THE SONA OF PRESIDENT GMA

EXECUTIVE SUMMARY

Amidst the global threats of rising food and fuel prices, of climate change, and of terrorism, among others, the Government remains steadfast in its drive to win the war against poverty. Doubly so, the President remains focused and driven towards the attainment of her governance mandate of a better life for every Filipino. Short-term interventions and the long-term reform programs continue to be pushed to ease the impact of the global threats as well as keep the reform programs on track to sustain economic growth, and bring about the prosperity our people so desire.

Pushing the Engines of Growth

The year 2007 was a banner year for the country as the economy performed well, posting unprecedented growth and achieving a stronger fiscal and external position. In 2007, Gross Domestic Product (GDP) grew by 7.2%, the highest since the 8.8% in 1976. With the Net Factor Income from Abroad (NFIA) expanding by 16.5%, the Gross National Product (GNP) grew by 8.0%, stronger than the 6.1% in 2006. In the first quarter of 2008, although GDP growth slowed down to 5.2% compared to the 7% GDP growth during the same quarter in 2007, we still consider this significant, noting the global increase in inflation and the economic slowdown in the Philippines’ major export markets. Meanwhile, the robust gains of 30.3% in NFIA pushed GNP to grow by 7.3% in the first quarter of this year.

Growth remained broad-based in 2007 as all sectors accelerated while the major engines of growth in the first quarter of 2008 are the services sector in the production side and capital formation in the expenditure side.

For the last ten years, the agriculture sector maintained steady positive growth. Average growth from 2001 to present has been robust and sustained at about 4%. Last year, we recorded the 2nd highest growth in recent memory at 4.9%, which is higher than the 3.84% growth in 2006. A 4% growth was first posted in the first quarter of 2008.

The industry sector also posted a 7.1% growth in 2007, higher than the 4.5% growth in 2006, as mining and quarrying, construction and utilities offset the weakness in the manufacturing sector. Likewise, tourism contributed significantly to the continued growth and competitiveness of the Philippine economy. Visitor arrivals increased by 35%, from 2.3 million visitors in 2004 to 3.1 million in 2007. Tourism receipts likewise grew by 41%, reaching US$4.88 billion in 2007. Receipts did not only exceed the US$3.73 billion target for 2007 but also the US$4.86 billion target for 2010.

Among the three sectors, the services sector posted the strongest full year growth of 8.1% in 2007. This is also higher than the 6.7% posted in 2006. The services sector also remained the strongest growing sector in the first quarter of 2008, posting a 6.9% growth, which boosted overall growth. Growth in services was brought by the strong performance of the trade, finance, and transportation and communication sectors.

Bringing Development Back to the People

With the resources in the coffers and focused direction by Government, we have been able to implement the short-term interventions needed to immediately mitigate the impact of the global rise in oil and food prices. We have as well continued to push our reform agenda towards the attainment of the 2010 vision of a modern and an empowered society.

Thus, we continue to increase peoples’ incomes, either through wage increases, livelihood opportunities, and tax exemptions, among others.

We have enabled workers to obtain wage increases through the Regional Tripartite Wages and Productivity Boards. As of 16 June 2008, all the Regional Boards have already issued new Wage Orders, granting another round of increases in workers’ salaries and/or COLA ranging form P10.0 to P20.0. In the National Capital Region (NCR), the wage increases raised the minimum wage levels over an eight-year period (2001-2008) by 52.8% or an average increase of 7% per annum, which benefited more than 1.38 million workers. Government workers also received a 20% increase in their salaries since 2007 and a P1,000 increase in their cost of living/personal economic relief allowances. RA9504 or the Tax Exemption for Minimum Wage Earners Act was also implemented, which the President signed on June 17, 2008, to provide financial relief to taxpayers through tax exemptions for minimum wage earners and increased personal exemptions for other employees.

On microfinance, we have lent to low and idle income men and women who want to start or expand their own businesses. Cumulative loans have reached P102 billion or 29 times the P3.49 billion we started with in 2001. Some of the major lenders are Land Bank of the Philippines with a portfolio of P69 billion, People’s Credit and Finance Corporation with P8 billion, National Livelihood Support Fund with P3 billion, Development Bank of the Philippines with P1 billion, and the DSWD’s SEA-K with P800 million.

From 2004 to April 2008, we created 2.29 million jobs from Microfinance and SME Lending. In microfinance, we lent P93.74 billion, majority of which went to the agriculture and fishery sector.

We too have provided more and better job opportunities for our people. In line with the goal to generate six to then million jobs by 2010, a total of 9.78 million jobs¹ were already generated from 2004 to June 2008, 163% of the six million minimum target and 97.8% of the 10 million high-end target, by tripling loans to micro, small and medium enterprises, developing two million hectares of land for agribusiness and developing key industries such as housing, tourism, mining and ICT.

Further, along with the decrease in the unemployment rate in 2007 at 7.3% vis-à-vis the 7.9% in 2006, we have achieved improvements in the quality of employment in 2008 despite the slight fall (-0.5%) in employment growth.

We too continue to address social justice and basic needs. Towards this end, we have implemented strategic policies and interventions in the areas of asset reform, health, water, hunger mitigation, job creation and livelihood and protection and empowerment of the poor and the vulnerable sectors.

• As part of social justice, we intensified agrarian and ancestral domain reforms. Along with land distribution, we also pursued land and beneficiaries development to sustain and safeguard the gains already achieved under the Comprehensive Agrarian Reform Program (CARP).
  
  
• To provide quality health care, we implemented mass-based health and immunization programs. We made half-priced medicines available through the Botika ng Brangay and Botika ng Bayan established nationwide. Under the National Health Insurance Program, we also provided health insurance to about 15 million indigent Filipinos in 2007.
  
  
• With the Government’s resolute pursuit of its Accelerated Hunger Mitigation Program (AHMP), the national hunger incidence declined by 0.7 percentage points from 16.2% in the fourth quarter of 2007 to 15.7% in the first quarter of 2008. All regions registered a decline in hunger incidence, i.e. three percentage points in Metro Manila, and two percentage points in the Visayas and Mindanao.
  
• On a nationwide scale, the barangay electrification level as of 31 March 2008 reached 96.69% with energization of 40,590 barangay, leaving only 1,390 barangays to be provided electricity.
  
  
• Since 2001, about 895,100 families have benefited from our national housing program. We have granted a total of P23 billion in housing loans in 2007 under the Pag-IBIG Fund, benefiting 47,367 families. This is the highest annual loan amount provided by the Fund since its creation. For the first months of 2008, P12.65 billion has also been provided that generated 24,379 housing units.

We continue to ensure quality education and youth opportunities. We have enhanced access to quality education through the construction of new classrooms, implementation of the Government Assistance to Students and Teachers in Private Education (GASTPE) Program; attainment of 1:1 textbook to pupil ratio (TxPR) in Sibika/Hekasi Grades 1-6, Araling Panlipunan Years 1-2 and English Grades 1-6 and Years 1-4 since 2002; promotion of educational excellence in the formative years through Early Childhood Education and Pre-school Programs; continuous improvement of the quality of teaching in the public school system; provision of computer access to 4,769 public high schools nationwide or 100% of total high schools in the country (29%) of which have internet access); and granting of loans and scholarships to poor and deserving students.

We have constructed a total of 82,933 new classrooms since 2001. on an annual basis, classroom construction has exceeded the yearly target of 6,000 new classrooms. From a backlog of 17,873 classrooms in July 2004, DepED was able to close the gap at 1:50 double shift in 2006. Because of this improvement, DepED reduced the classroom pupil ratio from 1:50 to 1:45 at double shift. Classroom backlog as of June 2008 stands at 12,418 classrooms.

We continue to work hard to achieve efficiency and self-sufficiency in the power sector.

In 2007, the country’s reliance on local energy resources reached 21,967 thousand tons of oil equivalent (kTOE) bringing our energy self-sufficiency level to 55.7%, the highest in history. Our goal is to increase this and achieve 60% energy self-sufficiency by 2010. We likewise pursued programs and projects to develop alternative and indigenous energy sources and collaborated with various stakeholders in the energy sector to increase local energy supply. We continue to move towards the realization of the goals of RA 9136 or the Electric Power Industry Reform Act (EPIRA) with the opening of the Philippine electricity market to competition. We have made major strides in pursuing the privatization of the National Power Corporation’s (NPC) assets.

We too continue to push for the development of the five (5) Super Regions through the completion of the 1479 priority infrastructure projects, among others. As of 15 July 2008, 20 projects have been completed consisting of 12 Roll-on/Roll-off (RoRo) ports, 2 airports, 2 roads, a bridge, 2 power projects, and a cold chain, have already provided their communities with jobs and livelihood, promoted stronger linkages between the country’s various islands, and allowed faster, safer, and cheaper transport of goods and people.

Strengthening the Bureaucracy Through Good Governance

We continue to strengthen our institutions, specifically weeding out corruption through good governance. This is to promote confidence in our country.

The government intensified its efforts against graft and corruption, focusing on punitive and preventive measures, as well as the promotion of zero tolerance for corruption. Partnerships with vigilant non-government institutions and media in exposing, detailing, and prosecuting cases of graft and corruption were also strengthened. As a result, more officials in key institutions have been investigated, indicted in court, dismissed, suspended from the service, or subjected to lifestyle checks. We pursued anti-corruption measures in the revenue collection agencies through programs such as the Run After Tax Evaders (RATE) and Run After the Smugglers (RATS).

It is these gains that allow us now to implement measures to cushion the impact of the global threats on our country. It is also these gains that allow us to keep our reform program on track and our vision of a modernized society by 2010 achievable.

Short-term measures - - lifeline assistance, katas ng VAT, etc.

The next years will be highly charged years not only for the country but for the entire world. We remain quiet but nonetheless vigilant as we are well aware that the skyrocketing prices of oil and of food will greatly impact on our daily lives and on our vision for a better life for everyone.

But we know that it can be done as we have prepared and done our work well.

Towards this end, we need to do more as a nation. We need to carry out strategic measures for global competitiveness. We need to be more self-reliant to be able to feed our nation’s needs. Further, we also need to strengthen the very institutions that will help us become a modern society.

It is for this purpose that we have articulated our call anew for everyone to get together in the face of the daunting global challenges. Realizing that the vision of the Philippines as a first world nation is inherently the responsibility of all levels of government and all sectors of the society, we should all continue to draw from the spirit of unity, solidarity and teamwork for the betterment of our people.

Copyright (C) 2008 Gov.Ph