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Studies in Governance and Regulation: The Philippines



Edited by Dante B. Canlas, Shigeaki Fujisaki
Published in 1999


Contents pdf (331KB)
Preface / Dante B. Canlas, Shigeaki Fujisaki
Chapter 1.
The Soft State, The Market and Governance / Raul V. Fabella
The Genesis of the Soft State
Marketization and Philippine soft State
re-Engineering the State
Disengagement from the Market
Type of disengagement
Efficiency Goals
The way ahead


Chapter 2.
The Judiciary and Economic Policy-Making / Ma. Lourdes A. Sereno, Raphael Perpetuo M. Lotilla
Nature of judical function

Chapter 3.
Interest-Group Competition, Legislative Obstruction, and Executive Power / Emmanuel S. de Dios
Instances of "Legislative Obstruction"
Overlapping Mandates
Congressional Weakness Relative to the Executive
The Supply of Accomodation
Relations between Executive and Legislature: Model games

 Mixed Strategy Equilibrium

Chapter 4.
Channeling Resources to Local Development Concerns: Issues and Options / Ruperto P. Alonzo
The problem defined
Unsettled questions
The study's objectives and scope of work
Devolution and the 1991 Local Government Code
Benefits from devolution
 Administrative and regulatory functions
 General public services
 Public infrastructure spending
Examples of excellence: The Galing Pook Award
 Health and nutrition
 Social services
 The environment
 Local public infrastructure
Intergovernmental Fiscal Relations: Theory and Practice
Models of expenditure and tax assignment
Intergovernmental transfers
Lessons from country experiences
Options for Channeling Resources to LGUs
Recurring themes and principles
 The role of community participation in Project development cannot be taken for granted
 LGUs are, in principle, better implementors of local projects than NGAs, because, coming from the area, they have a closer feel of people's needs
 Community equity contributions to project cost should be encouraged
 Cost recovery through user charges is desirable
 Private sector production should be favored where feasible
 As much as possible, private financial intermediaries should be tapped for the onlending of credit b the national government to LGUs, and LGUs' relending to, or collecting charges from, communities and households
Policy options
 NGAs' realignment of their expenditure programs
 An expanded and modified Municipal Development Fund
 Expanded GFI credit Programs
 Direct ODA loans to LGUs
 An expanded and enhanced Local Government Empowerment Fund
Suggested features common to all options
 The loan-grant-equity mix
 Rationing procedures for excess demand
 Project development Guidelines
A note on the IRA formula
The policy options and policy actions


Chapter 5.
Banking Risks, Financial Crises, and Bank Regulation in the Philippines / Dante B. Canlas
Banks and Financially Intermediated Markets: A Framework
Bank runs
Bank risk taking and financial innovations
Central Banking and Balance of Payments crises
Bank Failures and Financial Crises in the Philippines
Bank Regulation
 Central banking
General Banking
 Commercial banks
 Thrift banks
 Government-owned banks
Regulatory Reforms and New directions
Regulatory reforms
 Raising bank capital
 Redefinition of past-due loans and other adjustments
 Higher minimum reserve requirements
New directions


Chapter 6.
Options For Philippine Bond Market Reform / Renato E. Reside, Jr.
The Philippine Bond Market
The money market and capital market in the Philippines
Public money market and capital market securities
Private money market and capital market instruments
The primary and secondary market for private securities
Regulatory structure of the fixed income securities market
 Securities and Exchange Commission (SEC)
 Bureau of the Treasury (BTr)
 Bangko Sentral ng Pilipinas (BSP)
Credit rating agency
Clearing and settlement
Underwriter and dealers / brokers
Recent developments in securities markets
Options for Future Reforms to the Philippine Bond Market
Prior to strengthening regulations governing financial markets and establishing competitive market mechanisms for bond market development, there is a more fundamental need to strengthen corporate governance
The bond market is shallow and lacks liquidity (i.e., there are very few investors, and very few classes and types of securities)
 The market is dominated by government securities and there is a lack of variety in private bond issues
The absence of additional financial sector infrastructure that encourages bond market development
Absence of a formal trading venue for bonds and other fixed-income securities
Absence of proper benchmark reference mechanism for pricing credit
Need for enhanced credit rating capacity
Lack of facilities for financing inventories of securities
Complicated system of taxation of financial transactions and intermediaries
Conclusion and Recommendations for Going Forward

Chapter 7.
The Role of Institutions in the Services Sector / Marina Fe B. Durano
Institutions and the division of Labor
Information Asymmetry and Contraction in the Services Sector
Trade in services: International Conflicts
Trade in Services: Internal Conflicts


Chapter 8.
Opportunities and Risks in the Privatization-Regulation of the Metropolitan Water and Sewerage System / Orville Solon, Steven John Pamintuan
Bidding-out Water Concessions
Picking the Winners
Dive Bidders and the Regulatory Infrastructure
Incentives governing the concessionaires
Preserving the Gains from Privatization
Preserving the spirit of the bidding process - the 1998 EPA
A Strategy for Introducing Regulatory Reforms


Chapter 9.
Technological Convergence and Competition: The Telecommunications Industry / Ma. Joy V. Abrenica
Managing the Transition
Regulatory Challenges
The State of Philippine Telecommunications Sector
Breaking Grounds for Technological Convergence
Regulatory Signposts


Chapter 10.
Study on Governance and Regulation: A Summary pdf (360KB) / Shigeaki Fujisaki
The Role of the State
A summary of the Discussions