NPM and Globalization
THE PHILIPPINE EXPERIENCEDADELINA B. SARMIENTOAssistant Commissioner
Civil Service Commission
Republic of the Philippines

GLOBALIZATION: CHARACTERISTICS
Globalization, a world notable for borderless economies and advances in
information technology are hot topics of conversation throughout the world
particularly in developing countries.
What exactly are these, specificallyglobalization? Globalization is characterized by:ªUnprecedented economic interdependence driven by cross-border
capital movements, rapid technology transfer, and “real time”
communication and information flows.

ª

Rise of new actors that challenge state authority, like nongovernmental organizations and civic groups, global firms andproduction networks and even financial markets.

ªGrowing pressure on states to conform to new international standardsof governance, especially in the areas of transparency andaccountability.

ª

The emergence of an increasingly-Western dominated international
cultureª

The rise of severe transnational, problems that require multilateral
cooperation to resolve.

The full import of globalization became manifest in the Philippine public
sector in 1997 with the outbreak of the Asian financial crises. Drastic changes
ensued, wrecking havoc to the region’s economies. Speculators abruptly pulled out
their investments. Devaluation of currencies and even serious political instability
followed the economic dislocation.
Consequently, with the evolving role ofD

Country paper of the Philippine Government presented by Assistant Commissioner
Adelina B. Sarmiento of the Civil Service Commission during the “First Regional International
Conference” of the International Institute of Administration Sciences held on 19-22 June 2000 at Bologna,
Italy.

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governments and of public administrators in the face of globalization, such changes
likewise produced cascading effects.

GLOBALIZATION AND GOOD GOVERNANCE
Stability in governance and public administration systems is the consequenceof a shared-universal confidence of ordinary citizens, of local businessmen andinvestors and significantly, of the countries’ trading partners and of decision makers
in the financial capitals of the world that there are no instabilities, economic, politicalor otherwise, because the government had done the right things, is doing the rightthings and will continue to do the right things.
A World Bank study concluded that good public administration is a conditionsine qua non to socio-economic development and the ability of nations to cope withthe challenges of globalization, among others,
True enough, despite variances in culture and broad array of political systems,
one commonality emerged among nations with high performing economies --- astrong and responsive system for civil governance and public services delivery. It isbut logical to presume that good public administration is a pre-requisite to any
growth in the life of a community or a nation. To achieve this, reforms in
administrative machinery in terms of orientation, structures, processes and peoplefactor are a must.
Scrutiny of these administrative reforms reveals that they are synonymouswith the principles of the New Public Management which are characterized by:
1.
2.
3.
4.
5.
6.
7.

Hand-on professional management
Explicit standards and measures of performance
Greater emphasis on output controls
A shift to disaggregation of units
A shift to greater competition
Stress on private sector styles of management practiceStress on greater discipline and parsimony in resource use

PUBLIC ADMINISTRATION IN THE PHILIPPINESThe Philippines is a developing country in Southeast Asia with a fullyfunctioning democracy known for its system of checks and balances. It is one of thefirst countries in the entire Asian region to recognize Public Administration as a
distinct profession and as an academic discipline.
Certainly, New Public
Management is not an alien concept in Philippine academe and among career publicmanagers. However, the extent to which it has taken root in the public service has
been uneven.
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CONTRASTS
Conventional public administration gave high premium to the three E’s:
efficiency, economy and effectiveness. NPM, however, has introduced a wide range
of innovative ideas such as administrative relevance, values in administration, social
equity, client focus, participation, decentralization, administrator as change agent,individual growth, interpersonal relations and organizational adaptation, as
contradistinguished from such classic ills in public administration like political
patronage, inefficiency, incompetence, over regulation, bureaucratic red tape andcorruption.
Unfortunately, the Philippines has a long history of being steeped inconventional public administration practice with emphasis on procedures, oninternal order and efficiency, on regulation, not to mention the innate aversion of
bureaucracies to change, to new priorities and orientations.
With this as background, this paper will now proceed to discuss a selective
sampling of the Philippine experience in NPM, including personnel administration
given the background of the author.
ENFORCEMENT OF PRESCRIBED NORMS AND STANDARDS
Norms and standards have long been established in the Philippine
government’s personnel administration system and enforced by the Civil Service
Commission, the independent central personnel agency, at all levels --- inrecruitment and selection; in career progression; in performance and discipline.
Example: Qualification Standards as to education, experience, training andeligibility obtained by passing an examination.
Adverse intervening events such as political reasons or political patronage
affected compliance thereof.
It was only in the late 80’s that enforcement of norms and standards at alllevels were finally tightened up --- at the recruitment level; in actual job
performance; in discipline. Qualification standards particularly the eligibility
requirement were strictly enforced; passing marks for civil service examination wereraised; the performance evaluation system was refined and made more flexible to
make it relevant and applicable to the varied array of positions in the government.
A Very Satisfactory rating is now a non-negotiable pre-requisite forpromotion; two successive “Unsatisfactory” or one “Poor” rating is a ground for
dismissal from the service. The schedule of administrative penalties was updated toreflect current concerns and priorities. Prior to the updating, incompetence and nonperformance of duties were categorized as minor offenses. Now, they are serious
offenses punishable by dismissal.
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Job performance and performance-based tenure are now the emergent trends
in modern public personnel administration.
Early this year, the Civil Service Commission introduced an extensively
revised Performance Evaluation System (PES) which emphasizes explicit standards
and measure of individual employee performance on specific and measurable
outputs per employee over a defined period, plus the new dimension of client
satisfaction wherein an employee’s performance rating now factors in an assessmentof clients on how well (or how badly) he performs his job.

MAMAMAYAN MUNA – THE CITIZEN FIRSTThe mechanism by which client satisfaction will eventually become one of thebases of an employee’s performance rating has already been in place since 1994 andis at present the lead program of the Civil Service Commission called “Mamamayan
Muna, Hindi Mamaya Na” or “Citizen First, Not Later”. The program encourages
citizens to report good and bad behavior by government employees. It employs
telephone hotlines, radio programs and a nationwide network of action officers
complemented by non-governmental organizations. Result --- quick rewards for thedeserving and quick punishment for minor misdemeanors and untoward behavior
without going through tedious administrative and legal proceedings. The problemof the client is immediately resolved and the erring bureaucrat is chastened and on amore positive note, commendations for good service or behavior is a factor for
possible promotion, rewards or incentives.
The program is still evolving but this early, it has already received a very
positive response from the transacting public.
It is heart warming to note that such client satisfaction programs are common
to governments in the ASEAN composed of Indonesia, Thailand, the Philippines,
Malaysia, Singapore and Brunei. In Malaysia and Singapore, for example, suchclient-focused programs were the major factors in the transformation of public
perceptions about government service and eventually, to substantive reforms in theprocesses of government itself.

PROFESSIONALIZATION OF MANAGEMENT
The professional/technical and the administrative/support component of thePhilippine government workforce is categorized as professional in the sense thatthey possess all the credentials for their particular positions. They belong to thecareer service and enjoy security of tenure.
Efforts to build and maintain a corps of professional government managers
began in 1972 but the process has been rather slow. A big factor is the difficulty toqualify as a Career Executive Service Officer (CESO). Except for government&

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executives who are appointed as CESOs outright on the basis of validated
outstanding performance, a regular CESO has to pass a battery of managerial
aptitude tests and a sequential series of assessments, validation, further training andeven an extended period of “rural immersion” in depressed areas to better
appreciate the social, economic and cultural milleu of the greater mass of Filipinos.
While much remains to be done in this area, the professionalization of the senior
managerial ranks is proceeding apace. In 1990, only 19% of senior managers ingovernment are CESOs. Today, the proportion is 37% and efforts are continuing tospeed up the process without compromising standards.
Other longer-term programs address the issue of competent leadership andmanagement. This includes the Supervisory Development Program which has
produced 9,350 graduates. Another is the Local Scholarship Program (LSP) which is
the most substantial HRD investment and has sponsored 3,816 Division Chiefs for
Masteral Degree courses mostly in public administration and management. A
component of the LSP is the Graduate Scholarship Program in Public Management
wherein top performers of the program are sent to Canada for work exposure inselected Canadian public institutions. Other on-going managerial development
programs are the Advanced Management Development Program, also for Division
Chiefs and the exposure program for senior Philippine government officials to best
governance practices also in Canada.
An even longer term program which focuses at the entry or recruitment levelbut is aimed at eventually strengthening the senior managerial ranks is the“Brightest for the Bureaucracy Program (BBP-1996)” which seeks to draw brightyoung people of superior knowledge and skills into joining government and nurture
their career growth in the public service. These are the honor graduates, topnotchersof government licensure and eligibility examinations and the top 10% of graduatingclasses from university courses. Among the incentives given them are: substantive
and challenging work assignments; access to further training and development
opportunities in the Philippines and abroad; and rapid promotion within the boundsof existing personal rules.

A YOUNGER PUBLIC SERVICE
Sometimes, the weight of history and tradition can be a hindrance toinstitutional reform and the adoption of new public management practices. There isalso the issue of the chronological age of government employees themselves.
At present, the Philippines has the oldest retirement age among the ASEAN
Civil Service. Government employees may optionally retire with full benefits at lessthan 65 years with at least 20 years of service while mandatory retirement age is at
65. There is a pending bill in the Philippine Legislature to lower optional retirement
to age 55 and mandatory retirement at age 60.
(In the Judiciary, however, the retirement age is 70.)&

page 5RESHAPING GOVERNMENT
For years, the common perception was that the Philippine government was
too bloated; too centered in urban areas; with too many staff support but not enoughtechnical/professional people.
Thus, through the years there were various attempts to trim the numbers.
Paradoxically, those who left were the very people that should have been retained.
From 1992 to 1996, the Philippine successfully downsized the government
workforce through a system known as “attrition”. A law was enacted by thePhilippine legislature for this purpose. For a period of five years, positions as they
became vacant were prohibited from being filled up. Some 100,753 positions wereleft unfilled resulting in 9.3 Billion pesos savings.
Attrition is a painless downsizing mechanism which elicited no protest fromgovernment employees unlike reorganization. There were no service breakdowns
and while it was being implemented, the Philippine economy was growing: GNP
growth averaged 4.2% annually when attrition was in place.
(Note: What is needed is to rightsize the bureaucracy for a more effective and efficientdelivery of services.)
LESS SUPPORT STAFF, MORE DELIVERIES OF SERVICE
It used to be that the three-tiered bureaucracy was shaped like a pyramidwith support/clerical/utility personnel forming the base; the professional andtechnical personnel in the middle and the small, senior managerial ranks in the apex.
Today, professional and technical personnel constitute 64%; support, clerical,
utility 34% and the managerial/executive level is 1.6%. The predominance ofprofessional/technical people is a positive development.
The Philippine
bureaucracy is not top heavy nor is it overly laden with clerks and typists.
Government functionaries are not crowding that much anymore in the urban
areas, particularly Manila. About 9 years ago, 50% of government employees fromall sectors and levels were found in Metropolitan Manila area. Today, this figure hasgone down to 31%.
DECENTRALIZATION
Prior to 1991, the Philippine was a good example of centralized government.
The tone, the pace and the direction of the administrative machinery including
priorities and allocation of resources emanate from the central government usually
located in Manila. Regional (14 centers) as well as personnel in the payrolls of&

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national government agencies with regional assignments were accountable to theirhead office in Manila and not to the local government units whose populace they
serve.
This set-up renders service delivery difficult.
Decentralization of functions, resources and responsibilities from the national
to the local government units and the exercises of local autonomy were therecommended solutions. But a number of factors worked against decentralization:ª

The all too-human (and organizational) tendency to keep power in thecenterªLack of absorption capacity at the field unitsªReluctance to share not only responsibilities but resources as wellDecentralization presupposes that the center has sufficiently clarified allpriorities and expectations from the local government units by way of powers andresponsibilities.
It was only in 1991 when the Philippines took the first firm and substantial
steps towards true decentralization and local autonomy.
Amidst protracted
controversy and debate and despite the serious misgiving of oppositors, the Local
Government Code of 1991 was passed into Law.
With decentralization came devolution in the sense that local governments
were made wholly responsible for the delivery of health, social services,
environment, public works, education and tourism and the enforcement of certain
regulatory powers such as reclassification of agricultural lands, environmental laws
and inspection of food products and enforcement of quarantine regulations, among
others. Financial resources available to local government units were increased; fullautonomy in the exercise of proprietary, governmental and corporate rights andpowers of Local Government Units (LGUs) were also enforced.
Unfortunately, several attempts were made by some adversely affected
sectors to put devolution on hold, either wholly or by sectoral concern. An example
is health services which were proposed for exclusion from the devolution process
and for retention under the control of the national government. Hence, the “renationalization” of a number of hospitals.
On the whole, however, devolution and true local autonomy is progressing at
a good pace. Scenarios of breakdowns in public services delivery have notmaterialized. Furthermore, the local government sector has consistently been thefastest growing sector in the Philippine public service.

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Simply put, government personnel have moved out of Manila and theregional administrative centers and out of the national government payroll and havejoined the ranks of provincial city and municipal employees. It used to be that LGUs
outside the capital and its environs were regarded as poor country cousins to theirmore progressive and cosmopolitan counterparts in the big city. But not anymore.
The list of well-performing LGUs (one of which has drawn the UN’s attention) is
growing rapidly and appears to be capable of sustaining their progress anddynamism. Example of centers of excellence in local governance are the cities ofNaga (once bankrupt); Davao (once beset with serious peace and order problems);
Olongapo (once thought to be doomed with the closure of an adjacent American
naval facility); Palawan province (once in danger of environmental despoliation bymining, timber and commercial fishing interests) and the province of Naga (which
once faced extreme poverty and near famine with the collapse of the sugar industry
in the 80’s). The list also includes the cities of General Santos, Baguio and Cebu andthe provinces of Cavite, Laguna, Batangas and Quezon which are now bustlingindustrial and manufacturing centers.
These local government units all boast of healthy economies, efficient andresponsive public services and perhaps most important, active and sustained citizen
support. This critical support is made possible by strong, highly credible andpopular leadership.
THE PHILIPPINE PRIVATIZATION PROGRAM
The Philippine Privatization Program was launched in 1986, the year
democracy was restored in the country.
There was a perceived need for government to focus its energies andresources to the provision of basic public goods and services. Equally important was
the creation of a favorable investment climate for the private sector by eliminating
undue competition by government corporations. The program was also conceived
in the light of broadening public ownership of government properties in order todevelop a capital market; minimize government losses; and generate resources forpriority development programs such as the Comprehensive Agrarian Reform
Program. Lastly, like in all other programs involving the government corporate
sector, the privatization program is seen as a good ground for exposure ofgovernment corporations to market discipline and competition to improve theiroperational efficiency, make their operations more responsive to consumer needs
and remove their reliance on government subsidies, tax exemptions/guarantees andexpand economic activity through greater investment by the private sector. It will
be noted that all these are tenets of New Public Management.

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page 8SCOPE OF THE PHILIPPINE PRIVATIZATION PROGRAM
Under the Program, the government seeks to divest itself of government
owned and controlled corporations (GOCCs), idle assets and properties and thoseentities which were transferred by certain institutions to the national government.
Prior to the implementation of the program, there were 301 GOCCs comprising thegovernment corporate sector.
The program consists of three phases or “waves”. The first wave refers to thereprivatization of private assets acquired by certain government entities. The second
wave covers the disposition of government properties in the utilities andinfrastructure sectors which traditionally have been state-subsidized, such as waterand power. The third wave consists of the following components:(1)

opening a wider range of public services to private sector, such as
housing, postal services, education and pension funds;(2)

re-engineering government’s role as public service provider within thecontext of its role as enabler in civil society; and(3)a thorough review of the present scheme of public service delivery to
determine whether or not these services could be better managed,
more efficiently run or conducive to private rather than public
provision.

The first wave of the Philippine Privatization Program has been fullycompleted with the disposition of all acquired assets of the government throughpublic offering, bidding and negotiated sale. The second wave is in the last stages ofcompletion.
On the whole, The Philippine Privatization Program has been successful bothin terms of its physical and financial accomplishments. The total number of GOCCs
which have actually been privatized represents more than half of the total number of
GOCCs earmarked for privatization. This accomplishment is significant not only interms of the number, but more important, in terms of the kind of GOCCs disposed of.
Most of these GOCCs are the so-called Crown Jewels such as the sale of 40% of thePhilippine National Oil Company, the National Steel Corporation, the Philippine
National Bank and the Philippine Shipyards Engineering Corporation. Very recently,
the Metropolitan Waterworks and Sewerage System was also privatized.
In terms of gross revenues, the program generated a total of 170.4 billion
pesos for the period 1987-1996 representing the cumulative proceeds from thesale/disposition of 433 accounts. Of this amount, 69.7 billion pesos was generated
from the sale of 91 GOCCs while 44.3 billion pesos represents the proceeds from thedisposition of 334 transferred entities. Another 56.4 billion pesos was generated fromthe sale of other assets.
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page 9In addition to all these physical and financial accomplishments, it is important
to note that the program contributed much in rationalizing the management of theentire government corporate sector. For one, there has been a substantial
improvement in the financial performance of the remaining GOCCs as a result of
measures instituted to enhance their financial viability and operational efficiency.
An example is the standard corporate planning model for GOCCs. Moresignificantly, the infusion of scarce national government funds to GOCCs has been
contained even as the investment program of the retained GOCCs have beensustained. Consequently, the national government is now able to allot more funds
for the delivery of basic public goods and services and priority development
programs.
CURRENT ISSUES
While the Philippine Privatization Program is a success, certain issues remain
to be addressed.
First, there is a need to identify the strategic industries where the government
should retain a major interest on shareholdings to enable it to influence policies andpricing of services and commodities. This should be pursued in the context of thegovernment policy and economic liberalization.
Second, the legal impediments such as court injunctions stopping the sale ofgovernment assets and properties must be addressed with finality.
Third, there is a need to have a financial burden sharing arrangement
between creditors and shareholders. In many cases, the national government had toassume the debt burdens of GOCCs for sale to make them more attractive to buyers.
Fourth, an incentive scheme must be incorporated into the privatization
program to encourage investors to bring their own assets. This stems from theobservation that most foreign buyers of privatized companies borrow from local
sources and therefore compete in the already limited domestic capital market. This
calls for appropriate regulations requiring expatriate investors to bring their own
capital resources rather than tap local sources for investment in privatized entities.
Finally, there is a need to study and address the implications of privatization
to the employment situation to minimize and mitigate economic dislocation and theattendant social costs. There must be “safety nets” for those who would be
adversely affected, and for government to ensure that such measures are
implemented by the new owners of privatized government corporations.

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NEW PARADIGMS OF GOVERNANCE
While decentralization and privatization have gained much headway, somequarters still see the need for a radical but planned and deliberate
re-orientation
and restructuring of government. What is being envisioned has never been
undertaken in the 100-year history of the Philippine civil service. What will be
involved is not the cosmetic re-shuffling of boxes around the organizational tree but
a tear-down and rebuild undertaking dubbed “Reengineering the Bureaucracy”.
The effort will hew to the so called new paradigms of governance. This involves
defining and articulating the fundamental principles that will determine the scope,
the level and the focus of government intervention in society. Only after making
such a determination shall the new organizational structure be built.
Simply put, it must first be determined what government ought to do;whether it can do the job well and whatever its worth the money being spent.
Among others, this means re-examining all activities that are funded yearly anddiscontinuing those that have lost real value.
Government’s primarily responsibility will be limited to the following:a.

Management of the macro-economy, including the formulation andimplementation of socio-economic, fiscal and monetary policies;b.

Maintenance of peace and order, and national and political security;c.

Conservation of natural resources and ensuring their productive
utilization and sustainable development;d.

Maintenance of a reliable system of administering justice, lawmaking
and law enforcement;e.

Provision of adequate and appropriate infrastructure;f.

Provision of quality basic education, specially to the poor anddisadvantage population;g.

Promotion of economic and political diplomacy, developing andeffectively achieving sound and mutually productive economic andpolitical relationships with other nations and international
communities; andh.

Mitigation of disasters and management of state emergencies.

Thus, government will assume the role of enabler and facilitator, rather thanits traditional role of provider of services and regulator. The bigger challenge is not
so much in building the structure but in re-orienting the mindsets of the vast
bureaucracy when such a radical re-structuring finally does the place.
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The first attempt to reengineer government was made in the previous
administration. However, the legislature did not pass the measure.
The bill has been refiled by the present administration but parallel moves are
already being undertaken through administrative action by the President which areallowed by law.
This dual approach is necessary as legislation is inherently a long and tedious
process particularly when the status quo in altering the conservative bureaucracy is
involved.
The Philippine experience in NPM is still unfolding even as the challenges ofglobalization are already upon us. We have no illusions that it will be an easy andpainless process since we are pursuing it not with the iron hand of authority but
through the divisions and debates of a fully-functioning democracy.

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