer. We hav e to ask under what
conditions the conclusion holds. The case studies we have covered may not be illustrative of the general situationin the Philippines and therefore are not representative of all water supplier companies. There are water districts
bigger than the Laguna Water District, but far smaller than Metro Manila. Other areas are experiencing difficultyin accessing sufficient water. Thus, different conditions might lead to a different conclusion to our hypothesis.

References
Acosta, Roberto (2000), An introduction to the theory of and institutional arrangements for private sector participation in
urban water supply and the case of the Philippines. Forum for International Development, Forthcoming (vol.17, 2000)
Agos, The official employee newsletter of the manila water company | Vol.1 No 2 September 1997;Vol.1 No 4 November
1997;Vol.1 No 5 December 1997;Vol.1 No 7 February 1998;Vol.1 No 8 March 1998;Vol.1 No 9 April 1998;Vol.2 No 14
October 1998;Vol.2 No 17 January 2000;vol.2 No 24 August 2000;vol.3 No 29 January 2000;vol.3 No 34 June
2000;vol.3 No 35 July 2000;vol.4, No36 August; vol.4 No 37 September 2000;
Arriens, Wouter Lincklaen, J. Bird, J. Berkoff, and P. Mosley (1996),” Towards Effective Water Policy in the Asia andPacific Region.” Country Pap ers, Asian Development Bank, Manila, Philippines, 10 -14 May 1996.
AYALA NOW | Vol.1 No 5 July/ August 1997; Vol.3 No 1 January/February 1999; Vol.4 No 3 May -June 2000
Barreiro, Wilfrido C., and F. Arellano (1998),” Private Sector Participation in Metro Manila Water and Sewerage Services,”
Maynilad Water Services Inc. February 9, 1998.
Donnabelle Gatdula, 1996. MWSS privatization backed. MC May 29th 1996, p.11.
Engineering and Development Corporation of the Philippine, Final Feasibility Study Report of LGU Urban Water Supply andSanitation Project (LGU-UWSSP) June 1998.
Institute of Public Policy (1987), “A Few Facts About Privatization in the Philippines”, IPP Bulletin, February 1987.
18

For information on how many more urban water supply projects in the Philippines are planned for financing and operation by the private
sector, refer to Roberto Acosta (2000). An introduction to the theory of and organizational arrangements for private sector participation in
urban water supply and the case of the Philippines. Page .

Local Water Utilities Administration (1994),”LWUA and Water Districts.”
Luis Teodoro, 1997; Privatization jitters, MC February 3rd, 1997, p.5.
Manila Bulletin, Thursday, February 18, 1999. The Financial Aspect of MWSS; Before and after privatization.
Mark Dumol (2000) The Manila Water Concession: A Key Government Official’s diary of the World’s Largest Water
Privatization, Washington DC, World Bank, c.2000.
Nickum, James E., and K. William Easter (1994),” Metropolitan Water Use Conflicts in Asia and the Pacific,” Westview
Press, East-West Center. Program on Environment Honolulu, Hawaii, USA.
Patalinghug, E.E. (1995),” Philippine Privatization : Lessons and difficulties.” University of Philippines Business Library.
Patalinghug, E.E., . (1996),” Philippines Privatization : Experience, Issues, and Lessons” University of Philippines C enter for
Integrative and Development Studies.
Philippine Daily Inquirer METRO, Sunday February 19th 1995. Why Manila Water System is very sick?
Provincial Planning and Development Coordination Office. Provincial Physical Framework Plan of Laguna, Planning Period
1993-2002.
Quaiason, Rey L., V. Aquino-Quiason (1999),” MWSS 121st Anniversary : Water is Life, Tapping Nature to Quench theThirst of Metro Manila’s Burgeoning Population; from Manila Bulletin, Thursday February 18, 1999.
Romano, Genielle B. (1996),” Philippine Public Enterprises and Privatization”, Fiscal Administration Foundation, Inc.
(FAFI) Publication no. 23
Seventh Congress Of The Republic of The Philippines (second session)| Republic Act No 6253
Socio Economic Profile of Magdalena
United Nat ions, 1998. Towards Efficient Water Use in Urban Areas in Asia and the Pacific. New York.
Vea, Reynaldo B. (1999),” Setting New Heights Beyond Year 2000.”, Manila Bulletin, Thursday February 18, 1999.
Water Sector Reform in the Philippines (1994), Summary of an Informal Workshop Co-sponsored by the Economic
Development Institute of the World Bank and the Development Academy of the Philippines, Cebu City, July 25th – 28th,
1994.

71

APPENDIX 1: Summary of Interview Results in Metro Manila and Laguna
For us to determine the level of customers’ satisfaction with the water services being provided by thevarious suppliers, we conducted interviews for both the Metro Manila and Laguna water systems. For the Metro
Manila area, we interviewed at random 56 residents of Metro Manila whom we chance upon at the Rizal Park andat the Festival Mall in Alabang. For the Laguna Water District, we interviewed at random 11 residents in Los
Baños.

ManilaTotal no of people interviewed
Manila Water (East Zone)
Maynilad Water (West Zone)
others (including Laguna)

56
25
18
13

Water tariff (pesos per month)
Before privatization〜99
Manila Water
4
Maynilad5
After privatization
Manila Water
1
Maynilad3

100〜19911
4

200〜2993
3

300〜499
1
1

500〜
1
0

no answer
5
5

7
4

8
2

3
1

3
3

3
5

Did water situation improved after privatization?
Manila water
YESNO
no answer
Price
10
13
2
Quality15
82
Quantity
13
102Service11
12
2
Maynilad
Price
4
10
4
Quality9
5
4
Quantity
684Service684Overall satisfaction
Manila Water
Maynilad

YES
13
8

NO
8
6

no answer
4
5

LagunaNumber of p eople interviewed.
Los Baños
OthersWater tariff (pesos, per month)
Number of respondents

11
5
6
〜199
2

Did water situation improved after privatization?
Price
Quality
Quantity
YES
6
11
10
NO
5
0
1

200〜399
6Service92400〜5992

600~
1Overall satisfaction

Yes
11

No
0

Explanatory Notes:
Results of the Interviews on the Water Supply Situation in Metro Manila Area
In the case of Manila, almost all respondents said that the price of water has been higher than before
privatization. Both in the Eastern and western zone, 6 people said the price is more than 500 pesos per monthnow (One person said the water bill is 1200 pesos.). More than half of the persons complained about the price.
On the other hand, more than half of the people said that the quantity has been improved after the privatization.

More than 10 people said that they could get the water all 24 hours. Regarding the aspect of quality, however,few people said that they were able to drink the water. In this report, we have found that Manila Water ismanaging the water supply business better than Maynilad Water. In this interview, however, both tables show
similar tendency of overall satisfaction. However, in our research we came across a puzzling phenomenon. In
West zone, many people did not answer Maynilad but Metropolitan Waterworks and Sewerage System on thequestion of what company supplies them with water. It seems that many of the users who live in the western zone
do not know that Maynilad managed the water supply. It might indicate that Maynilad has not communicatedtheir commercial message as well as Manila Water.
Results of the Interviews on the Water Situation in Laguna
Almost all people were satisfied about their water situation, everyone replied “YES’ on the question of
overall satisfaction. With regard to the quality aspect almost all people said that they could drink the water from
Laguna Water District. This is the most different point compared with Manila, where almost all people repliedthat they do not drink the water from the pipes and consume purified water instead. Other questions had similaranswers to the question about the quality. This may be regarded as indicating that LWD have managed better than
Manila. (It is described in this group report). On the other hand, a person who lived in Los Baños, said that he
was getting water from a deep well. It was very difficult to connect a pipeline to his residence because it is far
from town center. In Manila’s interview in Festival Mall, we asked 2 people from Laguna. They also said thatthey get water from deep well due to the similar reason. It showe d that LWD has to consider extending pipelines
to people who live far from the wells of LWD.

APPENDIX 2. PICTURES
Picture 1: The Administration group in front of the pump house of the new water supply in
Magdalena73

Picture 2: Spaghetti connections of electricity (upon the wall) and water (on the ground) in
ManilaPicture 3: Manila Water representative explains usage of water meters.

Working Group 4

Tourism and Social Change

AdvisorKimiaki Takahashi, Professor
Members of Working Group 4
Megumi Arima

Yumiko Hayashi

Kiyoko Naitoh

Naoto Maeda

Yoji Mizobe

Eiji Shinkai

Mariko Ueda*

Lea Astrera (UPLB)

Lorie Cajegas (UPLB)*Group Leader

11. Introduction
We are living in the age of Mass Tourism1 (Yamashita, 2000). The World Tourism Organization has
estimated that at least 500 Million people travel each year (WTO 1995). Some tourist travel beyond their nationalboundaries in search of exot ic travel destination they cannot find in domestic venues. In Japan, about 15 million
tourists choose to travel abroad each year to seek adventure in foreign settings (Yamashita 2000). Although thenature of trips might be quite different for group tourists, backpackers, business travelers, and family vacationers,
the common denominator is all of them seek something new, exotic, and different from what they see in their
daily lives.
Come to think of it, we the OFW participants from GSID are tourists with such expectations. We came all
the way to Philippines not just to engage in a field research but also to enjoy ourselves. We are fully aware thatsome of us visited places like Vistamar in Batangas, El Nido in Palawan, and Pagsanjan Falls to experience
what the Philippines has to offer to tourists. When we were enjoying tourist amenities while being served by
Filipino waiters, hotel boys, guides, and many other tourism related workers, how many of us did pause for a
moment and thought about the lives of thes e ordinary people we met? We, the group of graduate students fromthe Graduate School of International Development (GSID), Nagoya University and with the assistance of faculty
and students of the Institute of Development Management and Governance (IDMG) of the University of thePhilippines at Los Baños 2 , decided to look into the lives of these people by conducting a field research on theissues of social change. For us to carry out a field research smoothly, we went through a series of discussions andpre -studies among the group members before and during the OFW Session. Through these intensive dialogues,
we were able to acquire a sound “people’s” perspective as our mind frame.
We proceeded to fulfill our research agenda by focusing on the tourism sector in the town of Pagsanjan.
Two critical issues were identified as objectives of our research. These are as follows:(1) At the macro -level, we posed the question “To what extent do external variables shape the degree ofsocio -cultural impact on the targeted municipality?” For us to be able to answer this question, we interviewed
government officials involved with the tourism sector at the national, regional, provincial and municipal
levels, members of chambers of commerce, tourists, non -governmental organization (NGOs), people’sorganizations (POs), and other related organizations. To validate findings from the interviews, we analyzed
various documents furnished to us by the different organizations such as brochures, fact books, policy papers,
and statistics. We also relied on our own personal observations.
(2) At the micro -level, we asked the question “To what extent are internal variables responding to the externalpressures of social change?” Similar with the first question, we interviewed several individuals involved in
the tourism sector. These include boatmen, resort workers, restaurant owners and workers, tricycle andjeepney drivers, sari-sari store owners, workers in embroidery factories, barbershops, and beauty parlors andaverage residents. By having in -depth dialogues with them, we tried to identify the patterns of local people’s
responses to and the influences of the presence of tourists.

1

Mass tourism can be defined as Tourism Activities that happens in a large scale. For more detailed definition, please refer to Yamashita(2000).
2
We have to thank Dr. Mimosa Ocampo (Mimi) , Loreli Cajegas, Lea Astrera and Prof. Takahashi for their physical and emotional supports
during the field Research. Without them, the research would not have become possible.

In sum, our group would like to articulate the process of social change, a concept most development
professionals working in the economic sectors find difficult to understand. The importance of putting local
people’s perspective first in development was underscored throughout the field research.
The outline of the report is as follows. Following this introductory chapter, we will provide an overview of
the tourism sector in the Philippines both at the national and provincial levels. At the provincial level, we focus
on the province of Laguna by identifying general socio -economic characteristics of tourism activities. The thirdchapter will present a detailed demographic profile of the town of Pagsanjan. This will give us a clear idea about
the locale and surrounding municipalities. The fourth chapter will describe the economic, socio -cultural,environmental and political impacts of tourism on the people of Pagsanjan. Since the central focus of ourresearch is to determine the impact of tourism on the local population, it is important that we come up with asound analysis. Through case studies, we tried to identify factors contributing to the process of social change inthe municipality. The paper concludes by presenting our findings on the role tourism play in shaping various
facets of community life in Pagsanjan.

2. National profile of tourism in Philippine and profile of Laguna province
National level
It has been 12 years since Philippine government started implementing the “ Welcome to Philippine”
tourism policy. In 1999, more than 1.9 million foreign visitors have arrived in the Philippines. During that year,
the tourism sector accounted for 8.7% of GDP and 9% of all employees are engaged in the tourism sector. As ofJune 2000, the largest number of visitors is from the USA, followed next from Japan and then from South Korea.
For the period June 1999 to June 2000, the numbers of tourists to the Philippines has been on the rise with South
Korean visitors increasing by almost 100 percent (Figure1-1 and 1-2)

Figure 1-1: Foreign arrivals share in the

Figure 1-2: Growth rate of foreign arrivals,

Philippines, 2000 June

1999.6-2000.6Country of
OriginHongKong

Rate
50%

6.02%

45.26%

40%

Korea

7.5%

30%
20%

17.22%

Japan

12.50%

28.17%

10.67%

9.22%

India

Japan

10%

USA
0%

0%

10%

20%
Share

30%

Korea

Sri Lanka

Country of Origin

3

DOT and PTA
The Department of Tourism (DOT), is one of the 27 cabinet agencies in the Philippine national government.
The department has 15 regional units which corresponds to the administrative subdivision of the country. The
DOT has been in existence since 1973 and it has been mainly responsible for handling all tourism investment andmanagement matters in the Philippine since then. In 1991, with the enactment of Republic Act 7160 or the Local
Government Code, the regulatory powers of DOT were transferred to provincial governments in line with theoverall government policy of decentralization. With decentralization, the major functions of the DOT has been
reduced to; (1) formulating national tourism policy and translating these into a nat ional Tourism Master Plan with
Singapore’s tourism development approach and Maldives island resort concept as models; (2) tourism promotion
outside of the country; and (3) organizing vocational training on tourism with the Technical Education and Skills
Development Authority (TESDA).
On the other hand, the Philippine Tourism Authority (PTA ) was established at the same time as DOT in
1973. The PTA is a specialized agency under the DOT. In Region 4, where Laguna is located, the agency
responsible for the ope ration and management of 17 hotels and resorts by using the Tourism Master Plan as theoverall guiding framework.
Region level
Region4-Southern Tagalog• Average income per family(1997)
1.Metro Manila
2.Central Luzon•Total population

9,696,068 (1995)•Number of tourist

898,000 (1999)•Infant mortality rate
(1995)•Simple literacy rate (%)(1994)

p270,993 1.Metro Manila
p133,130 2.Central Luzon

32
40

3.Southern Tagalog p132,363 3.Southern Tagalog 45•Life expectancy (1995)

1.NCR
98.8 1.Central Luzon
72.02
2.Southern Tagalog 96.4 2.Southen Tagalog 71.48
3.Central Luzon

96.3 3.Central visayas

71.18

Region 4 is comprised of 11 provinces collectively known as Southern Tagalog. Next to Metro Manila, theregion constitutes a geographical subdivision which known as the second largest economy in the entire
Philippines. The industrial and service sectors account for the highest contribution to the regions gross domestic
product at 44% and 30% respectively. The region is also socially well developed. As to tou rism, in 1999, thenumber of tourist arrivals in Region 4 was estimated at 898,000 (by yearbook). Of these, 54% are from theadjacent National Capital Region or Metro Manila while the other 46% are foreign tourists. For the domestic
front, the target for tourism advertisement is mainly Metro Manila, while at the foreign front is the East Asian
leisure market of Japan, Korea and China. The main tourism policy in Region 4 is the promotion ofenvironmental friendly eco -tourism which is aimed at preserving endangered animals and plant species in theregion while at the same time attracting domestic and foreign tourists.
Provincial level
Laguna• Total population

1,845,385(1999)•Number of tourist

83,000(1999)

Among the eleven provinces comprising Region 4, Laguna is considered as the 2nd largest province basedon the size of the population and the 3rd largest in terms of social and economical aspects. The province iscomposed of 29 municipalities and one city. As of 1999, provincial population was estimated at 1.683 million.
The number of foreign tourist’s arrival is about 83,000 in 1999. There are many tourist attractions and tourism
oriented and related establishments in Laguna.
A. Tourist attractions
1-.Natural Attractions
a. Water Falls
b. Cold/Hot springsc. Legendary Mountains

2-.Man -made attractions
a. Lake Caliraya
b. Water Parkc. Theme park3-. Historical sites/ shrines
4-. Religious/ Old churches
5-. Cultural/ Festival
6-. Education/ Museum

B. Tourism Oriented and related Establishment
1-. Oriented Establishments(numbers)

Hotels (26)
Resorts (274)2-. Related Establishments(numbers)
Restaurants (102)Museum (6)Cultural Center

3-. Cottage Industries
a. Wood craftingb. Embroidered Productsc. Footwear / Bags
d. Papier Machee. Stuffed Toys
f. Baskets g. processed Food

In comparison with other provinces in the Philippines, Laguna can be characterized as developed both in
the areas of social and economic development. According to the provincial government’s plan, the agricultural,industrial and tourism sectors should progress hand and hand. With these as the background, we will now discuss
tourism in well-developed area in Laguna province.

3. Tourism Sector of Pagsanjan
3-1. Profile of the Municipality of Pagsanjan
The municipality of Pagsanjan is located about ninety -two (92) kilometers southeast of Metro Manila. The
town is bounded on the north by the municipality of Lumban, in the south by municipality of Cavinti, in the eastby the canyon province of Laguna, and in the west by munic ipalities of Sta. Cruz and Magdalena. Pagsanjan isfor its majestic falls Two rivers, the Balanac and Bumbungan Lewin creek, traverse the town. The town isadministratively subdivided into has sixteen (16) barangays 3 , six (6) of which are classified as urb an (Barangay 1,
Barangay II, Maulawin, Pinagsanjan, Sampaloc and San Isidro) while the remaining ten (10) are rural (Anibong,
Buboy, Biñan, Cabanbanan, Calusiche, Dingin, Lambac, Layugan, Magdapio and Sabang). In 1999, themunicipality had an estimated population of 32,626 growing at an average of 3 % per year. The towns populace
constitute about 2% of the total population of Laguna province. Out of the town’s population, 61% or 19,784 is in
the labor force. On the other hand, the number of households in Pagsanjan is around 7,250 of which most of them
speak Tagalog and Bicolano. In 1999, the municipality registered a population density of 12 persons per hectare –35 persons per hectare in the urban barangays and 6 persons per hectare in rural barangays. The economy ofPagsanjan is principally agriculture -based. Of the total municipal land area, 2,190 hectares or 83% is devoted toagriculture. Major crops grown are coconut (56%), palay (24%), fruit trees (3%) and vegetables (1%). Aside from3

The basic political unit in the Philippines is called barangay. In some places where barangays are relatively large, it is further subdivided
into sitio and purok.

5

growing crops, Pagsanjeños are also engaged in livestock production. At present, there are three (3) contract
growers in swine, one in broiler and the rest are backyard growers of cattle, carabao, swine, goat and poultry.
Commerce and industry in Pagsanjan is largely concent rated in the Poblacion or the town proper. Commercial
activities include retailing, wholesaling and merchandising. Of the total number of establishments, around 542
are engaged in retail merchandising (68%) while 80 are into trading (10%) and 66 are servic e-oriented businesses(8%). Industrial activities in the municipality are limited to manufacturing of chopsticks, popsicle, shoes, hollow
blocks and concrete poles. Light industrial activity is likewise limited to vehicle maintenance (welding andrepair).
3-2. History of tourism
Though we were unable to find out the exact date when tourists started visiting Pagsanjan Falls, some oldboatmen indicated it started around late ’50s. Tourism business expanded rapidly in mid ’70s. we gathered thatthe peak was 1981-85. However, after this period the number of tourists begun to decrease. This decline wasreported to be primarily due to the high cost of tips that boatmen asked for. In April 1, 1991, because of thedeterioration of peace and order situation in the town, the DOT withdrew its promotion of Pagsanjan as a tourist
destination. This continued before the functions of DOT were transferred to the local government in 1993.
During 1993, the municipal government through the Pagsanjan Tourism Office (PTO) started to manage tourism
by itself. This shift in responsibility was made possible by the enactment of the ‘The Local Government Code of
1991’ which devolved tourism operations to local governments. Correspondingly, the number of tourists
increased again. However, in 1998, a drastic decrease in the number of tourists was noted resulting from theworldwide economic crisis plus the fact that Philippine Airlines, the country’s carrier shutdown its operation. At
the same time, because of the diminishing income of th e local people incidents of harassment and forced tippingby the boatmen have been coming out to the surface. With the declining earnings from tourism, some barangay

officials in Pagsanjan started programs promoting the shift to other activities such as fa rming.
3-3. Profile of tourism
Pagsanjan is just but one of the tourism centers in the province of Laguna. Aside from the town, there areother touristic attractions which include but are not limited to Mt. Makiling, hot spring resorts around Los Baños
as well as a man-made lake in Caliraya. As such, tourists engagement and activities at each location are different
and being a competitor with one another, it seems hard to find the relevance or integrity among the spots acrossthe whole province.
The main tourist attraction of Pagsanjan is the boat riding tour called ‘Shooting the rapids’. The tour
involves going upstream the river more than 7 kilometers to the Pagsanjan main water fall and then ride
downstream in five mater length shallow canoes paddled by t wo trained boatmen called ‘ Bangkero’. Both sidesof the river are surrounded by sheer cliff. On the way to the main fall, one may feel the relaxing atmospherebrought by nature with beautiful sunrays passing through the trees. On the way back, one may enjoy the thrill ofshooting ravine with splash.
3-3-1 . Functions of Local Government’s Administration
One of the main roles of the Pagsanjan Tourism Office (PTO) is to control and regulate the activities ofboatmen. The office requires boatmen to get busines s licenses and work permits. In addition, the PTO is also
engaged in organizing support groups for the “shooting the rapids” tour. The support group’s main tasks are as
follows: removing garbage; preventing rock fall alongside the course; monitoring the wa ter level; and enhancing
rescue knowledge. Nowadays, the PTO is eager to change the negative image of tourism in Pagsanjan. Two years
ago, the office launched The ‘Bangkero Festival’ which is another means of attracting tourists to visit the town
during th e high season in May. The festival aims to invite more visitors. The PTO also has a plan to conduct a
training seminar for boatmen to be held on 2001. The office is also exploring for new tourism spots which caterto eco -tourism.
3-3-2. Boatmen Engagement
The “shooting the rapids” tour directly contributes to the household income of boatmen’s’ family. Whilerecords at the municipal office show that only 1,796 persons hold the necessary permit to work as boatmn, wewere told that more than 3,000 men are engaged in the trade. This number is about one –third of the total 9,563
men in Pagsanjan within the age range 15-60 registered in the municipality’s projected population in 1999. As
such, the job of boatmen has a huge impact of the level of employment in the town. While this might be the case,we should also consider the possibility that not all of the boatmen are necessarily residents of Pagsanjan.
There are seven boatmen associations with the corresponding number of members as follows: (1)Pagsanjan Rapids-514; (2) Pagsanjan Falls Lodge -396; (3) Magdapio Lodge -250; (4) La CoronaHotel-190; (5)Pagsanjan Village -116; (6) ,Pia Zen San -26; and (7) Garden Resort -20. At present, only three are considered as
the main associations. In total, over 1,500 boatmen belonging to the seven associations and by virtue of theirmembership, they can get easy access for work opportunities and social security benefits.
By using the case of the association at the Pagsanjan Rapids Hotel, we tried to estimate a boatman
monthly income by using monthly ticket sales data. The results is listed below:
The analysis shows that a member of a boatmen association gets a job according to the order once in every
three days. In February, a boatman was able to earn P4, 000 as maximum. However, during lean times, a boatman

7

Table3-1: Sample projection of boatmen's net income Pagsanjan Rapid Hotel in 1999
Month

Ticket ales

EngageIncome (moth)

Jan
Feb

3,537

6.9

2,615

Gross earning

580.0

5,541

10.8

4,096

To Hotel accommodation

-45.0

Mar

3,047

5.9

2,253

Share Pagsanjan

-15.0

Apr

2,996

5.8

2,215

Share Cavinti

-7.5

May

3,146

6.1

2,326

Share Lumban

-7.5

Jun

2,609

5.1

1,929

Share province

-3.0

Jul

3,350

6.5

2,477

Trust fund

-2.0

Aug

4,211

8.2

3,113

Boat rent

-50.0

Sep

2,238

4.4

1,655

Motor boat

-20.0

Oct

2,894

5.6

2,140

Dispatcher

-10.0

Nov

3,976

7.7

2,939

To Association

-40.0

Dec

2,638

5.1

1,950

Net incom e

380.0

Total

40,18329,707is only able to work once a week and the total earning only amounts to P1, 650 per month.
3-2-3. Revenues of Related Parties
From the P 40 charged from each tourist, the boatmen association was able to accumulate an aggregate
fund totaling P1.6million. This fund is redistributed to each member as a form of social safety net or ascompensation if a boatman decides to leave the job. On the other hand, the hotels and inns in the municipality
earn a total of at least P3.9million per annum from the accommodation fees paid by tourists as well as sales fromrestaurants and souvenir shops.
The presence of tourists also contributes to the revenues of municipalities traversed by the “shooting the
rapids” tour. While the main waterfall is located within the boundaries of the neighboring town of Cavinti,
tourists have to start from Pagsanjan through a spot just south of Lumban. As such, the local governments inthese three municipalities came up with a ‘Memorandum of Agreement’ which defined how the income fromtourism should be shared among them. According to this document, from the P 30 charged each touris t, thePagsanjan municipal government is entitled to one -half or P15, while the remaining half will be shared equallyby the Cavinti and Lumban municipal governments at P7.50 each. In one year each of the participating local
government can get a total share ranging from P 0.6 million at the minimum and P1.2million at the maximum. In
the town of Cavinti, the municipalities share from the boat ride fee constitutes its second biggest source ofrevenue, which is low at about 5 percent of the total, next to the P 18 million it gets as share from the Internal
Revenue Allotment (IRA).
Aside from boatmen, there are numerous other jobs directly or indirectly related to tourism. These include
vendors in food and souvenir shops, employees of hotels and restaurant and drivers of tricycles and jeepneys
among others.
3-4. Profile of tourists
The Pagsanjan experienced the highest number of tourist arrivals in 1996 at 219,934. However, this was
short lived with a sharp decline to 97,708 arrivals in 1998 and further to 86, 999 in 1999. The unprecedented
drop may have been mainly caused by the Asian economic crises. Tourist arrival is also affected by the climaticcondition in the Philippines wherein the year is divided into wet and dry seasons. The dry season begins in Marchand end in June while the wet season last from July to October. The best period to visit Pagsanjan is from March
to May, which also corresponds to the long summer vacation in Philippine schools. During the end of February
when the Chinese New Year is cele brated, many tourists from Taiwan come to visit Pagsanjan. Based on the mostrecent ticket sales record, the number of tourists in February considered as the peak season was at a high of
12,002 persons accounting for 13.8% of the total arrivals for the yea r. On the other hand, the lean season was
during September when tourist arrival was recorded at only 4,820 persons or 5.5% of the total. Thus, the revenue
earned per month is not regular and fluctuates according to the season.
According to an employee fro m one of the hotels, Japanese started visiting the town as early as the 1970s.
In the 80s, Koreans and Chinese started to come. Based on a survey conducted by two major boatmen
associations, about 80% of the most recent tourist arrivals are from Korea. During the fieldwork, we saw at least
two large bus tours with more than 40 Korean tourists in each bus with accompanying Korean agents. We werealso able to get 12 replies from this group of Korean tourists on our questionnaire about the impressions on theboat riding experience. The Chinese tourist’s rush to visit foreign countries during the month of February does
contribute to the peak of tourist arrivals in Pagsanjan and this has much implication in terms of perking up the
local economy.
Based on the results of our questionnaire survey, we found that 83% of the tourists visited the waterfalls asa group. Although six tourists joined as individuals, four of them applied at the hotels’ tour desk at Manila andcame together in a small bus. The result of our exit point
Table 3-2: Profile of Tourists

questionnaire as follows:In summary, the main features of tourists visiting
Pagsanjan are they come in a group in a one day tour which
originates from Metro Manila.

1. Are you group tourist or individual tourist?
Group
30
83%
Individual
6
17%
Sum
36
100%

3-5. Tourists’ level of satisfaction
We did a survey on various aspects of the tour which the tourists appreciate on their visit to Pagsanjan. The
results show that scenery is most appreciated at 80 %, followed by ‘service’ and ’safety’. In addition nearly 90%of the respondents said they will recommend the trip to Pagsanjan Falls to other people. On the other hand, ten of
the respondents said they were annoyed by the shop vendors’ PUSHY attitude and the boatmen’s demand for tips.
These two aspects spoiled the tourists otherwise relaxing experience of viewing the beautiful scenery while going
down the rapids.
Finally, nearly 90% of reply showed that they would recommend Pagsanjan Falls to whom they know.

Table 3-3: Tourists’ satisfaction
2. If you satisfied with Pagsanjan falls tour, Pleasecheck among below listed. (multiple choice)
Service18**

Scenery

30***

Safe ty
Price

17
9

**
*

Duration

8*

OthersUnsatisfied

1
1

3. Do you recommend Pagsanjan Falls to whom you know?
Yes
32
89%
No
3
8%
Unknown1
Total
36

Entertainment

9

4. Impact of Tourism in Pagsanjan
4-1. Definition of Impact and Target Group
Since the main focus of our research is the impact of tourism, we have to define what we mean by “impact”.
By “impact” we refer to the way the local people or local community respond to the presence of tourists. The
following questions have to be answered: (1) Has there been any change in their community brought about by
tourism and what are these changes? ; (2) Did the local people change their life style ever since tourism has
emerged prominently in the local socioeconomic setting?; and (3) Do they accept or oppose the presence of
tourists? These possible negative and positive influences which may have been caused by tourism are considered
as “impact” .
Qualitative research methods were employed in order for us to identify and determine the impact of
tourism. These included conducting in -depth interviews with local people, especially with those whose work are
related to Pagsanjan Falls. Participatory observation which included three days of home stay was also done.
As mentioned earlier, the main feature of tourism in Pagsanjan is the visit to “Pagsanjan Falls”. Whenevertourists enter Pagsanajan, they cannot avoid boatmen who usually flag their vehicles and persuade and/or force
them to visit the falls by engaging their services. With this prevailing situation, the boatmen are the first contact
of tourists and thus have the most direct relation to the tourism sector. Thus, the boatmen became the main targetof our research.
While we refer to boatmen in general terms, we have to consider that there are various ways to work as aboatman. Some work full-time, others work as a side business while several others work part time on weekends.
We categorized anyone working as a boatman either full-time or part -time as “Boatmen” and those who do notwork as boatmen as “Others”.

4-2. Boatmen and their families
4-2-1 . Economic Impact
The income earned from being a boatman is not stable. The competition is high since farmers and fisher
folks also work part time as boatmen in order to supplement their income. Before the tourism boom in Pagsanjan,

the income gap between the rich land owning class and thepoor tenant farmers was wide. According to the Municipal
Planning and Development Coordinator (MPDC), theincrease in the number of boatmen has contributed
significantly to the narrowing of the income disparity
between the rich and the poor. This economic phenomenon
resulted into the emergence of the middle class inPagsanjan. However, now that tourism has declined andthat there is a glut in the number of boatmen given thatboating has become the main job in the town, instability ofthe main source of income may result to the reemergenceof a yawning disparity between the rich and the poor.
Boatmen have several coping mechanisms in orderto survive this economic difficulty. As mentioned earlier,most of the boatmen belong to associations that provide
the job to members and distribute the tips collected fromtourists through the accumulated fund. The share of eachboatman from the fund is availed in situations wherefamily expenses pile up such as during enrolment period
when the children’s school fees have to be paid or during Christmas. This system of fund distribution helps theboatmen a lot. However, during the lean season, each boatman can work only once per week thus he has to seekother ways to earn money. To cope with the difficulty, two ways are employed. First, in order to have at least two
turns per week, some boatmen have double membership 4 in the associations. Second, some off-duty boatmen
flag down vehicles ferrying tourists and persuade and/or force them to engage their services with the hope that if
the tourists will do so, the boatmen can have a chance to work even if their turn has yet to come. There are alsoboatmen engaged in this unpleasant practice who do not belong to any of the associations. By working
independently, the boatman can get all the tips. Third, some boatmen continue working as farmers while others
seek alternative job such as tricycle driver. However, except for illegal activities such as drug trafficking or
pimping, it is very difficult to find alternative jobs, thus most of the boatmen remain being a boatman. In sum,
the economic condition of boatmen and their families is heavily influenced by the boom or bust of tourism inPagsanjan. They have no choice by to adapt their way of life to the prevailing situation.
4-2-2 . Socio-cultural Impact
1) Education and children
We understand that in Pagsanjan, the decision to obtain higher education is directly with the trend of
tourism. When tourism was booming and to become a boatman was considered a “good job”, people had lessincentive t o continue their studies. This is not only because they cannot not afford, but also because to become aboatman does not require formal education. However, we found a case wherein higher educational attainment

4

They have to pay from 10.000 to 20.000 pesos to obtain membership and receive their saddle cloth that has their own number.

11

enabled a boatman to switch his job to become a teacher (Case 1). At present, the youth of Pagsanjan town aresons and daughters or even grandchildren of the first generation of boatmen. Unlike their parents, today’s youth
tend to pursue higher education. We found that some college students are workin g as boatmen and the income
they earned is spent for their families’ livelihood, their own education and for their entertainment. They and theirparents expect that after their graduation from college, they would be able to find another job. Some of them go
to Manila to pursue higher education and stay and work there afterwards. It is not only the sons of boatmen, butalso the daughters who want to pursue higher education.
2) Housing
Income from boating allows boatmen’s families to buy their own land and construct a new house.
Boatmen’s families live along the river and in the center of municipality. We observed that boatmen were able tochange the materials for houses from easy to obtain and cheap materials such as bamboo, cogon and wood tomodern materials such as concrete walling and galvanized -iron roof. While the durability of houses has improved
significantly, the traditional style of housing has started to disappear. We interpret this to mean that theirperception of housing has changed.
3) “Easy mone y” and “vice”
When tourism was booming, the people of Pagsanjan refer to income from boating as “easy money” forthey were able to earn without much effort. During those prosperous times, some tourists especially Japanese
were very generous in giving tips 5 . Since it was “easy money” some boatmen started to waste their income on
vices such as drugs 6 , gambling and drinking. Today, even if the number of tourist arrivals has declined
significantly which means that earning money has become a daily struggle, some of the boatmen still managed tocling on to their vices.
4) Communication
With the arrival of tourists, boatmen were able to improve their communication and language skills. Theircommand of the English language has been significantly improved by the almost daily conversation they havewith foreign tourists. Through their interaction with tourists from Korea and Japan, they were also able to learn
5
6

At that time, boatman associations did not have systems that gather tips from members. Boatmen could get tips as their income directly.
According to a staff of Women’s club, the consumers of drug are boatmen and not tourists. They buy drug in Lumban where is known as acenter of drug. Pagsanjan municipality is very strict about drug and has checkpoints on the boundary. Some organizations also fightsimple greetings in the Korean and Japanese languages. We found that most of boatmen are used tocommunicatin g with tourists thus they have become friendly and have an open mind on foreign culture. On theother hand, we have the impression that people who are not working as boatmen are shy.
5) Environmental awarenessSince the cleanliness of the river is an impo rtant condition for tourism to thrive in Pagsanjan, boatmen
have become more conscious of their environment. They participate in the campaign to clean the river. Residents
consider that the pollution of river and the problem of garbage are caused by themselves, not by tourists because
the thrilling and unstable boat trip does not enable tourists to throw away anything out of the canoe during thetrip. Local people think that the boating activities itself does not make much negative impact on the environment .
However, the amount of garbage has increased with tourists’ arrival at hotels.
6) Culture
During our field research, we did not hear from the people we interviewed the cultural impact of tourism,
thus we were not able to identify anything on this aspect. However, what we can say is that the Bangkero River
Festival is an opportunity to reintroduce the lost traditions of the town. According to the brochure of the festival,
the water parade will highlight the town’s history, people’s legend and arts. The fes tival has just started two years
ago thus a longer time is needed to determine whether it will have a significant impact on the town’s cultural
practices.
7) Pedophilia
From whoever’s standpoint, people in Pagsanjan seem to recognize the existence of pedophilia 7 . However
this is considered as a thing of the past. Moreover, it was clarified that victims of pedophilia are not from thetown but brought from other regions. According to the MPDC, in the past, the town may have benefited
economically from the pedophiles. According to Mr. B8 , some boatmen helped pederasts 9 to find child victims.
In return for their services, these boatmen got benefits such as money, free -stay in Manila hotels, and evenfree-trip to Hong -Kong. Mr. B described this relationship between pederasts and boatmen as friendship and hesaid “ I do not want to call it ‘pedophile’, but it helped our town a lot ”. The period when a big number ofpederasts came overlapped with the height of tourism in Pagsanjan. After Christian organizations and journalists
initiated a big campaign which criticized pedophilia, 22 pederasts were arrested in 1988 (Matsui, 1993).During
our fieldwork, we were not able to find any evidence that pedophiles still exists. While it would be unreasonable
to say that pedoph ilia directly contributed to the decline of tourism, we cannot simply ignore it as irrelevant to
the growth of tourism in Pagsanjan.
8) Women
As far as wives of boatmen are concerned, we were not able to find sufficient information indicating any
signs of impact. In Barangay Magdapio where most of men are boatmen, many of the wives are plain housewives
and laundry women and a small numbers of them are vendors. Up to 20 women from the barangay went abroad towork as domestic helpers. We were also able to verify that daughters of boatmen pursue education as much as
their sons do. We assume that daughters of boatmen have more choice than their mothers in terms of job.

against drug activity.
Victims of pedophilia alled Ponpon. There were about 3000 ponpons at the peak in Pagsanjan(Matsui, 1993).
8
Refer to case 2.
9
It means client of pedophile. In this case, most of them were gay-tourists from western countries and Japan.
7139) River as a part of people’s living space
As some guidebooks describe, we observed that a raft trip offers a glimpse of rural life. Women and young
girls were doing their laundry. Men and boys were fishing and playing with water on the bank. Local people
cross a stream by canoe to the bank of Barangay Magdapio, which only has a suspension bridge . The river is not
only a space for tourism but also an indispensable part of the people’s life. While we do not know how they feel
when tourists pass by and invade their life space we assume that their lifestyle which is closely intertwined withthe river has not been much affected by tourism.
Case A:
Mr. A is a teacher at Benitez Elementary School, Pagsanjan’s oldest school. He is 60 years old and was aboatman in the 1950s. Mr. A’s father and grandfather were both boatmen and they were the ones who encouraged
him to learn the skills of shooting the rapids. When he was in high school in the late 1950s, tourists were mostly
European and the boat -ride fee was a just P 7.50 per head. During his high school days, he helped his father andgrandfather in their boating activities. During that time, there were just few boatmen so they were able to earnmore income by accommodating European tourists.
Using the swimming skills he acquired from accompanying his father in the falls, he was able to join hishigh school’s swimming team. He competed in several inter-school sports festival and even gained a number ofawards and cash prizes which helped him support his education. Driven by his dream to finish a university degree,
Mr. A worked hard as a boatman. He stopped going to school when he was a freshman in order to look for otherwork besides shooting the rapids. He saved whatever income he earned as a boatman. In the latter years, hedecided to pursue his university education. He took education as a major and finally earned the degree in the late1960s.
At present, Mr. A’s children had finished college and were involved both in government and private
services. According to him, being a boatman had helped him in fulfilling his dream of obtaining a university
degree des pite coming from a poor family.
Case B:
Mr. B has been the barangay captain (village chief) of Barangay Magdapio since 1997. This barangay has
300 households of which 270 of the household heads worked as boatmen. The others not working as boatmen are
farmers. He is 64 years old and has been a boatman since 1981. Prior to becoming a boatman, her worked as apoliceman. He was able to finish high school and during those times, only two or three boys from his barangay
could pursue high school education. His wife is teacher. They have two sons and two daughters with ages ranging
10 to 22 years old who are all students. Mr. B does not expect his sons to become boatmen.
Case C:
Mr. C is 44 years old and became a boatman eight years ago. Prior to this job, he worked as waiter androom boy at the Pagsanjan Rapids Hotel located across the river from his house. After spending two years incollege, he decided to leave school. He has a paddy field so he also does farming. He is a member of barangay
council and actively participates in the activities of the Barangay Magdapio Cooperation against Poverty such as
butchery and selling of pigs. He draws a small salary from the council and benefits from the cooperation.
Mr. C’s wife is 43 years old. She graduated from high school and then got married in 1976. Now she ishousewife. His father was a woodsman and his wife’s father was fisherman. When Pagsanjan Rapids Hotel
opened her parents started selling woodcraft.

Mr. C has six children who live together with him and his wife . The eldest child is 23 years old andgraduated from college. She worked as a design engineer for four months in the Japanese company Denso , but
she quit the job because of long commuting distance. At present she is looking for a job. On the other hand, t heir
only son is 21 years old and is also boatman. He started boating 5 years ago and was a working student but heleft college. Since he joined two boatmen associations, he has more jobs than his father does. However , he ispreparing to go back to school to study auto engineering again. He would like to find any other job after
graduating from college. The other four daughters are also studying and are at various levels in their education.
The family depends on the income earned by the father and the son from working as boatmen. The same asother boatmen, Mr. C recognizes that the boatman is in hard time now and he prefers to find an alternative job if
he were younger. His opinion reflects his son’s choice for his future.
Case D:
Mr. D’s brother lives ne xt door and he and his two sons are also boatmen. The sons are studying in college
while working as boatmen at the same time. After graduation, they would also like to look for other jobs. The
eldest daughter of Mr. C’s brother is working in Metro Manila and lives there with her husband. Mr. D’s brother’sfamily takes care of their baby. Mrs. D’s family help each other in daily life.

4-3. Others
The Pagsanjan Falls serves as the major attraction of tourism in Pagsanjan. The boatmen have direct accessto the Pagsanjan Falls. In this section, we describe the basic structure of tourism in Pagsanjan Falls in terms ofaccessibility. Figure 4-1 shows the basic structure from boatmen to local people. The longer a tourist stay inPagsanjan, the more likely s/he will have direct contact with local people. We already mentioned the boatmen
who are shown standing in the figures’ center. Now, we would like to discuss other persons involved in the
tourism industry starting from vendors to local people.

Figure 4-1: The basic structure from Boatmen to Local people
Longer stay

Local Community
Restaurants
Drivers
Vendors
HotelsBoatmen

One-day trip

Indirect

Direct“Pagsanjan Falls”

4-3-1. Hotel
Since most tourists who go to Pagsanjan falls have to enter a hotel, the people working there would receive
concrete impact from tourists. But since most of tourists are on a one-day trip, they do not buy anything from thehotels’ souvenir shops does employees cannot learn another language. However, recently they do not have muchcontact with tourists who come with translators. In relation to income, people working in hotels can send theirchildren to study college in Manila. This is considered a positive impact of tourism.
4-3-2 . Vendors
In Pagsanjan, we can see vendors on the street, in front of the hotels, and alongside the river. Although15their activity is beneficial to them, sometimes their aggressive behavior is an irritant to tourists. To be able to sell
their products, some vendors conspire with boatmen to force tourists to buy. While this is a negative impact,
there is also a positive side to this since they were able to learn other foreign languages such as Korean, Japaneseand Chinese.
4-3-3 . Drivers
Jeepneys and tricycles are very useful
mode

of

transportationforindividual

tourists. Tricycle drivers can have direct
personal contacts with individual tourist.
Many tricycle drivers worked as
pimps during night time by enticing tourists
to engage the services of prostitutes.
4-3-4 . Restaurants
Except those inside hotels, restaurants in Pagsanjan are located very far from the falls. For individual
tourists, they cannot use the services of these restaurants. According to an interview with one restaurant owner,
tourists are not their main customers. After the number of foreign tourist arrivals decreased significantly ,restaurants now cater more to residents and domestic tourists as customers.
4-3-5 . People of the local community including those not engage in tourism sector in Pagsajan
Because the local community is far from Pagsanjan falls, the people are not directly influenced by tourism.
While some communities are located right next to the hotels, their contact with tourists has been minimal. When
we walked through Pagsanjan’s streets, we found that some people from the local community (includingchildren) can speak other languages such as Korean. We can say this is an indication that many Korean tourists
come here. As indirect influences of tourism, the local people’s image of foreign culture and language skills have
improved.
As to other impacts, we can consider two. First is environmental impact which means the community’s
response to the increase in pollution caused by the increasing number of the tourists. Second is the political
relationship between boatmen’s associatio n and the local government. However, we do not have strong evidence
to support this claim.
Case E: Owner of the “Relaxation Restaurant”, 28 years old
He is the last-born of eight brothers. He owns the restaurant -bar called “Relaxation”. He believes that if
more tourists will come and visit Pagsanjan, his restaurant can have good business. But for now, most of the
tourists from Manila are usually on a one -day trip who return to their origin in the afternoon. Thus, most of his
customers are people living in P agsanjan. The restaurant has a stage where bands can play music. On Fridays andSaturdays, he invites bands whose members are his friends to perform in the restaurant. Customers who visit therestaurant can enjoy drinking and chatting while listening to mu sic.
Mr. E is an overseas contract worker. He frequently goes to Oman for business. He is an architect and canspeak Arabic, English and Tagalog. According to him, there is a big Filipino community in Oman thus thiscountry is an attractive place for him to work. One of his friends owns a Thai restaurant. He said that he was anaide of former President Marcos. Mr. E is not appreciative of the efforts of the municipal government ofPagsanjan in promoting tourism.
Case F: Driver and Boatman , 50 years old
He has two jobs: he is a boatman during the day and a tricycle driver at night. Driving a tricycle is asideline job. His family members work in a factory in Manila. During the day he bawls out “Falls! Falls!” tocatch the attention of tourists who visit Pagsanjan. At night, he shifts to shouting “On -na! On -na! (Girl inJapanese)” in order for Japanese male tourists to be enticed to visit a pub called “Node”.
Case G: Tourism Operation Officer, Municipality of Pagsanjan, 26 years old
She was born in Pagsanjan but studied and finished college in Manila. She studied computer management.
After graduation, she was hired by the Pagsanjan municipal government and she has been working there for thelast four years. Her main responsibility is the town’s tourism sector. Her activities include the following:
enforced the rule that boatmen should be registered with the municipal office; minimized the activities ofboatmen who flag tourists vehicles and force them to avail of their services; organized a safety workshop forboatmen; maintaining cleanliness in Pagsanjan river; and planning and holding the Bangkero festival. She lives
in the town center of Pagsanjan with her husband and two children.
In addition, she has organized a dance team made up of juveniles (10~20years old) who live in Pagsanjan.
The team practices dance from Southern Philippines for about one hour everyday. Sometimes, she has dinnerwith the team members .

5. Conclusion: Types of Tourism- community based tourism
In this paper we attempted to identify t he process of social change occurring in Pagsanjan by looking at the
lives of people employed in the town’s tourism sector. Our research have found that what is happening in
Pagsanjan seem to demonstrate what we call a “community based tourism”. This type of tourism effectively
provides more rooms for the average Pagsanjanios to participate in the sector. In Pagsanjan, tourists have directcontact with boatmen who bring them to the falls, meet vendors who sell souvenir goods and drinks, and areserved by restaurant waiters with the local cuisine. While the people are trying to be service oriented, the way it
is done is not in a professional manner as normally received in any traditional tourists enclave. Rather, thequality of service delivered directly comes from a genuine response embedded in the people’s socio -cultural
background and shows the extent to which the appreciation of tourism lie within their community settings.
On the contrary, in most resorts in Philippines, foreign tourists enjoy man-made amenities like pools,
restaurants, bars, discos, and engage in other activities without having to leave the site. In these places, theservice is provided by well-trained workers who serve a tourist needs in a professional manner. Thus, a tourist
does not necessarily need to establish genuine contact with local community. Therefore, in this sense, the impact
of tourism is limited in that the residents who are employed by the tourism sector are the sole recipients of direct
impact from tourists.
From our research experience, we have come to believe that this community -based tourism seems to play avital role in shaping the process of social change in Pagsanjan. As we have noted earlier, social change in
Pagsanjan has socio -cultural, economic, environmental, and political dimensions. Social change can evolve froma number of different sources: changes in the ecosystem (which can cause the loss of natural resources orwidespread disease); technological change (epitomized by the Industrial Revolution, which created a new social
17

group, the urban proletariat); population growth and other demographic variables; and ideological, economic, andpolitical movements. In case of Pagsanjan, we can say that the social structure has changed from one based on
agriculture to another which is tourism oriented. People’s lives have increasingly become reliant on the presenceof tourists. Their values have changed as demonstrated by attitudes toward life style. Some people get educatedas a result of increased income. Some went to work in Manila and expose themselves to new lives as a result ofreceiving higher education. These diversified responses among the community members to the process of socialchange seems to call for greater need in our part to understand local society carefully. Traditional development
approaches that tend to view a local society as static lacks these dynamic aspects of social change that we thesocial change group embraces. We hope that more officers in development-oriented organizations working in thefield should become aware in the near future of the concepts of social change and its significance in their own
project implementation. In doing so, the project will reflect fruitful and a realistic picture of local community,
which is what the alternative model of development is trying to achieve.

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