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Republic of the Philippines

REGIONALDEVELOPMENTCOUNCIL

National Economic and Development Authority

Region Ill, Central Luzon

2/F Hyatt Garden Building, Dolores,

City of San Fernando, Pampanga 2000

Telefax. Nos. 045) 963-6772 to 73, 961-3902

e-mail: neda@pldtdsl.net

Excerpts from the Minutes of the 13th Regional Development Council III RDC) Meeting held 25

February 2011 at Mimosa Convention Center, Clark Freeport, Pampanga)

RDC Resolution No. 03~1-2011

APPROVING AND ADOPTING THE CENTRAL LUZON MEDIUM TERM REGIONAL DEVELOPMENT PLAN

C L-MTRDP), 2011-2016 AND THE MEDIUM TERM REGIONAL INVESTMENT PROGRAM MTRIP),

2011-2016

the President directed the formulation of Central Luzon Regional Development Plans

for 2011-2016 for incorporation in the Medium Term Philippine Development Plan,

2011-2016;

the formulation of the CL-MTRDP 2011-2016 emphasized the production of a good

document on the region s direction and priorities for the next six years and the

process to be observed to maximize people s participation;

the Central Luzon CL-MTRIP is a companion document of the CL-MTRDP, 2011-

2016;

the formulation of the CL-MTRIP is in consonance with EO 325 that gives the RDCs

the mandate to review, prioritize and endorse the investments programs and annual

budgets of national government agencies; and,

the CL-MTRIP contains the list of public sector programs and projects necessary to

realize the development objectives of the region.

NOW, THEREFORE, ON MOTION DULY SECONDED, BE IT

RESOLVED, AS IT IS HEREBY RESOLVED, That the RDC III approves and adopts the framework of

Central Luzon Medium Term Regional Development Plan, 2011-2016;

RESOLVED FURTHER, That the RDC III requests all concerned to submit to the secretariat their

proposed priority programs, projects or activities for 2011-2016 consistent with the adopted

framework.

WHEREAS,

WHEREAS,

WHEREAS,

WHEREAS,

WHEREAS,

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RESOLVED FINALLY, that a copy of this resolution be furnished to all concerned.

Done in Clark Freeport, Parnpanga this 25

day of February in the year of our Lord two thousand and

eleven.

Certified Correct by:

N /

LYNNETIE Y. BAUTISTA

Secretary, RDC III

Assistant Director, NEDA Ill)

Approved by:

C { .--A .

EMIGIO A. MER~O

Presiding Officer, RDC III

Regional Director, NEDA Ill)

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will act as a common roadm

the necessary infrastructure

social opportunities for ou

Development Goals, our con

will also give our provinces i

We came to government wit

our nation. As we carry out

environment of sustainable

fulfill the potential of our gre

M A N I L AM A N I L AM A N I L AM A N I L A

May 2011

Message

I commend the NEDA Regional Developm

all stakeholders in the 17 regions for co

formulate your respective Regional Dev

May this partnership among regional and

the private sector, and civil society ensu

success of these programs and the dis

benefits throughout the country.

Along with the Philippine Development Pl

guide our development efforts in the ne

ap for our countrys development and for the

that will help us achieve our goal of increasi

people. Guided by our commitment to the

erted efforts will not only help accelerate econ

proved access to quality education, health, an

h a mandate to eradicate poverty and create a

ey reforms in the bureaucracy, we also strive t

and equitable progress in the coming years.

t nation.

BENIGNOBENIGNOBENIGNOBENIGNO S. AQUINO IIIS. AQUINO IIIS. AQUINO IIIS. AQUINO III

President

Republic of the Philippine

ent Councils and

ming together to

elopment Plans.

local institutions,

re the continued

ribution of their

n, the RDPs will

t five years, and

establishment of

g economic and

UN Millennium

omic growth, but

social services.

better future for

o set in place an

Together, let us

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The attainment of our goals requi

other productive activities. The P

the proper and equitable allocati

people. Likewise, our plans sha

climate and disaster risks, promot

The RDPs provide the framework

units to align their local plans an

regional institutions and the priv

them have helped prepare. We nas we promote public-private part

I thank the Regional Developmen

and we count on their continued l

Message

The Regional Development Plans (RDPs) r

aspirations of Filipinos in different areas of th

accompanying documents of the Philippine

Plan (PDP) 2011-2016, the RDPs also provi

dimension to the national plan by identifyin

contributions to our goal of a high, sustaine

based growth. This inclusive growth i

economic expansion that must reach popu

throughout the country through the provisionemployment opportunities, thereby reducing po

ires massive investments in infrastructure, social

P, along with the RDPs are the key instruments

n of resources to ensure improvements in the

ll direct our efforts in protecting the environm

ing good governance and ensuring peace and sta

for local development. We thus enjoin the loca

d programs with the RDPs. We likewise seek t

te institutions in the realization of the plans

ed to strengthen our multistakeholder cooperatiership to improve the provision of services for ou

Councils (RDCs) for spearheading the preparatio

adership in coordinating development efforts in

CAYETANO W. PADERANGCAYETANO W. PADERANGCAYETANO W. PADERANGCAYETANO W. PADERANG

Secretary of Socioeconomic Pl

NEDA Director-Gener

epresent the

e country. As

Development

e the spatial

the regions

d and broad-

volves rapid

lation groups

of productiveerty.

l services and

hat will guide

elfare of our

ent, reducing

bility.

l government

he support of

hich many of

n particularlyr people.

n of the RDPs

he regions.

,,,, JR.JR.JR.JR.

nning and

l

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re

Against an accurate assessment

Regional Development Plan (C

challenges that will push growth

crusade of no less than our P

economic conditions of the dis

distributing opportunities to the u

The past six years have been relaRegional Development Council (R

is on hand for Central Luzon.

Message

Greetings!

Being a gateway to the world, the role of Central

development can never be left to chance. With

in communications and the close inter-connecti

incidents in the outside world impact the poor

far-flung barangays, who all have the huma

opportunities for progress. DevelopmentRegional Development Council (RDC) III

coordinator and integrator of all development

gion play a crucial role to balance all the varying i

of the current situation obtaining in the region, t

L-RDP), 2011-2016 squarely addresses criti

and spread its benefits to everyone. This has

esident Noynoy: growth and development w

dvantaged. The Government should have me

derprivileged.

tively better-off but also challenging for the regiDC) we can continuously strive for improvement

OSCAR S. RODRIGUEZOSCAR S. RODRIGUEZOSCAR S. RODRIGUEZOSCAR S. RODRIGUEZ

RDC III Chairman

Mayor, City of San Fer

Luzon in national

the advancement

ity of economies,

st households in

n right to equal

entities like theas the primary

initiatives in the

terests on hand.

he Central Luzon-

cal development

been the ardent

ile elevating the

chanisms for re-

n. With a strongbecause the best

ando, Pampanga

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2016, resulted from the aforesai

network of economic and free por

within the zones and host-Local

leap to growth may be realizediversification and expansion sh

sustained growth.

The Plan as crafted epitomize

presentation. Costs from natural

by integrating Disaster Risk Redu

the Planning Environment, identifi

Human Rights principles were li

inputs equated with land and ca

treated with utmost respect in

enhancing strategies, legal and

particularly of the farming commu

The report is organized following

solutions to the priority developm

A brief yet substantive introdu

Challenges. The more detailed r

make the main document brief an

The priority Programs and Project

reflect their substantive contributi

On the whole the CL-RDP mirrors

and inclusive development.

Foreword

From 2004-2009, Central Luzon maintained its

largest contributor to national output. Howev

8.64 percent in 2004, its annual share slid doin 2009. With this as background, the stakehol

put their minds together and diagnosed the cau

the region from soaring above its accustomed

income generation given its vast potentials and

opportunities that the special economic and free

The Central Luzon Regional Development Plan

multi-sectoral collaboration. Under the Plan th

t zones shall be unleashed through infrastructure

overnment Units (LGUs) so that the needed sy

. Through the process, technology upgradeall fortify the regions human and physical ca

responsiveness, efficiency and straightforw

disasters are minimized and benefits from devel

tion (DRR) and Climate Change Adaptation (CCA)

cation of Development Challenges and Strategy f

ewise used. Labor is treated not only as one

pital but as human person, endowed with dign

ublic policies. Expectedly, employment genera

physical access to productive assets and basi

nities assumed high importance in the Plan.

a one-page summary that presents the linkage

nt problems.

tion provides a background for the succeed

port on the analysis of the Planning Environme

d uncluttered without excessive details.

were deduced from the Strategies. Thus, these

on to higher and sustained growth.

the oneness of the Region III stakeholders to p

niche as the third

r, from a high of

n to 8.1 percentders in the region

ses holding down

place in national

the wide array of

port zones offer.

(CL-RDP), 2011-

potentials of the

and skill upgrade

ergy for a higher

and investmentpital for a more

rd analysis and

pment optimized

in the analysis of

rmulation.

of the productive

ity, who must be

tion and income-

ic social services

of the proposed

ing Development

t is appended to

are well-knit and

rsue sustainable

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TABLE OF CONTENTS

Regional Development Council Resolution No. 03-01-2011Message of President Benigno S. Aquino IIIMessage of NEDA Secretary Cayetano W. Paderanga Jr.

Message of RDC Chairman Oscar S. RodriguezForeword of NEDA Regional Director Remigio A. Mercado

Chapter 1 Introduction 1 - 3

Chapter 2 Development Challenges 4 - 22

Chapter 3 Our Desired Future 23 - 35

Chapter 4 Priority Programs and Projects 36 - 48

Chapter 5 Monitoring Plan Implementation 49 - 50

Annex 1 The Planning Environment 51 - 84

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List of Tables

Table 1. CL-RDP Indicators 50

Table 2. GRDP/GVA Actual Growth Rates vs Plan Targets, Central Luzon Region, 2004-2009

55

Table 3. Inflation Rate by Major Commodity Group, Central Luzon Region, 2004-2009 56

Table 4. Household Population 15 Years Old and Over by, Employment Status: CentralLuzon: 2006-2009

57

Table 5. Profile of Local and Overseas Filipino Domestic Workers, 57

Table 6. Number of Employed by Industry Central Luzon: 2008-2009 58

Table 7. Human Development Index by Province: Philippines and Central Luzon 1994,1997 and 2000

59

Table 8. Basic and Functional Literacy Rates: Central Luzon 1989, 1994, 2003 60

Table 9 National Achievement Test Results (%): Central Luzon 61

Table 10. Vulnerable Sectors in Central Luzon, 2009 63

Table 11. Road Density, Philippines and Central Luzon, As of End 2008 68

Table 12. List of Airport, Region III as of end 2009 70Table 13. Existing Power Plants in Central Luzon 71

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List of Figures

Figure 1. Existing Flood Forecasting & Warning System (FFWS) 20

Figure 2. Enhanced W Corridor 26

Figure 3. Satellite image of Central Luzon 51

Figure 4. Incidence of Poor Population (%): Central Luzon 52

Figure 5. GRDP: Growth Rates (%) Central Luzon, 1985=100 53

Figure 6. Road Development in Aurora, 2009 66

Figure 7. Section of Manila North Road Improvement, 2009 66

Figure 8 Governance and Policy Infrastructure Framework 72

Figure 9. IRA Independency Ratio, by region Year 2004 to 2007 75

Figure 10 IRA Independency Ratio, by province Year 2004 to 2007 76

Figure 11. Capital Formation budget ratio, by region Year 2004 to 2007 77

Figure 12. Capital Formation Budget Ratio, by province Year 2004 to 2007 78

Figure 13. Risk to Projected Rainfall Change 80

Figure 14. Risk to Typhoons 80

Figure 15. Impacts of global warming on sea level rises 81

Figure 16. High Risks to Typhoons 82

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1

Chapter 1: IntroductionTo realize P-Noy's Social Contract with the People of Central Luzon (CL), the formulation of the

Regional Development Plan (RDP), 2011-2016 emphasized the production of a good document on

the regions direction and priorities for the next six years and the process to be observed to maximize

peoples participation. This is intended to ensure that the growth strategies will be realistic in

sustaining growth and relevant in making effective poverty reduction strategies in the region.

Substantive inputs from the Provinces and the Program/Project beneficiaries were drawn and made

part of the Plan.

I. Regional Development Agenda

The Central Luzon 20/20 Vision for 2025 and the Regional Development Agenda (RDA) served as

the basic framework in Plan preparation. As crafted, the Vision Statement in the RDA: CentralCentralCentralCentral

Luzon: A SustainabLuzon: A SustainabLuzon: A SustainabLuzon: A Sustainable and Caring Global Gateway through Publicle and Caring Global Gateway through Publicle and Caring Global Gateway through Publicle and Caring Global Gateway through Public----PrivatePrivatePrivatePrivate----Partnership and Growth forPartnership and Growth forPartnership and Growth forPartnership and Growth for

AllAllAllAll provided the development directions of the RDP. The Regions 2025 Vision presupposes that

improving the quality of lives of the people of Central Luzon requires concerted efforts among allstakeholders government (national and local), business sector and civil society in harnessing the

regions potentials for economic growth.

The following are the Basic Descriptors of the Vision Statement:

1. A Sustainable and Caring Global GatewayA Sustainable and Caring Global GatewayA Sustainable and Caring Global GatewayA Sustainable and Caring Global Gateway. To be sustainable, the share of the Central

Luzon in the Gross Domestic Product (GDP) as measured in its Gross Regional Domestic

Product (GRDP) cannot afford to experience a boom-bust cycle, much less a consistent

downward trend. From 9.5 percent in 1991-2000, the average share of Region III in the

GDP went down to 8.8 percent. Its GRDPs contribution to growth was on a consistent

decline, from 12.3 percent in 1981-1990 to 7.9 percent in 1991-2000, it dove further to

6.7 percent in 2001-2006. The RDP must identify the determinants and their interrelationsthat slow down its growth and pull down Region IIIs share in the national output. It will

determine the most critical and ease them to boost performance and unleash the regions

potentials for the better. To sustain consistent output increase, measures to reduce the

adverse effects of disasters and enable the region to adapt to climate change shall be

consciously pursued.

On the other hand, a Caring Global Gateway means that the marginalized and the

vulnerable will be accorded access to adequate social protection and safety nets amidst the

opening of the region to world commerce because of the presence of the airport and

seaport facilities in the special economic and free port zones and their connectivity to the

regions improved road network system.

2. PublicPublicPublicPublic----PrivatePrivatePrivatePrivate----PartnershipPartnershipPartnershipPartnership. Public-Private-Partnership (PPP) is the principal means to

facilitate attainment of the Sustainable and Caring Global Gateway. The region shall

harness the benefits of the very high trust rating for P-Noy from all sectors of society

particularly the business community. Legislation is the primary instrument to exploit this

opportunity. However, the regions strong relationship and the synergy it developed with the

business community and civil society organizations shall be continuously adopted as a

cross-cutting strategy in the pursuit of regional growth.

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2

Public-Private-Partnership shall be aggressively promoted in areas where the current fiscal

situation will not warrant national government funding support. Investments in

infrastructures particularly transport and electric power shall be promoted as top priority for

the contractual arrangements.

3. Growth for AllGrowth for AllGrowth for AllGrowth for All. The directions that will guide and the interventions that will implement the

RDP must be crafted in such a manner that no one shall be left behind. While a highprivate investment level is expected to boost opportunities for productive employment and

income growth, it does not however guarantee income equality among population groups.

Thus, specific interventions to address inequality of access to health, education and other

social services and to productive assets will form part of the Plans poverty reduction

strategies.

Gains from income growth, improved capital investments and poverty reduction programs

will all be negated unless governance concerns are addressed. Hence, measures to

address corruption, weak rule of law and public institutions and deficient policies shall take

a dominant position in the Plan.

II. Schedule of RDP Preparation

To enable local development planning efforts to catch up with the Medium-Term Philippine

Development Plan (MTPDP) preparation, a work schedule for the preparation of the RDP was

adopted and followed. This helped ensure that priority regional and local needs are reflected in the

national plan.

III. Priority Sectoral/Sub-Sectoral Issue Matrix

In addition to the consultations that were conducted with National Government Agencies

(NGAs) and the private sector partners to draw inputs to RDP preparation, a Priority Sectoral/Sub-

Sectoral Issue Matrix (P-SIM) was prepared, disseminated and consolidated by NEDA-3 to facilitate

input generation from various stakeholders (see attached Annex A). The P-SIM consisted of five

columns to be filled by development partners, as follows:

1. Sectoral/SubSectoral/SubSectoral/SubSectoral/Sub----Sectoral Issue/ConcernSectoral Issue/ConcernSectoral Issue/ConcernSectoral Issue/Concern.... Identifies the problem being addressed by the

agency as part of its legal mandate as shown by comparison of statistics/ benchmarking of

indicators, surveys, insights from in-depth case studies and analysis.

2. Brief Description of the Issue/ConcernBrief Description of the Issue/ConcernBrief Description of the Issue/ConcernBrief Description of the Issue/Concern.... Discusses why the issue or concern is a problem to

include its determinants or factors that make up as causes. It may also include the location

where such problem is being observed or experienced.

3. Existing Agency Program or ProjectExisting Agency Program or ProjectExisting Agency Program or ProjectExisting Agency Program or Project.... The title of the Program or Project implemented by the

concerned agency to address the issue or concern.

4. Assessment of Effect or ImpactAssessment of Effect or ImpactAssessment of Effect or ImpactAssessment of Effect or Impact. Effect refers to the rate to be given which in this case is in

a scale of Low, Medium or High depending on the benefits immediately generated for the

target beneficiaries such as number, areas covered, problems solved, other projects

enhanced, etc. Impact refers to the long-term change as evidenced by Outcome Indicators.

5. Implementation ProblemsImplementation ProblemsImplementation ProblemsImplementation Problems.... Advances reasons why the pre-identified objectives of the

Program or Project have not been attained to include factors within and outside the control

of the implementing agency such as policy/legislation gaps.

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3

IV. Report Structure

The main report of CL-RDP 2011-2016 consists of five chapters and several annexes. The

first chapter sets out the rationale, process and inputs generated in crafting the substantive content.

The second chapter summarizes the development issues and concerns and challenges that impingethe socio-economic development of the region. It likewise introduces the possible implications of

these challenges and issues on the overall development pace while identifying key factors that can

facilitate the search for answers to the former.

The third chapter outlines the priority development directions through a discussion of the

horizontal linkages of the proposed major projects to the development objectives, strategies and

goals. The chapter opens up with a description of the preferred long term scenario for the region

followed by its implication or translation on the physical conditions through the long term spatial

strategy.

The fourth chapter translates the development objectives into more operational terms

through development programs and projects which shall be funded through the regular budgetingprocess of the national government and its instrumentalities complemented by local government

financing.

The last chapter discusses the main implementation mechanisms including proposed

policies and procedures for investment prioritization and fund sourcing approaches. It also presents

a monitoring plan that provides the instruments and processes for information gathering processing

and decision-making.

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Chapter 2: Development Challenges

I. Introduction

A diagnosis of the current situation of the population, economy, physical resources of CL and itscontribution to the national output has surfaced critical development challenges that constrainedthe regions otherwise stronger potentials and more promising opportunities for faster growth.Determinants of the constraints were identified through consultations with differentstakeholders. The detailed analysis of the planning environment is presented in Annex 1.

II. Development Challenges

A.A.A.A. High and SustainedHigh and SustainedHigh and SustainedHigh and Sustained GrowthGrowthGrowthGrowth.... From 1993 to 2009, while Central Luzon maintained its

position as the number three largest contributor to the national output, its contribution was

notably on a consistent decline, from a high of 9.94 percent to a low of 8.1 percent.

Sustaining and increasing growth is crucially important as a challenge for the region in view

of the need for the national economy to be elevated to a higher growth plane to catch up with

its Southeast and East Asian neighbors.

B.B.B.B. Inclusive GrInclusive GrInclusive GrInclusive Growthowthowthowth as a key philosophy of the Philippine Development Plan (PDP) impliesNon-Discrimination which is a core principle of Human Rights. Non-discrimination denotesequalization of social and economic forces so that those who are economically deprived mayat least be given opportunities to grow. For purposes of regional development planning andpolicy reform, this means that those who are left behind must be given opportunities to bedrawn back to the development cycle by hauling them out of the financial difficulty. Thissituation continually impairs and nullifies their capacity to contribute to long-term investmentintended to address disparity in infrastructures sought after by prospective investors and

accord easy access to basic social services and safeguards for the most at risks of havingtheir human rights violated amidst a tight local fiscal situation. A glaring challenge that facesthe regions development stakeholders to achieve inclusive growth is how to mainstreamthe numerous indigenous peoples residing in the region, from the mountain areas ofZambales, Aurora, Tarlac, Bulacan and Pampanga to the coasts of Zambales and Aurora. Ourrural agricultural and fishing families are also sectors that need to be considered in oursearch for inclusive growth.

C.C.C.C. Improving IntraImproving IntraImproving IntraImproving Intra---- and Interand Interand Interand Inter----Regional Circulation and the land transportation access to theRegional Circulation and the land transportation access to theRegional Circulation and the land transportation access to theRegional Circulation and the land transportation access to theeast and west coasts of the regioneast and west coasts of the regioneast and west coasts of the regioneast and west coasts of the region. In the midst of the accomplishments on transportationinfrastructures mentioned in Annex 1 there is still much work to be done. The region stillneeds to pursue the implementation of capital investment projects strategic and critical to

stimulate, accelerate and sustain economic growth. Projects will address blockades alongnational highways, roads and bridges that lead to major tourist destinations andunderdeveloped areas, flood control and drainage facilities that will mitigate floodingincluding improvement of conflict-affected areas that promote development and resolvepeace and order problems.

The North Luzon Expressway (NLEX) has become the fastest link of the different industrialestates in Bulacan for their supply and export requirements. The locators of the differentecozones and industrial estates in Bataan, in addition to their own port facilities, may also

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access the facilities in Clark and Subic through the Roman Highway. All other industrialestates in Central Luzon may benefit once the key arterial road networks of the region areimproved, expanded, or rehabilitated.

The region supports the integrated management of the port facilities of Subic and airport inClark.

The region shall also endeavor to provide cheaper alternative land routes by improving thelevels of service of existing road sections running parallel to the North Luzon Expressway oroperation of railway services.

Physically connecting the eastern coasts and western coasts to the central corridor shall begiven emphasis. This includes opening and construction of new road sections along theeast-west corridor especially the Zambales-Tarlac and Nueva Ecija-Aurora connections.

Rehabilitation and improvement of existing road sections shall precede new constructionespecially in areas adjacent to the central corridor. Rehabilitation and improvement of farm-to-market roads and improvement of rural-urban road connections are expected to supportor catalyze productivity improvements in the agriculture sector through lesser production

costs.

In the same manner, improving the levels of services of inter-regional roads shall strengthenthe regions role of being a catchment area of raw materials where processing activities canbe economically located.

The regions port system shall be improved in accordance with the national governmentpriorities in Strong Republic Nautical Highway. An exemption shall be the conscious effortto develop Dingalan as an International Port of Entry.

The establishment of a reliable network of airports between key tourist destinations(Zambales and Aurora) with Clark Airport as regional hub shall be pursued.

It must be emphasized that the development of all the transport modes in the region shall beconsistently guided by the principle of seamlessness, all development interventions shallconsider inter-modal connections.

Eight percent or 181 of the total 2,169 kilometers of national roads in Region 3 remainunpaved. Eight national bridges are still bailey or timber waiting to be made permanent. Ofthe 534 cases of road traffic accidents reported in the region, 71 or a little more than 13percent are attributed to road defects.

D.D.D.D. StrengtheningStrengtheningStrengtheningStrengthening MMMMSMEsSMEsSMEsSMEs. From a largely agri-based economy, Central Luzon has evolved overthe years to a region now anchored on services and industry. Influencing this transformationis the conversion of the former U.S. military bases located in the region to Special Economic

Zones that had as a result inducing industrial and urban growth, and the regions proximity toMetro Manila which had the region serving as spill over catchment to Metro Manilaspopulation. Subsequent to these developments, Central Luzon emerged as one of thecountrys major economic contributors, ranking third to NCR and CALABARZON in share tothe national output.

Central Luzon still has a lot of room to grow, what with existing available space in the

ecozones dotting the region and the ample supply of trainable labor. But as the same

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condition may be said of other regions here and abroad, this makes it imperative for the

region to continuously endeavour to make itself a cut above the rest or enhance its

competitive edge. This calls for the region to rise up to the following challenges and address

these in order that it may continue to move forward and allow its people to enjoy the fruits of

a thriving economy. This includes strengthening the regions Micro, Small and Medium

Enterprises (MSMEs) which form bulk of the regions industry and service sectors base.

Difficulties in accessing financial assistance packages resulting from high interest rates andstringent collateral requirements deter the rapid development of our MSMEs. This iscompounded by inadequacies in product design, development and packaging efforts, highcost of doing business due to corruption and red tape, unreliable and expensive powersupply, and freight costs. The Information and Communication Technology (ICT) sub-sectorspecifically is faced with inadequate supply of English-proficient manpower. Raising the levelof competitiveness of Central Luzon MSMEs especially on the quality of MSME products is amust. Products must conform to international standards so that focus should not only be onthe domestic market but on penetrating the export market.

Other concerns hounding the MSMEs in the region are summarized below:

1. Lingering mismatch of labor supply and demand. The skills and level of proficiency of

available labor do not meet the standards or requirement of industries. Priority attention

should therefore be given to capability building or human resource development in these

areas especially for targeted industries.

2. Streamlining of business permit and licensing procedure and harmonizing documentary

requirements. One-Stop-Shops have been established in some areas and the processing

time for business permit and license (BPL) applications were cut substantially. The long

list of requirements for BPL applications remains, however, a concern among investors,

and therefore ways of improving this must continue to be an objective for facilitating

investment.

3. Promotion of backward and forward linkages of industries. This is to ensure

sustainability of industries in the production chain by linking the sources of inputs to

output markets. Such linkage at the moment is deemed needing more bridging effort or

assistance.

4. Reducing the cost of doing business to increase competitiveness of industries.

5. Harmonizing policies and defining incentives for promoting investments in the region.

LGUs do not have investment codes that would guide investment promotion and regulate

the conduct of business.

6. Consolidating or coordinating support services for business promotion. There is need to

coordinate assistance dispersed to the various agencies to facilitate provision of these

especially to industry winners and help push for their growth.

7. Entry of cheap imported goods erodes MSMEs business confidence level especially of

start-ups.

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E.E.E.E. IncreIncreIncreIncreasing Agriculture Productivity and Farming Family Incomes and Attaining Riceasing Agriculture Productivity and Farming Family Incomes and Attaining Riceasing Agriculture Productivity and Farming Family Incomes and Attaining Riceasing Agriculture Productivity and Farming Family Incomes and Attaining RiceSufficiency and Food Security.Sufficiency and Food Security.Sufficiency and Food Security.Sufficiency and Food Security. As a major producer of food items especially rice, fishes,fruits, vegetables, poultry and swine, Central Luzon enjoys a comparative advantage that isfurther boosted by its proximity to large domestic markets and easy access to internationalmarkets. Thus, it is incumbent on the region to produce these food items at higherefficiencies and qualities to be able to compete both in the domestic market against

imported primary products and in the international market against local products and otherimported items.

In the domestic front, priority shall be accorded to untangling obstacles to make food cheapand plentiful.This is especially true for rice whereby increasing production is imperative tokeep at pace with the increasing local demand due to increasing population amidstdecreasing production areas due to conversion to other uses.

The region faces declining productivity or below national average productivity for some of its

agricultural products where it plays a major role. Palayproductivity is well above the national

average but is shown to decline from 2007. Where the threat of conversion is palpable, not

to mention low farm income, improving and sustaining a high level of productivity is critical toensuring food security and sufficiency, competitiveness of agricultural products and

enhancing farm income.

The extent of prime lands available for agricultural production is slowly decreasing due topressures of conversion into other higher value activities such as urban or industrialdevelopment. The pressure is even higher in the central plains where the infrastructures aredeveloped. Landowners and farmer-beneficiaries alike succumb to tempting offers of realestate developers to acquire the formers properties for conversion. The extent of lahar-affected areas that remains unused almost 20 years after Mt. Pinatubos eruption adds tothe sectors dilemma.

The sector still reels from high cost of production and low farm prices because of poor or lackof access to markets. The challenge thus is on reducing the cost of production, strengthening

farmers organizations and improving marketing efficiency and access, for farmers to get the

optimum possible return from their investment. Demand is still high for support

infrastructure to agriculture such as farm-to-market roads, post-harvest and storage facilities,

irrigation facilities, transportation, and food terminals. Among the needed post-harvest

facilities are dryers, warehouses, cold storages and world-class sanitary abattoirs.

Post-harvest practices and facilities continue to be inadequate contributing to high losses inhandling and processing. Although Central Luzon is the rice bowl of the country, there is stillwidespread practice of sun-drying on concrete pavements and roads resulting in low quality

milled rice and spillage losses. For high value fruits and vegetables, the diversificationprogram has been constrained by the inability of packaging and handling technologies tokeep pace with market demands. Mangoes, for example, are still transported in traditionalbamboo or reed baskets (kaings) which result to in-transit damages like fruit skin bruising.The Department of Science and Technology (DOST) has been very active in adaptingpackaging technologies especially for mangoes but this has yet to receive popular supportbecause of the additional investment it requires.

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With the exception of the swine industry, agriculture output is realized from the sale of rawand primary products. This leaves the farmers vulnerable to depressed prices during surplusproduction events (bumper harvests). A zero-waste approach to agriculture that involvesprocessing into secondary and final consumer products could provide alternative incomestreams and provide off-farm employment opportunities.

The need to increase value-adding for agricultural products through processing andupgrading from micro-level production to commercial scale has been felt for quite a time. Thelatter is to seize opportunity for export and increasing income. For example, although Aurorais a net palay exporter, milled rice is relatively more expensive since post harvest facilitiesare wanting in the province. They have to buy milled rice from outside the province. Themango producers of Zambales and Bataan easily fall prey to traders especially duringproduction gluts due to the absence of post-harvest processing activities in the area and thenon-availability of technology to lengthen mango shelf life. The same is true for the oniongrowers in Nueva Ecija, who have limited access to storage facilities. Compounding theproblem of onion growers is smuggling and importation of onions at a time when Nueva Ecijafarmers are harvesting their onions, and unavailability of locally produced onion seeds.

Most farming families experience a dearth in sources of additional income generatingactivities especially after planting. For coconut farmers in Aurora and mango producers ofZambales and Bataan, onion growers of Nueva Ecija, rice farmers and fishpond operators ofBulacan and Pampanga, the long idle periods between harvests can be used for other moreproductive activities but they need technical, marketing and financial assistance.

Enhancing the quality of our agricultural products to meet export-quality standards remains a

standing challenge. The regions mango industry for instance requires packing houses and

Extended Water Treatment Facility which are needed for prolonging product shelf-life and

ensuring that products conform to phytosanitary standards as required for export products.

The opportunities offered by the international demand for higher value-added fishery

products have not been exploited by Central Luzons fish farmers. Most of them produce fishto meet local demands yet fall prey to low farm gate prices especially during production gluts.The profitability of going into production for the international market and other high-endusers was proven time and again by a very few producers. For instance, although the regionis a major producer of tilapia, the product is unable to meet the size requirements of hotelsand restaurants. Thus, the Philippines is a net importer of fish fillet although the quality andtaste of tilapia can easily surpass those of the imported fillets. Productivity improvements inthe fishery subsector may be achieved by extending assistance to our small and mediumfish-farmers in improving their production processes and increasing their access toprocessing centers for their products to be globally competitive.

In contrast, the forestry subsector is hounded by low value adding activities among the major

players in the logging industry. There are very limited value-adding activities performedwithin the region for logs harvested especially from the Sierra Madres. On the other hand,our wood-based furniture industry has gained national and international acknowledgementfor superior craftsmanship. The latter, however, is being faced with problems on availabilityof raw materials to sustain their production. In contrast, the big logging companies arecontinuously harvesting logs and exporting (outside the region) lumber and other low value-added products.

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With globalization just around the corner, CLs agricultural production systems have yet toreach efficiency levels that may be comparable to neighboring countries. Costs of productionper unit of output need to be competitive in order to sustain production and providelivelihood to the rural households. Cheaper substitute imports can easily replace majorcommodities and, therefore, threaten inefficient systems.

Through the identification and delineation of Strategic Agriculture and Fishery DevelopmentZones (SAFDZ), it was hoped that farmers shall be encouraged to shift to more globallycompetitive crop production systems. Efforts by the Department of Agriculture (DA) throughthe Bureau of Soils and Water Management (BSWM), crop suitability information havebecome available for some years now. However, internal resources and constraints posed bythe devolution of the agricultural extension function limit its capabilities to make thisinformation readily and directly available to farmers. Information borne out of researches byState Universities and Colleges (SUCs) and other research institutions in the region need toreach and benefit the farmers.

The extensive land resources of Central Luzon that are highly suitable for high value cropshave yet to be fully harnessed. It is sad to note that farmers in the region stick to their time-

tested production systems. Only a select few (especially those who are within the radius ofinfluence of research centers) dare venture into new systems that recognize the regionscomparative advantages that can be used to respond to the demands of emerging domesticand international markets. For example, the regions corn production is a measly 143,000metric tons, way below the requirement of the poultry and livestock industry. Yet the Bureauof Soils and Water Management (BSWM) shows that there are extensive areas in the region,especially in the western and eastern parts, that are technically and financially viable for cornproduction but are presently planted to other low value traditional crops.

The need to increase production areas for corn to support the regions livestock and poultry

industry cannot be overemphasized. Though the region is the center of swine and poultry

production and maintains a good concentration of feed mills, bulk of the corn requirement of

the said industries are imported from other regions and sources outside the country. Thissituation had thus led these industries to suffer from high production cost.

Growing demand for small ruminants (goat and sheep) meat and other derivative products

has been noted. Though the Central Luzon State University(CLSUs) Small Ruminant Center

has developed and perfected technologies for the production of goat, supply has remain

limited and unable to meet expanding demand for goat meat.

Disease control is critical to the livestock and poultry sector in so much as the region

provides for a significant share of the countrys meat and poultry supply. DA reports the

region is now Foot-and-Mouth-Disease (FMD)-free but with vaccination. Despite this positive

development, the region continues to contend with other disease outbreaks. This hence callsfor efforts at intensifying disease control and ensuring that we meet and keep up to

standards, to sustain growth of the sector and the regions meat processing industry, as well

as expand our market reach.

Industrial and urban crawl is slowly eroding the areas for livestock and poultry production.

Sustaining the growth of these sectors and maintaining the position of the region as a major

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producer hence requires that the industry is allotted adequate land and protected from

encroachment from human settlement and industries.

Pollution of our water bodies, deterioration of coastal and marine ecosystems and poor

management of fishing operations are threatening to undercut fish production. Rehabilitation

of the regions coastal and inland water bodies, pollution control and increased monitoring

and extension to promote better management are deemed therefore crucial and must be

given focus if the region were to see the sustainability of its fish industry.

With increasing variation in climate pattern and the regions high vulnerability to weather

disturbances, Research and Development (R&D) on Climate Change Adaptation (CCA) is

crucial to enabling the region cope with or mitigate the impact of climate change. This is

particularly important especially as the region shares the largest in the countrys staple and

therefore is critical in ensuring the stability of the countrys rice production.

Saline water intrusion in certain rice production areas in the region, such as in Pampanga,

Bulacan and Bataan, covering about seven thousand hectares is undermining rice farming

and productivity in these areas. The challenge is in converting these areas to alternativeproductive uses. One alternative according to the Bureau of Fisheries and Aquatic Resources

(BFAR) is the conversion of these once productive rice lands to fishponds for growing saline

tilapia.

Small volumes of production of each of so many farmers limit their access to externalmarkets even with price information provided by the DA. Economies of scale and theperishable nature of agricultural commodities dictate a need to consolidate them at the leasttime. Facilitating the consolidation through common service facilities and a more efficientmarket exchange system shall contribute to improved productivities. One way to effect

consolidation is strengthening farmers organizations and encouraging farmers to workcollectively to seize opportunities for reducing production cost and increasing accessto markets. Backward and forward linkages are better promoted when farmers areorganized and work collectively. Integration increases productivity and maximizesreturn to investment in agricultural production. Farm diversification cushions smallfarmers from price fluctuations and economic shocks particularly those broughtabout by extreme weather and temperature changes.

Other issues that have been repeatedly raised as causes of agricultural underdevelopment ofCentral Luzon include: (1) poor management of water resources; (2) poor access totechnologies; (3) high transport costs; (4) supply inadequacies of certified and good seeds;and, (5) unexplored alternative products and opportunities.

F.F.F.F.

Attracting more Tourists.Attracting more Tourists.Attracting more Tourists.Attracting more Tourists. Central Luzon enjoys certain advantages that present opportunitiesfor developing tourism. For one, Region III is the gateway to Northern Luzon, a more populartourist destination. As a gateway, people pass through the region, giving way to people-regionencounter and the opportunity for raising awareness and interest on what the region has tooffer. The natural or geographic make-up of the region, characterized by a mix of coastal,lowland and upland, favors diversity of attractions and, therefore, a variety of tourismmarkets. The regions proximity to Metro Manila is also a plus factor as it offers a convenientreprieve for a huge local market seeking short-duration rest and recreation. Add to these

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pluses are the regions infrastructure such as airports, sea port, and road network. Withthese existing, the region has a lot more opportunity to attract or invite tourists.

Yet, the same advantages would not matter much if there are no attractions of the right

quality and quantity to speak of. The region, in this case, would continue to be just a stop-

over or a jump-off point to other destinations. Such appears to be the case as the region,

though showing uptrend in visitor arrival, still lags in the list of favored destinations in the

country. This means that the region is unable to capture the potential market size or value

that the said elements mentioned for attracting tourists could generate.

Several factors, according to industry stakeholders, are locking up the opportunities that

could push industry growth further up. The challenges as listed below range from institutional

gaps, underinvestment in tourism, weak marketing, to lack of a sense of tourism culture and

synergy in tourism promotion and development:

1. Fragmented or disjointed tourism promotion, activities and attractions. Theres no

program that would tie up the various destinations or attractions. Efforts at attracting

visitors/tourists are localized or location or LGU- specific. This tends to limit the choicesof tourists in terms of places to visit or attractions to enjoy.

2. Lack of packaged tourism attractions resulting in tourism operators focusing on

outbound market promotion.

3. Preserving integrity of the environment or environmental quality not integral to tourism

development. Efforts at tourism promotion weakly involve enhancing the adjoining or

surrounding environment. Again, focus is on attraction-specific development than on

holistic management.

4.

Increasing capacity to meet demand for large conventions. The facilities in the region,even at Clark and Subic, prevent the region from accommodating large conventions,

which is showing good demand.

5. Outside of Clark and Subic, in recent years, investments in beach resorts have increased

along the China Sea coastline (from Bataan to Iba) and in the Pacific coastline (Dingalan,

Baler and Dinalungan of Aurora) but a considerable number of the facilities that have

been put up are below tourist standards. The owners have expressed their need for

financial assistance packages to improve their facilities. Tourist spots are either

inadequate or in poor condition. The latter manages to attract only the local market.

6. Inadequate transport system or services designed for tourists and high transport cost.

Where there are vehicles, transport fares are not standard and are exorbitant.

7. Lack of a definitive market position or brand with which to identify Central Luzon

tourism. Industry stakeholders posit that it would help the region better promote itself if it

carries a brand that would project a good image of the region.

8.

Limited air seat capacity of international flights at the Diosdado Macapagal International

Airport (DMIA).

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9.

The region, Clark in particular, as just a jump off point, indicates the need to enhance

the overall look and impression of Central Luzon that will elevate it from being just a

gateway to an inviting tourism destination.

10.

Need for visitor information and assistance centers in tourism areas to help guide/assist

tourists in moving around the region.

11.

Need to enhance quality of attractions and security in destinations.

12.Inculcating the culture of tourism that would have all stakeholders participating and

contributing to promoting tourism in the region.

13.

Weak local government capacity for tourism promotion and development thus rendering

local tourism potentials largely untapped.

G.G.G.G. InInInIncreasingcreasingcreasingcreasing Housing Units.Housing Units.Housing Units.Housing Units. The Housing and Urban Development Coordinating Council

(HUDCC) estimated that almost half a million (461,368) housing units are needed to fill in

the cumulated shortage of decent housing in the region from 2005-2010. The problem is

made more urgent by the location of a sizeable chunk of these families along easement of

river banks and other waterways and on the mountain slopes constantly at risk of being

wiped away by flood water and buried by massive soil downpour from landslides.

H.H.H.H. The assessment of the GGGGovernance,overnance,overnance,overnance, PPPPolicy andolicy andolicy andolicy and IIIInstitutionnstitutionnstitutionnstitution highlighted the followingdevelopment challenges that hold off the capacity of the region to move and accelerategrowth and translate beneficiaries of social services and programs as active participants ofregional development: 1) Lack of Growth-Stimulating and Efficient Operating Activities; 2)Lack of Substantive Insights from the Mandated Review of the Local Government Code(LGC); 3)Weak Support of Regional Line Agencies (RLAs) to RDC-Identified Priority PPAs; 4)

Lack of Formal Mechanism at the Regional Level on How Financially Incapable LGUs canaddress resource constraints in the implementation of their Priority Programs/Projects; 5)Absence of Administrative Sanctions for non-compliance with R.A. 9184; 6) Small Valueattached to the Code of Ethical Standards for Government Employees; 7) Lack of a commonregional standard for business permit processing; and, 8) Lack of unified regional crimeprevention.

1. Lack of Growth-Stimulating and Efficient Operating Activities. It may be gleaned from theforegoing that although degrees vary, areas with high Internal Revenue Allotment (IRA)Independency ratios have relatively higher budget that they can mobilize for capitalinvestment projects. For Region III, to have more funds available for capital formationand create longer reach for the vulnerable, a review of the current operating processesmust be conducted to make regional operations more efficient.

An interface of IRA Independency Ratios and investible funds for capital formation willindicate that while Regions CAR, 2 and 7 had lower IRA Independency Ratios in 2004,they got higher percentage ratios for their budget available for capital investment. In2005, Bicol Region was added to the other three regions which while having lower IRAIndependency Ratios had higher investible fund for capital formation. Eight other regionsfollowed suit in 2006. This number was reduced to five in 2007.

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Using Region III as benchmark, the number of regions having higher IRA IndependencyRatios namely Regions I, III, NCR and IV did not change. This means that the gapbetween IRA and Own-Source-Revenues (OSRs) is so wide that in four years their numberand composition did not change altogether. Despite this phenomenon, the number ofprovinces having financial capacity to invest in capital formation changed. This meansthat as far as having more funds for capital investment, improved operational efficiency

highly matters. The inability to come out from IRA dependence is noticeable also acrossthe region. Using Region III IRA Independency Ratio of 32.49 percent as reference, fiveout of the seven provinces of Central Luzon fell short of the standard mark for the period2004-2007. Thus, if assistance is not forthcoming as in the case of Auroras relativelyinability to fund its capital investment projects, the general observation nationwide andregionwide for regions and provinces to graduate from IRA dependency appeared evenmore difficult.

Hence, bail-out measures need to be adopted and implemented in this regard. To effect,sustain and accelerate growth, economic activities must be deliberately pursued toensure not only efficiency in operations but also higher investments for capital formation.

2.

Lack of Substantive Insights from the Mandated Review of the LGC. Entitlement to IRAand their amounts are provided for under the LGC. Their entitlement cannot bechallenged even by executive fiat because by law their releases are deemed automatic.But while the share of the LGUs in the national wealth is facilitative of local developmentefforts in this respect, its relevance must be subject of continuing review.

Used as criteria in IRA determination under the LGC are population level, land area andequal sharing. The formula falls short of considering other factors which could serve asvital inputs to making IRA responsive and relevant to changing local developmentrequirements after twenty years from implementation of LGC such as the impact of theunique geographic characteristics of an area, the dynamics of the population primarilytheir attitude and capacity to change, the values of local government officials such astheir appreciation of geographically inter-locking growth and development concernswhich could have been vital inputs to the mandatory review of the LGC. Section 521 ofthe LGC clearly provides for its mandatory review every five years as minimum.

3. Weak Support of Regional Line Agencies (RLAs) to RDC-Identified Priority PPAs . TheRegional Development Council (RDC) is supposedly the forum whereby the RegionalDevelopment Plan (RDP) is coordinated, harmonized, synchronized and integrated.Ideally, the RDP must be a reflection of various interests, the implementation process ofwhich a full-proof measure at ensuring the realization by the claimholders of theirentitlements to public goods, resources and institutions necessary for a life of dignity.

Past experiences and the prevailing practice atRDC III are symptomatic not only of the lack of transparency as to how region-based

priority programs and projects, their identification and targeting are being undertaken atthe national level and their ultimate translation into agency budgets. The continuinglack of transparency in the system is constantly subjecting the most vulnerable personsand geographic areas to being left out. This is not in harmony with the right toinformation principle being espoused by the P-NoyAdministration. It is not consistentwith the non-discriminatory quality of the inclusive growth of the MTPDP.

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Anecdotal incidents point to LGU priority programs and projects being passed on tolegislators for chance funding. After almost two decades of decentralization, regionalcounterparts of national government agencies continue to function more as extensionsof their central offices and less as representatives of LGUs trying to reach out to centralgovernment through the RDC for budgetary support.

Worse, craving for budgetary support from elsewhere has actually been perpetuating ahistory of institutional dysfunctionalism and myopia towards local governance concernsand an attitude of indifference towards the more organized and systemic developmentplanning. In view of the lack of attribution on the difference that development planningcould make on peoples lives, what should have been an effective window for makingpeople and communities realize as a critical factor for effective local leadership iscontinuously being wasted and rendered meaningless. A clear opportunity for makingone vital criterion in the selection of good local leaders is being lost.

4.Lack of Formal Mechanism at the Regional Level on How Financially Incapable LGUscan address resource constraints in the implementation of their Priority

Programs/Projects . Totally leaving the impediments to growth to the relatively financially

incapable LGUs and those with relatively poor geographic conditions starts with non-recognition of their incapacity to fend for themselves. Continuing disregard of thisproblem practically leaves them at the mercy of national government agencies andlegislators for budgetary support.

Loans are not a viable option not only because of the stringent requirements foreligibility but also the high social costs should they become unable to repay. Sovereignguarantees are an indispensable requirement for Official Development Assistance(ODA). LGUs that will likely benefit from these guarantees are those financially capable.

Build-Operate-Transfer (BOT) is likewise not a viable option because private investorswould naturally look for good infrastructure, reliable market, and predictable tax policiesthe implementation of which would again have irreversible cost to local constituencies.Past attempts at vertical haul-out has been questioned because of the perceivedpotential risks from serving as disincentive to better economic performers. The highcost to poor economic performers is manifested in slow growth and increasing incidenceof poverty, which undoubtedly has wide-ranging implications on the country as a whole.

5. Absence of Administrative Sanctions for non-compliance with R.A. 9184 GovernmentProcurement Return Act. In addition to the reported collusion in the qualification ofwinning bidders, which by its nature is hard if not impossible to prove, anecdotalincidents of leakages in the procurement of supplies, contractors and consultants timeand again surface. Transparent processes abound in the law. However, non-compliance therewith entails no administrative sanctions to parties to the transactions,hence better judgment would be to just ignore and be beyond its scope.

6. Small Value attached to the Code of Ethical Standards for Government Employees.Republic Act No. 6713 provides for the obligation of every permanent employee ofgovernment to submit his/her Statement of Assets, Liabilities and Net Worth (SALN)every year. It is an efficient way of noting wide variations in Net Worth of those workingin government. Unexplained disproportionate increases in Net Worth are good subjectsof criminal investigation. Accomplishing SALNS has ceased being a solemn and formalduty attached to the public office. Its value sometimes is reduced to a mechanical act

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subject for experts to work on ingeniously for the purpose of evading possibleinvestigation.

While accusations at manipulating SALN would subject the accuser to stigma andsocial humiliation, there is no body or entity in the region to whom to go to for recourseshould reports at remedying the numbers being placed at the SALN are known.

Although the prevailing rule is that the burden of proof lies on the government officialswho accomplish and execute the SALN, the opposite appears to be what is happening.This norm leaves those guilty of wrong doing literally untouched. This continuingmockery of the Human Rights Principle of Rule of Law is still prevalent despite theenactment of a related law, Republic Act No. 1379 or the Law on Forfeiture of Ill-GottenWealth.

7. Lack of a common regional standard for business permit processing. The fiscalautonomy accorded to LGUs is manifested even in areas where uniformity should beobserved if the region is to be promoted as a common investor destination area.Variations in business processing caused by the dichotomized performance of therespective mandates of LGUs and NGAs are observed at the local level.

8. Lack of unified regional crime prevention. Crime statistics of the region are suggestiveof the wide differences as to how Local Chief Executives (LCEs) in Central Luzonaddress peace and order, and security concerns. The differences of appreciation andthe relative values attached to peace and security as a factor in investment promotionand development by LCEs continue to pose as a challenge to the region. The nature oflinkage and coordination between the different national law-enforcement agenciessuch as the Philippine National Police (PNP), Armed Forces of the Philippines (AFP),and the National Bureau of Investigation (NBI) and the LGUs impacts on the real natureof this development challenge.

I. Complementation of Ecozones and MSMEs for Investment Expansion and Job Creation.Complementation of Ecozones and MSMEs for Investment Expansion and Job Creation.Complementation of Ecozones and MSMEs for Investment Expansion and Job Creation.Complementation of Ecozones and MSMEs for Investment Expansion and Job Creation.

The region is host to an extensive network of special economic zones and Freeport areas yetlarge tracts of lands within the proclaimed areas remain unoccupied and unproductive. The

marching challenge is how to make these employment generators live up to their

expectations of being major attractions to investments and job creation. As of 2009, there

are 354,000 jobless persons in Central Luzon. Despite the growing importance of

remittances from Overseas Filipino Workers (OFWs) a size percentage of whom come from

Region III, owing to the negative non-economic externalities that overseas employment

brings to the individual household, focus shall be given to domestic employment.

Constituting the bulk of those domestically employed at almost 60 percent, the Service

Sector is expected to play crucial role. Comparing 2008 and 2009, except for Electricity, Gas

and Water Supply, and Construction, the Service Sector considerably led the increase in the

number of employed persons. MSMEs and the Economic and Freeport Zones must work intandem for the domestic employment in-filling. This would require integration and

complementation of Economic and Freeport Zones and local MSMEs for skills re-tooling,

technology upgrading and investment expansion and diversification.

J.J.J.J. Stable Investment Showing in the Economic and Freeport Zones.Stable Investment Showing in the Economic and Freeport Zones.Stable Investment Showing in the Economic and Freeport Zones.Stable Investment Showing in the Economic and Freeport Zones. While continuing, the

dwindling share and erratic behavior of investment inflows within the Subic and the Clark

Special Economic and Freeport Zones are making hard or slowing down the development of

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the zones into logistics and transshipment hub. This suggests that competition of logistic and

transshipment service facilities around the globe are continually posing stiff competition

coupled with the complete recovery that the world still needs to go through after the

setbacks it suffered from the financial crunch it experienced more than two years ago.

K.K.K.K.Producing Globally Competitive Human Resources and Achieving the RegionsProducing Globally Competitive Human Resources and Achieving the RegionsProducing Globally Competitive Human Resources and Achieving the RegionsProducing Globally Competitive Human Resources and Achieving the Regions MillenniumMillenniumMillenniumMillenniumDevelopment Goals.Development Goals.Development Goals.Development Goals. Realizing Central Luzons Millennium Development Goals (MDGs)oneducation and environmental sustainability by 2015 is a continuing challenge since it isforecast that the targets for universal primary education especially in the elementaryeducation completion rates and environmental sustainability target indicators for CentralLuzon may be difficult to attain.

The development of a globally competitive human resource base requires preparing andsustaining the fitness of the economically productive population. Such should be founded onimproved basic education, improved access to health services, world-oriented highereducation and ensuring that their mental baggage is minimal especially those relating totheir dependents.

Basic education is continuously hounded by low enrolment of school age population and lowperformance of students in achievement tests. About 90 out of 100 children 6-11 years oldand 66 out of 100 children 12-15 years old were enrolled in government elementary andsecondary schools respectively. This is compounded by the weak holding power of schoolsas about 73 out of 100 pupils and 61 out of 100 students completed elementary andsecondary levels respectively in SY 2008-2009. The low performance of students inachievement tests is an offshoot of inadequate classrooms with the attendant facilities likedesks and tables, computers which are absent in almost all schools, shortage of teachersand textbooks and poor preparation of teacher-graduates. For SY 2010-2011, a total of1,435 classrooms in the elementary level and 4,190 in the secondary are needed to meetthe standard ratio of one classroom for every 45 students. The present classroom studentratio reached as high as 1:166 in one of the elementary schools and 1:293 in one of the

secondary schools. Attendant problems are limited school site and ownership problems thatare required in the provision of classrooms.

Textbook to student ratio ranging from 1:2 to 1:4 in the elementary level and 1:2 to 1:5 atthe secondary level was far from ideal. Teacher to student ratio was below the standardreaching as low as 1:405 in one of the elementary schools and 1:368 in one of thesecondary schools. The requirement for additional teachers number 692 at the elementarylevel and 1,461 at the secondary level for SY 2010-2011. Increasing cost of education-related expenses, lack of personal interest and inability to cope with schoolwork are said tobe the main causes of children not attending school or dropping-out of school.

For higher education, the persistent mismatch of school curriculum with the requirements of

industry particularly in Information Technology, Business and Medicine is continually causingthe production of potential unemployed. Graduates who fail to meet labor market placementstandards because of the mismatch symptomatic of a continuing wastage in preciousinvestment resources and results to foregone income from being unproductive.

The overall health status of the population may be gleaned from some basic health statisticssuch as infant deaths, prevalence of malnutrition and incidence of water-borne andpreventable diseases. A total of seven out of 1,000 live births died before reaching the first

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year of life in 2003. Moreover, there were still 2,626 births (1.49 %) that were attended byuntrained hilotsin 2000.

About 10.71 percent of total births or 18,831 had weights below the standard of 2.5 kilos.About 10.95 percent of children 0-5 years old had weights below the normal range(underweight) and 3.24 percent had weights above the normal range (overweight). This is

the most important stage in the development of children and interventions along this areimperative. The above situation was worse among school children where almost one-fifth(19.69 %) of them were underweight. The spatial distribution of malnutrition among pre-school children by municipality indicates that the problem is more pronounced in the easternand western parts of the region.

Water borne and preventable disease patterns such as diarrhea afflicted 85,477 persons or990 per 100,000 population and has been the second leading cause of morbidity for years.This is due to the accessibility of potable water to only 87.27 percent of households andsanitary toilet facilities to 86.37 percent. Fully immunized children accounted for only 85percent of all infants.

The continuing violation of the Ecological Solid Wastes Management Act of 2003leads to airpollution, water pollution and the clogging of local canals aggravating the flooding problemand its attendant social concerns especially in the urban area.

L.L.L.L. Optimizing Benefits from Mineral Resources.Optimizing Benefits from Mineral Resources.Optimizing Benefits from Mineral Resources.Optimizing Benefits from Mineral Resources. The Philippines is believed to be mineral-richwith an estimated potential mining wealth of US$840 billion. Reports have it that the countryranks among the top ten countries of the world in terms of gold, copper, nickel and chromite.Thus said, the government is driving efforts to push for the development of the countrysmineral resources to tap this vast potential wealth and gain as much as it could in terms ofinvestments and revenues to add to resources necessary for the countrys development.

Yet the value of mining is not only in its direct investments and revenues but also in itsindirect economic spin off. Mining is said to have a multiplier effect on upstream anddownstream industries, which when put together is estimated to have a potential value-added of P300 billion annually.

Central Luzon is endowed with both metallic and non-metallic mineral resources that when

tapped in accordance with the provisions of the countrys mining laws could bring about

economic growth. Mining, however, does not only impact the national economy but lends

also to local development as the laws provide for the sharing of the gains from the economic

activity with the host communities , as it also promotes local employment.

To jumpstart investments in the industry, the government identified priority mineraldevelopment and exploration projects of which three are in Central Luzon. The latter are

Acoje PGE Nickel Project in Sta. Cruz, Candelaria, Zambales, Akle Cement Project in SanIldefonso, Bulacan, and Sta. Cruz Nickel Projectalso in Sta. Cruz, Zambales. In addition tothese three projects, 36 Mineral Production Sharing Agreement (MPSAs) and 15 industrialpermits have also been approved and registered in the region.

While it is widely recognized that the development of the industry will create opportunitiesincluding jobs, transfer of technology and skills, concerns on environmental damage,benefits not reaching the poor and destruction of aesthetic attractions in mined areas deterfull-swing development. Already mining issues involving institutional jurisdiction, process

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flaws and violation of environmental regulations are felt around the region, and these it mustaddress if mining were to be sustained as a viable industry and for the full benefit of miningto redound to the regions development. The region must ensure that as much as thepotential contribution of mining to the regions economy is significant, it shall nonethelesspose no cost to life and the environment.

The following specific issues and concerns have been identified by the Mines and Geo-sciences Bureau (MGB) and other industry stakeholders as besetting the sector and

constraining or threatening to undermine its growth:

1.

Conflict in the issuance of small scale mining permits (SSMP) of LGUs that include :

a. issuance of SSMP within Mineral Reservation areas, which is under the

jurisdiction of Department of Environment and Natural Resources (DENR)-

MGB, protected areas, Community-Based Forest Management (CBFM) areas

and other forest lands without securing the necessary permit from the DENR

b.

issuance of SSMP within existing nationally approved mining rights that haveresulted in overlapping claims and therefore conflict between large-scale

and small-scale permitees

c. issuance of SSMP without the proper Provincial Mining Regulatory Board

(PMRB) review and endorsement

d. issuance of permits that are not in accordance with prescribed mining

rights: 30-day special mining rights or one year permit to quarry

e. issuance of SSMP without the appropriate Environmental Compliance

Certificate (ECC) issued by the DENR-Environmental Management Bureau

(EMB) and Environmental and Rehabilitation Program as well Social

Development and Management Program (SDMP)

2. Issuance of ECC by the LGU

3. Allowing the transport of mineral ores without the appropriate ore transport permit

(OTP) or issuance of the OTP beyond the maximum allowable volume tonnage limit

4.

Use of heavy equipment in SSMP operations, which is not only contrary to law but may

be adverse to the environment

5.

Collection of inappropriate taxes and fees (e.g. environmental tax, scholarship fees,

regulatory fees, extraction fees)

6. Non-payment of national taxes particularly excise tax and royalty payments to

indigenous peoples

RA 7942 Philippine Mining Act of 1995 is clear on the pursuit of responsible andsustainable mining as an avenue for attaining sustainable economic development. But if theindustrys stakeholders do not so much as to comply or remain true to their tasks as

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provided, then mining would continue to be seen as destructive to humans and theenvironment rather than as a medium for economic growth. The main challenge is inharmonizing the functions of the concerned national authorities and that of the LGUs even asthey play distinct roles. How the stakeholders coordinate may be the key to untangling theshackles that hold down rather than enable the region to enjoy the maximum benefit frommining.

M.M.M.M. Climate Change and Disaster RisksClimate Change and Disaster RisksClimate Change and Disaster RisksClimate Change and Disaster Risks ManagementManagementManagementManagement remain a big challenge for the sustainableeconomic development of Central Luzon. The large impacts of natural disasters are notonly related to the geography of the country and its high exposure to natural hazards, butalso to its vulnerability, which is closely linked to poverty and environmental management.In urban areas, poverty drives many poor families to live in high-risk areas. In the rural areas,disasters throw poor families back into poverty who are forced to rely on coping mechanismsthat reduce their long-term chances for improving their lives.

The risks posed by global climate change will severely affect key pillars of socio-economicdevelopment that include natural resources, agriculture, infrastructure, water resources andhuman health. While there is uncertainty on the likely conditions and changes in some

climate variables resulting from global warming, there are predictors of possible climatechange impacts in the country. Amidst the dearth of prediction models that reduceuncertainties for climate change impacts at the sub-national and sub-regional levels, it iscertain that surface temperature is rising and more warm days and lesser cool ones havebeen recorded. These temperature variations have already increased the risks to the countryand local level socio-economic development.

Although uncertainties continue to cloud the possible impacts of climate change at the locallevels, it is certain that increases in average temperatures that result in natural disasters arealready taking their toll on the socio-economic development of Central Luzon. This is due notonly to the natural hazards to which the region is exposed but also because of itsvulnerabilities that are exacerbated by poverty and environmental degradation. The mostlikely to be affected sector of the economy is the agriculture sector upon which aconsiderable number of the regions poor depend for their livelihood.

Being in the central plains of Luzon Island with three extensive river basins (Pampanga River,Agno River and Angat River) and having low-lying urban and economic activity centers, theregions fundamental priority is to ensure that past and future socio-economic investmentsshall not be wiped out in a wink of an eye due to the occurrences of natural hazards. Theurgency of more effective disaster risk management is further emphasized by theoccurrences of climate change indications in recent months and years.

The outdated disaster management policy framework of the Philippines has recently beenaddressed with the enactment of the National Disaster Risk Reduction and ManagementLaw (Republic Act No. 10121). The law emphasizes the need to understand thedevelopment-disaster nexus from local to national government and even within the privatesector and the inclusion of disaster risk management issues in development financingdecisions. This requires strengthening of capabilities of decision-makers in incorporatingclimate-change issues in public investment decisions. Aside from physical interventions tominimize risks to natural hazards such as flood control structures and drainage works, thereis an urgency of improving disaster forecasting and early detection capacities as pre-requisites to disaster preparedness.

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Related to disaster preparedness capacities are capacities of LGUs to respond to emergencyrequirements. These include stockpiling of ready-to-eat and easy-to-open stuff and basicnecessities of victims of natural disasters such as floods, landslides and mudflows.

Most LGUs need to be capacitated on disaster risk management and on improving disasterrisk reduction considerations in their respective Comprehensive Land Use Plans (CLUPs).However, national government technical agencies also need to step up their database onnatural hazards threatening specific areas in the region and make these available toplanners and decision makers for them to arrive at informed decisions.

Typhoons, earthquakes, volcanic eruptions and unusual climatic occurrences pose threats

and hazards to humans, infrastructures, properties and economic activities. These raise the

cost of development or draw funds and investments away from development.

An average of 20 typhoons visits the country each year. About 15 of these affect CentralLuzon. Typhoons combine with monsoons discharge a high rate of precipitation in theregion. And because many of the regions areas are low-lying (e.g. Pampanga Delta, Popontoand Central Tarlac), flooding usually accompanies typhoons and monsoons. The two mostextensive river basin areas that are usually affected by flooding are the Agno River Basin and

the Pampanga Delta shown in Figure 1. The DPWH has put in place flood forecasting andearly warning systems in these two areas. The national government has likewise invested inprograms and projects to alleviate the flooding problem in these areas. Local governments(such as Tarlac and San Fernando Cities) have also invested in improving the drainagesystems in their respective urban areas.

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Although much has been spent in infrastructures and other engineering interventions,unusual rainfall events still submerge extensive areas in the region. Tarlac, Nueva Ecija,Bulacan and Pampanga are usually worst affected. In the case of the Pampanga Delta area,the implementation of Phase II of the Pampanga River Irrigation and Flood Control Project didnot push through due to some social acceptability issues. The river systems in thePampanga River Network experienced decreases in capacities due to siltation and lahar

deposition. Several Mt. Pinatubo rehabilitation projects were implemented to increase theconveyance capacities of these rivers. However, the magnitude and extent of the laharaffected areas and the limited resources of government have left some areas to depend onreactive solutions to the flooding problems.

The most controversial is the Pampanga Delta Flood Control Project. Phase I was fullycompleted in 2002 after two loan extensions and 11 years of implementation. About 1.5kilometers was deleted from the original project design not only because of price escalationbut more especially due to strong opposition from the non-government organizations (NGOs)and families to be displaced in Barangay Candelaria, Macabebe, Pampanga up to BarangayMeyto, Calumpit Bulacan. Implementation of Phase II may not proceed unless consensusamong stakeholders is realized. Relocation has become a very sensitive issue that local

politicians have either shied away or used the controversy to pursue their political ends.

Another major contributor to flooding in some areas in the region is the discharge ofunusually high volumes of impounded surface run-off in the regions hydroelectric andirrigation dams (Angat and Pantabangan). Operators of these two dams are forced to releasewater since the dam capacities have decreased due to siltation and the high rates of run-offaccumulation. These have been blamed on the denudation of their respective watersheds.Indeed, the forest cover in several critical watersheds throughout the region diminishedthrough time, blamed primarily on illegal logging, kaingin and encroachment. It was alsodetermined that limited and overlapping mandates in the management of forest resources(watersheds included) weaken the implementation of otherwise resource conservationprograms in these areas.

N.N.N.N.

Ensuring Sustainable Groundwater Yields and Balancing Competing DemandsSustainable Groundwater Yields and Balancing Competing DemandsSustainable Groundwater Yields and Balancing Competing DemandsSustainable Groundwater Yields and Balancing Competing Demands amongindustries, domestic and agricultural uses is a challenge that needs to be addressedconsidering that water is an essential commodity for all these three uses. This wouldnecessitate identifying and protecting aquifer recharge areas, protection of existingproclaimed critical watersheds and identification of new critical watersheds for protection. Arelated challenge is how to mobilize multi-sector support for this activity.

O.O.O.O. Environmental Protection and Waste ManagementEnvironmental Protection and Waste ManagementEnvironmental Protection and Waste ManagementEnvironmental Protection and Waste Management The environment and the natural

resources around us tell so much of the life we live. They form the core of what determine

and shape human survival and human development.

Air, water and land provide the basics of what humans need to survive. Their availability

ensures that we live and fulfill our human task. But to live and enjoy life, man needs to have

these basics in quality and quantity that would allow for sustainable living. To have them

differently would be to limit life and limit living it meaningfully and to the fullest.

The challenge remains for Central Luzon to protect resources that are presently in good state

or from further degradation; to rehabilitate and restore those that can still be redeemed and

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be of productive use; and to enhance the quality of its environment to levels beneficial to

people and the economy.

Attention is needed in the following environmental responses:

Maintaining and preserving the regions protected areas and biodiversity;

Protecting the regions forest lands and watersheds from degradation; Reforestation and rehabilitation of degraded upland and mangrove areas;

Rehabilitation and restoration of Manila Bay and the regions other coastal andmarine resources;

Urban greening and sanitation;

Regular air and water quality monitoring;

Waste wat