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ISSN 2243-8963

Editorial Board
Paulito V. Hilario, PhD Editor Anita B. Obispo, M.A. Rommel Miles E. Corro, M.A. Maria Theresa L.Ingles, M.A Myrna Escoto, M.A. Karen Gabinete, M.A Board Members

Zarah Jasmin L. Jacob Cover Design

Thelma Geraldine A. Baricaua,M.S Consultant

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The Official Faculty Publication Of the College of Arts and Sciences

San Beda College Alabang

Alabang Hills Village, Muntinlupa City Volume 3 No. 1 (January 2010)
ISSN 2243-8963

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FOREWORD
Ugong Faculty Journal January 2010 issue is a product of scholarly researches of faculty members of San Beda College Alabang College of Arts and Sciences, whose interests are in various disciplines of business , IT, education, arts and sciences. The articles for publication may be in a form of a basic or applied research. This issue includes Prof. Arlegues comparative analysis of civil society engagement with the Association of Southeast Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC). The use of SWOT analyses in the education, real estate and maritime recruitment setting are the topics covered by the articles of Prof. Tolentino, Prof. Capulong and Prof. Herrera. Prof Jimenezs article delves on the factors affecting competitiveness of Cebu furniture manufacturers. The faculty journal follows the standard format for scientific journal, which includes the Title, Abstract, Introduction, Methodology, Results and Discussion, and Conclusion. The inclusion of Recommendation and Acknowledgement is optional to the author/ s of the article. The citation of references is presented based on the standard format set by each discipline; thus the authors decide on the style of reference citation to use.

The Editors

Table of Contents
A Comparative Perspective of Civil Society Engagement with the ASEAN And SAARC Celito F. Arlegue, M.A ..................................................................... 1 Teacher Education In Muntinlupa City: An Economic Perspective Ernida Ancheta-Tolentino, MSPE ................................................. 32 Factors Affecting The Competitiveness of Selected Home Furniture Exporters In Cebu Caryl Jimenez, MBA ...................................................................... 55 Turning Things Around Breathing New Life To An Almost-Dead Business Allan Capulong, MBA .................................................................... 71 A Strategic Management Paper On The Filipino Seafarer Recruitment Industry Antonio Herrera, MBA .................................................................. 83

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A COMPARATIVE PERSPECTIVE OF CIVIL SOCIETY ENGAGEMENT WITH THE ASEAN AND SAARC 1 CELITO F. ARLEGUE, M.A
Abstract This article provides a comparative analysis of civil society engagement with the Association of Southeast Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC). In particular, it examines the participation of Solidarity for Asian Peoples Advocacy (SAPA) Working Group on the ASEAN and South Asia Center for Policy Studies (SACEPS) in drafting or monitoring the implementation of the ASEAN Charter and SAARCs (Citizens) Social Charter respectively. The article does this by investigating the factors which facilitated (or obstructed) these CSOs engagement with the ASEAN and SAARC in making or monitoring the implementation of their respective charters. Utilizing the political process theory as a framework of analysis, the paper argues that the experience of SAPA and SACEPS in regional engagement shows that seizing and making opportunities, effective framing of issues, and astute mobilization of resources can open up even the most state-centered and elitist groupings like the ASEAN and SAARC to civil society participation. Governance in this day and age is a complex process characterized by multiple actors and levels. In the sub-national, national, regional and global arenas, a variety of actors interact, cooperate and compete to forward their respective agendas and advocacies in multiple settings or fora, both governmental and non-governmental. Indeed, the world, in a way, has transformed into a complex web of interdependence where varied and multiple transnational connections and interdependencies between states and societies appear to be increasing at an unprecedented rate. This global trend can also be observed in the sub-regions of Southeast and South Asia. In these places, governance at all levels is increasingly being challenged by civil society organizations (CSOs) operating nationally and transnationally. Civil society is an essentially contested concept (Connoly 1983) as scholars and activists do not agree on what civil societys composition, strategies and goals should be. In this article, civil society refers to the realm of individuals and groups, operating at the national or transnational levels, which aims to democratize and redistribute power in the state and regional institutions (Kaldor 2002). In particular,
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Paper presented in the Global South Workshop 2009, Geneva, Switzerland. This is drawn largely from the term paper written by the author for his Political Science 325 (Politics of Developing States) class, 2 nd Semester, AY 2008-2009. The author gratefully acknowledges Dr. Teresa S. Encarnacion Tadem and another anonymous reviewer for his or her comments on the initial drafts of this paper, but assumes full responsibility for the manuscript. This paper is still a work-in-progress and should not be quoted without permission from the author.

civil society is viewed in this article as synonymous with international nongovernmental organizations (INGOs), defined by Tarrow (2001, 12) as organizations that operate independently of governments, are composed of members from two or more countries, and are organized to advance their members international goals and provide services to citizens of other states through routine transactions with states, private actors, and international institutions. 2 In the past decade, the increasing regional involvement of CSOs has been acknowledged by the rise of new regionalism approach (Hettne and Inotai, 1994; Hettne, Inotai and Sunkel, 1999). This approach essentially argues that the process of regional integration necessitates the participation of both state and non-state actors. In Southeast Asia, the simultaneous opening of the Association of Southeast Asian Nations (ASEAN) and the realization of civil society groups and social movements of the importance of regional engagement has brought about an interesting case in analyzing governance at the regional level. ASEAN, known for being a bastion of sovereignty and national interest, has expressed greater willingness to engage with civil society organizations in recent years, which is a profound change from its state-centric and elite-driven nature in the past. The crafting of the ASEAN Charter provides a valuable case study on whether ASEAN was able to translate its rhetoric of becoming people-centered into reality. Similarly, in South Asia, leaders of South Asian Association for Regional Cooperation (SAARC) had signed the Social Charter in 2004, and recently acknowledged the vital role of CSOs in driving forward the implementation of the Social Charter and directed the NCCs (National Coordination Committees) 3 to mobilize civil society organizations to achieve this end. SAARC, like ASEAN, has placed great emphasis on state sovereignty and the doctrine of non-intervention in the affairs of member-states, and has only recently provided spaces for civil society participation in the implementation of its policies. Hence, it is interesting to know whether South Asian leaders fulfill their commitment to involve civil society actors to truly realize the objectives of the Social Charter. It is in this light that the paper provides a comparative analysis of civil societies engagement with the ASEAN and SAARC. In particular, it looks into the role of Solidarity for Asian Peoples Advocacy (SAPA) Working Group on the ASEAN and South Asia Center for Policy Studies (SACEPS) in drafting and in monitoring the implementation of the ASEAN Charter and SAARCs (Citizens) Social Charter respectively. More specifically, it investigates the factors which facilitated (or obstructed) these CSOs engagement with the ASEAN and SAARC in making and enforcing their respective Charters. Engagement is defined here as
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It must be noted that Tarrow (2001) argued that INGOs are conceptually different from transnational social movements (TSMs) and transnational advocacy networks (TANs). He defined TSMs as socially mobilized groups with constituents in at least two states, engaged in sustained contentious interaction with power holders it at least one state other than their own, or against an international institution, or a multinational economic actor (2001, 11). TANs, on the other hand, includes those relevant actors working internationally on an issue, who are bound together by shared values, a common discourse, and dense exchanges of information and services (Keck and Sikkink 1998, 2 as cited in Tarrow 2001, 13). 3 The NCCs are the bodies created to implement the provisions of the Social Charter in SAARC memberstates.

the involvement of CSOs in the consultation process regarding the drafting or enforcement of ASEAN Charter and SAARC Social Charter. 4 By looking at the issue of engagement, this article hopes to assist CSOs within and outside the Southeast and South Asian sub-regions in refining their strategies and tactics for more effective engagement with regional groupings. It also aims to contribute to the burgeoning literature on civil societys role in governance across the globe. The paper utilizes the political process theory in identifying and analyzing the factors which account for the success or failure of civil society groups and social movements in their engagement of state authorities in both national and supranational levels. The theory has three aspects: political opportunity structures, collective action frames and resource mobilization. While formally distinct, several scholars have already integrated these three aspects in analyzing civil society, social movements and their activities (Jenkins and Form 2005). Being a case study, the paper concentrates on the factors which facilitated or obstructed the engagement of SAPA and SACEPS in crafting or monitoring the implementation of the ASEAN Charter and SAARC Social Charter respectively. SAPA and SACEPS were chosen because both groups consider engagement in crafting or monitoring the implementation of the regional charter as one of their main advocacies (if not the most important one). It must be noted, however, that CSOs in the Southeast Asian and South Asian sub-regions are characterized by huge number and diversity, with varying influence on the ASEAN and SAARC. With regard to the drafting of the regional charters, there were other groups which participated in and contributed substantively to the process. The papers focus on SAPA and SACEPS, therefore, is one of its major limitations. This descriptive paper attempts to address the questions it posted mainly through qualitative methods of data collection, namely: literature review, key informants interview and document analyses. It is divided into seven parts. The first part sets the issue in context by tracing the involvement of CSOs in the two regional groupings. The second part offers a narrative of events leading to the adoption and implementation of the ASEAN Charter and SAARC (Citizens) Social Charter, and SAPA and SACEPSs role in the process. The next three parts, which are the heart of the discussion, provides a comparative analysis of the factors which impacted on the involvement of SAPA and SACEPS in the crafting or monitoring the implementation of their respective regional Charters. The sixth part analyzes the continuing challenges which confront CSOs in the two sub-regions. The seventh and final part presents some concluding remarks and prospects for the future.

It must be noted that CSOs do not agree on the meaning of engagement. Some CSOs, for example, equate engagement with official dialogue or lobbying. For this reason, they do not consider resistance as a form of engagement. This is the reason why CSOs are also not united as regards the utility of engagement. This view is drawn from the interview with Jenina Joy Chavez, Coordinator of the Focus on the Global South Philippine Programme, 4 March 2009.

CSOs in the ASEAN and SAARC: A Backgrounder Involvement of CSOs in ASEAN The 1997 financial crisis is a watershed event in terms of ASEANs relationship with its people. For one, the crisis led to ASEANs adoption of Vision 2020 which envisions Southeast Asia being governed with the consent and greater participation of the people, with its focus on the welfare and dignity of the human person and the good of the community (ASEAN Vision 2020 1997). This opening on the part of the ASEAN was accompanied by the simultaneous recognition of CSOs of the merit of engagement at the regional level. It must be noted that prior to the 1997 financial crisis, the focus of attention of CSOs in the sub-region had been, at various points, the United Nations (UN), World Trade Organization (WTO) and the International Monetary Fund (IMF). When ASEAN signified its commitment to better institutionalize itself and to make the people part of this process, CSOs thought that what they learned in their engagement at the global level could be applied in the Southeast Asian sub-region. The sub-region, therefore, is viewed as another arena where the different issues and advocacies of these groups can receive a hearing and hopefully, impact on supranational and national policy-making. While it cannot be denied that regional engagement of CSOs of the ASEAN has intensified in the aftermath of the Asian financial crisis, it has to be pointed out that the regional grouping has been dealing with CSOs for more than three decades already. For this reason, the involvement of CSOs in ASEAN processes can be categorized into two periods restricted engagement period (1967-1990), increasing engagement period (1991 to present). These periods, however, should not be seen as airtight divisions as civil society activities in the first period overflow to the succeeding period. Restricted Engagement Period (1967- 1990) ASEANs first two decades of existence were almost entirely devoid of grassroots civil society participation, although it tried to ask for inputs from the business community in its different economic initiatives. In a way, one of the reasons for the lack of grassroots civil society involvement is ASEAN itself was not very institutionalized. Tay and Estanislao (2000) pointed out that from 1967 to 1976, ASEAN can be described as merely a letter box, since its functions and programs were determined and undertaken primarily by national governments. During the second period, from 1976 to 1992, the authors labeled ASEAN as a traveling circus because the Secretariat remained weak despite the Associations increasing number of activities in different fields. Hence, during these years, it should not come as a surprise why ASEAN remained to be unreachable for grassroot CSOs. Furthermore, during this period, ASEAN can be labeled as largely a club of dictators 5 and therefore very elitist in orientation. Human rights issues
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This term is borrowed from M.R. Sukhumbhand Paribatra, former Thai Member of Parliament and currently Governor of Bangkok. The phrase was cited in Carolina Hernandez (2008, 307), The ASEAN Charter and the Building of an ASEAN Security Community. Indonesian Quarterly, 36 (3-4).

were considered to be a taboo and people who forward such advocacy were arrested and detained. The relationship between national governments and grassroots civil society organization was very hostile. The only engagement of ASEAN during this period was with the business community. The business community has interacted with the ASEAN since the 1970s. The ASEAN Chamber of Commerce and Industry (ACCI), for example, serves as a vehicle through which businesses can have input on regional economic issues. ASEAN ACCI, it has to be noted, played an important role in the creation of AFTA. Increasing Engagement Period (1991 to present) ASEAN moved toward greater institutionalization as a response to the changed global and regional environments brought about by the end of the Cold War and the Asian financial crisis in the 1990s. Apart from these, ASEAN also had to deal with the intensification of globalization and regionalization (in other parts of the world) and the rise of emerging high-growth economies like China and India. The complex challenges which characterized this period also pushed ASEAN to ask for inputs from different groups to properly understand and respond to these challenges. Institutions like the ASEAN Institute of Strategic and International Studies (ASEAN-ISIS), for example, had been requested by ASEAN to provide inputs to ASEAN policies. ASEAN-ISIS is a Track 2 diplomacy composed of individuals and institutes from most of the Southeast Asian countries. 6 Since 1991, ASEAN-ISIS has met the members of the ASEAN Senior Official Meeting. It is also holding the annual ASEAN-ISIS Colloquium on Human Rights since 1993. Furthermore, ASEAN-ISIS spearheaded the formation of ASEAN Peoples Assembly (APA), the first of which was held in 2000. The vision of APA is to have an inclusive ASEAN, an ASEAN which goes beyond the elites and include all sectors of society. Furthermore, APA also aims to articulate the concerns of these sectors to decisionmakers as inputs to policy-making. Without a doubt, it was through APA that ASEAN and its member governments finally recognized peoples participation. APA is cited at the VAP and the ASEAN Security Community Plan of Action as a means to promote people-to-people contacts. Apart from ASEAN-ISIS activities, it must also be noted that the Working Group on ASEAN Human Rights Mechanism was established in this period to forward the cause of human rights protection and promotion in the region

ASEAN-ISIS members include the Brunei Darussalams Institute of Policy and Strategic Studies (BDIPSS), Cambodias Institute for Cooperation and Peace (CICP), Indonesias Centre for Strategic and International Studies (CSIS), Laos Institute for Foreign Affairs (IFA), Malaysias Institute for Strategic and International Studies (ISIS), the Philippines Institute for Strategic and Development Studies (ISDS), Singapores Institute of International Affairs (SIIA), Thailands Institute for Security and International Studies (ISIS), and Vietnams Diplomatic Academy of Vietnam (DAV), formerly Institute for International Relations (IIR).

As noted above, ASEANs recognition of the importance of the people in ASEAN processes only occurred in the aftermath of the Asian financial crisis. From that time on, ASEAN officials and events have never failed to reiterate this recognition. In the 4th ASEAN Informal Summit held in Singapore in November 2000, the Eminent Persons Group (EPG) declared that the peoples of ASEAN must themselves take ownership, of the ASEAN Vision 2020, and that ASEAN matters should not only be prerogative of governments, but also of businesses, the civil society, and ultimately the people (Report of the ASEAN Eminent Persons Group on Vision 2020: The Peoples ASEAN, 2000). This was also the keystone of the ASEAN Socio-Cultural Community established by Bali Concord II in 2003. In the Vientiane Action Program (VAP) ASEAN Socio-Cultural Community (ASCC) Plan of Action, CSOs are explicitly invited to act as agents for implementing the ASCC. The four elements of the Plan of Action where CSOs could play a role were: building a community of caring societies; managing the social impact of economic integration; enhancing environmental sustainability; and strengthening the foundation of regional social cohesion (Collins 2008). On the initiative of Malaysia, which served as head of the ASEAN Standing Committee in 2005, the first ASEAN Civil Society Conference (ACSC-1) was held. This conference brought more than 120 CSOs across the region to raise their issues and concerns to ASEAN officials. It was highlighted by the first ever 15-minute interface between ASEAN heads of states/governments and civil society representatives. It was also during the chairmanship of Malaysia that the Kuala Lumpur Declaration on the ASEAN Charter was adopted, with an encouragement of CSOs in the region to participate in crafting the regional groupings constitution. Not wanting to lose the momentum brought about by this initiative, the Solidarity for Southeast Asian Peoples Advocacies (SAPA) was established in 2006. SAPA is network of CSOs, trade unions, and grassroots organizations spearheaded by Focus on the Global South, the Asian Forum for Human Rights and Development (FORUM-ASIA), South East Asian Committee for Advocacy (SEACA), Third World Network (TWN), and the Asian Partnership for the Development of Human Resources in Rural Asia (AsiaDHRRA). It is an open platform for consultation, cooperation, and coordination between ASEAN social movements and civil society organizations including NGOs, peoples organizations, and trade unions that are engaged in action, advocacy, and lobbying at the level of intergovernmental processes and organizations (Rillorta 2007a, 15). SAPA has formed a specific Working Group on the ASEAN, whose primary advocacy is to make the people part of the ASEAN community-building process, particularly in the drafting of the Charter and its Blueprints. SAPA has also been in the forefront of the organization of 2nd, 3rd and 4th ACSC held in 2006, 2007, and 2009 respectively. Involvement of CSOs in SAARC Whereas ASEAN has been incrementally opening up spaces for civil society engagement, SAARC remains to be officially closed to such process. In the SAARC Summits and other regional meetings, there is still no space for representation of CSOs or at least, for the issues and concerns of the South Asian people to be heard. This comes as a surprise, especially as SAARC noted the 6

importance of interaction at the people-to-people level as early as 1987 - in the Katmandu Declaration issued on the 3rd SAARC Summit. That document recognized that academics, researchers, non-governmental organizations and others have an important role to play in promoting the SAARC spirit and giving impetus to regional programmes and projects. While SAARC remains to be relatively closed to official civil society engagement, this is not to deny its different initiatives to take the interests of the people into account since the mid-1990s. Broadly speaking, civil society involvement in SAARC can be divided into two periods: the restricted engagement period (1985-1996) and increasing engagement period (1997 to present). These periods, like the ones on ASEAN above, are not entirely independent of each other and are only employed here for discussion purposes. Restricted Engagement Period (1985-1996) This period covers the first decade of existence of SAARC. The seven (7) SAARC Summits held during the period addressed the most relevant issues and concerns for South Asian people. Given that political and security issues were (and continues to be) very sensitive due to the bilateral disputes in the sub-region, particularly the long-standing dispute between India and Pakistan, it appeared that SAARC had no choice but to discuss issues which fall in the economic and sociocultural realm. Some of the issues discussed in the Summits during this period include rights and welfare of the child, satisfaction of basic needs, population planning, environmental protection, human development and poverty alleviation. The seventh summit held in Dhaka in April 1993, where consensus on the eradication of poverty was arrived at, was significant because it also highlighted the importance of people-to-people contact. Specifically, the 7th SAARC declaration stressed the need to further promote people-to-people contact in order to ensure increased involvement of peoples of South Asia in the process of regional cooperation. As regards the issue of poverty, the Report of the Independent SAARC Commission on Poverty Alleviation also contained favorable references to the role of NGOs in poverty alleviation programmes across the region. Commenting on the recommendations of the report, Bhargava et.al (1995, 39) pointed out that the members of the Commission had a common understanding that with the declining role of the governments consequent to economic liberalization in the countries of the region, significant role would have to be played by labor organizations and NGOs in such activities as awareness generation, empowerment of underprivileged groups and in the implementation of development activities. The 7th SAARC Dhaka declaration was also important because South Asian leaders noted in this document that the formulation of guidelines and procedures for extending recognition to regional apex bodies would facilitate participation of these bodies in promoting regional cooperation at the people-to-people level. Such guidelines and procedures have already been drawn and implemented. All of the regional apex organizations recognized by SAARC, however, are professional organizations such as the SAARC Chamber of Commerce and Industry (recognized 7

1992), and SAARC Law (recognized 1994). To this day, the regional organizations attached to SAARC are limited to business and the professions such as doctors, architects, accountants, among others. While SAARCs policies remain to be restrictive as regards civil society participation, non-official dialogues involving intellectuals, journalists, parliamentarians, environmental activists, artists, writers, women and human rights groups thrived during this period. Furthermore, grassroots CSOs and social movements started conducting parallel Summits to the SAARC at about this time. As discussed below, the origins of Peoples SAARC can be traced to this period. The anniversary of SAARCs first decade of existence was marked by a declaration from South Asian leaders in the 8th SAARC Summit in 1995 that people-to-people contact has already been taking place through various fora within and outside the SAARC framework. This declaration made it clear, however, that the people-to-people contact that SAARC was referring to was facilitated mainly through SAARC Chamber of Commerce and Industry and SAARC Law. Grassroots South Asian CSOs, then and now, remain to be marginalized from SAARC processes. Increasing Engagement Period (1997 to present) The 9th SAARC Summit held in Male in 1997 was important in terms of civil society involvement in SAARC processes as this meeting called for the creation of the Group of Eminent Persons (GEP). This group, with the SAARC SecretaryGeneral as resource person, was tasked to undertake a comprehensive appraisal of SAARC, and identify measures including mechanisms to further vitalize and enhance the effectiveness of the Association in achieving its objectives. Furthermore, SAARC leaders declared that the GEP may develop a long-range vision and formulate a perspective plan of action including a SAARC Agenda for 2000 and Beyond which will spell out the target that can and must be achieved by the year 2020 (Male Declaration, 1997). The Group was mandated to report to the Heads of State or Government at the Tenth SAARC Summit. The GEPs report was very significant as it recommended the creation of the Social Charter. The Colombo Declaration of the 10 th SAARC Summit states: The Heads of State or Government reviewed the progress made in the social sector by SAARC and determined that, in order to increase effectiveness, it would be necessary to develop, beyond national plans of action, a regional dimension of action including a specific role for SAARC. In this context, they agreed that it would be necessary for SAARC to develop a Social Charter, which would focus on drawing up targets with a broad range to be achieved across the region in the areas of poverty eradication, population stabilization, the empowerment of women, youth mobilization, human resource development, the promotion of health and nutrition and the protection of children. The Heads of State or Government 8

further directed the Council of Ministers to initiate work on drawing up a Social Charter. Sri Lanka, which held the Chairmanship of SAARC during this period, requested the Marga Institute based in Colombo to prepare a concept paper on the Social Charter. The concept paper prepared by the said Institute recommended the conduct of broad-based consultations with civil society groups across the sub-region in order to get inputs from the grassroots on the contents of the Charter. This recommendation, however, was not taken up by SAARC officials. For this reason, the South Asia Center for Policy Studies (SACEPS), regional think tank where the Marga Institute is one of the founding members 7 , launched a process of civil society consultations in six countries in the sub-region in order to formulate a Citizens Social Charter to complement SAARCs initiative to come up with a Social Charter. SACEPS is an independent, non-profit making, regional, nongovernmental organization engaged in promoting policy dialogues, research and interaction between policy makers, business community and civil society by drawing in a wider constituency of people committed to promote regional cooperation in South Asia. In the next Summit held at Kathmandu in January 2002, South Asian leaders recognized the contribution of the GEP in evaluating SAARC and in drawing out a specific plan of action to better improve its performance. Furthermore, they also endorsed the report of the Council of Ministers on the implementation of the recommendations of the GEP Report 8 , and directed the same body to undertake a review of progress in this regard. This mandate from the leaders put the drafting of the Social Charter on top of SAARCs agenda. The 12th SAARC Summit held in Katmandu witnessed the signing of the Social Charter. This landmark document seeks to establish a people-centered framework for social development to build a culture of cooperation and partnership and to respond to the immediate needs of those who are most affected by human distress. States Parties are determined to meet this challenge and promote social development throughout the region. In relation to civil society participation, the Charter includes as one of its principles the promotion of participatory governance, human dignity, social justice and solidarity at the national, regional and international levels. Furthermore, on the operationalization of the Charters provisions, the National Coordination Committee in each country is also mandated to make it a transparent and broad-based participatory process (SAARC Social Charter 2004). The same participatory approach should also be adopted in implementation and evaluation of the Social Charter programmes under national plans of action. CSOs in the sub-region received a further push when South Asian heads of state and government directed the National Coordination Committees (NCCs) in the
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Other founding institutes of SACEPS include Centre for Policy Dialogue (CPD) Bangladesh, Research and Information System for the Non-aligned & other Developing Countries (RIS) India, Centre for Policy Research (CPR) India, Institute for Integrated Development Studies (IIDS) Nepal, Lahore University of Management Science (LUMS) Pakistan, and Institute for Policy Studies (IPS), Sri Lanka. 8 The GEP Report, however, was not accepted by the Council of Ministers in its entirety.

14th SAARC Summit held in 2007 to mobilize civil society organizations in driving forward the implementation of the Social Charter. In the latest Summit held at Colombo in August 2008, SAARC leaders moved a step further in transforming SAARC into becoming more people-centered when it directed its Council of Ministers to ensure that SAARC mechanisms identify further areas of cooperation where people-centric partnership projects could be initiated (Colombo Declaration 2008). Without a doubt, the adoption of the Social Charter and subsequent declarations of SAARC leaders about its implementation can be utilized by CSOs in the sub-region to demand involvement in the regional groupings institutions and processes. Certain segments of South Asian CSOs, however, pointed out the statecentric limitations of the Social Charter and how these would affect its effectiveness. For one, they claimed that no substantive changes in the socio-economic conditions of South Asian nations have occurred since the adoption of the Charter in 2004. For this reason, CSOs and social movements across the sub-region, on the initiative of the South Asia Alliance for Poverty Eradication (SAAPE), floated the idea of having a Peoples SAARC. The origins of Peoples SAARC can be traced as early as 1993, when representatives of CSOs and social movements, joined by peoples organizations of women, workers, peasant, fisher-folk, marginalized castes and social groups, ethnic, religious and linguistic minorities, students, and youth conducted parallel meetings with the SAARC Summit. During those meetings, the idea of having an alternative to SAARC was brought about. This idea finally became a reality with a decision to hold the very first Peoples SAARC at Kathmandu in March 2007 (Ahmed 2009). Its vision reads: People's Solidarity in South Asia must legitimately cherish the vision and perspective of a alternative political, social, economic and cultural system in the region which will do away with all distinctions and discriminations of gender, caste, religion, language and ethnicity; will lead to a situation free from exploitation and oppression, will inaugurate a climate in which each individual will have the opportunity, in concern with the collectivity, to realize the full development of her or his human potential; will restore the balance and harmony with nature, will liquidate the artificial and inhuman barriers that divide lands, collectivities and minds and transcend all boundaries. Such a South Asia must be the goal of the people of this region and of their solidarity (Peoples SAARC Concept Notes 2007) The second Peoples SAARC was held more than a year later at Colombo in July 2008. It came up with a 17-point goals and aspirations for consideration of the 15th SAARC Colombo Summit to be held more than a week later on August 2-3, 2008. More interestingly, this meeting forwarded the radical goal of a Peoples Union of South Asia, which appears to transcend the notion of nation-state and state sovereignty, and therefore contradictory to the nature of the official SAARC. Civil Society Engagement in Crafting and Implementing Regional Charters 10

Crafting the ASEAN Charter and the Role of SAPA The concept of an ASEAN Charter is not something new 9 , although ASEANs ardent desire to come up with a charter is relatively recent. It can be traced in November 2004, when the Charter was listed as one of the Associations goals in the Vientiane Action Programme (VAP). This document acknowledges the importance of a charter in strengthening ASEAN, and consequently, in realizing the ASEAN Community. One year after, the ASEAN leaders signed during the Kuala Lumpur Summit the Declaration on the Establishment of the ASEAN Charter, creating an Eminent Persons Group (EPG) to make bold, innovative, and visionary recommendations on the Charter. This declaration also formed the High Level Task Force (HLTF) to do the actual drafting. In January 2007, the leaders came up with the Cebu Declaration on the Blueprint of the ASEAN Charter, endorsing the EPG Report and directing the HLTF to begin drafting the Charter. From February to October 2007, the members of the HLTF conducted thirteen meetings (13), apart from their consultations with ASEAN senior officials, parliamentarians and members of the civil society. In November 2007, all the ASEAN Heads of State and Government signed the Charter at the 13 th ASEAN Summit in Singapore. Immediately after its approval, the ratification process in all the ten ASEAN member-states was set into place. All the ten ASEAN member countries had already ratified the Charter. The Charter has entered into force in December 2008. Recognizing the importance of the ASEAN Charter, the SAPA Working Group on the ASEAN utilized all political spaces to influence its provisions. It made submissions to the EPG on the ASEAN Charter on three occasions: Security Cooperation (April 17, 2006 Bali Indonesia), Economic Cooperation (June 28, 2006 - Singapore) and Socio-Cultural Cooperation (November 10, 2006 Philippines). The submissions on security and economic cooperation were received by the EPG as a group. As regards the submission on socio-cultural cooperation, since EPG no longer conducted a regional consultation, the Working Group just made their submission through former President Fidel V. Ramos, the Philippine representative to the EPG, and Ambassador Rosario G. Manalo, Ramoss EPG assistant. These SAPA submissions, it must be noted, were products of the national processes conducted from 2006 to 2007. These processes were held in the BurmaThailand border, Cambodia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. These processes were envisioned to be fora for discussion and learning on the concept of authentic regionalism and its possibilities in the ASEAN; of civil society engagement with the ASEAN on the country level; on the advocacies for pro-poor ASEAN policies and development agenda; and to elicit civil society inputs on the ASEAN Charter framework (SEACA 2007: 3). The key principles of SAPAs recommendations on the political and security pillars include: a broader definition and reference to security; an introduction of human security; a more conducive political environment for peace, security and
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The Philippines first proposed a charter for ASEAN in 1974, although the initiative did not take off the ground.

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stability; a process of harmonizing instruments and norms with international norms and standards; and a clear definition of ASEAN key stakeholders, which should include civil society groups across the region (SAPA Submission to the EPG on Security Cooperation 2006). On the economic pillar, SAPAs submission highlighted the following principles: economic integration; financial and monetary stability; regional harmonization and complementation in industry, agriculture and services; human resources; labor rights; harmonizing existing norms and mechanisms to address transboundary economic concerns; increased support to small-scale producers to build their potential, sustainable production and consumption; energy and development; implementation, monitoring, and mechanisms for adherence; and social dialogue (SAPA Submission to the EPG on Economic Cooperation 2006). Finally, on the socio-cultural pillar, the ten principles that SAPA recommended for inclusion are: adherence to international norms; harmony and cultural diversity; entitlements and freedoms; environmental sustainability; rights to shared resources; recognition and protection of migrants; womens socio-cultural rights; protection of the rights and the development of full potentials of children and youth; role of a free, independent and plural media; and appropriate and peoplecentered science and technology development (SAPA Submission to the EPG on Socio-Cultural Cooperation 2006). On November 26, 2006, SAPA made another submission to the EPG reiterating the main elements of the previous submissions on the three pillars. That submission identified the seven key points that SAPA wanted to include in the Charter: regional recognition of human rights and human dignity as foundation of the community; introduction of human security; regional harmonization and complementation in industry, agriculture and services; sustainable production and consumption, energy and development; environmental sustainability; institutional mechanisms for responsive regionalism; and securing a process for the ASEAN Charter (SAPA Reiteration of Civil Society Views on the ASEAN Charter 2006). The EPG submitted its report on the occasion of the 13 th Summit in Cebu City, the Philippines on January 2007. This report was subsequently endorsed by ASEAN leaders for consideration of the HLTF tasked to draft the actual provisions of the Charter. According to Corinna Lopa, they were generally satisfied with the EPG report. They were quite certain from the start; however, that the bold and forward-looking recommendations of the EPG would be watered down by the HLTF due to the latters bureaucratic composition. 10 Nonetheless, they still participated in the only regional consultation held by the HLTF in March 2007 at Manila. Apart from this meeting, some individual members of the HLTF also conducted national consultations in their respective countries. These only happened in Indonesia, the Philippines and Thailand. In majority of the Southeast Asian countries, however, no such consultations occurred.
10

Corinna Lopa, Regional Coordinator of the South East Asian Committee for Advocacy (SEACA), interview with the author, January 30, 2009, handwritten notes.

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For this reason, it should not come as a surprise that the draft charter prepared by the HLTF failed to incorporate many of the principles enunciated by SAPA in their EPG submissions. 11 This, however, did not deter SAPA members from further engaging the ASEAN. As noted above, the members of SAPA expected that HLTF would not be that progressive in crafting the provisions of the Charter. They were also realistic enough to know that the best that they can expect from ASEAN would be incremental change. 12 This position, it must be noted, was different from some individuals who are part of ASEAN-ISIS, who expressed openly their reservation on the ratification of the ASEAN Charter. 13 In the Statement of the 2nd ASEAN Civil Society Conference held in Cebu City, the Philippines, SAPA called for the creation of the Peoples Charter that embodies the rights, interests and aspirations of all peoples in the ASEAN region. This was subsequently reaffirmed in the 3rd ASEAN Civil Society Conference in Singapore, stating CSOs commitment work for the creation of a just, peoplecentered, caring and sharing ASEAN Community that shall be enshrined in an ASEAN Peoples Charter. This Conference also launched the process of drafting the Peoples Charter which is envisioned to embody the shared values and collective aspirations of the Southeast Asian people. More importantly, it is viewed to be a consensus document and reference point for a future amendment campaign. This explains why this process was envisioned to have a five-year time frame (20082013), as by 2013, the ASEAN Charter would already be open for amendments. To this end, SAPA held a meeting in Bangkok on February 1, 2008 to discuss the regional and national initiatives that must be put in place in line with the formulation of the Peoples Charter. The meeting also strategized on how the regional network would engage the ASEAN on the crafting of the ASEAN Political and Security Community (APSC) and ASCC Blueprints. Three days after the meeting, they held a dialogue with ASEAN Secretary General Surin Pitsuwan who expressed openness on engaging civil society on the following areas: migration, environment, Burma, internally displaced persons, child soldiers and the ASEAN Socio-Cultural Blueprint, among others. A month after, on March 5, 2008, SAPA also met with senior staff members, including the Special Assistant to the ASEAN Secretary-General/Political Officer at the ASEAN Secretariat in Jakarta to explore windows of ASEAN engagement of civil society and laid down civil society plans for engaging the ASEAN. In May 2008, national processes pertaining to the ASEAN Peoples Charter and Community Blueprints were launched in Cambodia, Indonesia, Malaysia, the Philippines, and Singapore. These processes aim to: 1) introduce the ASEAN Charter and SAPAs critique of the Charter, as well as the three Community Blueprints; 2) to develop civil society inputs for the blueprints of ASEAN political
11 12

For a detailed discussion, see SAPAs Analysis of the ASEAN Charter (2007). This, however, is different from the public positioning of SAPA on the ASEAN Charter. Publicly, they signified their opposition to the Charter. Among themselves, they think they can work with it. 13 Herman Joseph Kraft, Executive Director, Institute for Strategic and Development Studies (ISDS), interview with the author, February 9, 2009, handwritten notes.

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security community and socio-cultural community; and 3) if possible, develop an action plan of civil society organizations at the national level on the engagement with their respective governments ASEAN departments. As regards the results of these initiatives, it was pointed out that there was a need to build a popular campaign (national and sub-regional) beyond the processes that were already conducted. On the Blueprint, no substantial policy proposals came out of the exercise. It was also noted that the drafting of Political Security and Socio-Cultural Community Blueprints was generally a closed process that did not provide spaces for civil society engagement. SAPA was also active in engaging the High Level Panel (HLP) which just submitted the terms of reference for the ASEAN Human Rights Body. 14 Crafting and Monitoring the Implementation of SAARCs Social Charter and the Role of SACEPS The importance of the Social Charter in South Asia cannot be overemphasized. South Asia, home to about one-fourth of the worlds population, is characterized by severe poverty. This poverty, it must be noted, is both a cause and result of sociopolitical tensions, armed insurgencies, gender discrimination and violence against women, worst forms of child labor and appalling inequalities of all forms (SAAPE Website). Among SAARC member-states, at least five countries are grouped by the UN in the category of least developed countries (LDC) namely Bangladesh, Bhutan, Maldives, Nepal and SAARCs newest member, Afghanistan. The three other members India, Pakistan and Sri Lanka - while not part of the UNs LDC list, are also not developed either. As discussed above, the concept of the Social Charter was first mentioned in the Colombo Declaration of the 1998 SAARC Summit. The Charter was adopted six years later, in the 12th SAARC Summit in 2004, as the Summit meetings were disrupted for more than four years due to the Kargil war. The adopted Social Charter covered issues such as poverty alleviation, population stabilization, empowerment of women, youth mobilization, human resource development, promotion of health and nutrition, and protection of children. The crafting of the SAARC Social Charter, however, was generally closed to civil society participation. While Sri Lankas Ministry of Foreign Affairs tapped a research institute to come up with a concept paper on the Charter, the institutes key recommendation of conducting broad and participatory consultations with civil society groups in all member-countries was unheeded by SAARC officials. SAARCs failure to let CSOs participate in the crafting of the Social Charter led SACEPS to formulate the so-called Citizens Social Charter. SACEPS commenced the Citizens Social Charter Process by establishing a Task Force to conduct consultations with CSOs in each SAARC country.
14

This discussion on recent SAPA initiatives were largely drawn from the plenary presentation of SEACAs Corinna Lopa, ASEAN Peoples Charter and the Three Pillars of Cooperation, 4 th ASEAN Civil Society Conference (ACSC 4), Bangkok, Thailand, 22 February 2009.

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Accordingly, meetings with CSOs in Bangladesh, India, Maldives, Nepal, Sri Lanka and Pakistan were held under the auspices of SACEPS. The consultations were described to be an open, inclusive, participatory process which involved civil society, academic and research institutions, and other segments of the society. Furthermore, (t)here was a strong feeling that the civil society consultation should be able to project their expectations before the national leaders of SAARC and their responsibilities in resolving social concerns spelt out, so that the leaders could then be held accountable for implementing their commitments under the Charter. (Sobhan and Rahmatullah 2003, 15). Based on the result of these national consultations, the CSOs in each country drafted a National Citizens Social Charter based on a set of guidelines given by SACEPS. The Task Force, through its Convenor, consolidated these national charters into a first draft of the South Asia Citizens Social Charter. This draft was then presented in a symposium where an eminent group of citizens from CSOs across the region took part, including Nobel Prize winner Amartya Sen. Revisions to the draft were made based on the recommendations of the participants in the symposium. The revised draft was presented again in the CSOs in each country for comments. The final version of the Charter was afterwards written, taking the comments on national CSOs on the revised draft into account. The Citizen Social Charter is viewed as complementary to the official SAARC Social Charter. However, the two charters also have significant similarities and differences. As regards the similarities, both charters have dealt with issues like poverty, women, children, youth, and human resource development. The Citizen's Charter, however, has dealt with social integration and good governance, areas not addressed by the SAARC charter. In turn, the later has covered areas like health, education and drugde addiction which the citizen's charter did not consider. 15 At present, one of the on-going projects of SACEPS is the monitoring of Citizens Social Charters implementation in five SAARC countries. The project hopes to examine the common elements of the Charter and monitor its implementation in the following sectors: eradication of poverty; empowerment of women and promotion of their well-being; the rights and well-being of children; the rights and well-being of youth; development and utilization of human resources; environmental degradation and ecological imbalances; protection of aged population; and social integration and good governance (SACEPS Website). SACEPS Board Members also attended a number of meetings and fora on the contents of the Charter and its implementation, not to mention the reports and papers that it published on the topic. Beyond the Social Charter, SACEPS engaged the SAARC by conducting an Annual Audit of SAARC's policy/programs. This audit reviews the past commitments made by SAARC in its treaties and declarations, identifies what has been achieved and what parts of the commitments are still pending, and enumerates the decisions that need to be taken to carry out these obligations. Copies of the audit,
15

This is based from the news account of the speech given by the SACEPS Task Force Convenor on the Citizen Social Charter. Cited from http://www.thedailystar.net/2004/03/01/d4030101099.htm.

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in the form of annual report, are presented to member governments, civil society and the members of the media prior to the SAARC Summit with the hope that these would be incorporated, or at least considered, in the SAARC process. In the last two summits held in New Delhi and Colombo, SACEPS even made separate recommendations for consideration of SAARC leaders. Political Opportunities Facilitating the Engagement with the ASEAN and SAARC In both Southeast Asia and South Asia, global and regional developments presented political opportunities which have been seized by SAPA and SACEPS to influence the crafting and implementation of regional policies. In some instances, political opportunities themselves have been made in order to facilitate civil society engagement of ASEAN and SAARC. Political opportunity structures pertain to consistent but not necessarily formal or permanent dimensions of the political environment that provide incentives for people to undertake collective action by affecting their expectations for success or failure (Tarrow 1994, 85). Goldstone and Tilly, (2001, quoted in Jenkins and Form 2005, 337) also refer to them as the probability that social protest actions will lead to success in achieving a desired outcome. These structures deal with changes in political environment that provide incentive for undertaking collective action. They can be structural or dynamic. Structural opportunities, such as state strength, refer to stable aspects of institutional structure (that) shape the differences in movement formation and strategy (Tarrow 1994, 89). From the standpoint of social movements, these aspects are essentially fixed and given, barring dramatic and unforeseen changes beyond their control (Gamson and Meyer 1996, 277). Dynamic opportunities, on the other hand, pertain to the immediate institutional environment which may be relatively volatile, shifting with events, policies and political actors (Gamson and Meyer 1996, 277). They include four dimensions: opening up of access to participation; instability of ruling alignments; availability of influential allies; and cleavages within and among elites (Tarrow 1994). With regard to increasing access to participation, two points need to be emphasized: 1) even partial opening can provide an incentive to participate; and 2) there is a danger that groups which seek to expand opportunities may find themselves cut off from their base. Political instability is also another incentive for collective action as this creates uncertainty among supporters, encourage challengers to try to exercise marginal power and may induce elites to compete for support from outside the polity (Tarrow 1994, 87). The presence of available allies is another encouragement for collective action as it increases the probability of success. Tarrow (1994, 88) noted that (c)hallengers are encouraged to take collective action when they have allies who can act as friends in court, as guarantors against repression or as acceptable negotiators. For resource-deficient groups, allies are an external resource that can be depended upon. The last dimension pertains to divisions of the elites, which not only encourages collective action but also pushes the disaffected elites to seek support from outsiders or to assume the role of tribunes of the people. 16

Political opportunities can also be expanded by civil society groups. As what Khagram et.al noted (quoted in Encarnacion Tadem 2008, 45), political opportunities are not only perceived and taken advantage of by social movements they are also created. Tarrow (1994, 52) pointed out that groups create opportunities for themselves and for others by diffusing collective action through social networks and by forming coalitions of social actors; by creating political space for kindred movements and counter-movements; and by creating incentives for elites to respond. As regards diffusing opportunities, it is claimed that collective action of one group can expand the opportunities of other groups. According to Tarrow (1994, 96), this happens when early risers make claims on elites that can be used by those with less daring and fewer resources. Furthermore, collective action exposes opponents point of weakness that may not be evident until they are challenged. Collective action, however, not only creates opportunities for groups and their allies, it also creates opportunities for opponents. For example, (m)ovements that make extreme policy demands can be outmaneuvered by groups that pose the same claim in more acceptable form (Tarrow 1994, 97). This is what is meant by the statement that collective action by one social movement can generate a countermovement. Finally, collective action also creates opportunities for the elites, both in the negative and the positive sense. Collection action can either result in repressive actions of the elites or in a situation wherein disillusioned elites proclaim themselves as representatives of the people. In Southeast Asia, a confluence of events in the 1990s and in recent years led to changes in the political environment where CSOs operate. The end of the Cold War, intensifying globalization, increasing regionalism in other parts of the world, the expansion of ASEAN membership to include Cambodia, Myanmar, Laos and Vietnam (CMLV), and the rise of transnational and non-traditional security threats were just some of the events which led ASEAN to move for greater institutionalization. This action was further reinforced by the 1997 financial crisis. The financial crisis which swept the region exposed the increasing mobility (and therefore volatility) of international capital movements due to information and communication technology and the liberalized policies of the states. The crisis also supposedly put to an end the East Asian economic miracle, which, consequently, cast doubt on the viability of ASEAN. ASEAN was blamed for failing to predict the crisis and for failing to mitigate its effects when it struck. While there were questions on what ASEAN could realistically do given the multifaceted nature of the crisis, it nonetheless responded by engaging East Asian countries through ASEAN + 3 and by accelerating the implementation of the AFTA. Without a doubt, the crisis contributed immensely on the decision of ASEAN to build an open, dynamic and resilient ASEAN Community and consequently, to recognize the possible contributions of the Southeast Asian people, particularly CSOs in the process. Alternatively, the increasing clout of ASEAN in regional affairs attracted the attention of CSOs in the sub-region which used to think that ASEAN is too weak to really matter and therefore carried their advocacies in other arenas such as the UN, IMF or the WTO. 17

Apart from the adoption of Vision 2020 which sought to make ASEAN a community of caring societies, succeeding declarations and agreements of the regional grouping further opened up access to participation of CSOs. The Declaration of ASEAN (Bali) Concord II, building on the objectives set by Vision 2020, envisions the creation of an ASEAN Community based on the three interrelated and mutually reinforcing pillars of political and security cooperation, economic cooperation, and socio-cultural cooperation. As a framework to achieve the ASEAN Community, the ASEAN Security Community (ASC) 16, the ASEAN Economic Community (AEC) and the ASEAN Socio-Cultural Community (ASCC) would be established. In the 2004 VAP, concrete measures were identified to implement Bali Concord II. As noted above, it was in this document that CSOs were tasked to assist in the realization of ASCC. The 11th ASEAN Summit held in Malaysia in 2005 further enlarged the political space for civil society participation for two reasons. First, the Summit was held parallel to the 1st ASEAN Civil Society Conference where the first ever 15minute interface between ASEAN heads of state/government and CSOs took place. Second, that Summit also came up with a declaration stating the desire of ASEAN leaders to establish an ASEAN Charter. For this purpose, an EPG was established to provide bold and forward-looking recommendations on the contents of the Charter. The drafting of the Charter is another avenue for CSOs to participate in ASEAN community-building process. As noted by Joy Chavez of Focus on the Global South, the Charter-making process was a clear target for the CSOs.17 It cannot be denied that this process was the primary impetus for the establishment of SAPA. SAPA was formally established in a regional consultation held in Bangkok Thailand in February 2006. This consultation was attended by more than 50 participants representing about 30 CSOs from the region. At present, more than 70 CSOs in both the national and regional level are part of SAPA. SAPA has created a specific Working Group on ASEAN in order to engage the regional grouping in drafting the ASEAN Charter. SAPAs engagement with the ASEAN was also brought about by the presence of a number of allies among ASEAN leaders and officials. On the EPG, SAPA noted the contributions of Fidel Ramos of the Philippines and Ali Alatas of Indonesia. As noted above, SAPA submitted its recommendations on the ASCC to Ramos as the EPG no longer conducted another civil society consultation for the socio-cultural pillar. The late Ali Alatas, on the other hand, has been a good friend of a number of SAPA officials since his stint as Indonesian foreign minister. Former Ambassador Rosario Manalo, who headed the HLTF during the most critical stages of the drafting process, was also a key ally of SAPA. Despite her
16 17

This is now called ASEAN Political Security Community (APSC). Jenina Joy Chavez, Coordinator, Focus on the Global South Philippine Programme, interview with the author, March 4, 2009, handwritten notes.

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strong posturing in relation to civil society, CSOs in the region have a long relationship with her since her stint in the UN. Behind the scenes, it was said that former Ambassador Manalo conducted informal conversations with civil society representatives to ask for their inputs to the Charter. On the related issues of Burma and human rights, SAPA found an unexpected ally in the persons of President Gloria Arroyo. President Arroyo, it must be remembered, even issued a statement saying that it may be hard to have the ASEAN Charter ratified in the Philippines because of Burmas rampant violation of human rights at the height of the saffron revolution. From Thailand, SAPAs allies include Prime Minister Abhisit Vejjajiva, Ministry of Foreign Affairs Kasit Piromya, and ASEAN Secretary-General Surin Pitsuwan. As the current chair of ASEAN, Prime Minister Vejjajiva extended significant support for CSOs activities, including engagement with the ASEAN. In the interface between ASEAN leaders and civil society representatives on the occasion of the 14th ASEAN Summit, the Thai Prime Minister performed an unprecedented act of meeting the representatives from Burma and Laos who were either refused entry or decided not to participate for fear of retribution from their governments. The Thai leader was the only one among the ASEAN leaders who decided to do so, despite appeals from civil society representatives during the interface for ASEAN leaders to be in solidarity with their Burmese and Laotian counterparts. During the meeting, he was joined by the Foreign Affairs Minister Kasit Piromya. It must also be noted that Minister Kasit also participated in the 4 th ASEAN Civil Society Conference held on February 22, 2009 at Chulalongkorn University. It that conference, he was joined by ASEAN Secretary-General Surin, who, as pointed out above, met with SAPA during its meeting in Bangkok for the ASEAN Peoples Charter. Apart from Secretary-General Surin, a number of senior officials in the ASEAN Secretariat also have good relations with SAPA. On instability in ruling alignments and cleavages within and among the elites, it may be said that the rotating leadership of ASEAN and the policy differences between the democratic and less democratic ASEAN countries also contributed to the vibrancy of SAPA. On the rotating leadership, it must be noted that ASEAN is known for one-upmanship, wherein the Chair of the Standing Committee is expected to come up with initiatives that would define his/her countrys chairmanship. This was precisely what happened in the 1st and in the 4th ACSC conferences. In both instances, the leader of the ASEAN chair country provided substantial financial support and encouragement to these conferences, as they were viewed as part of the legacy of their leadership. The division between the democratic and less democratic countries in the region also opened up spaces for civil society participation. Countries like Indonesia, Philippines, Thailand and to a lesser extent, Malaysia are known to be more supportive of CSOs compared to the other countries in the region. In the case of SAPA, their relative success may also be attributed to the fact that the past and present chair countries of ASEAN namely Malaysia, Philippines and Thailand are relatively sympathetic to the cause of CSOs in general. 19

SAPA, undoubtedly, also benefited from the expanded political opportunities resulting from the activities of ASEAN-ISIS and other networks such as the Regional Working Group for an ASEAN Human Rights Mechanism. ASEAN-ISIS, in particular, can be considered as an early riser which paved the way for the democratic opening of the ASEAN. This networks practice of Track 2 diplomacy served as a confidence-building mechanism between two previously hostile groups the ASEAN elites and CSOs. The increased confidence between the two camps was successfully tapped by the likes of the Regional Working Group, which, in turn, became one of SAPAs models for successful engagement. Developments in Southeast Asia also impacted on the dynamics of regionalization in South Asia. While the Asian financial crisis did not affect South Asia directly, the repercussions of the crisis on the ASEAN were observed with great interest by SAARC leaders. As discussed above, the crisis resulted in ASEANs adoption of Vision 2020, which essentially shows Southeast Asian leaders desire for greater political, economic and socio-cultural cooperation in order to weather the crisis and regain the groupings international prestige. Fearing either the growing regionalism in Southeast Asia or the possible spread of the crisis to the South Asian subcontinent, SAARC decided to take stock of what it had accomplished and to chart its future direction. The Group of Eminent Persons (GEP), which was created for these tasks, delivered an honest and forward-looking report which identified the ways forward for SAARC. While the report was never implemented in its entirely, many of its provisions were adopted by SAARC, including the creation of the Social Charter. The impacts of globalization made the need for a Social Charter more glaring. Problems like widespread poverty, increasing rates of malnutrition and female illiteracy, trafficking of women and children, increasing unemployment, depletion of natural resources, among others, which have been connected to globalization directly or indirectly, gave a sense of urgency for the creation of the Charter. As noted above, the proposed Social Charter is envisioned to address a broad range of issues including poverty alleviation, health, education, human development and youth mobilization, promotion of the status of women, promotion of the rights and well-being of children, population stabilization, drug de-addiction, rehabilitation and integration, among others. For this reason, the SAARC leaders announcement of their desire to craft a Social Charter, apart from their directive that the process should include broad-based national consultations, attracted the attention of CSOs immediately. In the case of SACEPS, therefore, SAARCs decision to craft a Social Charter is a political opening which must not be left to pass. As noted by Ahmed (2009), by committing themselves to the Social Charter, SAARC leaders, wittingly or unwittingly, accepted regional integration as a goal. Regional integration, in turn, entails civil society involvement in regional decision-making and processes. For this reason, when SAARC ignored its recommendation to involve CSOs in the process, SACEPS decided to conduct a parallel process where CSOs in SAARC countries can input their contributions. The result of this process was then used as a base document to engage the drafting of the official SAARC Social Charter. This is 20

a clear case of CSOs creating political opportunities when there were none. By coming up with a Citizen Social Charter, SACEPS pushed SAARC elites to respond by hastening the drafting of the official Social Charter. Knowing that there is already a social charter which was a product of broad-based civil society consultations, the elites responded by ensuring that the official SAARC Social Charter include inputs from the unofficial social charter. It is important to note that Citizen Social Charter was eventually submitted to the SAARC Secretariat as an input to the official deliberations and finalization of the SAARC Social Charter. Another interesting point was that Dr. Godfrey Gunatileke, who was officially asked by SAARC Council of Ministers to draft the concept paper for the SAARC Social Charter, also served as Convenor of SACEPS Task Force on the Citizen Social Charter. For this reason, the Citizen Social Charter which came out of the process was complementary to the official Social Charter. At least on the issue of the Social Charter, other political opportunities available for CSOs in Southeast Asia have not been available for South Asian CSOs. For one, there were no South Asian counterparts to the likes of Fidel Ramos, Rosario Manalo, Abhisit Vejjajiva, Kasit Piromya, among others. While there were serious divisions among SAARC member-states, particularly between India and Pakistan, these did not lead to the opening of political opportunities for CSO participation. SAARC, while it is slowly opening up, remains to be purely intergovernmental in its processes and institutions. Framing the CSOs Engagement with the ASEAN and SAARC While political opportunity structures are important for explaining collective action, civil society groups and social movements must also be concerned on formulating collective action frames that dignify and justify their action. Tarrow (1994, 122) noted out that these frames serve as accentuating devices that either underscore and embellish the seriousness and injustice of a social condition or redefine as unjust and immoral what was previously seen as unfortunate but perhaps tolerable Similarly, Khagram et. al (quoted in Encarnacion Tadem 2008, 45) stated that movements help to create and recreate meanings through framing or the strategic efforts by groups of people to fashion shared understandings of the world and of themselves that legitimate and motivate collective action. Frames, therefore, are used by CSO and movement leaders to externalize blame by attributing grievances to the mutable policies and practices of institutional elites, and they propose concrete social changes to alleviate these problems (Jenkins and Form 2005, 339) The formulation of these frames depends on the actors in the struggle, the opponents that they face and on their access to broader public through the forms of collective action they employ and the political opportunities they exploit (Tarrow 1994, 134). Collective action frames must also be considered in conjunction with ideology and consequently with strategies and tactics. As noted by Jenkins and Form (2005, 341), framing is best understood as a central component of ideological work that links grievance claims to broader movement goals as well as to specific strategies and tactics. Also, frames, once formulated and successfully employed, can also be imported into the messages of other movements. 21

Broadly speaking, both SAPA and SACEPS framed their engagement in the ASEAN Charter and SAARC Social Charter in terms of forging a more accountable, transparent and participatory governance at the regional level. Critical of the statecentered and elite-driven nature of both ASEAN and SAARC, these regional networks advocated greater peoples participation in decisions that affect their lives. Given the widespread poverty in South Asia and the rationale of the Social Charter, SACEPS also framed the issue in terms of social development and good governance. In the case of SAPA, the group forwarded two objectives on why it engaged the ASEAN Charter process: 1) to cultivate ASEAN as a people-centered organization and 2) to strengthen the sense of ownership and belonging among its people, including enhancing the participation of and interaction among Parliamentarians, NGOs, and civil societies of its member states. Through its inputs in the ASEAN Charter, SAPA envisioned an ASEAN that recognizes universally accepted rights and standards, addresses transboundary economic, social, and environmental conflicts in a peaceful, just and effective manner, and upholds peoples participation (Nuera 2007, 13). SAPAs engagement with the ASEAN Charter process was framed in terms of making ASEAN more democratic and accountable, more effective and more people-centered. It considers engagement both as a right of citizens of the ASEAN region and an obligation to the region as well (Nuera 2007, 13). This framing can be best observed in the themes of the civil society conferences which SAPA spearheaded. In the 2nd ACSC held in December 2006 in Cebu City, the theme was Creating a Caring and Sharing Community: Enhancing Peoples Participation in Governance and Development. When Singapore hosted the 3rd ACSC, it adopted the theme, Moving Forward: Building an ASEAN Peoples Agenda. The 4th ACSC held in February 2009 in Bangkok adopted the theme Advancing a Peoples ASEAN. In all the three conferences where SAPA served as part of the organizing committee, the common threads which bind the themes are the enhancement of peoples participation in ASEAN institutions and processes and building an ASEAN that truly and effectively responds to the genuine aspirations of the people in the region. These two threads, it must be noted are intricately related, as they are based on the democratic assumption that what is to the interest of the people can be best gauged by the people themselves. Hence, an ASEAN that is not democratic and accountable cannot effectively respond to the true needs and aspirations of the Southeast Asian people. The framing of the issue in terms of forging a more people-centered ASEAN, both in processes and results, also affected SAPAs strategies, tactics, and arguably its ideological positioning. While both Corinna Lopa and Joy Chavez denied compromising their issues and concerns in the course of their engagement, they also admitted that their actions have also been shaped by ASEANs nature. Recognizing ASEANs traditional enmity with civil society participation, Lopa said that they learned to tone down their delivery of issues. On the part of Chavez, while her group Focus on the Global Souths advocacy has always been deglobalization, such term was never used in SAPA engagement of the ASEAN. Given ASEANs 22

liberal and capitalist character, SAPAs organizers knew that such advocacy would not fly. SACEPS, on the other hand, initiated a parallel Citizen Charter process because of the lack of spaces for engagement in the crafting of the official SAARC Social Charter. As noted by Behera (2008, 29), The intergovernmental process for preparing the SAARC Social Charter moved at its own pace with little involvement or dissemination about it among the civil society organizations. It failed to receive national and regional inputs because the SAARC Secretariat had not mandated it nor had enough resources to play a proactive role in mobilizing member states and civil society in the preparation of the Social Charter. The Citizen Social Charter, however, is not envisioned to be an alternative to the official Social Charter. The former was envisioned to be a framework document for engagement with the SAARC official process, as well as for dialogue with other civil society organizations in South Asia. By drawing up a Citizen Social Charter parallel with the official SAARC Social Charter, SACEPS conveyed the message that the crafting of this important document cannot be left in the bureaucrats hands, that the peoples perspectives on the issues which involve them are important to make the document relevant and effective. Given SAARCs and its member-countries lackluster record in terms of implementations of regional agreements, SACEPS also made it clear that civil society participation should be encouraged not only in the drafting process, but also in implementation and monitoring as well. Civil societys role in the drafting, implementation and monitoring of both the Citizen Social Charter and the SAARC Social Charter is critical in giving flesh to the document. This perspective is also linked to the issue good governance and social development (or more correctly, the lack of it) in South Asia. The widespread poverty and marginalization in the sub-region, in a way, is a testament that SAARC and national officials cannot address these problems alone. They need CSOs in order to foster good governance and consequently, social development The way SAPA and SACEPS framed the issue has been quite effective for two reasons. First, as discussed above, ASEAN and SAARC, then and now, have been perceived as an elitist association, a grouping that is primarily run by foreign and economic ministers. In the case of ASEAN, the peoples alienation from the grouping can be seen in the fact that to this day, there remains much misunderstanding about what ASEAN is and how it does things, what it has been meant to be and do, what it has done and what it has failed to do, what it can and cannot do, and the promise of what it could yet become and accomplish (Severino 2007, xii). Given the complex global and regional challenges that ASEAN face, the claim that the regional grouping can no longer remain to be alienated from the people attracts the attention not only of people in the region but of Western countries as well. This has positive impacts for funding of CSOs as discussed below. SAARC, on the other hand, is much guiltier of being state-centered and elite-driven. As noted above, there is still a narrow political space for civil society participation in SAARC processes and institutions. This space, however, has been 23

increasing due to the adoption of the Social Charter and greater openness on the part of SAARC leaders to receive inputs from civil society. Second, the call for a more democratic, accountable and people-centered ASEAN is based on the declarations that ASEAN leaders themselves made. Hence, this advocacy is just a way to make the leaders accountable for the promises and commitments that they themselves said. As discussed above, a number of ASEAN documents such as the Vision 2020, Bali Concord II, Vientiane Action Program, the EPG Report on the ASEAN Charter, among others, recognize the importance of involving the people in ASEAN institutions and processes. The same can be said with regard to SAARC. SAARC, in its recent declarations, has also recognized the importance of involving the people in the process, particularly in realizing the goals of the Social Charter. Unfortunately, these declarations are usually nothing but rhetoric, and SAARC bureaucrats and national officials do not usually translate these democratic principles into practice. Nonetheless, these commitments of South Asian leaders in recent SAARC Summits can be used as rallying points to truly make the regional grouping more democratic in its principles and practices. Mobilizing Resources for Effective Engagement of the ASEAN and SAARC Mobilization deals with the resources that are available for social movements to mobilize (Tarrow 1994). Resources include any capacity for carrying out collective action, ranging from tangible resources (money, space, publicity) to people resources (leadership, expertise, access to networks and decision makers, volunteer time and commitment) and societal resources (social status, legitimacy and name and issue recognition (Freeman 1979, quoted in Jenkins and Form 2005, 337). It also takes into consideration that actors and their allies and targets differ in terms of resources they command, their preparedness to make resources available and their ability to use these resource effectively (Klandermass and Staggnborg 2002, quoted in Encarnacion Tadem 2008, 45). One increasingly important resource is the mass media, which is used by CSOs and social movements to transmit messages and encourage others to follow their example or to take sympathetic notice of their claims. (Tarrow 1994, 143-144). The increasing regional prestige of SAPA and SACEPS are also due to its ability to mobilize grassroots civil society organizations in a number of countries in the region. As regards the ASEAN Charter process, SAPA network conducted national processes in most of the countries in the sub-region to get a sense of the issues and concerns that the people want to bring in the Charter. The same process has been done again in connection with the move to come up with a Peoples Charter. SACEPS also did the same thing on SAARCs Citizens Social Charter. Disappointed with the slow progress of the SAARC intergovernmental process and its failure to conduct consultations wit CSOs, SACEPS initiated a parallel process marked by the formation of citizens groups in at least six SAARC countries. Through this participative process, civil society organizations in each country got an opportunity to identify their own strategic issues and problems as these emerged within their development context, and design systems and strategies which could 24

reduce the social insecurity of their vulnerable groups and draw up country-specific Citizens Social Charter (Behera 2008, 29). These national social charters serve as the key inputs in drawing up a SAARC Citizens Social Charter, whose initial draft was again presented in the citizens groups for comments and suggestions. The final version of SAARCs Citizen Social Charter also included a provision calling for the formation of Citizens National Forum in each country to monitor the implementation of the Social Charter. These CSO-based forums have performed a good job in monitoring the discrepancies between official pronouncements made by governments and the real situation on the ground. They also guaranteed civil society participation in the process, as the National Coordination Committees established to monitor the official SAARC Social Charter are generally devoid of representation from CSOs. The importance of these national processes cannot be discounted. Recognizing Tarrows (1994) warning about the possibility of CSOs and social movements being cut off from their base as the opportunities for engagement expand, these national processes keep the SAPA and SACEPS grounded with the constituencies that they seek to represent. Furthermore, these national processes also impacts on the nature of regional engagement. As what SAPA itself recognize, (i)n engaging the ASEAN Charter process at the regional level, strong foundations should have been first at the national level because national interests defines ones regional agenda (Nuera 2007, 19). The participation of SAPA in the ASEAN Charter process was also due the generous support provided by Western governments and foundations to their activities. As discussed above, Western countries played a huge role in pressuring ASEANs to open up spaces for peoples participation. It should not come as a surprise, therefore, if these countries are very supportive of the activities and processes which aim to achieve a more people-centered ASEAN. SAPA-initiated civil society conferences also showed efficient use of resources by letting participating organizations fund their delegations. Apart from being cost-efficient, it also creates a sense of ownership among the participants. Furthermore, SAPA also effectively used the media to turn around events to their favor, such as ASEAN leaders refusal to grant access to civil society participants from Burma and Cambodia in the 14th ASEAN Summit. Immediately after the commotion, APF/ACSC organizers gave interviews and release a statement drawing attention to ASEANs actions. In the case of SACEPS, it also benefited from the generous foreign funding of United Nations Department of Economic and Social Affairs (UNDESA). UNDESA financed SACEPS process of drawing up a Citizens Social Charter from its initiation to its adoption. Apart from foreign support, SACEPS also utilized its links with eminent persons in the sub-region in order to put prestige and credibility to their policy recommendations. These group of distinguished individuals, who also served as the think tanks international advisors include: Professor Amartya Sen, Nobel Laureate, Master, Trinity College, Cambridge University; Professor Nurul Islam Emeritus Professor, IFPRI, Former Deputy Chairman, Bangladesh Planning Commission; Mr. Rafeeuddin Ahmed, Former Associate Administrator, 25

UNDP, New York; Mr. K. K. Bhargava, Former Secretary General, SAARC; Dr. Mohammad Latheef, Permanent Representative of the Maldives to the United Nations, New York; Former Minister of Education, Maldives; and Dr. Gowher Rizvi, Director, Ash Institute for Democratic Governance and Innovation, Harvard University. Challenges Facing CSOs in Southeast and South Asia Given the differences in the political, economic, socio-cultural and historical contexts of Southeast and South Asia, the nature of the challenges confronting CSOs in the two sub-regions is varied. However, there are still common problems that Southeast and South Asian CSOs face. The first one is the inability of civil society groups to come up with a united stance vis--vis their respective regional organizations. In Southeast Asia, this is most evident in the seeming division between APA and ACSC and its organizers, ASEAN-ISIS and SAPA. As Collins (2008, 322) observed, The danger for CSOs is that having both APA and ACSC, and in 2007 those two were joined by another civil society conference meaning that three civil society conferences about ASEAN were held in the span of thirteen days, creates the perception of confusion over what CSOs want and thus hinders the likelihood of them achieving an institutionalized relationship with ASEAN. In South Asia, the same problem can also be observed. As observed by Behera (2008, 26), (t)here are too many tracks operating in the non-governmental domain with little coordination. This often results in duplication and frittering away of limited resources and energies to achieve the same goal. More importantly, there are divisions among their ranks. Professionals involved in policy advocacy at the top tend to look down upon NGOs and activistsThis is only matched by activists disdain for the veterans of Track Two dialogues who are often debunked as living in ivory towers, divorced from the social realities on the ground. While there was no evident competition between SACEPS and SAAPE, it cannot be denied that these two are miles apart ideologically. While SACEPS activities are consciously crafted to provide inputs to the SAARC process, SAAPE-initiated Peoples SAARC is designed to provide an alternative political, social, economic and cultural system in the sub-region that appears to go beyond SAARC. In a way, this plurality of perspectives is a good thing. However, this ultimately affects other considerations such as funding among others. The second challenge is that ASEAN and SAARC, generally speaking, remain to be essentially the same. In the case of ASEAN, its modus operandi remains to be the talk big, act modestly approach (Katsumata, 2007). This can be gleaned in the ASEAN Charter, which did not include any provision on institutionalizing CSO participation in ASEAN decision-making processes. While the political space for engagement has widened in recent years, this process remains determined, directed and controlled by the state elite, as evidenced by the 2006 guidelines on CSO engagement. As observed by Collins (2008, 315), it is a top-down process where ASEAN establishes the objectives that the CSOs pursues and it is perhaps not surprising that the types of the CSOs that are granted accreditation represent professional and industry associations Similarly, SAARC institutions and processes remain to be off-limits to civil society participation. There was not even 26

an institutional mechanism to link Track 1 and Track 2. To this day, the linkage remains to be informal, ad hoc, and based on personal networks. Furthermore, all the organizations attached to the regional grouping continue to be from business or the professions. No accreditation is given to grassroots CSOs up to the present. Conclusion and Prospects This paper investigated regional civil society organizations engagement of Association of Southeast Asian Nations (ASEAN) and South Asian Association for Regional Cooperation (SAARC). In particular, it looked into the factors that facilitated or obstructed the engagement of regional CSO networks, Solidarity of Asian Peoples Advocacies (SAPA) Working Group on the ASEAN and South Asia Center for Policy Studies (SACEPS) of their respective regional organizations. To provide greater focus on the study, their involvement in crafting and/or implementing the ASEAN Charter (in the case of SAPA) and SAARC Citizen Social Charter (in the case of SACEPS) were analyzed and compared using political process theory. The theorys three elements namely political opportunity structures, collective action frames and mobilization served as the basis for comparison of SAPAs and SACEPSs engagement of ASEAN and SAARC respectively. With regard to political opportunity structures, it appears that the political environment in Southeast Asia provided greater incentives for civil society engagement. Developments outside and within ASEAN, particularly the Asian financial crisis and the subsequent ASEAN community-building efforts, opened up spaces for SAPA participation. These spaces were buttressed by a number of influential allies, both in the ASEAN structure and in national governments, who carried the cause of SAPA. Division among ASEAN leaders and their practice of one-upmanship also benefited SAPA as this led to the establishment and funding support for ASEAN Civil Society Conferences (ACSCs). More importantly, these divisions lead to the inclusion of some progressive provisions in the Charter such as the creation of ASEAN human rights body and adherence to democracy, human rights and good governance, which in turn, could become the focal points of new advocacies. Apart from the opportunities presented by the political environment, SAPA also effectively framed the issue of engagement and mobilized resources to forward their advocacy. Aware that ASEAN has been perceived as an elitist organization primarily run by foreign and economic ministers of member countries, it portrayed its engagement of the ASEAN Charter process as a way to make the regional grouping more democratic, accountable, and participatory. It also astutely used the official declarations of ASEAN leaders themselves to push for its greater involvement in crafting the ASEAN Charter. Moreover, its engagement was also made possible by the generous support from donors within and outside the subregion. The way SAPA structured its conferences, particularly the ACSC where its member organizations fund their own delegation, resulted in more efficient use of resources and creating a sense of ownership of the process.

27

In the case of South Asia, the political environment was not the same with that of Southeast Asia. While the repercussions of globalization and regional developments in other parts of the world pushed SAARC to adopt a Social Charter, the regional grouping remains to be elitist in both its institutions and processes. To this day, there was no institutional mechanism for civil society participation in SAARC. Despite this, however, SACEPS was able to make political opportunities available by crafting a Citizen Social Charter. Since the process of drafting the official Social Charter was closed to civil society involvement, the SACEPS-led initiative of coming up with a Citizen Social Charter forced the SAARC elites to respond accordingly. SACEPS, like SAPA, also framed the Citizen Social Charter process as a mechanism for civil society organizations across South Asia to participate for their issues and concerns to be incorporated in the Citizen Social Charter. The broadbased and participatory way of crafting the Citizen Social Charter was also contrasted with the elitist and managerial manner of drafting the official Social Charter. For this reason, SACEPS was able to make the SAARC leaders realize that their citizen charter has higher legitimacy in the eyes of the people and therefore its provisions should at least be taken into consideration in making the official Social Charter. In terms of mobilization of resources, SACEPS, in the process of drafting the Citizen Social Charter, received generous funding support from UNDESA, which supported the process from beginning to end. It also imbued greater prestige and legitimacy to the process by mobilizing its own group of eminent persons. SAPAs and SACEPSs experience in engaging their respective regional organizations, while characterized by varying degrees of success, shows that seizing and making opportunities, effective framing of issues, and astute mobilization of resources can open up even the most state-centered and elitist groupings like the ASEAN and SAARC to civil society participation. However, this should not make CSOs in both sub-regions complacent. As discussed above, there were still obstacles to be overcome like division among the ranks of CSOs and the still largely elitist nature of both ASEAN and SAARC. These, and other problems unique to each sub-region, must be addressed if a democratic Southeast and South Asia is to be realized. References Ahmed, Ishtiaq. 2008. SAARC Social Charter www.isasnus.org/events/activities/20090305%2020Prof%20Ishtiaq%20Ahmed.pdf and human security.

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Behera, Navnita Chadha. 2008. SAARC & beyond: Civil society and regional integration in South Asia. SACEPS Paper No. 19. Bhargava, Kant Kishore, Heinz Bongartz and Farooq Sobhan. eds. 1995. Shaping South Asias future: Role of regional cooperation. New Delhi: Vikas Publishing House Pvt Ltd. Caballero-Anthony, Mely. 2005. Regional security in Southeast Asia: Beyond the ASEAN way. Singapore: ISEAS. Chandra, Alexander and Jenina Joy Chavez. 2008. Civil society engagement with ASEAN: An overview. Pp. 22-36 in A. Chandra and J.J. Chavez, eds., Civil society reflections on South East Asian regionalism. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Chandra, Alexander. 2006. The role of non-state actors in ASEAN. Pp. 71-82 in Revisiting Southeast Asian regionalism. Quezon City: Focus on the Global South Manila. Cohen, Jean and Andrew Arato. 1992. Civil society and political theory. Cambridge: MA: MIT Press. Collins, Alan. 2008. A people-oriented ASEAN: A door ajar or closed for civil society organizations? Contemporary Southeast Asia, 30 (2): 313-331. David, Randolf. 2007. Political space: Lessons from Southeast Asia Pp. 13-28 in Joel Paredes, Marissa de Guzman and Eltheodon Rillorta, eds., Breaking through: Political space for advocacy in Southeast Asia. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Encarnacion Tadem, Teresa. 2008. Linking local and global social movements and the anti-ADB campaigns: From Chiang Mai to Samut Prakarn. Kasarinlan: Philippine Journal of Third World Studies, 23 (1): 43-70. Freeman, Jo. 1979. Resource mobilization and strategy. Pp. 167-89 in Mayer Zald and John McCarthy (ed.), The dynamics of social movements. Cambridge: MA: Winthrop. Focus on the Global South. 2006. Revisiting Southeast Asian regionalism. Quezon City: Focus on the Global South Manila. Gamson, William and David Meyer. 1996. Framing political opportunity. Pp. 26590 in Doug McAdam, John McCarthy and Mayer Zald, eds., Comparative perspectives on social movements. New York: Cambridge University Press. Goldstone, Jack and Charles Tilly. 2001. Threat (and opportunity): Popular action and state response in the dynamics of contentious action. Pp. 79-94 in Ronald 29

Aminzade, Jack Goldstone, Doug McAsam, Elizabeth Perry, William Sewell, Sydney Tarrow, and Charles Tilly (eds.), Silence and voice in the study of contentious politics. Cambridge, UK: Cambridge University Press. Gonsalves, Eric and Nancy Jetly, eds. 1999. The dynamics of South Asia: Regional cooperation and SAARC. New Delhi: Sage Publications. Guan, Lee Hock, ed. 2004. Civil society in Southeast Asia. Singapore: Institute of Southeast Asian Studies (ISEAS). Hernandez, Carolina 2008a. Institution building through an ASEAN Charter, Panorama, pp. 9-52. Hernandez, Carolina. 2008b. The ASEAN Charter and the building of an ASEAN Security Community. Indonesian Quarterly, 36 (3-4): 296-311. Hettne, Bjorn and Andras Inotai and Osvaldo Sunkel, eds., 1999. Globalism and New Regionalism. London: Macmillan Press Ltd. Hettne, Bjorn and Andras Inotai, eds., 1994. The New Regionalism: Implications for Global Development and International Security. Helsinki: United Nations University / World Institute for Development Economic Research (UNU / WIDER). Jenkins, J. Craig and William Form. 2005. Social movements and social change. Pp. 331-349 in Thomas Janoski, Robert Alford, Alexander Hicks and Mildred Schwartz (eds.) The handbook of political sociology: States, civil societies, and globalization. New York: Cambridge University Press. Jones, Michael. 2004 Forging an ASEAN identity: The challenge to construct a shared destiny. Contemporary Southeast Asia 26: 1 (April): 140-154. Katsumata, Hiro. 2007. The ASEAN Charter controversy: Between big talk and modest actions, RSIS Commentaries (15 November): pp. 1-3. Keck, Margaret and Sikkink, Kathryn 1998. Activists beyond borders: Advocacy networks in international politics. Ithaca, New York: Cornell University Press. Khagram Sanjeev, James Riker and Kathryn Kikkink (eds). 2002. Restructuring world politics: Transnational social movements, networks and norms; social movements, protest, and contention. Minneapolis and London: University of Minnesota Press. Klandermass, Bert and Suzanne Staggenborg. 2002. Methods of social movement research: social movements, protest and contention. Vol. 16. Minneapolis and London: University of Minnesota Press. Kraft, Herman Joseph. 2008. A charter for ASEAN. Indonesian Quarterly, 36 (34): 278-295. 30

Nuera, Arturo. 2007. Engaging the drafting of the ASEAN charter. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Paredes, Joel, Marissa de Guzman and Eltheodon Rillorta, eds. 2007. Breaking through: Political space for advocacy in Southeast Asia. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Rillorta, Etheodon. 2007a. Civil society engagements with the ASEAN. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Rillorta, Etheodon. 2007b. Comparative analysis of the ASEAN Charter blueprint and the SAPA submissions on the 3 Pillars. Quezon City: Southeast Asian Committee for Advocacy (SEACA). SEACA. 2007. Engaging the ASEAN: Proceedings of the 2 nd ASEAN Civil Society Conference, 10-12 December 2006 and 2006 ASEAN Civil Society National Processes. Quezon City: Southeast Asian Committee for Advocacy (SEACA). Severino, Rodolfo. 2006. Southeast Asia in search of an ASEAN Community. Singapore: ISEAS. Sobhan, Rehman and M. Rahmatullah. 2003. Role of civil society in influencing the policy discourse in Bangladesh. EGM on Engaged governance for pro-poor policies south-south cooperation. Colombo, Sri Lanka, 9-11 December. Solidarity for Asian Peoples Advocacies (SAPA). Working Group on ASEAN. 2007. Analysis of the ASEAN Charter. http://www.focusweb.org/analysis-ofthe-asean-charter.html?Itemid=94 , 19 November. Sukma, Rizal. 2008. Building the ASEAN Community. Indonesian Quarterly, 36 (3-4): 258-277. Suryadinata, Leo 2005. Towards an ASEAN Charter: Promoting an ASEAN regional identity. Pp. 41-44 in Rodolfo Severino (ed.). Framing an ASEAN Charter: An ISEAS perspective. Singapore: ISEAS. Tarrow, Sydney. 2001. Transnational politics: Contention and institutions in international politics Annual Review of Political Science 4: 1-20. Tarrow, Sydney. 1994. Power in movement: Social movements, collective action and politics. New York: Cambridge University Press. Tay, Simon and Jesus Estanislao, 2000. The relevance of ASEAN: Crisis and change Pp. 3-24 in S.SC. Tay, J. Estanislao, and H. Soesatro, eds., A new ASEAN in a new millennium. Jakarta: CSIS.

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TEACHER EDUCATION IN MUNTINLUPA CITY: AN ECONOMIC PERSPECTIVE ERNIDA ANCHETA-TOLENTINO, MSPE

Abstract The study qualitatively evaluates and contrasts the teacher education in a public and private higher educational institution using administrators, faculty interviews, and school visitations within Muntinlupa City. It utilized descriptive research technique to examine the socio-economic situation of teacher education. Content analysis was used to examine the mission vision and teacher education program overview of both institutions using publicly available data from the institutions official websites. Management strategies of the two institutions in relation to the program offerings for teacher education were compared using publicly available data as well as interviews form administrators and individuals involved in the institution using the SWOT (Strengths, Weakness, Opportunity and Threats) Analysis. Implications of the SWOT to teacher education were discussed. Education is deemed as a tool to economic and social growth. Stakeholders such as parents, students, government and others are attuned to making education available to all since it is considered as the most important determinant of a mans occupational destination there and studies suggests a wide belief that there is a relationship between education and occupation. (Halsey, 1977), thus affecting his or her growth within the society. Like any other nation, the Philippines place emphasis on the value of education throughout all levels of society. This is evident in the volume of children entering the basic education system (both public and private) annually. According to the National Statistical Coordinating Board (NSCB), between school year 20052009, the participation rate for elementary and secondary school level rose from 84.4 to 85.12 and 58.5 to 61.9 (2008) percent respectively. This growth in participation however is not sustained as the level of schooling appreciates. Data from the NSCB indicates that out of the participation rates (in school year 20052008) stated earlier, only 61.1 to 73.7 and 61.7 to 75.4 percent of the elementary and secondary school participants completes their respective levels. A more dismal picture is seen in Higher Education participation. The Department of Education states that for every 100 grade1 pupils entering the system, 66 pupils will graduate grade 6, 58 students will enter high school, 43 students will graduate high school, 23 students will enter College and only 14 students will earn a baccalaureate degree. The number of graduates from teacher education has increased through the years. From 1991 to 2000, there is an annual increase of 3.6 percent or about 47 392 new educators that graduates each year. (Bureau of Labour and Employment Statistics, 2003) Even with the growth of teacher education, records form the Professional Regulatory Commission (PRC) shows that of about 132,119 examinees 32

in the Teachers Board Exam, only about 26.7 percent (35,238) passed the exam. This however, excludes the graduates whom eventually passed the exam after their first try. To address this situation, the CHED issued Memorandum 30 (s 2004) to update the undergraduate teacher education curriculum in the Philippines. This new curriculum increased the number of curricular units of both elementary and secondary schoolteacher majors (174 from 144 units; and 174 from 151-176 units respectively). It decreased the number of general education subject units from 107 and 99 units to 63 units for both elementary and secondary school majors. (Ministry of Education, Culture and Sports, 1986) Additional professional education and specialization subjects/units were included as well (from 30-35 to 57 units; and 4045 to 60 units respectively). (Commission on Higher Education, 2004) The basic education sector, (specifically the public school system) generally causes the demand for teachers in the Philippines. Moreover, with the number of teachers employed remained almost unchanged, this scenario suggests a surplus in the number of qualified teachers in the country. Based on the 2000 Labour Force Survey conducted by the National Statistics Office shows that about 30 percent of their respondents with education degree were employed in non-teaching occupations. (Bureau of Labour and Employment Statistics, 2003) This scenario causes these unemployed teachers (and other professionals) to seek employment abroad, made worse by the high rate of unemployment (13.9 percent) and underemployment (19.6 percent) (American Federation of Teachers, 2009). In addition, with better-qualified teachers going abroad to seek better paying employment, this results to poor quality of instruction and working condition in the basic education, specifically in the public school system. Making it worse is the influx of students entering the public schools system, because of the current global economic crunch, which affects those families who send their children to private schools. Such events forces public schools to accept these students, and therefore to have two, three or even four class shifts a day, each with about 70-80 students per class to accommodate them. (American Federation of Teachers, 2009) It would then be the role of higher educational institutions offering teacher education courses to provide quality pre service training for would be teachers. The teachers in turn will shoulder the task of providing quality instruction to the Philippine education system. This is the reason for a renewed and continuous interest in improving the quality of education. Aside from creating programs that caters the needs of teachers, the Commission on Higher Education (CHED) released Memorandum 30 (S.2004) entitled Revised Policies and Standards for Undergraduate Teacher Education Curriculum which addresses the needs to improve the quality of pre-service teacher instruction in the Philippines. It also recognizes the role of higher education, (teacher education in particular) in improving the quality of life of its citizenry, through the attainment of various social and economic benefits. In this paper, the researcher qualitatively evaluates and compares the teacher education in a public and private higher educational institution. For the purpose of analysis, these institutions differ in two points. First, one is a privately owned and the other is a local government funded institution of higher learning. Second, the 33

first one had only started offering teacher education program this academic year (2009-2010) and the other, have been offering teacher education course since 1991. Methodology In this paper, the researcher aimed to qualitatively evaluate and contrasts the teacher education in a public and private higher educational institution using administrators, faculty interviews, and school visitations within Muntinlupa City. This study utilized descriptive research technique to examine the socio-economic situation of teacher education in Muntinlupa City. The first part of this study is to analyze the mission vision and teacher education program of both institutions using publicly available data from the institutions official websites. Content analysis is the technique used for analyzing this information. Second part is to contrast the management strategies of the two institutions in relation to the program offerings for teacher education using publicly available data as well as interviews form administrators and individuals involved in the institution. SWOT (Strengths, Weakness, Opportunity and Threats) Analysis was used in data analysis/treatment in these areas: (1) Teacher education program, including instruction, achievements, research and development (2) Financial management strategies, including their status (3) Facilities management and market strategies (4) Human resource management. Permission to conduct study were asked from and granted by the administration of the institutions concerned. The financial status reports of both schools are limited only to what the institutions are willing to disclose to the researcher. In both cases, most of what was shared is an estimate of the actual values that were the target data for this study. The interviews lasted for an hour and recorded using a digital video camera. The interviews were also later transcribed. The chosen school participants in this study are two higher education institutions located in Muntinlupa area. One is a university owned and funded by the local government that has been offering teacher education since 1991, which we will refer to as the Local University (LU). Although it was originally a polytechnic college, it has been offering baccalaureate (CHED) courses since its foundation. The other is a privately owned college, which has started offering teacher education in the first semester, academic year 2009-2010, which we will refer as to as Private College (PC). Patterned after the Technological University of the Philippines, PCoriginally offers technical (TESDA) courses, but later expanded and ventured into offering baccalaureate (CHED) courses as well. These schools are the two of the three higher educational institutions that are currently offering teacher education in the in the Muntinlupa City area.

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Findings: Mission Vision of Higher Educational Institutions The Local University was founded in the spirit of the 1987 Philippine Constitution that states that the State should promote, foster, and promote the rights of all citizens to affordable quality education at the tertiary level (Muntinlupa, About PLMun, 2009). The LUs College of Education declares a mission-vision philosophy based on learning and living Itenvisions itself as a center for creative development and researchoriented teacher education activities contributing its full share to the development of Filipino teachers as exemplars of academic excellence and leadership in education as it reaches out to the rest of the world. The LUs mission states that the College of Teacher Education exist with a mission of promoting and facilitating the development of dynamic professional teachers who are: C career-oriented T touches and transforms E every Filipino through evolutionary quality education thus enabling them to meet the challenges of the changing times. (Muntinlupa, College of Education, 2010) It is evident in the LUs mission vision that the primary function of their university is to provide quality, low-cost (if not free) tertiary education for the people of Muntinlupa City who is capable to adapt to the ever-changing demands of the global community. The Private College started as a technical school, the PC soon expanded into offering baccalaureate degree as well as graduate courses in cooperation with the Technological University of the Philippines, where PCs founder is an alumnus. PC envisions itself to be... one of the nations leading educational institutions involved in the pursuit and advancement of knowledge in all dimensions, as an end in itself and as a tool in personal, community and national development. The PC commits itself to these goals: 1. Educate, train, and develop the students into competent, productive, and values oriented professionals who shall serve as pillars of our countrys economy. 2. Advance human knowledge through research and study. 3. Cultivate a deep sense of moral and spiritual values so as to enhance development of human and just individuals. 4. Make higher (sic) accessible to everyone through scholarship grants and other related programs. 35

5. 6.

Promote and maintain beneficial linkages and network with institutions and agencies in local. (Sic) Contribute to the appreciation of the historical and cultural heritage of the Filipinos and of mankind. (Alabang, Mission and Vision, 2010)

One remarkable feature of PCs mission vision is the vision of having their graduates to become pillars of Philippine economy. This clearly shows the values adapted by their founder whom like all of their students, came from a humble beginning and was able to be successful through hard work, dedication and continuous education. These traits are what they would like to inculcate to their graduates. Teacher Education Course Program The teacher education programs of both higher educational institutions are based on the curriculum implemented by the Commission on Higher Education (CMO 30, s. 2004). Though similar programs are present in both HEI, some differences may be noticed. The LU offers the following CHED teacher education programs under its College of Teacher Education: Bachelor of Science in Secondary Education, major in: Mathematics Science Music, Arts and Physical Education (MAPE) Filipino Social Science (Agham Panlipunan) General Science Bachelor of Elementary Education, major in Regular (Elementary Education) Early Childhood Education Special Education Special Programs (Certificates) Certificate in Early Childhood Care and Development Certificate in Teaching Programs Graduate Studies Master of Arts in Educational Management Licensure Examination for Teacher Review The PC on the other hand offers the following CHED teacher education programs in their College of Education: Bachelor of Secondary Education, majors in Bachelor of Elementary Education Bachelor of Technical Teacher Education (BTTE) Unique to PC is their program on Technical Teacher Education that prepares career and technical teachers for Secondary schools and Post Secondary, such as career centers, technical institutes, correctional facilities and community colleges. (Alabang, Courses, 2010) This program is patterned after a curricular offered by the Technological University of the Philippines. 36

Admission and Retention Policies Most of the LUs students came from the public schools within and around the Division of Muntinlupa. Currently the LU-College of Teacher Education has an enrolment of 962 students; 331 freshmen, 314 sophomores, 178 juniors and 139 seniors. Patterned after the Philippine Normal University (PNU), prospective LU students are screened upon the recommendation of the applicants high school guidance counselors (preferably but not limited to city residence). Applicants with a grade of 80 or higher are qualified to take the entrance exam of the College of Teacher Education. Personal interview soon follows, for students who passed the written entrance examination. In LU, a required grade of 85 (2.00) should be maintained by all teacher education students, and are required to pass the qualifying exam for each year/level in order to continue and attain their desired baccalaureate degree. A special requirement for all female students is included. Any student who is with a child out of wedlock (become pregnant) during her stay in the LU is disqualified from continuing her study in the College of Education. The administration of the college perceives this situation as a deviance to the proper values and virtue that a teacher should possess in her profession. This special requirement however is not applied to the male students. Following the provisions for CMO 30, s. 2004, students are expected to fulfill the required Field Study Courses (6 subjects, 1 unit each) prior to their actual Practicum (Practice Teaching, 6 units), one semester prior to graduation. Having the whole Division of Muntinlupa as its laboratory, the student teachers are assigned to have their practicum in a public school near his/her residence making it easier for the students to accomplish the said requisite. The practice teaching requirement is completed for one whole semester. Students are conferred of their degree once they passed their curricular program requirements, and others that are specified in their student manual. Similar to LU, PCs students came also from lower income bracket families (Class C and D); most from public schools but there are also students who graduated from private schools. Currently, the PC has a population of about 2500 students (CHED and TESDA courses), and 20-30 percent of them are working students. Prospective students of the College of Education needs to apply together with their secondary education credentials and must be able to pass the written entrance exam as well as the medical examination. They need to have at least an 85 grade weighted average (GWA) in their secondary credentials, and need to maintain the same grade requirements to continue their degree of choice. If for some reason, the student fails to comply with this maintaining grade requirement, they are advised to shift to their second choice degree provided their GWA qualifies on that degree.

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Students Performance and Achievements The LU has a modest performance in the Licensure Exams for Teacher (LET), a required professional license for all teachers who wishes to practice their profession. The LET mean passing rate of LU is higher than that of the national mean passing score. In October 2009 LET, LU had 15 students who passed in the Elementary Education program and 15 students who passed in the Secondary Education program. As in other colleges in the LU, teacher education students are required to complete research papers and instructional modules, as part of their partial requirements in various subject areas. As of now, all thesis and term papers made by the students (both undergraduate and graduate levels) are unpublished and are housed in the colleges library. The College of Education has its own student publication (newspaper), apart from the institutional publication, which disseminates information within the college, and is currently in the process of making their refereed journal to highlight the researches and modules developed by both the students and faculty. Graduates of teacher education (both Elementary and Secondary) are easily employed in various basic education schools within and around the Muntinlupa City area. Most of them start out in private schools since public schools strictly implement the minimum requirement for teachers to pass and have a teachers license. Graduates employed in the private schools are eventually able to pass the LET, some opt to be employed in the Division of Muntinlupa, while others opt to stay in the private sector for higher remunerations. Collaboration with other institution of higher education is a part of LUs avenue for program development. Being a member of the Association of Local Colleges and University (ALCU) gives LU the opportunity to share information with its other members. Participation in seminars and trainings such as those organized by the Philippine Normal University is an example. Some of their faculty members were also gives opportunities to become resource persons for such seminar/workshops within and outside of the Muntinlupa City area. Foreign exchange students are also welcomed in the LU. For the first time in LU-CTEs history, a computer technology education student is currently participating in a foreign exchange program in Japan this academic year (2009-2010). Since PC is still on their initial year of offering Teacher Education, they only have one section for all three majors (Elementary, Secondary and Technical Education) whom are all taking up general education courses. Because of this, they could not yet provide data on their colleges performance on Licensure Exam for Teacher. However, based on other CHED courses with similar PRC exams (such as those for Accountancy and Criminology) PC has a modest exam performance in the courses mentioned. As in all course subjects, PC teacher education students are required to submit research papers as partial requirements in each subject in their respective programs. These papers however are unpublished that are found at the colleges library. PC is planning to put up a research colloquium to showcase these works and hopefully publish its own refereed journal to disseminate their students 38

and facultys work, which will not only be available for teacher education but for other Baccalaureate programs as well. A part of the research and development program of the PC is the module development for the various courses offered, in both baccalaureate and technical programs. These programs however are not directly funded by the PC. Faculty members are encouraged to produce these works for their classes and are made available to the students through the PCs bookstore. A portion of the earnings from its publications is given to the facultyauthors that serve as additional income and productivity incentives. Financial Management Strategies As a higher educational institution founded through the provisions of Republic Act No. 7160 (Local Government Code), the LU is funded primarily by the City Government. This includes budget for academic programs, administrative functions, faculty and staff salaries, maintenance and other operating expenses. Funding for LCU may be implied as with higher budgetary allocation than old state institutions (whose funding came from the national government), based on the Local Government Code provision, of 40 percent of the internal revenue collection over the previous 3 years is allocated to LGUs. (No.6-5. Medium Term Plan, 19992005) (Dayrit, 2005), p.3) The local government also shoulders a part of tuition fees of a portion of the student population in the LU. The Local Government for instance, allots 1500 slots of sponsorships for the whole LU, about 300 slots are allotted for the College of Education. Sponsored students are, graduates of public schools of Muntinlupa City. They pay more or less Php800.00 every semester (for those who are not entitled to it, are to pay Php2000.00 tuition fee every semester) for a full student course load of 21-24 units. Scholars must maintain certain grade requirements set by the LU. The sponsorship scheme of the local government is in two parts; first, the tuition fee of all freshmen entering the LU-CTE is shouldered by the local government in their first year. After this, the students are then required to pay their tuition fee in full in their succeeding years in the LU. With such low cost tuition fee, the survival and completion rate of LU-CTE students are relatively high. Since the funding of the LU came primarily from the city government, they do not experience instances of having their funding subjected to budget cuts typically experienced by traditional state universities whose funding are from the national government. All funding needs of the LU for their academic and other programs may be requested from the local government as well. The bulk of the LUs budget is allotted for the facultys salary, maintenance of facilities and programs; maintenance and other operating expenses. Currently, they have their own building within the grounds of a local high school. It houses the classrooms, laboratories, library and covered courts (sports facilities). In the College of Teacher Education, additional income-generating activities to augment budget deficit is non-existent now since the current administrator is in their first year of leadership. They may have such activities once the administrator has already settled down in their position. 39

Although research and development endeavors of its faculty are highly encouraged by LU-CTE, these programs however does not receive allotment form the LUs academic program budget. Research grants and similar funding opportunities are non-existent. Being a private institution, PCs main source of funding is the tuition fees collected from the students, who pay Php420.00 per course unit or about Php16, 500.00 every semester for a full student course load. (21-24 units) Considering that the bulk of the PC students came from the middle class (Class C and D), and about 20-30 percent are working students, the tuition fee rate of PC is quite affordable. Currently, the PC does not offer scholarships, they do however offer tuition fee discounts for early enrollees. Like most private institution of higher education, PC adopts a system of tuition payment schemes for their students. They have the full semester payment scheme, and the installment payment scheme. The latter allow students to pay their tuition fee in 4 quarters (during preliminary, midterms, prefinal and final terms) within the semester. Every examination, almost 50 percent of the students submits promissory notes in lieu of their tuition fee payment, and most of time, these payments are delayed. The students are allowed to take their exams, without paying their tuition fee provided they submit a signed promissory note, noted by the PC president. It is only during the final exams do the PC is able to collect most of the students tuition fee payment in full. A yearly students clearance form allows the PC to collect all unpaid tuition fees from the students. Other sources of income for PC are its own bookstore, which supplies books, modules, school, and P.E. uniforms for the students and the school cafeteria. It was not specified though if both sources of income were run by the PC themselves or by a concessionaire. It is income; although not big enough to be significant also help provide additional income for the PC. The PC and Technological University of the Philippines has an agreement that lets the TUP offer graduate programs using the facilities of the PC campus. However, it was not specified if PC leases their facilities to TUP for this specific program offerings. In terms of spending, the PC uses its funds for improving its facilities such as the computer laboratory. The facility is primarily used by the Computer Science program (but it is used by other programs as well).The PC does not have its own school building, so the biggest spending allocation the institution is their building rent, aside from faculty and staff compensation. Currently, they are renting three buildings to house their school: the main campus, which houses the bulk of the academic and administrative offices, laboratories and the library, another building that houses the human resource office and sports facilities, Elizabeth Building, and another school building in Alabang. Other expenses includes faculty other employees salary, maintenance of facilities and programs, and maintenance and other operating expenses. Aligned with their teacher education program, the PC is planning to expand their school to house a basic education department (elementary and secondary level) which will serve as a laboratory school for their teacher education students who will undergo practice teaching.

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Likewise, although research and development endeavors of its faculty are highly encouraged in PC, these programs however do not receive allotment form the PCs academic program budget. Research grants and similar funding opportunities are non-existent. It is therefore up to the faculty or student concerned to fund his or her own research and development projects. Human Resource Management The LU-CTE only employs faculty members who have at least a masters degree (Master of Arts, or Master of Science but not Master of Arts in Teaching). Further, LU-CTE employs those with a baccalaureate degree in education but may have a Bachelor of Science degree (for those who will teach majors class), which is the required minimum academic requirement of CHED for tertiary teaching position. Moreover, faculty members all passed the Licensure Exam for Teachers in their respective area of specialization. These requirements are applicable for both faculty members who teaches general education, professional and specialization subjects. The bulk of their faculty holds Masters degree. Program chairpersons are also with the same, if not higher degree holders. These chairpersons are all appointed by the upper management whose appointment may be terminated if deemed appropriate or necessary. None of the faculty members however, is employed fulltime. Subsequently, faculty tenure is also non-existent. They are compensated on an hourly basis, according to their qualifications or rank and the equivalent remunerations provided under the Salary Standardization Law (which is followed by all government employees). Their salary rate, although modest is lower than what is given in the private sector. In addition to their salary, a cash gift of Php5000 annually is the only benefit that the faculty receives. They do not receive yearly bonus. In addition, as a part time employee, they are not entitled to any scholarship grants, vacation or sick leaves, and professional promotions. This practice therefore serves as a budget savings since they do not need to allot a bigger budget for faculty benefits, just the actual salary. This working condition however may appeal only to those who are not looking for the security of tenure, or are not after good salary and benefits (such as retired teachers and practitioners) since most if not all faculty members are dispensable or may be terminated as it deemed necessary. Although faculty members holding graduate degrees are preferable, PC on the other hand also admits faculty members for its CHED courses, who have not yet completed their Masters degree, provided they would be able to complete their study within three years of their employment in PC. In the Teacher Education program, they currently have Doctor of Philosophy, as well as Masters and Baccalaureate degree holders in their faculty roster. They employ full-time as well as part time faculty members; therefore, security of tenure is present in the system. Faculty members may be considered for tenure if he or she meets the academic requirement of at least a Masters degree and other work and ethics related qualifications set by the PC. Such favorable working conditions would be appealing to faculty members who would like to serve the PC permanently as well as those whom preferred to work in a part time basis. The program coordinators (for elementary, secondary and technical teacher education majors) are chosen by the 41

upper management, must have at least a Masters degree, wherein their field of specialization is related with the program they will be leading. Administrators (upper and middle), faculty and staff are compensated according to their qualifications or rank and its equivalent remuneration according to the guidelines in their employees manual. There is no fixed starting salary for all employees. To have an idea of the salary rate for PC, the lowest ranked faculty, (Instructor 1) receives a salary rate of around Php11,400.00. Aside from the benefits mandated by the government, faculty members also receive benefits such as sick leaves, study grants or study assistance (for those taking up graduate studies), and de loading (less 18 unit teaching load) for Masters and Doctoral candidates (in their thesis or dissertation stage). The study grant/ assistance are a form of a loan because the school is not financially stable enough to provide full scholarships to its faculty. This is one of the faculty development goals (program) that the PC would like to put into place soon. Faculty members who avails such grants are required to render full time service to the school for a particular length of time, as stated in their faculty manual. Marketing Strategies and Students School of Choice Although both the LU and PC aim to attract the same market share (students from Class C and D; teacher education program offering), both see their schools appeal to prospective clients as an advantage against other institutions. LU sees the advantages of having local government funding in their appeal to prospective students. LU can offer free if not low cost higher education for students residing in Muntinlupa City. Backed by their long experience and achievements in teacher education, graduates employability and LET passers ratings, they find their school as the better school of choice for teacher education in the Muntinlupa area because schools achievements it serves as a mirror of their standard of excellence in curricular or program offerings. It helps them attract students from neighboring areas such as Laguna as well. It also allows them the opportunity to choose applicants whom are more academically inclined than their competitors are. By selectively employing licensed, professional faculty members with Masters of higher degree, LU could assure prospective students that only qualified professional instructor will be allowed teach in their teacher education program. These strategies allow the LU to depict its image as the school of choice for teacher education in the Muntinlupa City, whose academic excellence and affordability is at par with the rest, has to offer in the area, especially for their targeted socio-economic group (Class C and D families). PC on the other hand looks at their low cost private education offering, strategic location and academic tie-up with TUP as their major advantage in attracting prospective students in their school. Even if they are in their first year of offering teacher education, they opt to adopt selection requirement similar if not more stringent than LU. They are also targeting those students who were not able to qualify in the LUs teacher education program. If the student could not maintain the required grade for teacher education, they are allowed to transfer to another course (provided their grade qualify with the course they would like to be transferred to), so they could still keep the student 42

enrolled in their school. Compared to other private schools in the area, their tuition fee rate is reasonable. and would attract students to enroll in their school instead of going to the university belt to acquire their baccalaureate degree. Moreover, their tie-up with TUP and other tertiary institutions helps their school to maintain a high quality standard in their curricular offerings for both the CHED and TESDA courses. Through these images, the PC markets itself as the private school of choice for tertiary (academic and technical) education in the Muntinlupa City area. The PC projects a school that could offer quality education tertiary at an affordable rate that has safe and accessible campus location that would make prospective students to reconsider their plans of going to other areas such as the university belt to acquire their degrees. Marketing and promotional activities using word of mouth allows them to disseminate information about their institutions not only for graduating high school students but also to the lower level students. This information allows lower level students to form an image of the institution which helps them in their decision making process in later academic career (life), for it was found out that such information is significant for higher education bound youths decision in selecting schools. (Hemsley-Brown, 1999) To attract potential student applicants for their teacher education programs, both LU and PC employs various marketing and scouting strategies. Prior to the closing of each school year, the LU, in cooperation with the Division of Muntinlupa, visits all public high schools to give students applications to all graduating students. With the help of the guidance counselors of the respective public schools, deserving (academically inclined and, or coming from low-income families) students are given the opportunity to apply and avail the free (or low) tuition fee tertiary education offered by the local government trough the LU. This opportunity is also extended to those high school students graduating from local private schools. PC on the other hand ties up with various local public and private high schools so, together with other higher educational institutions, could be included in the schools career orientation seminars where they are given the opportunity to communicate directly with their prospective clients. They could provide them with their school information such as curricular or program offerings, amenities and costs. Leaflets and fliers are also distributed during these seminars. Tarpaulin posters are also put up in strategic places (specifically right in front of the academic buildings) to provide information to would be student applicants of their course offerings and student benefits. Furthermore, they are also offering tuition fee discounts for early enrollees to attract would be students to have PC as their school of choice. Although these efforts may be seen as effective means of marketing and promotional strategies to attract would be students in their institution, these attempts may have come too late because during this stage when graduating high school students are given career seminars, they are already predisposed in favor of a particular course or institution based on the context or influence of their families and peers years before. (Hemsley-Brown, 1999) It was found out that young people 43

are affected by their family (particularly their parents) and peers in their choice of career (academic or technical/vocational) and school of choice. Parents unconsciously send messages to their children as to what course would best suit them and the school that would best give them the training they need for the particular career. Youth are partly affected by the kind of students a particular school accepts. Typically having the desire to be accepted, young people is more attracted to schools that they may have a sense of belongingness. The more these students see similarities between the students of a particular school and themselves, the more likely they would choose a particular school. (Hemsley-Brown, 1999) SWOT Analysis Using the SWOT Analysis for evaluating the Teacher Education of both the Local University and Private College, we arrived at the following examination: Local University College of Education For the Local University College of Education, SWOT analysis revealed that the following areas are their strengths, weaknesses, opportunity and threats: Strengths: Programs approved by CHED. Wide range of course offerings. Qualified educators, Masters Offer free if not low tuition fee due to government funding Use of the whole Division of Muntinlupa as its laboratory Outstanding marketing and promotional strategies Opportunities: Improvement in their research and development program Opportunity to be centres for development if not for excellence Collaboration with various companies for additional funding Weaknesses: Special requirement obligatory to all female students Funding may be seen as incumbent mayors generosity only Unfavourable working conditions for the faculty (accepts contractual faculty members only)

Threats: Keeping highly qualified instructors to teach due to unfavourable working conditions Stagnant older faculty members must be balanced with younger innovative faculty.

The strengths associated with the LU-CTE are the following: First in program offerings, the LUs programs follow the rules and guidelines prescribed by the CHED. Its course offerings range from Bachelor of Elementary Education to Master of Arts in Education. The faculty roaster boast qualified educators who holds the minimum required credentials prescribed by the CHED. 44

Based on their graduates LET modest performance, it can be said that quality teacher education is offered in LU-CTE. It also helps that the LU adopts stringent qualifications in selecting students for its programs. By doing so, it assures the LU that they can get the best possible students in the area and this will assure quality of the graduates they could produce, who will in turn be able to pass the LET and become licensed professional teachers. Second, in financial management strategies, with LU being funded by the Local Government, the school could offer free if not low cost tertiary education to its students. Instead of relying on the tuition fees alone for funding, the local government could easily provide the need funding for program and maintenance expenses without relying too much on the tuition fees collected from the students. Having its own school building situated at a government owned property saves the school additional funding allocation that may go to property lease or realty taxes. This savings is used to enhance the schools education production cost through additional budget allocations for the university library, classrooms and laboratory equipments as well as other maintenance expenses. Third, because the LU makes use of the whole Division of Muntinlupa as its laboratory for student teachers to have their practicum, and its graduates are readily employed within and around the city area, it helps in the schools marketing and promotion as a school of choice for teacher education. Free or low cost tuition fees also add to the universitys appeal to its target market (students). The weaknesses associated with the LU-CTE are the following: First, the undocumented special requirement obligatory to all female students (but not applicable to male students), which states that any student who is with a child out of wedlock (become pregnant) during her stay in the LU is disqualified from continuing her study in the College of Teacher Education demonstrates gender inequality and double standards in the admission and retention policy of the LU. Although the call to preserve values and virtues of future teachers are important and admirable, policies pertaining to its preservation should be made applicable to all, not just for particular members of the student population. Second, by having the Local Government fund the LU, students, parents, administrators, faculty and staff may see the abundance or scarcity of budget allocation for LU as a demonstration of the incumbent local government administrations generosity (or thriftiness) toward their constituents and not as part of their responsibility to the people for being an elected government official. Third, perhaps due to the perceived limited public funding, LU choose to hire (contractual) part time instead of fulltime faculty members. Faculty members employment at LU is at the mercy of the middle and upper management. This means even that if the faculty is performing up to the LUs standards, the management may terminate his or her employment if deemed it is necessary. The faculty concerned has no choice but to obey its decision. With less faculty benefits, and non-existent promotion opportunity for LU faculty, it would be more 45

economical for LU (in terms of budget allocation). This scenario however would result to unfavorable working conditions for the faculty because of the economic insecurities and academic (career) stagnation it would cause. It may also be a ground for highly qualified faculty members to leave LU in favor of institutions with better benefits, job security and professional growth. The opportunities associated with the LU-CTE are the following: First, the LU can readily improve their research and development program. Having the whole Division of Muntinlupa as its laboratory, the LU could use this opportunity to develop innovative instructional materials and teaching strategies. Modules and other instructional materials, including computer assisted instruction and multi-media materials developed by their students (as part of their required thesis) and faculty could be piloted within the city, and if found effective may be adopted by the division which in turn, will help improve the quality of teaching and learning techniques in Muntinlupa City. Second, with LET performance that continuously improving and having qualified faculty at its roster, the LU could aim to have the CTED to be one of the centers for development if not for excellence in teacher education. This may be done by improving the working conditions of the faculty through offering job and tenure security, as well as opportunities for career growth. Third, with the limited funding sponsored by the Local Government, the LU could seek tie ups with various companies whom, because of their social and corporate responsibility to help the society, are willing to provide financial and other assistance to the academic programs of LU. This will help LU to further improve their curricular offerings and instruction. It will also give LU students a chance to work with different companies that will in turn enrich their learning and working experience. The threats associated with the LU-CTE are the following: First, the absence of tenure security and career growth opportunity may pose as a threat to the LUs faculty roaster. The LU may have difficulties in keeping highly qualified instructors to teach not only in teacher education but in other programs as well. Teachers, with their not so high salaries may opt to choose teaching positions somewhere else whom may provide them with employees benefits far better than what LU could offer. Second, Although hiring more experienced seasoned faculty may give an advantage to students in terms of the on the job experiences and wisdom they may share in and out of the field, it is the personal career drive of younger generation faculty that will enable teacher education students to be more open and acceptant to change and innovations. Younger faculty members, although lacking in wisdom and work experience, are not afraid to try to accept new ideas. They are also more acceptant of student teachers who have ideas different from their own and who are not afraid to fail. Seasoned faculty members have the tendency to be complacent 46

about what works and what will not in the field, and are not inclined to try doing something different. This may result to having graduates who are not inclined to innovate and develop new teaching and learning strategies and materials. Private College College of Teacher Education For the Private College College of Education, SWOT analysis revealed that the following areas are their strengths, weaknesses, opportunity and threats: Strengths: Programs approved by CHED. Wide range of course offerings BTTE course offering Accessible location Alternative choice for non state college qualifiers Affordable tuition fees, qualified instructors and professional tie-up with TUP Opportunities: Alternative choice Improvement of their research and development program Opportunity to be centre for development or even excellence Opportunity for Graduate studies Weaknesses: Lack of experience for the institution in handling the program Faculty qualification, Bachelor High rental expenses for its campus

Threats: the presence of better working conditions and benefits found in its competitors offering the same teacher education program,

The strengths associated with the PC-CED are the following: First, aside from the elementary and secondary teacher education program, the PC offers technical teacher education program, which is usually only offered by technical universities. It shows a broad scope of programs offered by the PC to their students. Teacher education students who are more inclined to teaching technical courses have the opportunity to do so with this course. It also opens the doors for adult learners to enter the PC, aside from regular young adult learners, this increasing its income. It will also strengthen and improve the quality of technical education in Muntinlupa City area, which offers career opportunities for people who would not be choosing the academic path in their career choice. Second, the strategic location of the main campus along the national road (the main city thoroughfare) will attract the students who wanted to attend tertiary education but are weary of travelling to and from other tertiary institutions such as those from the university belt area. It will save their students time, boarding and 47

travel allowance. It will also be accessible for students who are working near and around the Muntinlupa City area. Third, for students whose academic qualification could not meet the standard set by other tertiary institutions (specifically, but not limited to public higher institutions), the PC can be an alternative school of choice. With its affordable tuition fees, qualified instructors and professional tie-up with the TUP (for graduate courses) to ensure quality instruction and programs, it could be the private school of choice for its target market within Muntinlupa City area. The weaknesses associated with the PC-CED are the following: First, although the program is headed by qualified, seasonal professional educator, since the PC is in its initial year of offering teacher education, it can be its weakness because of the lack of experience of the institution in handling the program. Necessary experience in these course offerings may only be gained through time. Second, although hiring faculty members with Masters course units only is both acceptable and logical academic decision; it would be more beneficial for the program to hire faculty members with at least a Masters degree qualification most notably, if it is the minimum requirement for CHED course instructors. This may be easily done once the institution gains experience and produce graduates who will be able to pass the LET and employed in schools within the area. Third, by not having its own campus, the PC will always incur high rental expenses for its campus. Funding which would likewise be allocated for program or facilities development. This will only be alleviated once they acquire their own property that will necessitate a huge capital on the part of the PC. Once this is made, the PC could now allocate additional funding for its faculty and staff benefits and program improvements. The opportunities associated with the PC-CED are the following: First, the lure of affordable, quality private tertiary education within the Muntinlupa City area is not easy to resist specially among students from lowincome families and working students. This is made more appealing if the said student could not qualify to free education offered by the government (local or national) in the various local and state colleges or universities. The PC may be an alternative for such students. Second, through its course offering of teacher education, the PC could help improve the basic education sector in setting up its own department, a proposed course offering by PC in the near future. This will be of help to the community because, similar to LU, it will be the laboratory school for teacher education students. Innovative teaching strategies, course modules, instructional materials, including multi-media instructions may be piloted in the basic education department, which may later be adopted. Such instruction development output may bring 48

academic distinction to the institution thus may result in it to become a centre for development or even excellence in teacher education, research and development. Third, collaboration between the PC and TUP allows the latter to offer graduate programs (masters and doctoral) within the PC campus. This will give the faculty of PC an opportunity to be able to attain higher academic qualifications and improve their teaching techniques without going outside of the campus. It may be further improved if the PC could offer scholarships of discounts for faculty members who will enroll in their programs. It will also allow others (specifically teachers both formal and technical) in the community the opportunity to acquire graduate degrees. The threats associated with the PC-CED are the following: First, the presence of better working conditions and benefits found in its competitors, who are offering the same teacher education program, faculty members may be tempted to transfer to other schools in favor of better compensation and career growth opportunity. Second, a presence of another private institution of higher education offering the same or better teacher education program may be more attractive to their target student applicants so a more competitive curricular offering, faculty roaster and LET performance may need to be developed. Conclusion and Recommendation This study aimed to qualitatively evaluate and contrasts the teacher education in a public and private higher educational institution using administrators, faculty interviews, and school visitations within Muntinlupa City. It utilized descriptive research technique to examine the socio-economic situation of teacher education. It then content analysis was used to examine the mission vision and teacher education program overview of both institutions using publicly available data from the institutions official websites. The management strategies of the two institutions in relation to the program offerings for teacher education were compared using publicly available data as well as interviews form administrators and individuals involved in the institution using the SWOT (Strengths, Weakness, Opportunity and Threats) Analysis. The areas for comparison: (1) teacher education program, including instruction, achievements, research and development, (2) financial management strategies, including their status, (3) facilities management and market strategies, and (4) human resource management. Results show that although the two institutions are following different philosophy in educating their students, both LU and PC share commonalities in their mission vision. Both institutions are targeting the same student market that came from lower income families and working students. Both institutions would want to produce teacher education graduates who are skilled at their craft, who imbibed the proper values and virtues that the institution deemed important. The course offerings of both institutions are approved by CHED, in which the Technical Teacher Education course, a special course 49

offering by the PC, but not in LU. They both expect their graduates to use their skills and knowledge for the betterment of Philippine society. The opportunity given by both institutions of higher to acquire higher education at a low cost is a welcome chance for students from low-income families to grow economically. Thus, both schools are true to their mission and vision as stated earlier. The way these teacher education graduates contribute to the society remains to be seen. In the case of the Local University, by being absorbed by the basic education system, they are able to fulfil their socio-economic duty to serve the people, especially if they are absorbed by the public school system where they are needed more than the private school sector. Furthermore, as a scholar of the people, it is the LU graduates responsibility to return the academic opportunity given to them to the ones who invested and needed those most, which are the people of Muntinlupa City. In the case of the Private College, being in the first year of their teacher education offerings, it will take four years to find out the returns of their educational investments. Although not as accurate, it may be inferred by looking at previous graduates of PC, (how they are readily absorbed by the labour sectors, thus are able to contribute to the society) that the PCs teacher education graduates may take similar positive path. One could clearly see in this study, the important role of the private sector in providing tertiary education opportunity to many Filipinos (such as in the Muntinlupa City area) coming from the low-income families (Class C and D). In most cases, students from low-income families would rely on public tertiary educational institution for the opportunity to acquire a baccalaureate degree. The Philippine government, may it be the local or national government could only do so little in providing quality tertiary education to its people, due to the bigger and more urgent need of providing basic education for school-age children as mandated the Philippine Constitution of 1987 and acted by the Philippine Education for All plan in accordance to the UNESCO- Education for All. (EFA) With the high cost of tertiary education, it is through the efforts of private higher institutions such as PC that offers low cost tertiary education that helps low-income families, to get access to it if they could not qualify in public colleges and universities. One could not deny the fact that the teacher education course attracts students of a particular profile. Teaching is a predominantly female occupation, perhaps due to the nurturing nature of the profession, which is the primarily a female role. In relation to teacher quality, studies also suggest that on average teachers standard test scores are relatively lower than non-teachers. (Hemsley-Brown, 1999) Among college graduates, teachers salary and other alternative wages may determine who will most likely teach and where they would teach. This may imply that if given the opportunity, students specially academically inclined ones, will choose not to teach if the monetary remunerations for it is not as competitive as that of the other occupations. This is probably the reason why the teaching profession does not attract the best students to take it up. These students would rather choose a high 50

paying profession such as those in nursing, where their educational investments will definitely pay off. Moreover, by taking up teacher education course, one will be fixed in this profession thus being trapped in a low paying occupation. Moreover, for wellmeaning individuals, those with intentions of sharing their professional knowledge would think twice in teaching because of it. Such scenario results to having not so bright students entering teacher education course. With such a pool of prospective applicants to choose form, the education sector, most notably the basic education, ends up having would be teachers with lower academic capabilities. This may be the reason why half of the teachers who took and failed LET need to do it twice for them to qualify for a license. The prospect of having unlicensed teachers practicing the profession in the basic education sector (specifically in private schools) is a big gamble in the quality of instructions and future achievements of the basic education students. Facing this scenario, what could be more effective in attracting academically better students in the teaching profession, without compromising their ability to switch career paths (to and from teaching), than to offer a double degree program wherein the students could earn a baccalaureate degree in their chosen field (such as sciences, mathematics or fine arts) and have an baccalaureate in education degree at the same time. By making them to be teaching profession ready, these would be graduates may be given an option to practice their profession, polish their skills, techniques and experience in the field, which will then be useful and address the needs of the labor industry, once they decide to share them in the form of teaching in the higher education. This will also eliminate the need for them to have a separated degree and later take up required education units, and pass LET. It will also lead to innovation in the basic and tertiary level education in the country. The notion that one cannot share what one does not have may also be applied to education. Although not all are capable of being effective educators, especially for fast learners whom could not bring themselves to the level of their students, there are those untapped talents who could do more in improving the quality of education in the country, if only they would be given an opportunity to do so. In relation to this idea, it is worthwhile to note the Bachelor of Technical Teacher Education course offered by the PC, which was patterned after the program offered by the TUP. It usually attracts adult learners who are already established in their chosen technical/vocational field, and for some reason, would like to share their knowledge, skills and techniques with those who are of the same interests. Although its format is quite different than what is proposed, its similarity in the idea of molding teaching profession ready industry practitioners is quite innovative and will greatly help in uplifting the socio-economic status of many Filipinos whom, up to now, is relying on their employability as a main method of gaining socio-economic success. The teacher education sector has much potential in terms of uplifting the socio-economic status of the country. Education administrators, managers, policy makers and planners need to be open to innovation and continuously seek endless possibilities in making teacher education able to address the needs of the people. 51

Program possibilities such as those mentioned above could open the doors for would be industry practitioners whom would likewise be discouraged to teach, to help the tertiary education adopt its programs and instructions to the needs of the industry. This will thus eliminate the problem of having graduates with mismatched employment qualifications. This will give them the opportunity to collaborate with academicians; if left on its own to run the course programs, would likewise continue to widen the gap between theory and practice. What academicians could share to their students is limited to what they have experienced in the field. Most of the time, their knowledge are limited and, would look and work well only in theory or in an experimental settings but not in real life scenarios. This is what the proposed teaching profession ready industry practitioners could give, a bridge to fill the gap between what would work in theory and what could be expected in real life, thus, will produce education graduates who are highly skilled and qualified to meet the needs of the society. References American Federation of Teachers. (2009). archive.aft.org. Retrieved Mar 22, 2010, from American Federation of Teachers.org: http://archieve.aft.org/pubsreport/intl/Teacher_Migration.pdf Arkes, J. (2010). Using Unemployment Rates as Instruments to Estimate Returns to Schooling. Southern Economic Journal, 76 (3), 711-722. Blaug, M. (1992). Where are we now in the Economics of Education? In M. Blaug(Ed), The Economic Value of Education: Studies in Economics of Education (pp. 211-222). Aldershot: Edward Elgar Publishing Limited. Bureau of Labor and Employment Statistics. (2003, July). LABSTAT Updates: Supply and Demand Situationer for Teachers. Retrieved Mar 18, 2010, from Department of Labor and Employment: http://www.bles.dole.gov.ph/PUBLICATIONARCHIVES/LABSTAT%20UPDATES%20(NEW%20CATEGORY)/issues/ vol7_12.PDF Bynner, J., Dolton, P., Feinstein, L., Makepeace, G., Malmberg, L., & and Woods, L. (2003). Revisiting the benefits of higher education. Retrieved May 2009, 2, from Institute of Education, UK: The Bedford Group for Life course and Statistical Studies: http://www.hefce.ac.uk/Pubs/Rdreports/2003/rd05_03 Commission on Higher Education. (2004). Revised Policies and Standards for Undergraduate Teacher Education Curriculum. Retrieved March 15, 2010, from Commission on Higher Education: http://www.ched.gov.ph/policies/CMO2004/CMO%2030%20S.%202004.pdf Feinstein, L. (2002). Qualitative estimates of the social benefits of learning, 1:Crime. London: Centre for Research on the Wider Benefits of Learning: University of London. 52

Feinstein, L.; Hammond, C. (2004). The Contribution of Adult Learning to Health and Social Capital. Oxford Review of Education , 30(2), 199-221. Gang Cheng and Keming Wu . (2008). The internal efficiency in higher education: An analysis based on economies of scope. Front. Educ. China , 3(1); 79-96. Geraint Johnes and Jill Johnes. (1994). Policy Reforms and the Theory of Educational Finance. Journal of Economics Studies , 21;1; 3-15. Greenbank, P. (2006). Institutional admissions policies in higher education: A widening participation perspective. International Journal of Educational Management , (20), 4, 249-260. Halsey, A. (1977). Towards Meritocracy? The Case of Britain. In J. a. Karabel, Power and Ideology in Education (pp. 173-185). New York: Oxford University Press. Hammond, C. (2003). How education makes us healthy. London Review of Education , 1(1), 61-78. Johnston, G. (2004). Healthy, wealthy and wise? A review of the wider benefits of education. Retrieved Aug 8, 2007, from New Zealand: Treasury working paper 04/04: http://ideas.repec.org/p/nzt/nztwps/04-04.html Koen, C. (2006). An Analysis of Research on Graduate Employment in South Africa. In C. Koen(Ed), Higher Education and work: Setting a new research agenda (pp. 1-30). Cape Town: HSRC. Lillis, M. P., & Tian, R. G. (2008). The Impact of Cost on College Choice: Beyond the Means of the Economically Disadvantaged. Journal of College Admission , 5-14. Lyceum Alabang . (2010). Courses. Retrieved Feb 8, 2010, from Lyceum Alabang: http://www.lyceumalabang.edu.ph/courses.php Lyceum Alabang (2010). Mission and Vision. Retrieved Feb 8, 2010, from Lyceum Alabang: http://www.lyceumalabang.edu.ph/mission.php Merwe, A. v. (2010). Does Human Capital Theory Explain The Value of Higher Education? A South African Case Study. American Journal of Business Education , (3),1,107-118. Ministry of Education, Culture and Sports. (1986). Amendments to MECS Order 26, S. 1983 (Policies and Standards for Teacher Education). Retrieved Mar 16, 2010, from Department of Education Website.

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Moleke, P. (2005). Finding Work: Employment Experiences of South African Graduates. Cape Town: HSRC Press. Muntinlupa, P. n. (2009). About PLMun. Retrieved Feb 8, 2010, from Pamantasan ng Lunsod ng Muntinlupa(University of Muntinlupa City): http://www.plmun.edu.ph/about.html Muntinlupa, P. n. (2010). College of Education. Retrieved Feb 8, 2010, from Pamantasan ng Lunsod ng Muntinlupa (University of Muntinlupa City): http:www.plmun.edu./cte.html Murray, J. (Nov 2009). The wider social benefits of higher education: What do we know about them? Australian Journal of Education - ProQuest Education Journals , 53,3, 230-244. Organisation for Economic Co-operation and Development. (2006). Education at a glance: OECD Indicators - 2006 Edition: Public and private investment in educational institutions. Transition Economies , (16) 374-398. Orkodashvili, M. (2008). Investment in human capital:vocational vs. academic education. Preston, J. & Hammond, C. (2003). Practitioner views on the wider benefits of further education. Journal of Further and Higher Education , 27(2), 211-222. Puno, C. S. (2006). Keynote Speech. International Conference on Teacher Education- 20 Jun 2006. SEAMEO Innotech, Diliman Quezon City: International Conference on Teacher Education 2006. Tsang, M. C. (1988). Cost Analysis for Education Policymaking: A Review of Cost Studies in Education in Developing Countries. Review of Educational Research , 58;181-230. UNESCO Institute for Statistics. (2006, April). UIS Regional Profile: Teacher supply and demand in East Asia and the Pacific. Retrieved Mar 18, 2010, from UNESCO Institute for Statistics: http://www.uis.unesco.org/TEMPLATE/pdf/Teachers2006/Regional_Profiles /RegProfile_EAsiaPacific.pdf Yamauchi, F. (2002). Why do schooling returns differ so much? Observations and puzzles from Thailand and the Philippines. Conference on Education on Training, (Paper No.3 for Session 1:Education Choice and Returns from Education). Japan.

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FACTORS AFFECTING THE COMPETITIVENESS OF SELECTED HOME FURNITURE EXPORTERS IN CEBU CARYL CHARLENE E. JIMENEZ, MBA
ABSTRACT This study attempts to identify the key factors that affect Cebu furniture manufacturers using Michael Porters Five Forces Model (1998) of competitive analysis. The study explored factors from the departments of marketing, production and finance to specific functional strategies to target competitive advantage against other Asian producing countries in equally producing high quality innovative furniture pieces in the international market. The study discussed possible strategic thrust for Cebu furniture companies in attaining competitive advantage in the age of globalization. The wave of globalization has affected largely industries in all parts of the world. The open trade policy has thrown the Philippine economy to a competitive global arena where countries fight for space and place in the international market. Take change by the hand or it will take you by the throat. Attributed to Winston Churchill, this brief sentence emphasizes the need to understand and embrace change in general (Bullard and West, 2002). Change is necessary to be abreast with the impact of globalization. With innovation at the forefront of many businesses worldwide, what is its impact with the home furniture exporters in the country mainly in the Cebu area? Moreover, within the organization, what can furniture manufacturers do to take change by the hand in the integral departments of marketing, financial and production to be competitive today and in the near future? In the Philippines, the furniture industry has fully emerged as the trendsetter among the furniture-producing countries of Asia, earning the title as the Milan of Asia. With the rich tradition in furniture making combined with native artisans with excellent design flair and deft hands, the country ranks among the worlds best and continues to capture worldwide acclaim in the international market. Despite the countrys economic crisis, the furniture export industry maintains an impressive record of accomplishment as a major export earner and net exporter. As such, it has earned a place in the governments list of top ten export priority products. The thriving industry is now at the forefront of the countrys drive towards global competitiveness. The country has three main centers of furniture production: Metro Manila, Pampanga and Cebu. It is the Small and Medium Enterprises (SMEs) that mainly dominate the industry, with 98% of the estimated 15,000 manufacturers employing less than two hundred employees. In fact, 63% of the firms employ no more than nine workers. The large furniture manufacturers, mostly comprised of exporters, employ around 43% of the industrys total workforce of 481,500 direct workers. 55

Another 300,000 people are indirectly employed as subcontractors (FPRDI, PCCARD, 2000). Furniture export performance for the period of 1995 to 1999 yielded an export growth between 8 to 11%. The United States remains to be the countrys biggest market, importing as much as 59% of our total exports. During the export ban on rattan poles in the 1980s, wood furniture products were the alternative resource that replaced rattan as the most common material used in furniture making. The use of metal, mixed media and parts of furniture followed suit as a process of innovation. As of December 2000, furniture exports to the United States amounted to US$225.4 M. Other export markets include members of the European Union which amount to US$52.5 M. In the United States, the Philippines ranks as the eighth among the top sources for imported furniture, with China leading the forefront, having exported US$3.7 B to the United States as of year 2000. (FPRDI, PCCARD, 2000) In 1986, the Philippines established itself as the top exporter of furniture among its Association of South East Asian Nations (ASEAN) counterparts. Today, the countrys ranking dropped to the fourth, next to Malaysia, Indonesia and Thailand. In terms of absolute value of exports, the Philippines pales when compared to Malaysia, Indonesia and China which recorded furniture exports of US$1.2 B, 860 M and 3.7 B, respectively (FPRDI, PCCARD, 2000). According to studies as of year 2000, the world furniture export market was estimated at US$52 B. This means that in the year 2000, the total Philippine furniture exports were valued at US$381 M. These figures barely cornered percent, or 0.733%, of the global market share for furniture. Glaring facts that furniture and timber industries in other parts of the world more effectively supply this global market demand (FPRDI, PCCARD, 2000). There is a growing concern that the local industry has not grown in leaps and bounds as compared vis--vis to its neighboring countries. China has aggressively adopted manufacturing and technology strategies with an emphasis on cost combined with the importance of quality leading furniture manufacturers to incorporate a flexible production system to produce innovative furniture pieces. The Secretary- General of the Chinese National Furniture Association (CNFA) in fact predicted that within twenty years Chinese furniture will match foreign producers for variety, quality and technique (Robb and Xie, 2003). The interest of the researcher was further fortified to pursue the study as the statistics in the country show that while the country showed an export growth of 13% from years 1999 to 2000, China has garnered an export growth of 37% in the same period. With Chinas accession to the World Trade Organization (WTO), it becomes a major threat to almost all manufacturing businesses not only to those engaged in furniture manufacturing as it boasts of a 500 Million workforce combined with low labor costs. While furniture-manufacturing still remains relatively labor intensive, because of high interest rates, strict financing requirements and foreign restrictions in the 1980s, manufacturers had found it difficult to expand or modernize facilities and 56

import modern equipment. Capital investments and other fixed assets amounted to 3.5% of manufacturers total expenses in an industry that depend more on manual technology and simple woodworking machines. Other productivity impediments include sourcing and cost of raw materials, sustaining product innovation and more. The country already has a disadvantage of higher labor costs and interest rates; wherein China and Indonesia are close at our heels posing as huge threats to the flourishing industry. Given such obstacles, there are still areas wherein Philippine furniture exporters can gain competitive advantages that this research aims to achieve. These considerations lead to the development of this study in order to identify the key factors that affect furniture manufacturers; from the departments of marketing, production and finance to specific functional strategies to target competitive advantage against other Asian producing countries in equally producing high quality innovative furniture pieces in the international market. The study determined the furniture manufacturers strategic thrust towards its competitive advantage in the age of globalization. Specifically, this study obtained answers to the following objectives: 1. Determine the factors that affect the competitiveness of furniture firms. 2. Identify the strategies adopted by the firms to sustain competitiveness. 3. Distinguish the extent of functional departments contribution to competitiveness. 4. Identify the relevance of the model equation to enhance the competitiveness of the furniture industry in the country. Theoretical Framework Michael Porters Five Forces Model (1998) of competitive analysis as shown in Figure 1A , is a widely used approach for developing strategies in many industries. With the intensity of competition among firms varies widely across industries, the nature of competitiveness in a given industry can be viewed as being influenced by the five forces which are threat of new entrants, threat of substitute products, bargaining power of suppliers and bargaining power of buyers. In the furniture industry like most industries, a company must develop an edge over rival or competing firms, wherein it is instrumental that a firm must fully understand the industry context that the company operates. Rivalry among competing firms is considered the most powerful among the five competitive forces. The success of a firms strategy will depend largely on the extent that the firm is willing to provide competitive advantage over the strategies pursued by another rival firm. Changes in strategy may be in the form of lowering 57

prices, enhancing quality standards, adding product features, providing more services, extending warranties and increasing advertising. The potential entry of new competitors increases the intensity of competitiveness among firms. Barriers to entry for these new firms can include the need to quickly gain economies of scale, to gain technology and specialization, strong customer loyalty, strong brand preferences, large capital requirements, inadequate distribution channels, government regulatory policies and tariffs, inaccessibility to raw materials, unfavorable locations and over saturation of the market. However, despite implementation of these barriers, new firms may still permeate the market by offering higher-quality products with lower prices. A firm must provide counteractive measures through assessing or monitoring potential new entrants and capitalizing on existing strengths and opportunities. Presently, many industries are in close competition with producers of substitute products in other industries. The threat of substitute typically impacts an industry through price competition where a products demand is affected by the price change of a substitute product. The more substitutes available in the market, the demand becomes more flexible since customers have more alternatives. A close substitute product constrains the ability of firms in an industry to raise prices. The market shares that these products obtain measures the strength of substitute products. The bargaining power of suppliers greatly affects the intensity of competition in an industry especially where instances of large number of suppliers exists, few good substitute raw materials or the cost of switching raw materials is costly. Producers and suppliers must work out strategies to assist each other to enhance long-term profitability through improved quality, reasonable prices, and development of new services, just-in-time deliveries and reduced inventory costs. The bargaining power of consumers represents a major force affecting the intensity of competition in an industry. Factors may increase or decrease the buying power of consumers such that firms use strategies by offering extended warranties or special services to gain customer loyalty whenever the bargaining power of consumers is substantial. The Five Forces Model provided useful ways of thinking about and analyzing the nature of competition within an industry to identify opportunities and threats. However, managers need to be aware of their limitations, as these are not yet proven empirically. In the study, the researcher adopted some factors as the variables for the model.

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At a macro level, the changes in the Five Forces of Michael Porter provided a clearer understanding to the opportunities and threats affecting a firm. Such that the firm must then formulate appropriate internal strategic responses based on the theory. The researcher through Michael Porters Value Chain Framework made a parallel analysis as it complimented the Five Forces Theory at a micro level.

The value chain, a process of transforming inputs into outputs, comprises a number of primary and support activities. Each activity adds value to the product, while achieving superior efficiency, quality, innovation and customer 59

responsiveness requires strategies that embrace several distinct value creation activities. These goals are regarded as cutting across the different value creation functions of a company or cross-functional integration (Hill and Jones, 2002). The primary activities are executed together with design, creation and delivery of a product, as well as its marketing and its support and after-sales service. The research and development activities are concerned with the design of products and the production process. With a superior product design, research and development (R&D) can increase the functionality of products, which makes them more attractive to consumers. The role of the research and development is to ensure efficient production process, thus lowering production costs. The production activities are concerned with the creation of a good or services wherein a company creates value by performing its activities efficiently so that lower costs results are equally consistent in performing high product quality which leads to differentiation and lower costs. Through brand positioning and advertising, the marketing function can increase the value that consumers perceive to be contained in a companys product. The marketing and sales can also increase value by discovering consumer needs and communicating them back to the research and development (R&D) function of the company, which can then design products that had better match the needs based on consumer feedback. The role of the service function of an enterprise is to provide after-sales service and support. This function creates a perception of superior value in the consumers by solving customer problems and supporting customers after they have purchased the product. The support activities of the value chain provide inputs that allow the primary activities to take place such as materials management, human resource and information systems. The materials management or logistics function controls the transmission of physical materials through the value chain, from procurement through production to distribution. The efficiency in carrying out the task lowers costs, thereby creating more value. The support activity of human resource ensures that people are adequately trained, motivated and compensated to perform their tasks efficiently as human capital is the greatest resource of a firm. The information system combined with communication features of the Internet creates efficiency and effectiveness which the company manages its other value creation activities. The final support activity is company infrastructure, wherein the companywide contexts within which all the other value creation activities take place. The infrastructure includes the organizational structure, control systems and culture 60

of the company. Since top management can exert considerable influence on these aspects, top management should be viewed as part of a companys infrastructure. Given the present obstacles that firms confront with globalization, it is critical that firms take matters into their own hands by formulating internal strategies specifically targeting the functional departments to enhance competitiveness and growth. Moreover, given the ever-changing business environment, local manufacturers need to formulate long-term beneficial strategies to survive the competition prevalent in the furniture industry worldwide. METHOD Research Design The researcher utilized a descriptive research design, specifically survey. Data collected through descriptive research can provide valuable information about the study units along relevant characteristics and about associations among those characteristics (Arboleda, 2004). The survey research determined the feasibility of the model equation from the previous study to the Cebu production cluster wherein frequency and regression analysis were used to validate the relationships. Population The samples were drawn from the trade associations namely the Chamber of Furniture Industries of the Philippines (CFIP) and Cebu Furniture Industry Foundation (CFIF). The furniture export firm Kosmos Furniture Design composed of a management team and selected employees were included in the study. Sampling Technique A non-probabilistic judgmental sampling design approach was utilized in the research, wherein not every element of the total population has a chance of entering the sample. The data survey from the Cebu cluster was obtained from the thesis proposal of Miss Leah Angeli Paclibar and Miss Nikki Garcia, Business Management students majoring in Marketing and Sales. The researcher interpreted the survey results to determine whether the model equation from the previous study of the author was applicable to Cebu as the remaining production center not included in the study. Sources of Data A structured questionnaire utilizing a four (4) point Likert scale served as the primary source of information. Focus group discussions through in-depth 61

interviews from consulting experts and professionals from the furniture study were also utilized to supplement the survey. Research Model From the results of the frequency analysis and secondary data from the previous study, the variables of price, volume, raw materials, labor cost, transportation costs and capitalization were also used for the Cebu production center to determine the research models relevance to the research. MODEL EQUATION: Yp = f (LC,C,TC,V,RM) Yp = a + b*LC + c*C + d*TC + e*V + f*RM Where: P - price in pesos (in 1000s) based on FOB shipping point, with a direct or indirect relationship with the variables of labor force cost, raw materials, and capitalization. LC - labor force cost in pesos (in 1000s), fifty percent in the FOB costing price is comprised of labor cost. A direct relationship to price as mandated by government wage order. C - capitalization in pesos (in 1000s) contributes ten percent of the FOB costing price. A direct relationship to price as influenced by capital infusion of the firm. TC - transportation cost in pesos (in 1000s) comprises fifteen percent of the FOB costing price. A direct relationship to price as influenced by order shipment destination/s. V - volume in pesos (1000s) comprises fifteen percent of the FOB costing price. A direct relationship to price as influenced by quantity of orders or contracts. RM - raw materials in pesos (1000s) comprises ten percent in the FOB costing price. A direct relationship to price as influenced by availability of raw materials. RESULTS AND DISCUSSION Factors that affect the competitiveness of furniture firms in Cebu. The results of the frequency analysis on Table 1, addressed the factors that affect competitiveness as identified below. For the variables with a sixty percent value and above was utilized as it provided a higher percentage for the data analyzed. 62

The sample data provided that in the supplier factor revealed that delivery schedules, supplier location and relations and availability of suppliers commonly received a less affect or a moderately affect rating notably due the present Cebu respondents belong to an outsourced company and not a direct manufacturer of furniture, a variation from the previous population. Data revealed that for the raw material factor, eighty nine percent of the respondents surveyed agreed that the Executive Order (EO) on the prohibition of the use of abaca wood less affects competitiveness. Cebu manufacturers are innovating with mixed media sources deviating from dependence on abaca as main components in furniture production. Results showed that on the competitor factor, fifty six percent of the respondents agreed that improvements with other existing furniture companies has a less affect on competitiveness while seventy eight percent of the respondents expressed that the emergence of other furniture producers in Asian countries moderately affects competitiveness. Indicating that domestic competition is not a threat to local furniture manufacturers but international specifically Asian competition posed a significant threat to competitiveness. Among the customer factors, almost all received a less affect or does not affect rating except the demand on products where seventy-eight percent of respondents agreed that the demand on products moderately affects competitiveness wherein customers dictate the volume of orders, the deciding point of buyers when placing orders to manufacturers.
Table 1 Factors that affect the competitiveness of furniture export firms in Cebu Weighted Mean 1.56 1.89 1.56 2.00 2.00 2.78 2.89 1.44

Variable 1.1 1.2 1.3 1.4 1.5

Description Availability of supplier Location of supplier Pricing given by supplier Delivery schedules of supplier Supplier relations

% 100.00 11.10 44.40 88.80 66.60 77.70 88.80 55.50

Interpretation Less Affects competitiveness Moderately affects competitiveness Strongly Affects competitiveness Less Affects competitiveness Less Affects competitiveness Does not affect competitiveness Does not affect competitiveness Moderately affects competitiveness

2.1 Government Policy on Anti Smuggling EO on the prohibition on the use of 2.2 abaca wood 2.3 Availability of wood and aluminum resources Emergence of other Asian countries in the 3.1 furniture industry Improvement of other existing furniture 3.2 companies 4.1 4.2 4.3 4.4 Table 1A Location of customers Demand on products Customer standards Customer relations

77.70 55.50 66.60 77.70 100.00 88.80

1.22 2.44 2.89 1.22 1.78 1.33

Moderately affects competitiveness Less Affects competitiveness Does not affect competitiveness Moderately affects competitiveness Less Affects competitiveness Less Affects competitiveness

Summary of the factors with above 60% value % 100.00 88.80 66.60 77.70 88.80 Weighted Mean Interpretation 1.56 Less Affects competitiveness 2.00 Less Affects competitiveness 2.00 Less Affects competitiveness 2.78 2.89 Does not affect competitiveness Does not affect competitiveness

Variable Description 1.1 Availability of supplier 1.4 Delivery schedules of supplier 1.5 Supplier relations 2.1 Government Policy on Anti Smuggling EO on the prohibition on the use of 2.2 abaca wood Emergence of other Asian countries in the 3.1 furniture industry 4.1 4.2 4.3 4.4 Location of customers Demand on products Customer standards Customer relations

77.70 66.60 77.70 100.00 88.80

1.22 2.89 1.22 1.78 1.33

Moderately affects competitiveness Does not affect competitiveness Moderately affects competitiveness Less Affects competitiveness Less Affects competitiveness

**Note: This was used to derive progressive model for economterics. A percentage from 60% and above was classified for model development

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Strategies adopted by the firms to sustain competitiveness. The results of the frequency analysis on Table 2 enumerated the strategies prioritized by each functional department. For the variables with a sixty percent value and above was utilized as it provided a higher percentage for the data analyzed. Data provided that all marketing strategies were considered to contribute to a less extent except for marketing research on the industry which was considered the most important to the respondents as this increases market viability and direction to forecast product lines to buyers. Product quality output remains to be a high priority as data showed that seventy-eight percent of the respondents signify the importance of quality as a production strategy to remain competitive. In research and development, a hundred percent of the respondents agreed that the creation of designs and innovations remain to be a priority as a factor for competition as the industry is strongly influenced by design trends. For finance, while a hundred percent of the respondents agreed that the budget on company operations was significant, the impact on competitiveness contributes to a less extent. This indicates that a continuous influx of contract orders is still necessary to for a firm to operate on an annual basis as buyers base product style forecasts in advance seasons. This also signifies demand on specialty products or items produced in a particular country.

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Table 2 Variable 5.1 5.2 5.3 5.4 5.5

Strategies that contribute to the competitivess of furniture export firms in Cebu Weighted Description % Mean Interpretation Marketing Plan Update 66.60 1.33 Contribute to a slight extent Marketing Research on the industry 66.60 2.11 Contribute to a moderate extent Strategic location for operations 88.80 1.56 Contribute to a slight extent Advertisements and promotions 100.00 1.22 Contribute to a slight extent Trade Fairs and other events 88.80 1.33 Contribute to a moderate extent 77.70 100.00 2.00 1.78 Contribute to a moderate extent Contribute to a moderate extent

6.1 Quality control on products Transactions with subcontractors and 6.2 employee relations Technologically advanced machineries, 7.1 equipment and software 7.2 Creation of new designs/software 8.1 Budget on company operations 8.2 Currency issues (foreign exchange) 8.3 Financial statement updates

100.00 100.00 100.00 77.70 44.40

1.11 1.67 2.11 1.56 1.64

Contribute to a slight extent Contribute to a moderate extent Contribute to a slight extent Contribute to a slight extent Contribute to a moderate extent

Table 2A Summary of the factors with above 60% value Variable 5.1 5.2 5.3 5.4 5.5 Description Marketing Plan Update Marketing Research on the industry Strategic location for operations Advertisements and promotions Trade Fairs and other events % 66.60 66.60 88.80 100.00 88.80 77.70 100.00 Weighted Mean 1.33 2.11 1.56 1.22 1.33 2.00 1.78 Interpretation to a slight extent to a moderate extent to a slight extent to a slight extent to a moderate extent

Contribute Contribute Contribute Contribute Contribute

6.1 Quality control on products Transactions with subcontractors and 6.2 employee relations Technologically advanced machineries, 7.1 equipment and software 7.2 Creation of new designs/innovations 8.1 Budget on company operations 8.2 Currency issues (foreign exchange)

Contribute to a moderate extent Contribute to a moderate extent

100.00 100.00 100.00 77.70

1.11 1.67 2.11 1.56

Contribute to a slight extent Contribute to a moderate extent Contribute to a slight extent Contribute to a slight extent

**Note: This was used to derive progressive model for economterics. A percentage from 60% and above was classified for model development

3. Model Equation using Linear Regression To qualify the responses derived from the surveys, a linear regression analysis using multiple predictors was used to develop a model to enhance the competitiveness of the furniture industry. The variables of price, raw materials and volume were classified for model formulation as these were derived from the frequency analysis with a sixty percent and above result. Other variables such as transportation cost, labor cost and capitalization were used from the data collected. Yp = f (T, L, C,RM,V) Yp = a + bT + cL + dC + eRM + fV Yp= 2.781 + .183T -.554L - .173C - .464RM +.146V (t=1.675) (t=-3.041) (t=-1.632) (t=-6.093) (t=1.884) Adjusted R square F Where: = 0.774 = 77.40% = 8.513, p = 0.11 P = price in 1000 pesos 65

LC = labor cost in 1000 pesos C = capitalization in 1000 pesos TC = transportation cost in 1000 pesos V = volume in 1000 pesos RM = raw materials in 1000 pesos

Coefficientsa Unstandardized Coefficients B Std. Error 2.781 .458 .183 .109 -.554 .182 -.173 .106 -.464 .076 .146 .078 Standardized Coefficients Beta .338 -.644 -.277 -1.017 .424 95% Confidence Interval for B Correlations Sig. Lower Bound Upper Bound Zero-order Partial .001 1.660 3.902 .145 -.084 .450 -.217 .564 .023 -1.000 -.108 -.258 -.779 .154 -.433 .087 .188 -.554 .001 -.650 -.278 -.822 -.928 .109 -.044 .336 .000 .610 Collinearity Statistics Tolerance VIF .507 .459 .715 .739 .406 1.972 2.179 1.398 1.353 2.460

Model 1 (Constant) TRANSPO LABOR CAP RAWMAT2 VOL2

t 6.072 1.675 -3.041 -1.632 -6.093 1.884

Part .240 -.436 -.234 -.874 .270

a. Dependent Variable: PRICE2

The above data considers the variables such as labor cost, capitalization, transportation cost, volume and raw materials as the predictors of price. The relationships between these variables are strong since the adjusted R square is 0.774, indicating that 77.40% in the variation of price was significantly explained by transportation and volume. Yp = 2.781 + 0.183T + 0.146V From the multiple regression result, transportation and volume had a direct relationship to price while the other variables of capitalization, raw material and labor force cost had an indirect relationship to price. Conclusions The study indicated that the five forces of Michael Porter influenced the factors that affect the competitiveness of furniture firms. The significance of price, transportation cost and volume emerges to be the primary issues that firms must address to enable them to be internationally competitive. Based on the results, the mentioned variables were significant as it affects the competitiveness of the respondent furniture exporters. Price or cost directly influences the other variables wherein an attractive price dictates contract orders of a firm. Volume was influenced by production output and customer responsiveness influences repeat or continuous orders of saleable furniture pieces. Transportation costs are now included as an important variable in the study 66

as unstable fuel prices in the world market greatly affects business worldwide. In addition, the raw material variable is not significant in the Cebu cluster, a variation from the previous study as firms use innovative designs on furniture pieces and include mix media materials to be less independent on rattan. The results indicated that furniture firms focused on building strategies on the functional level specifically on the marketing, production and finance departments. These strategies were directed at improving the effectiveness of basic operations within the firm, to achieve overall goals of efficiency, quality, innovation and customer responsiveness on products. Successful furniture exporters were able to able to maintain their competitive position against other furniture manufacturers by building competitive advantage through functional level strategies. In the production department, upgrading the production systems/processes and improving quality standards in the production department gained the highest rankings signifying directly affecting a firms competitiveness catering to both buyer and consumer increasing demands for home furniture worldwide. In the marketing department, strategies of increasing marketing promotions and research received the highest result in directly affecting competitiveness by strengthening the market viability of a firm in an international scale by capitalizing on the existing developed markets and locating new market segments to compete in. Strategies in the financial department stressed that firms were concerned that in order for firms to be competitive necessary funds must be available when needed and priorities of the firm are maintained and controlled. The contributory role of each of the functional department was limited to their functions. However, there were times when each department may embrace two or more functions, which requires close coordination to achieve overall company objectives. The role of each functional department was to ensure that strategic priorities of top management were understood and disseminated in operations. If the desired result was not met, then the manager of that specific department had the responsibility to inform top management of a particular strategys limitations. In the model equation, data revealed that only two variables significantly explained price, which were transportation and volume while capitalization, raw materials and labor cost had an indirect relationship to price. With volume, literature studies stress on a flexible production system responsive to scheduling adjustments to increase orders and marketing strategies based on innovation and risk to influence the increase of customer volume and product repurchases. These studies coincide with the results of the linear regression as increase of contract orders increases competitiveness. Philippine furniture manufacturers should address the low productivity level inherent in the manufacturing sector to increase the level of exports of the country as this has a direct relationship to price. While data on the transportation cost also reveal a direct relationship to price as opposed to the previous study. Transportation costs on country of origin to shipment destinations either single or multiple via sea freight or air cargo greatly 67

affects competitiveness, as local firms have to frequently adjust FOB price to the unstable weekly fuel prices. With regards to labor force cost, results reveal also an indirect relationship as opposed to earlier expected indications as costs according to literature studies reveal that competitive success is no longer about lowest labor cost but issues on quality, efficient production processes, compliance to worker safety and environment protection. Results in this study reveal a significant difference of variables affecting the Metro Manila/Pampanga and Cebu as production centers. While the Metro Manila/Pampanga cluster has the variables of capitalization, raw materials and volume that directly affects price, the Cebu cluster has only transportation and volume as variables affecting price. Therefore, we can assume that although these clusters belong in one country, these areas are still different and unique in terms of the conditions affecting their competitiveness. Recommendations and directions for future research From these insights, the researcher recommends intensive strategies focused on market penetration, market development and product development to uplift the Philippine furniture industry as a whole. Market penetration strategies may involve increasing market share with current contract buyers for present products in present markets and intensifying efforts to garner new furniture manufacturing contracts with new buyers to offer increased production capacity and new competencies to increase sales volume. By developing a flexible production plan for chase orders will differentiate the company from its competitors. Usually chase orders are furniture pieces that are considered core items of buyers and are not based on seasonal trends or chase orders that are saleable in the market thus a need for repeat orders. Market development strategies may involve firms introducing present products into a new geographical area that is the European Union (EU) market. Firms must capitalize on the brand name it has developed in the US market segment by locating new market segments to compete in. Firms should aggressively direct market themselves to European furniture trade fairs or directly to the buyer to present portfolios to gain market entry. Product development strategies involve increasing sales by improving or modifying present products or services, in fact, some firms have adopted strategies on outsourcing labor in China to compete with prices, but the strategy drawback on design pirating. However, the overall picture of an effective production strategy is with improved services, on-time delivery schedules are met which reduces shipment delays, additional freight shipment charges, charge backs or cancellations from buyers. At the same time, customer satisfaction is achieved because usually orders are sold in advance to stores, mail catalogs or Internet purchases. With improved products, firms may offer products such as childrens furniture to current buyers or to prospective buyers in the United States as trends still dictate to a high demand of children themed furniture similar to the increase of childrens apparel in the garment 68

industry. Firms can incorporate this new development in its production capacity, as price points offered by buyers are high and workable. With the model equation, firms may be able to utilize it to their advantage to be price competitive against the other Asian players in the market. As long as firms focus on the variables of volume and transportation costs which has a direct relationship to price, price will remain to be competitive. The motivational factor that attracts buyers to place orders with China and Indonesia is primarily low prices on products and vast sources of raw materials. Quality may be a concern but buyers reason that quality can be learned and improved in the long term. The researcher also recommends further researches concerning the variables not considered for model development with less than 60% value as these may also have an alternative effect towards competitiveness, which may improve the existing model. The researcher also encourages studies that include the external factors that affect furniture firms and other functional departments strategy contribution to competitiveness such as research and development (R&D), human resources, materials management and information systems. In the age of globalization, Philippine furniture firms have to evolve and be flexible to the ever-changing business environment to keep up with competition prevalent in the furniture global market. With Chinese manufacturers adopting competitive strategies to enhance their position in foreign markets by lifting the level of performance on a variety of objectives, Chinas World Trade Organization (WTO) accession all the more fuels their continued expansion and performance in the industry by and placing pressure on other major exporting nations. Similar from the previous study, top management remains to be conservative or traditional in strategy at the expense of potential competitive growth to cut down on cost. Top management still has the prerogative to decide on which strategy is best suited for the whole organization. The functional department supports top management to ensure that strategies are aligned and disseminated within the department. With globalization, a traditional management style is no longer effective as strategic orientation in achieving competitive advantage is geared towards flexibility, innovation and how well their organization competes in the global market place. To date, buyers have a renewed interest to place orders in the country as goods made in China has saturated the North American market, giving customers less variety and options. With this opportunity, firms must immediately take change by the hand and become organized, to surpass other Asian players in equivalently producing innovative and quality furniture at a competitive price.

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REFERENCES Arboleda, Corazon R., Writing a Thesis, Manila, 2004. Bullard, Steven H. (2002). Innovate or Evaporate Business Concept Innovation in the Furniture Industry in the Age of Information. Institute of Furniture Manufacturing and Management, Mississippi State University, Mississippi. Bullard, Steven H. and West, Cynthia D. (2002). Furniture Manufacturing & Marketing: Eight Strategic Issues for the 21 Century. Forest and Wildlife Research Center, Mississippi State University, Mississippi. Castellina, Giovanna (2002). Ready- to- Assemble furniture still growing, World Furniture International Markets Review, 12-15. Chakravarthy, Balaji and Lorange, Peter (1991). Managing the Strategy Process: A Framework for a Multibusiness Firm. Prentis Hall Engelwood Cliffs, New Jersey p xiii. Culbreth, C. Thomas, Miller, Michael and O Grady, Peter (1996). A Concurrent Engineering System to Support Flexible Automation in Furniture Production, Robotics & Computer-Integrated Manufacturing 12 (1), 81-91. David, Fred R. (2003). International Edition Strategic Management Concepts & Cases 9 Edition, Pearson Education, Inc., New York, Vol. 2, 98-101 Forker, Laura B., Vickery, Shawnee K. and Droge, Cornelia L.M. (1996). The contribution of quality to business performance, Int. J. Operations and Production Management 16 (8), 44-62. Foster, Jeremy J., Data Analysis Using SPSS for Windows, Sage Publications Ltd., London, 1998. FPRDI, PCCARD under a DOST Project (2000). An Assessment of the Philippine Furniture Industry. Fuller, Peter B. (1994). Assessing Marketing in Small and Medium-sized Enterprises, European Journal of Marketing 28 (12), 34-49.
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TURNING THINGS AROUND BREATHING NEW LIFE TO AN ALMOST-DEAD BUSINESS ALLAN CAPULONG, MBA
Greatlands Development and Marketing Corporation started Villa Regina Subdivision in 2004. The project was a low-cost, subdivision selling house and lot packages ranging from P550,000 to P750,000. It is located in McArthur Highway between the cities of San Fernando and Angeles Pampanga. It was one among the low-cost real estate projects with low selling velocity and had no broker network activity. The project took a major facelift from August 2006 to December 2006, where it totally stopped its marketing and sales efforts and was re-launched last January 2007 as Florida Residences. An American-inspired community that offers house and lot packages ranging from P2,000,000 to P3,000,000. It is now the number one (1) selling medium-end housing product as of 3rd & 4th quarter of 2007 beating real estate giants like Avida by Ayala Land, Sorrento by Crown Asia of the Villar Group, and Robinsons Land. Yes, its true. The business had a revenue growth of 1,900% in a span of one (1) year. At first, this may sound impossible, but I say it was possible. Entrepreneurs reach a common phase in the business life cycle where every strategy is just ineffective, all your ideas does not seem to match the required output, and to add a little more drama, your people does not have that fire in them to help you get through. What do you do? Close shop? Go find a job? Soul search? Well, a true Entrepreneur sits back, takes a step backward, musters all the sanity left in him and redefine his business plan once more. Again, its a battle between the negative and positive you, no one else but you. For a losing company that was on the verge of collapsing, it takes real inspiration and imagination to see the light and it doesnt take brilliant, rocketscience, or an Albert Einstein type of a strategy to turn things around. All it takes is to ask yourself the basic question where us Entrepreneurs always ask especially in times of crisis like what Ive experienced. What is the logic of my business? It was the easiest question to ask but the hardest one to answer. Allow me to take you through the exciting process of how I repositioned our real estate company from a losing and close-to-damnation company to one of the best selling real estate project in Pampanga. 71

Knowing That There is a Problem, A Very Big One A common mistake of entrepreneurs is that the blame for the business nonperformance goes through a lot of people and a lot of departments. One of the greatest paradigm-shift for an entrepreneur is to finally look in the mirror and tell the person one sees that you are the problem! From this point on, one begins to see that since the business was originally anchored on the entrepreneur, of course its success and failure will definitely be anchored on him/her. Once the entrepreneur has that mindset of change, he/she begin to see that from him/her flows the lifeblood of a companys drive for change. In all its areas and on how it functions in the business environment. From here, he/she takes a look at the main indicators of what is obvious. Therefore, the story of realization and change begins. In the case of the researchers business, it was sales. The real estate project was already on its 3rd year and still no sales were coming in. To add to the confusion, this project was located in a very strategic location in Pampanga and as you know well, in a province that is booming very fast. Now whoever said that real estate was all about location? I beg to disagree. On the onset, it was what the developer originally thought of. The developer buys the land, develops it, and sells it. Nobody came. A business where capital expenditure is huge, losing money for three (3) consecutive years was more or less a sign for the developer to finally close shop. Again, what was the logic of my business? Stop, Look, Listen, and Think The developer started by checking what is happening to this country. These are some of the findings from my research: 1. 2. 3. The country experienced growth in terms of GDP at 5.5% and GNP of 5.8% in 2006. I also found out that during the same year, our global heroes who are the OFWs poured in $12B through formal channels and an unconfirmed data that it was the same amount through informal channels. Opportunities to supply the need for housing are still very visible. There will be an estimated 3.8 million housing need come 2005-2010. This housing need is composed of the expected backlog, substandard, and new household according to the Housing Urban Development Coordinating Council (HUDCC).

The government identified key challenges for housing that they have to accomplish and these are the following: 1. Meeting the rapidly growing housing need; 2. Expanding private sector participation in socialized housing financing and construction; and 72

3. 4. 5. 6. 7.

Strengthening the capacity of housing institutions; An industry called the Business Process Outsourcing (BPO) industry is like a spreading wildfire in the metropolis and in key cities nationwide. Local and international tourists are increasing everyday. A special segment of the Filipino Baby Boomers scattered around the world were looking for a place to invest and because they are as I have said Filipinos, we are on top of their list. The Philippines is being eyed as a strong candidate to be the retirement capital of Asia because of the countrys natural resources and its culture of hospitality.

Government Programs & Directions According to the Housing Urban Development and Coordinating Council (HUDCC), the housing efforts of the government for the next three years will focus on the bottom 40 percent of households because of their inability to get formal housing assistance. This means providing these households with affordable socialized housing either through efficient production of housing units for ownership or rental or through sustainable housing finance. If and when necessary, the government will step in to provide subsidies to make housing more affordable. Government however will ensure that these are targeted and transparent. The housing market should be made more efficient. This strategy calls for government to improve the efficiency of the housing market and for private sector to innovate and produce decent housing at lower costs. Housing agencies have been tasked to cut down bureaucratic red tape in the processing of housing applications. The target for this activity is to cut into half the processing period. To address the high price of urban lands for housing, Congress is being encouraged to enact the National Land Use Code. This code identifies all areas for specific uses and resolves conflicts in the use of land, their classification and their location. This will be accompanied by the Land Insurance Bill that seeks to promote a more reliable and fraud- proof system of securing land titles and addresses the problem of forgery of land titles. A sustainable housing financing shall be put in place. When one thinks about housing finance, one immediately thinks of PAG-IBIG. This should no longer be the case when the private sector is encouraged to participate in the housing market. Housing finance shall rest on market-based principles and efficient use of subsidies and incentives to address specific market failures. Innovative financial schemes shall be put into place to generate long-term funds for housing. The OFW Phenomenon One of the major factors that have been affecting a lot of industries other than real estate is the emergence of the OFW market. This does not only fall under the social aspect of this environmental analysis but is also directly affecting the economy of the Philippines because of the huge inflow of money from different 73

parts of the world. The typical Filipino being known as the global employee has been to every destination possible, working hard for their families to let them survive while they are struggling here in the Philippines. This social phenomenon has opened a lot of businesses and gave the country a new hope for sustaining its growth. An estimated 8.3 million Filipinos or 17% of the total population are working abroad. If we will look at it on a micro level, there will be one (1) OFW for every six (6) household. Some 800,000 to 1M Filipinos emigrate on an annual basis. This number is expected to grow steadily in the years to come. The Philippines is the third largest country that sends out its labor force in world. The Philippines is only third among the top two (2) countries namely Mexico and China. An average of 2,500 Filipinos leave the country everyday. According to the recent report by the Asian Development Bank (ADB), the growing OFW market of the Philippines ranks 3rd in the world for remittance made. This amounts to around $14-21 billion in remittances or a total of 32% of the GNP. This is expected to grow at 17.5% per annum. According to the data by POEA in 2006, the deployment rate increased by 7.5% from 2005 to 2006. OFW remittances increased as well by a huge 19.4% from 2005 to 2006. 2005 2006 % Change # Of Deployed OFW OFW Remittance in $ Source: POEA 988,615 $10.7B 1,062,567 $12.8B 7.5% 19.4%

The table below shows the origin of the $12 billion OFW remittances. From these figures, overseas marketing efforts may be planned well and marketing budgets allocated for campaign programs of real estate companies. There was a whopping increase in remittances from Canada that recorded 400%. Country 1. USA 2. Saudi Arabia 3. Canada 4. Italy 5. United Kingdom 6. Japan 7. UAE 8. Hongkong 9. Singapore 10. Taiwan Source:POEA 2005 6,424,848 949,372 117,061 430,071 300,725 356,659 257,429 338,895 240,149 86,551 2006 6,526,429 1,117,915 590,627 574,662 561,670 453,398 427,246 413,723 285,126 168,998 % Change 1.58% 17.75% 404.55% 33.62% 86.77% 27.12% 65.97% 22.08% 18.73% 95.26%

The top ten provinces ranked by the number of OFW Households are shown below. This will help real estate developers evaluate specific locations if it is viable 74

or not. The usual investment choices made by a typical OFW is to buy properties for personal use and their relatives in the province. Pampanga has the most number of OFW household compared to the total household recorded in that province. Province Number of OFW Household Share of OFW Household to total number of Household 27% 29% 27% 25% 25% 24% 23% 18% 26% 26%

Pangasinan Pampanga Iloilo Laguna Cavite Rizal Batangas Bulacan Negros Occidental Tarlac Source: POEA

124,956 99,359 98,122 96,650 93,620 82,510 77,739 71,818 59,290 52,290

The top ten destinations of OFWs from year 2004 and 2005 are illustrated below. TOP TEN DEPLOYMENT DESTINATIONS OF OFWS 2004 2005 % Change 1. Saudi Arabia 188,107 193,991 3.13% 2. Hongkong 87,254 94,553 8.37% 3. UAE 68,386 81,707 19.48% 4. Taiwan 45,059 46,714 3.67% 5. Japan 74,480 42,586 -42.82% 6. Kuwait 36,591 40,248 9.99% 7. Qatar 21,360 31,418 47.09% 8. Singapore 22,198 27,599 24.33% 9. Italy 23,329 21,261 -8.86% 10. UK 18,347 16,799 -8.44% Source: POEA From the data that was gathered, it proved that the real estate industry today compared to what it was during the financial crisis of 1997 is now standing on solid ground. This means that there is a strong and growing market compared then that most real estate investments were all speculative. Another finding is that the sophistication level of the market that we are serving have increased due their exposure in the global market and that the 75

dynamics of the marketing landscape has changed tremendously over the years. Porters Framework Analysis The framework helped me understand the inter-connectivity of the players in the industry and how to gear my company in response to the changing behavior. Bargaining Power of Suppliers The power of suppliers of raw materials in the real estate industry mostly depends upon the economic situation. During this time of construction boom, suppliers generally have greater bargaining power and have the capacity to command higher prices. During times of crisis, suppliers tend to lower their prices because of the diminished number of customers. This is very much manifested in steel and cement materials. During this time that real estate is booming, suppliers give higher prices due to increased demand and urgency. Bargaining Power of Customers Individual buyers do not have much bargaining power when it comes to prices. On the other hand, corporate accounts may have certain advantages because of volume discounts. The power of the individual buyer relies on his ability to pay in cash, which forces a developer to lower prices in exchange for better cash flow. Homebuyers are highly price sensitive since this expenditure represents a large fraction of the buyers monthly income and savings. They also face high switching costs in terms of location that a developer is offering. However, due to the increasing sophistication of buyers, which is brought about by their exposure, they are able to demand for higher quality, extended financial terms and better service in terms of amenities and other value-added features. Pressure from Substitutes Not everyone from the listed housing backlog can afford houses. That is why substitutes include purchasing lots only, renting, and living with parents, etc. No matter how uncomfortable these substitutes are, these are more practical options for those who cant afford to purchase their own house for the moment. Threat of New Entrants The horizontal housing industry is a capital-intensive industry. Its barriers to entry are high due to the need for suitable land banking requirement, access to financing for development, financing that will come from customers and the need to apply economies of scale. However, in the horizontal residential sub-sector where it is highly fragmented, entry barriers are made lower because of the emergence of many landowners offering joint ventures. This is also the sector in real estate where location is the least sensitive unlike condominiums that require it to be in a developed location and resorts that demand a naturally beautiful location. In order to garner a good market share, buyers must know and appreciate the product that the developer is offering. In any given development before, land was always the largest cost but because of possible joint ventures, developers now can allot their funding in developing nice entrances and model houses for pre-selling which will improve their cash flow. Access to development financing is also a prerequisite in real estate. This 76

funding line should at least have the lowest possible rates. This is possible if a developer has a good track record and a good relationship with the bank. Some old time developers tap their own source of financing for a project to push through. Financing for customers is also a major factor since not everyone has the capacity to pay outright. That is why a part of this paper talked about financing access like HDMF and GSIS to name a few. Economies of scale play a major role in keeping costs down. A lean organization handling a lot of projects at one point is the most ideal. The key to achieving economies of scale is by developing and selling the first project fast and opening new projects by using all and the same business template. A real estate company that maintains its own construction company should be able to expand to more than 1 project since the investment and learning curve of the organization will be put to waste. Knowing Ones Competitors Intimately A developer has to understand the success factors of the big players in my industry and to know how they position their products in every locality that they are into. The size of the horizontal housing industry is very difficult to estimate because of the number of small players scattered in various parts of the country. In 2006, six (6) major developers had about P33 Billion in booked sales of residential subdivisions. Below is an overview of the major players in the real estate industry: Below is an overview of the major players in the real estate industry: Brittany, Crown Asia, Camella, etc. under the Villar Group This company is the pioneer among the market leaders in the mass housing for socialized, low and medium income segments. They became successful in penetrating this market because of liberal payment schemes to those who are in financial difficulty. After developing its capability in these segments, this group is now catering to higher income market segments having developed some of its new projects in Region IV. Sta. Lucia Realty The Chamber of Real Estate and Builders Association (CREBA) bestowed upon this 31-year old real estate company as the Developer of the Year for 2006 during the CREBA-HUDCC national convention. This company survived the hard times by not acquiring massive properties but participated through joint-venture agreements with landowners. Aside from developing residential properties, this company also ventured into malls and retailing. As of today, Sta. Lucia has developed 137 subdivisions, 11 championship-quality golf courses, 7 first-rate golf communities, 5 sports and country club estates and 1 mall. Filinvest Land Inc. The company was spun off from Filinvest Development Corporation, the listed holding company for real estate business of the Gotianun family. Its projects are primarily located in Luzon, particularly, the National Capital Region (Novaliches, Quezon City, Paranaque, and Las Pinas) as well as in Cavite, Laguna, Batangas, Rizal, and Bulacan. Some are also located in the Visayas-Mindanao 77

region, specifically Cebu and Davao. Filinvest is involved in various projects such as high-end residential communities, middle-income projects, socialized housing developments, farm estates, township projects, technology parks, and leisure malls. Filinvest Land, Inc. has a land bank of 2,608.5 hectares. Landco Pacific Corporation Landco Pacific Corporation is a major, multi-product real estate development firm engaged in high-end residential resorts, leisure farms, first home residential developments, shopping centers and CBDs and memorial parks. Founded in 1990, the company was soon overseeing the planning and management of an estimated 80 development projects for some of the country's major property developers, such as The Tutuban Center and Filinvest Festival Mall. The company was also responsible for the development of the winning bid for the Fort Bonifacio Global City. Robinsons Land Corporation Robinsons Land Corporation (RLC), one of the Philippines' leading real estate companies, is involved in the development and operation of shopping malls and hotels, and is also one of the country's most progressive in developing residential condominiums, as well as land and residential housing developments, including socialized housing projects located in key cities and other urban areas nationwide. RLC was incorporated on June 4, 1980 to serve as the real estate arm of JG Summit Holdings Inc., one of the country's largest conglomerates with diverse interests in branded consumer foods, agro-industrial and commodity food products, textile, telecommunications, petrochemicals, air transportation and financial services. Ayala Land Inc. This real estate arm of the Ayala Corporation is known and considered as the most successful real estate player in the country today. This company is the only full time property developer engaged in land development construction of office and residential buildings, shopping centers, industrial estates, office buildings, apartment buildings, hotels and resorts, infrastructure development and middleincome housing. Through its over 50 years of experience in real estate, Ayala Land, Inc. has earned a reputation as the country's leading real estate developer. It is primarily credited for Makati City's metamorphosis from grasslands back in the 1940's into the premiere business district it is today. To this day, it is the preferred business location of the most prestigious corporate, commercial and residential addresses, site of many international hotel chains and home to exclusive high-end residential areas developed by the Ayala group over the past 50 years. An estimated 65% of the projects of these major developers cater to the midmarket segment. All of these developers except for Sta. Lucia Realty offer house and lot packages. Sales coming from the provinces account for about 33% of the 2005 sales of major developers. This percentage mostly came from the two developing regions IV and III. There is an estimated minimum of 2-5 developers present in any given location. Sta. Lucia realty sells mainly open lots with cuts ranging from 150sqm above and sold at a minimum of P3,000 per square meter. 78

Crown Asia, on the other hand, focuses on house and lot products targeted to the middle-income market. Filinvest is involved in doing both house and lot selling and lots only. As of October 2007, there are emerging companies that will also play a major role in the growth of the Real Estate Industry. These companies have also invested billions of pesos as part of their future plans. These companies continue to experience high sales and it is important to assess what makes them successful as we move forward. They are as follows: 1. Megaworld / Empire East 2. Century Properties 3. Eton Properties 4. Globe Asiatique 5. Federalland 6. Nuvo Land 7. SM Development Corporation 8. Phinma Properties 9. DMCI Homes Understanding Ones Micro-Market One of the most unforgettable experiences for the researcher was to re-scan the market where my business operated. There was the realization that the company was not competing at all in a marketplace where competition was very stiff. This, if I may advice my fellow Entrepreneurs especially those in the early phases of their business life cycle, is very important. Scan your micro-market and better things will happen. The basic ingredient of a good micro-market scan involves an analysis of the locality, the competitors, and most importantly, the customers. Findings (Sample results from our micro-market scan) Locality The Pampanga market had one of the fastest population increases amongst all the provinces in the Philippines. The new North Luzon Expressway increased land values in Pampanga. The newly opened Subic-Clark-Tarlac interchange will give Pampanga a boost in its local economy. Customers Age-range of potential customers is from 28-40 years of age. The potential market includes local professionals, small and medium-size business owners, and families of OFWs. OFWs can purchase a house by offering financial package that would extend their payment term. Competitors 75% of our competitors in Pampanga are in the lot-selling segment only. Only 25% offers house and lot packages. 79

Only a few developers engage in comprehensive marketing and sales activities. The absorption or selling speed in Pampanga is very high at 200-300 houses per month. Re-visiting the companys micro-market gave the developer the right mix of how to repackage their product and choose the exact segment that they wanted to serve. Because of the research findings, it was the developers decision to finally shift from the low-cost segment upward the mid-cost segment. This was a major decision point because doing so will also entail that the entire organization upgrades the way it does business. Know What It Takes In order to be successful in real estate, the following things should be considered: 1. Location and accessibility of the development 2. Extensive market research 3. Product packaging 4. Customer-oriented housing products 5. Value-added features 6. Tailor-fit financial packages 7. Access to capital 8. Cash flow management 9. Product concept and innovation 10. Comprehensive marketing plan Re-configuring Ones Organization With the changes in the environment, also came the need to effect change in the organization. The configuration of your organization must be aligned to what type of market opportunity one will be seizing based on your long-term strategic plan. One cannot just configure it the way others do it, otherwise one will fall into the trap of fielding the wrong army in a competitive war. Marketing The owner informed the marketing department that they would pause operations and reconfigure everything. When they all came back, it was totally a different product that they had to sell. The owner had to go through the process of evaluating the current sales force if their profile is still the one needed to push for a new type of product. The upward movement of the target market requires an upward movement in the entire packaging of who will push for the product not only in their physical appearance but also in the type of knowledge and attitude needed to be a deserving front-liner of the company. The owner replaced each one of them. The marketing communications also changed dramatically because suddenly, they will have to communicate to a new market segment, which is more knowledgeable, more sophisticated, and more powerful in terms of purchasing power. The pricier a product becomes; the more sophisticated ones customer gets. 80

Operations Imagine a workforce that was used to delivering low-quality products and then suddenly the owner asked them to deliver, industry breaking, quality, and timely products. Marketing promised customers superb product delivery, the department delivered the promised perception that the marketing department gave the customers. Operations in real estate comprise 90% of total spending since bulk is used for land development, and housing construction. Therefore, the Entrepreneur should make sure that resources are utilized at an optimum level while seeing to it that expectations are met with the right quality and delivery time. A long-term training program was designed to meet the ever-growing quality needs of the new target market as well as exposure programs so that the workforce knows the quality and type of finishing that other players offer. A part of this is the handling of the organization that delivers the goods. New product, new quality demands, new culture. The owner had to do a total facelift to how things were done and measured in order to respond to the needs of the changing market. There were many rejections from the start because everyone was already in their comfort zone. Finance & Accounting/Procurement The companys back office support suddenly became a war zone because of the many demands that needed support. The company had to establish a more professional way of counting numbers, which means newer systems and better procedures. Before, it was just a matter of recording transactions but it totally evolved to a back office support that also responds to the needs of the market such as extended financial terms, efficient collection services, and financial management. Cash flows had to be managed because since sales grew by 1,900%, the organization had to be robust enough to be able to handle such kind of sudden growth in sales. Cash flows had to be managed daily, weekly, monthly, so that management is always updated on sudden change in the movement of its vital resource, which is cash. Suddenly one starts to realize that personal finances cannot sustain the operations of ones business and that a bigger appetite for financial infusion is needed from other channels like loans from bank and investment companies. Human Resource One does not force people to change, one inspire them. The developer had to sell them the idea that the developers plan for change will be for the betterment of the company. From the entrepreneur lies the ability to create a very good vision for the company that people will follow because they see something good in it. One has to know that this is the hardest resource to manage because they are human beings after all, with feelings, dreams in life, and the right to choose. Gone are the days that employees are given their job description, sent to their workplace, and paid every 15-30 and the job will automatically be accomplished. It is about showing them that working for the owner creates satisfaction. A feeling where their input adds up to the companys drive for success, the companys achievement of their vision. Start with the ABCs of human resource by providing for their basic needs and 81

make sure that mid-term and long-term plans are laid out for their growth. Clear communication, involvement, and inspiration are the things that one should always practice and remember. For the company, it was all about investing in a human resource team before anything else. Always remember, no investment pays higher dividends than investment in the employees. Ready, Aim, Fire After analyzing every facet of ones business, a good business plan should always be produced so that lampposts are established and management control is present. Once one is ready with all the scientific analysis together with the right gut feel, it is time to cross the bridge and do it.

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A STRATEGIC MANAGEMENT PAPER ON THE FILIPINO SEAFARER RECRUITMENT INDUSTRY ANTONIO HERRERA, MBA
Introduction ABC Co. Inc. is a recruitment agency that supplies Filipino seafarers to ship owners in different parts of the world. Since its founding in the 1970s, the company has grown to a size of 200 employees and has had experience operating passenger vessels, general cargo, oil tankers, liquid gas carriers, etc. In keeping with its philosophy, ABC has developed in-house training programs and a seafarer family welfare program that keeps its seafarers performance and motivation at a high level and customers ultimately satisfied. One of the problems of the company, however, is that it has not had any significant sales growth in the past years. The company has been catering to only two primary clients for the past ten years. Although the company has been receiving consistent income for the years that it has been in existence, the potential for growth has been covered by a cloud of complacency. This study is aimed at identifying the opportunities for growth in the company and formulating plans, making use of the companys strengths, while still striving to reverse its internal weaknesses. Research and Methodology The evaluation methods used for this paper include the External Factor Evaluation Matrix (EFE), Internal Factor Evaluation Matrix (IFE), ThreatsOpportunities-Weaknesses-Strengths Matrix (TOWS), Competitive Profile Matrix (CPM), Porters Five Forces of Competition Model, Internal-External Matrix (IE), Grand Strategy Matrix, Strategic Position and Action Evaluation Matrix (SPACE), and the Quantitative Strategic Planning Matrix (QSPM). A Balanced Scorecard was also developed to evaluate between shareholder and customer/operational objectives. General Philippine Economic Environment Major Economic Indicators, Philippines, 2001-2005 Item GDP growth Gross domestic investment/GDP USD Exchange Rate Inflation rate (consumer price index) Debt service ratio 2001 3.0 20.6 50.99 6.1 15.8 2002 4.4 19.3 51.60 3.1 16.4 2003 4.5 18.7 54.20 3.1 16.1 2004 5.0 19.5 56.04 4.5 19.0 2005 5.0 19.5 55.09 4.5 18.0

Sources: Bangko Sentral ng Pilipinas; Bureau of Treasury; National Statistical Coordination Board; National Statistics Office; staff estimates. 2005

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A picture of the Philippines general economy is important in any strategic formulation. The Philippines is currently experiencing a slow but steady rise in terms of its GNP from the years 2001 to 2005. In terms of the inflation rate, the economy experienced a decrease of 3% from 2001 to 2002, but since then has increased at a slow pace. Although the government has been heralding a promising economic future for the Philippines, it remains to be experienced by individuals and small corporations. Some of the main reasons for this are the upward trend of international oil prices, and the constant weakening of the peso against the dollar (as seen in the general economic factors table). These two factors have made an increasing impact in local prices, whether it is by real pressure from foreign suppliers or by perceived price increases in various industries. Although ABC Co. Inc. along with the other players of the Philippine manning industry are somewhat shielded by their dollar-earning nature from these price fluctuations, a lot of administrative expenses such as office supplies, transportation, and the like, are still obviously purchased in peso. This means that while most of the companys expenses that are directly related to the deployment of the seafarers, a considerable part of its expenses are still affected by this particular economic condition. Rising OFW Indicators Since ABC Co. Inc. is primarily a supplier of sea-based, and to a lesser extent, land-based Filipino workers abroad, it would also be important to consider the economic factors that relate foreign employment of Filipinos and how these factors have contributed to opportunities in the manning industry. For starters, so many Filipinos have been turning to overseas employment for their livelihood over the years. Whether it has been for economic factors, political instability or otherwise, more and more Filipinos have looked to other countries for employment.

OVERSEAS FILIPINO WORKERS' REMITTANCES in thousand US dollars Worker Sea-based Land-based TOTAL * 2000 926,677 5,123,773 6,050,450 2001 1,093,349 4,937,992 6,031,271 2002 1,199,183 5,686,973 6,886,156 2003 1,298,223 6,280,235 7,578,458 2004 1,464,930 7,085,441 8,550,371 2005 1,669,358 9,019,647 10,689,005

Source: POEA 2005 The continuous increase of Filipinos seeking employment abroad is evidenced by the upward trend of Overseas Filipino Workers remittances over the past several years. The remittances of Sea-based OFWs increased by a rate of 97.27% from 1999 2005. The remittances of Land-based OFWs also increased by 51.63%.18
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This not only signifies the fact that going abroad is becoming more attractive to Filipinos, it also shows that Filipino laborers are also becoming more and more attractive to foreign employers. The dramatic increase in remittances of sea-based Filipino workers not only means that more are leaving the country to work in internationally owned ships. It also means that foreign ship owners have been accepting more and more Filipino seafarers for employment. This presents an opportunity for the company to rely on the rising dependability of Filipino seafarers to look for additional clients and broaden their geographical reach in terms of clients, and ultimately boost profits. This particular indicator is a two-edged sword. Seeing the fast upward pace of overseas sea-based workers means that, the other competitors have been steadily increasing the fleets of foreign ships that they have been manning over the years. To not keep up with the competitors pace would mean being left behind in the race for market share. This implies so many other repercussions. First, it strengthens the bargaining power of the current customers since the companys customer base remains stagnant and the business depends on them. Then, it could bring the company out of touch with current market demands such as up-to-date technology, IT solutions, and value-adding services that come much easier to those having a wider variety of customers. Indeed, if the company does not broaden its reach, it could fall into the trap of complacency in servicing their existing customers and lose sight of the expertise that it takes to cater to different types of clients. High Unemployment in the Philippines Although some socio-cultural factors are developing that reinforce the upward trend of the OFW remittances, unemployment in the Philippines is one of the main reasons why a lot of Filipinos look for work abroad. Unemployment was increasing from 10.2% in 2002 to 12.7% in 2005. When looking at these figures in relation to its Asian neighbors, the Philippines unemployment rate is alarmingly high. 19

Unemployment Rates in Southeast Asia 2005

15.00% 10.00% 6.40% 5.00% 0.00% 3.60% 1.40% Philippines Malaysia Thailand Singapore Indonesia 12.70%

10.90%

Source: CIA World Factbook

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Malaysia posted an unemployment rate of 3.6% in 2005, Thailand 1.4%, and Singapore 6.4%. Among its more developed neighbors, only Indonesia had an unemployment rate in almost the same level at 10.9%. Certainly, the unemployment rate in the Philippines could be counted as a factor contributing to the attractiveness of foreign employment to Filipino citizens. More Filipinos are looking for opportunities abroad to compensate for the lack of jobs here in the Philippines. In addition, if it takes too long to turn the unemployment situation around, as will be discussed later, it could produce a lingering culture of preference towards employment in other countries. One external factor that contributes to the increasing demand for seafarers is globalization. The global market, because of the loosening of trade restrictions among countries in the recent years (especially with China), is continuing to need more and more means for the transport of their goods across the seas. This means that the demand for seafarers globally would be in a steady ascent in the coming years. Rising Need for Land-based Workers in Japan and Other Parts of the World As will be discussed later in the internal assessment, one of the companys key strengths is that it has recently acquired a license to deploy land-based workers. It is also important, therefore, to take into account the growing demand for landbased workers all over the world.
Annual Philippine Land-based Deployment Growth (2000 - 2005)
10.00% 8.00% 6.00% 4.00% 2.00% 0.00% -2.00% -4.00% -6.00% 1999 2000 2001 2002 2003 2004 2005

Source: POEA 2005 The Philippine land-based deployment industry has been experiencing an optimistic trend in the past years after a decline during 2003. This could be attributed to the growing demand for skilled workers (factory, construction, electrical, etc.), which rose by 8% in 2005. The deployment of teachers and civil engineers also climbed by 45.6% and 27% respectively. Overall, the deployment of Filipino land-based workers abroad is clearly on an upswing and is expected to maintain its steady growth in the end. Reasons for this upward trend are perceived to be the following: 86

1. English proficiency and culture adaptability of Filipinos; 2. increasing acceptance of outsourcing through foreign workers by multi-national companies; 3. small difference in the degree of service at a big price difference of Filipino technical personnel (teachers, IT professionals, engineers); 4. acceptance by the Philippine Government of Filipino workers as a primary mover in the countrys economy.; and 5. Aggressive moves by the Philippine Government to market Filipino workers to more and more destinations in the world. This increase represents an opportunity for land-based agencies to reap profits if the proper marketing is implemented to reach new clients. Top Ten Sources of OFW Remittances 2005 in Million USD USA Saudi Arabia Italy Japan HongKong United 6 Kingdom 7 UAE 8 Singapore 9 Germany 10 Canada Source: POEA 2005 1 2 3 4 5 6424 949 430 356 338 300 257 240 134 117 1 2 3 4 5 6 7 8 9 10 Top Ten OFW Destinations 2005 by deployment Saudi Arabia Hong Kong UAE Taiwan Japan Kuwait Qatar Singapore Italy United Kingdom

One location of particular interest is Japan, where one of the companys main customers for the sea-based unit, Mitsui OSK Lines, is located. Japan has been one of the most consistent Filipino OFW destinations in the world. According to the 2005 annual report of the POEA, Japan was ranked fourth in the world in terms of OFW remittances, and fifth in the world in terms of number of OFWs deployed. This attests to Japan employing a high number of Filipino workers as well as the high level of monetary gains that the OFWs in Japan are able to bring home.

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Top Ten Destinations of OFW New Hires 2005 1 2 3 4 5 6 7 8 9 10 Source: POEA 2005 Saudi Arabia Japan Taiwan UAE Kuwait Qatar Hongkong Lebanon Korea Bahrain 65,259 38,803 34,369 33,969 24,917 17,671 17,633 13,210 6,920 4,817

Despite Japans tightening of immigration policies in recent years, it still hired the 2nd highest total of new OFWs for the year 2005. Looking at the previous reports, it is also notable that Japan ranked 1st in new hires in the two previous years, 2003 and 2004. Also making the deployment outlook to Japan brighter is the enactment of the recently signed Free-trade Agreement between Japan and the Philippines. The agreement that was signed on 9 September 2006 paves the way for the entry of a limited number of Filipino nurses and caregivers into Japan. Although it is a modest start, the agreement is viewed by some as the start of more employment opportunities for OFWs in Japan. This strengthens the fact that Japans acceptance of Filipino workers remains stable and opportunities to deploy to Japan will be present for years to come. Technological Factors / Phase-Out of Single-Hull Ships by the International Maritime Organization On November 13, 2002, a 26-year old oil tanker called Prestige sank along the coastline of Spain. It was instantly a worldwide ecological issue and sprang forth numerous calls for action by governments, environmental groups, and citizenries. It also has a number of European countries fighting over accountability for the incident. The Prestige spilled an estimated 17,000 tonnes (4.5 million gallons) of its 77,000-tonne (20 million gallon) cargo of fuel oil, contaminating hundreds of kilometres of coastline, killing wildlife and forcing a ban on fishing and seafood harvesting that has put tens of thousands of people out of work.. - CNN.com 88

In response to this incident, the International Maritime Organization (IMO) made moves to phase out the single-hull design of the Prestige in favor of the safer double-hull type of oil tankers. This move would prevent further risk of oil tankers sinking and contaminating global waters and was immediately supported by a lot of countries. Hence, the IMO dictated several deadlines for the phase-out of single-hull oil tankers depending on their categories and ages. Trade by way of these ships would be prohibited after their respective deadlines. This would mean that a majority of single-hull tanker ship owners in the world would be either scrapping them or selling them to purchase the new technology double-hull ships in line with the different deadlines. It is also important to note that though this IMO directive was addressed for oil-tankers only, that several shipowners of other kinds of ships (cargo, passenger, VLCCs, etc.) could also be anticipating further directives, and as such, would also purchase double-hulls to replace their other ships as well. The first deadline for Category 1 tankers (as highlighted in the IMO revised phase-out schedule), was on April 2005. Categories 2 and 3 tankers have their deadlines set at varying times from 2005 to 2010 depending upon their ships anniversary dates.

Revised phase-out schedule

Category of oil tanker Category 1 - oil tankers of 20,000 tonnes deadweight and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 tonnes deadweight and above carrying other oils, which do not comply with the requirements for protectively located segregated ballast tanks (commonly known as Pre-MARPOL tankers) Category 2 - oil tankers of 20,000 tonnes deadweight and above carrying crude oil, fuel oil, heavy diesel oil or lubricating oil as cargo, and of 30,000 tonnes deadweight and above carrying other oils, which do comply with the protectively located segregated ballast tank requirements (MARPOL tankers), and Date or year for phase-out 5 April 2005 for ships delivered on 5 April 1982 or earlier Anniversary date in 2005 for ships delivered after 5 April 1982

5 April 2005 for ships delivered on 5 April 1977 or earlier Anniversary date in 2005 for ships delivered after 5 April 1977 but before 1 January 1978 Anniversary date in 2006 for ships delivered in 1978 and 1979 Anniversary date in 2007 for ships Category 3 - oil tankers of 5,000 tonnes delivered in 1980 and 1981 deadweight and above but less than the Anniversary date in 2008 for ships tonnage specified for Category 1 and 2 tankers delivered in 1982 Anniversary date in 2009 for ships delivered in 1983 Anniversary date in 2010 for ships delivered in 1984 or later

Source: International Maritime Organization 2005

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This technological factor could be viewed both as a threat and as an opportunity for the company. This is for the mere fact that as several ships are sold or scrapped, several manning agreements would also be ending. This would definitely coincide with the ship owners renegotiating contracts that naturally come with buying new ships, such as the manning agreement. As the ship owners dispose of old vessels and acquire new ones, they would surely renegotiate their contracts with their current manning agency for the new vessel. More than any period, this would be when the country could expect ship owners, who are not satisfied with their current manning agencies, to go out and contact other prospective work force suppliers. It would also be the time that ship owners who are satisfied with their current manning agencies would contact new prospective agencies for constructive competition. The threat and opportunity lies in the thought that many agencies could possibly lose their current clients or gain new clients during this time. It would all depend on the course of action they would take in response to the IMO edict. Legal / Political Factors20 The POEA Hard to Enter, Easy to Leave Policy The government agency that is most directly related to the industry is the POEA. Over recent years, the POEA has been moving for tighter regulation of the sea-based and land-based agencies and better prevention of incidences of illegal recruitment in the country. This has been the main area where the government and legal factors come to play. POEA administrations campaign policy has been hard to enter, easy to go. In line with this policy, many measures have been taken to ensure that new license applicants are screened heavily, and that government regulations would be strictly enforced among those agencies that are already licensed and running. From 2004 to 2005, there was a 19% decrease in the number of new licenses issued (from 99 to 77 licenses). There was also a sharp decline in the number of licenses renewed from 468 in 2004 to only 64 in 2005, representing an 86% drop for the period. Moreover, because of the POEAs tightening degree of implementation, there was a significant increase in the number of cancelled agency licenses in 2005 compared to that of 2004. From 36 licenses in 2004, 67 licenses were revoked in 2005, representing an 86% increase. The POEA conducted 863 agency inspections in 2005, discovering 33 violations to existing POEA rules and regulations. This affects the industry in different ways. First, it gives more experienced agencies better footing in industry ground since it is putting up higher barriers for new recruitment agencies to enter. Second, it is also making it imperative for all existing players to tighten their
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policies in communicating with their applicants, in the representation that their company has to these applicants, in its briefings before departure, and many other facets of their business. Development Initiatives of POEA for More Foreign Employers to Take in Filipinos The Philippine Government is very much interested in developing the OFW industry of the country, both sea-based and land-based. President Gloria MacapagalArroyo has initiated projects through the POEA and DOLE to continue looking for new foreign clients. One of the successful projects of 2005 was the DOLE Labor Opportunities Program which brought together prospective employers and Filipino recruitment agencies. The event generated a total of 15,462 job orders from the participant agencies. The POEA also undertook marketing missions to Taiwan, UAE, Qatar, Bahrain, and Cyprus, proving that the government is serious in its thrust to market the Filipino worker in Asia and all over the world. Competitive Forces Industry Background The main business of ABC Co. Inc. is to supply sea-based manpower to ship owners or any of their agents around the world. This means that while this study examines ABC as competing with the other manning agencies in the Philippine manning industry, the owners cannot ignore that competitors are present around the world. It should also be emphasized that the global manning industry is directly dependent on the world shipping industry the transport of goods such as oil, cargo, and passengers by sea such that one cannot be studied without consideration of the other. Background on the Global Shipping Industry The manpower demanded by ships required for seaborne trade would certainly be directly proportional to the amount of trade goods that are to be transported each year. In the same way, the amount of seafarers demanded by the world market would be directly proportional to the number of ships currently comprising the global merchant fleet. As of January 1st 2005, the world trading fleet was made up of 46,222 ships, with a combined tonnage of 597,709,000 gross tonnes.

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Different Sectors as percentage of total number of ships in world fleet: 1 January 2005
Passinger Ships, 12% Container Ships, 7% Other, 4%

General Cargo Ships, 39%

Bulk Carriers, 13%

Tankers, 25%

Source: Lloyd's Register Fairplay January 2005. World Shipping Figures 2002-2004 2002 2003 2004 World Trade Output Growth 1.9% 2.6% 4.1% Rate World Seaborne Trade (goods 5.88B Tons 6.17B Tons 6.76B Tons loaded for the year) World Seaborne trade growth 0.8% 3.7% 4.3% rate World Merchant fleet growth 2.3% 1.5% 4.5% rate Oil Tankers world Growth Rate 6.6% 4.1% 6.1% Dry Bulk Carriers Growth Rate 1.9% 2.5% 4.2% Source: United Nations Council on Trade and Development 2004 Globalization has been an external factor that has affected almost all industries in the world. Shipping, and consequentially manning, are two of the worlds industries that are more directly affected by globalizations continuing spread. World trade goods output growth has been increasing from 1.9% in 2002 to 4.1% in 2004. Vigorous trade brought about by globalization has brought about the need for more seaborne trade, and more ships. 2004 has given impressive numbers in terms of trade growth and the growth of the global shipping fleet, especially the oil tankers. One of the reasons for this sharp increase in tankers is the scrambling for the purchase of new double-hulled tankers (as discussed earlier). The next section would give a background about the global manpower industry and how the Filipino seafarers fare in the competition to man these trading ships.

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Background on the Global Manning Industry21 As of 2005, the population of seafarers worldwide serving on internationally trading merchant ships is estimated at 466,000 officers and 721,000 ratings. Of this number, the Philippines is the leader, providing 20% of the worldwide population. That means that the Philippines supplied around 220,000 seafarers in 2005. The prevailing reasons for international ship owners preference towards Filipinos is their level of English proficiency, adaptability in changing environments, and nonconfrontational nature. According to the BIMCO ISF (Baltic and International Maritime Council / International Shipping Federation) Manpower update 2005, there was a surplus of 224,000 ratings with respect to demand and a shortage of 16,000 officers in the year 2000. This implies that there is intense competition for the supply of ratings seafarers internationally.

Though the Philippines is the leading seafarer supplier in the world, China has been making great strides towards competing for market share with our country. A study in 2002 that appeared in the international publication Maritime Review gave a little overview of how Chinese seafarers have been increasing in demand the part several years. In 1998, China had 80,000 seafarers employed in deep sea trade. After being stagnant in the years previous 1998, the figure was expected to swell to 105,000 in 2005 because Chinas continuing liberalization. The obvious reason for this rise is because of the cheap price of labor that is being paid to Chinese seafarers. The ITF (International Transport Workers Federation) standard rate for an average of 22 seafarers is $750,000 per annum, the average for Chinese seafarers is $300,000 per annum. Although the Filipinos wage scale is generally below ITF standards, it is still much higher than the Chinese crew. At a rough estimation of industry standards, the figure would be around $500,000 per annum at 22 seafarers.
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BIMCO ISF Manpower Update 2005 93

Background on the Philippine Sea-based Manning Industry The Philippine Sea-based Manning industry is composed of 723 registered manning agencies all over the country. The current market leader is Magsaysay Maritime Corporation. ABC is in the upper half of the industry in terms of deployment along with a high concentration of its players. The number of Filipino seafarers deployed as recorded by the POEA experienced an annual growth rate of 4.60% from 2000-2005. Marketing Mechanisms Since the manning industry does not rely on conventional marketing vehicles such as television and print advertising, it is important to discuss the mechanisms available for players in the manning industry to hunt and close deals with shipowning companies abroad. One of the reasons why Magsaysay Maritime Co. is the leader in the industry is that they have been a shipping company before entering into the manning industry. As such, they have had the privilege of being in the network of shipping companies worldwide, being in contact with the clients while many of the other players started from scratch. Today the unified efforts of shipping companies to forward their causes and profitability gives rise to several shipping federations all over the world who meet regularly in what are called shipping conferences. The largest of these groups are called the International Maritime Organization and the International Shipping Federation. In these conferences, several representatives from shipping companies all over the world gather in one venue, giving delegate manning agents a chance to market their services. The attendance fees for these types of conferences, though a bit onerous would compensate for the collection of prospective clients in one venue as opposed to visiting their offices one by one. The conferences that seem to be diamonds in the rough are those of smaller shipping organizations, some national or some just instituted by a group of few shipping companies that have the same agenda. It is in these conferences that the delegation is a bit smaller and a more personal approach could be made to the individual prospects. The more risky and costly form of marketing for the manning industry is when companies contact the shipping companies from national business directories or ship registries and arrange visits with the goal of closing a deal to man their fleet of ships. This kind of marketing is risky because it depends on whether the random shipping companies are looking for new manning agents or not. So much of it depends upon timing and coincidence that the company could fund several trips and still not be able to net a manning agreement.
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Competitive Profile / Critical Success Factors It cannot be overemphasized that the main factors that affect success in this industry have to do with the size and bargaining power of the ship owner clients, and the international character of the industry. Because of these considerations, the familiarity of manning agencies with conducting business in the global setting is hoisted into the forefront of critical success factors ahead of conventional ones such as price and efficiency of service. The following are the critical success factors that are essential in measuring competitiveness in the manning industry: 1. Global Marketing Initiative 2. International Corporate Image 3. Pricing 4. Seafarer Performance / Efficiency 5. Office Staff / Processing Efficiency Global Marketing Initiative As the industry caters to large, corporate, foreign clients all over the world, conventional means of marketing such as television and radio advertising, print media and the like are not applicable to this kind of industry. The first customers that a manning agency will get to start with will most likely come from international networks (probably a foreign acquaintance or common friend). To be able to achieve growth after the first client, however, an agency would have to aggressively pursue marketing efforts in other countries. There are numerous ways of going about this, with varying effectiveness. Some manning agencies choose the random approach, procuring shipping directories from different ship intensive countries such as Greece and Japan, and individually contact them with the interests of making personal visits in the hope of closing a deal. This method, though less costly than others, relies much on luck and coincidence to be successful. The more prevalent practice in the manning industry is to send marketing delegates to attend international shipping conferences around the world. These conferences are attended by many representatives from different ship owning companies, offering a large concentration of prospective clients in one location. Having access and taking advantage of these marketing channels would be one of the big keys to surviving and growing in the manning industry. Having more clients effectively gives each agency more adaptability through experience with different ship owners and would add to their international exposure and image.

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International Corporate Image When ship-owning corporations are seeking for a manning agent, they usually get information from one of three sources. First, they would skim through the manning agents they already have contact with, namely the agents that have reached them via the marketing channels mentioned above. Second, they would be asking their colleagues from their own industry about their experiences with their own manning agents and recommendations according to which agents their friends in the industry know of. And lastly, if they have a nationality in mind that they would like to inquire about, they ask the government agency that is related to foreign employment and shipping in that particular country (in the Philippines, these would be the POEA and the MARINA respectively). Of these three sources, access to global marketing channels helps with the first. International corporate image brings the manning agent closer to the second and third sources (exposure to industry players and government agencies). Attaining that level of international corporate image wherein random ship owners contact your agency is difficult and would require taking care of relationships and networks. When attained however, it gives a great competitive advantage, providing the possibility of new clients even with less marketing efforts. Pricing In general, players in the Filipino manning industry already enjoy a price advantage over western competitors such as European seafarers, while at a disadvantage with some Asian competitors such as China and India (as mentioned in the competitive forces section). The weight of price competitiveness between Filipino manning agencies, therefore, is a little lower than others. Ship owner clients, in favor of the price difference between Western and Asian seafarers, give a little more breathing room when Filipino agencies are concerned. Pricing is still, included in the first negotiations between clients and manning agents, before the ship owners get their first opportunity to gauge the seafarer performance and office performance of each manning agent. It is, therefore, placed before the rest in terms of weight. Seafarer Performance / Efficiency When initial contact has been made and the manning agreement has been done, maintaining the client would largely depend on the product itself, which is the performance of the seafarers. High performance means the imperative of minimizing problems onboard and any possibility of labor disputes between the seafarer and the owners. Accidents and delays to ships always prove costly. Collisions between ships result in multi-billion dollar suits, while any sort of delay in port or at sea would 96

mean thousands of dollars in opportunity and maintenance costs for the ship-owners. Because of this, it is very important to note that one small human error from any seafarer could cost many monetary losses. Liabilities from these kinds of errors as well as the chance of losing the client make sailor efficiency all the more important. In addition to this, seafarer performance could easily build-up or pull down any agencys international corporate image, since players in the shipping industry are easily connected to each other. Office Performance / Efficiency Office performance works hand-in-hand with seafarer performance in being the two key determinants of effective service in the industry. Office functions of the manning industry include the following: Building an efficient database / pool of qualified seafarers for deployment; receiving and working on manpower orders from the client ; processing seafarer documentation; PDOS (pre-departure orientation seminar); travel arrangements from the Philippines to the ships next convenient port; coordination with the ship owners port agent; and dispatching of seafarers on date of departure Client frustration over seafarer problems onboard the ship are almost equal to any frustration they may encounter due to delayed deployment, missed flights, incomplete documents and poorly briefed sea crew. The difference between office performance and sailor performance would be that faulty seafarer performance entails greater liabilities or costs. External Factor Evaluation Matrix (EFE)
KEY EXTERNAL FACTORS Force Weight Rating Weighted Score

Opportunities 1 2 3 4 5 High Unemployment Rate Economic 0.05 0.05 0.20 0.05 0.13 2 2 1 2 1 0.10 0.10 0.20 0.10 0.13

Culture of Migration / Foreign Employment Socio-cultural Rising need in foreign countries for landbased workers Globalization / Steady growth of global fleet Phase-out of single hull ships Economic Economic Technological

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Threats 1 Competitive rise of Chinese seafarers Competitive Political Economic Economic Economic 0.10 0.08 0.05 0.12 0.17 1.00 3 4 2 2 1 0.30 0.32 0.10 0.24 0.17 1.76

2 Stricter implementation of POEA 3 Appreciating peso value 4 Inflation 5 Worldwide surplus of seafarers Total EFE Score

Internal Assessment Management Well- Experienced Management Being one of the pioneers in the Philippine Manning Industry, ABC has had the privilege of being manned by very competent managers. The years of experience that the company has had, gives ABC managers the advantage of having been through several irregular circumstances that contribute to their adaptability to change. These instances include management of ships through transferred ownership, disaster management of sunken ships, and handling cases such as jumpship or onboard conflicts. This gives managers the edge of being dynamic enough to handle various situations without many problems. Good Standing with POEA Furthermore, the companys efficiency in the industry has translated into a good relationship with the POEA. Its constant high level of deployment and other unique achievements have been cited by the POEA in numerous occasions: 1. received Top Performer Award (Citation for deployment) 1994, 1996, and 1998; 2. received Award for Excellence (Consistent Top Performer) in 2002 and 2005; 3. received POEA citation for being one of the pioneers in the manning industry; and 4. received POEA citation twice for exemplary concern for seafarer welfare. Management System / Low Employee Empowerment The companys management system could be characterized as being vertical or traditional. While the middle and lower ranks have their own everyday routines and designations, top management exercises a high level of supervision and most of the decisions still have to be run through them before proceeding. In certain 98

aspects, this kind of management is still appropriate. This is because the allowance for error in the manning industry is very small. A small delay in documentation or communication with the client or the seafarer could result in many losses for the clients. Moreover, since individual clients control a large chunk of the companys profitability, it is only fitting that mistakes be kept at a minimum and constant monitoring is one way of ensuring this. As a result, employee empowerment has been difficult to attain. Micromanagement has been made a practice by some of the managers and bureaucracy has hindered employees individual contributions. Such a high value is given to not committing a mistake that the middle and rank-and-file employees go to meetings expecting a defense rather than a forum to voice their ideas to improve the company. Employees pay more attention to their individual work rather than the bigger picture because of the vertical system. In addition, the decisions that need to be run through top management causes the turnover of work to be slower than what it is desired to be. In trying times where initiatives in marketing and cost cutting are quickly becoming imperatives, the company needs to make initiatives to empower their employees. This would entail giving them more freedom to do their jobs, but setting measurable quotas in minimizing errors and such. This would give the employees more confidence in their jobs, allowing the ideas to flow and taking a little pressure off top management. Human Resource Development / Lack of Initiative to Develop Employees As aggressive as the company has been in developing training programs for the benefit of its seafarers, it has not been as active in looking for ways to cater to the self-improvement needs of its employees. As the everyday work for employees in a manning agency can be considered mechanical and as ongoing pressure to minimize errors are constantly called for in the different departments, the company has not made an initiative to equip their employees with the proper training for them to have an attitude towards excellence. New employees are usually just set off into their new jobs with the development of a high standard of work dependent on the way the managers will be able to mentor them. Although the company does boast a line-up of extremely competent and well-experienced management, development through personnel training would still be able to raise the bar and more formally introduce the measurable standards by which the company wants to operate. Marketing Product ABC is committed to supplying the most responsible and dynamic seafarers in the Philippines. The company has had years of experience handling different kinds of ships including general cargo, dry cargo, bulk carriers, oil tankers, liquid gas tankers, and passenger vessels. ABCs continuous seafarer training is not only to maintain the high level of performance of its seafarers, it is also geared 99

towards making all crew from ABC fit to be deployed for duty in any kind of ship in the world. When ship-owner clients ask about the availability of a crew for a particular kind of ship, the goal is to be immediately able to pull out from the pool with no need for additional time. Limited Customer Base ABC currently caters to two primary clients: 1. DEF Co. (Greece) 2. GHI Co. (Japan) Because of the limited number of clients that the company has catered to for many years, the references that these clients are able to make for ABC is likewise limited. Word of mouth and networks from the shipping industry are some of the best springboards for growth in the manning industry and in this respect; ABC has not been able to cash in. Absence of a Marketing Plan Currently, the company does not have a clear cut marketing policy, nor does it have a designated position for marketing in its organizational structures. As marketing in the manning industry relies largely on international networks and word of mouth from ship owners, ABC has concentrated on operations and has not had efforts to hunt for new clients abroad. This dependence on external forces in gaining new clients has been one of the reasons for the slow growth of the company through the years. New clients arriving in the company during the late 1990s up to the present have been minimal and merely through coincidence. Walk-in clients in the manning industry are extremely low in incidence. Operations ABC was one of the first manning agencies in the Philippines to be ISO certified. Because of this, quality procedures are monitored regularly and a Quality Assurance Representative is present to organize management review meetings and internal audits in order to keep the standards of the companys procedures at a high level. License to Deploy Land-based Workers One of the new recent projects of the company that has gained it an opportunity for profits is the incorporation of a land-based recruitment agency. To start with, ABC went into a joint venture with an independent management group that had clients in Japan in need of land-based workers from the Philippines. The initial agreement was for ABC to fund a land-based corporation and for the management group to make use of the license under supervision of the company. 100

The group would pay ABC a fee for making use of the license and the agreement would hold until the group is already able to fund its own license. This started in the year 2003, and the agreement ended in 2005 when the management group decided to go independent. This left the company with a landbased license without any clients to start with. This gives ABC an advantage over other manning agents in that it has opened a window to diversify into another industry with opportunities to generate more profits for itself. The operations department is subdivided into fleets. These fleets are determined by manageable sizes and are sorted by client. Each fleet has its own manager, who directly communicates with the clients representatives for their assigned ships, and a fleet assistant, who is in charge of gathering and compiling all documentation requirements for crew in that particular fleet. Each fleet also has its own corresponding accounting staff in the accounting department that sees to the disbursements of wages and communicating with the clients regarding billing. There are two centralized sub-departments of the Operations Department, namely the Dispatching and Recording Department. Dispatching is in charge of accompanying boarding seafarers to the airport for smooth facilitation. Recording, archives all copies of crew documents for all fleets in case a need for these documents arises. Welfare Program for Seafarers As the company was founded by a former ship captain, there has been from the start an attitude of care towards the seafarers of ABC. One of the first unique programs of the company has been its welfare program for the benefit of the families of the seafarers it deploys. Having control over the release of all the seafarers salaries and wages from the ship-owner clients, ABC has ventured into granting cash advances to the seafarer beneficiaries. Their families are welcome to go to the office when there is a need. They are then interviewed by company representatives, and when the reason for cash advances are satisfactory, are given cash to be deducted from the seafarers salary account with minimal interest. In addition to this, the company has also been active in disaster coordination, always contacting seafarers families who live in the location of a recent disaster (storms, earthquakes, volcanic eruptions, etc. ABC has found that one of the biggest factors that contribute to the motivation of seafarers onboard is the knowledge of their families safety and well-being. These welfare measures take motivation to a higher level and consequently help performance and loyalty rise as well.

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Internal Factor Evaluation Matrix

KEY INTERNAL FACTORS 1 2 3 4 5 1 2 3 4 5 Strengths Well-experienced Management License to deploy land-based workers Good Standing with POEA Welfare Program for Seafarers In-house training for Seafarers Weaknesses Limited Customer Base Low Employee Empowerment No Marketing Plan Poor Collection Efficiency Lack of Human Resource Initiative for Employees Total IFE Score Function Management Operations Management Operations Management Marketing Management Marketing Finance Management Weight 0.15 0.15 0.05 0.07 0.07 0.08 0.08 0.20 0.10 0.05 1.00 Rating 4 4 4 3 4 1 1 1 2 2 Weighte d Score 0.60 0.60 0.20 0.21 0.28 0.08 0.08 0.20 0.20 0.10 2.55

Strategy Formulation TOWS Analysis

STRENGTHS S 1. Well-experienced Management 2. License to deploy Land based 3. Good Standing with POEA 4. Welfare program for Seafarers 5. Seafarer In-house Training OPPORTUNITIES - O SO STRATEGIES 1. Develop a new seafarer training program for double-hull operation (O5, S5) 2. Build Marketing Efforts for Land based Deployment (O2, O3, S2) WEAKNESSES- W 1. Highly Vertical Management 2. Low Employee Empowerment 3. No Marketing Plan 4. Poor Collection Efficiency 5. Lack of H.R. Initiative WO STRATEGIES 1. Build Marketing Plan for Current and potential Customers (O4, O5, W3, W4) 2. Promote people from the ranks to form a designated marketing team in company (O3, O4, O5, W1, W2, W3)

TOWS ANALYSIS

1. High Unemployment Rate

2. Culture of Migration 3. Rising Need for Land based 4. Steady Rise of Global Fleet 5. Phase-out of Single-hull Ships

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THREATS -T

ST STRATEGIES 1. Implement Stricter Policies in dealing with applicant seafarers (T2, S1, S3)

WT STRATEGIES 1. Strengthen Employee Cost-Consciousness through seminars ( T4, W4, W5)

1. Rise of Chinese Seafarers 2. Strict Implementation POEA Reg 3. Appreciating Value of Peso 4. Inflation 5. Worldwide Surplus of Seafarers

TOWS MATRIX STRATEGIES Concentric Diversification Proposed Strategy In consideration of the companys strengths and weaknesses, as well as the opportunities and threats present in the current environment, the most appropriate strategy would be concentric diversification into the land-based recruitment industry. The company, however, should not take for granted the opportunities present for the sea-based unit, where secondary strategies of market penetration and market development should be pursued. Concentric Diversification (Land-based Industry) In order for the company to get its land-based unit up and running, it just needs a place to start. Its good standing with the POEA and well-experienced management give it the capacity to maximize the benefits of its land-based license should the first client start asking for workers. In addition, the companys high degree of liquidity makes it ready to finance an aggressive land-based marketing campaign that would provide the clients that it needs to start. 1) Marketing Campaign for Japan could start immediately One of the companys 2 primary clients is located in Japan. It has come upon several business connections in Japan over the years. Japan was ranked #2 in the 2005 POEA annual report in terms of new OFW hires (38,803), despite Japans implementation of strict immigration policies last year. Japan ranked #5 in the top ten Destinations of Filipino OFWs 2005 2) Studying market prospects to other Asian countries Market Development Market Penetration Product Development

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Market Penetration and Market Development While the company starts marketing into the land-based industry, it should not ignore the opportunity presented by the deadlines enforced by the International Maritime Organization (IMO) to phase out single-hull oil tankers. Since a lot of oil shipping companies would be selling or scrapping their ships in favor of the new technology double-hull ships, a renegotiation period arrives in which these companies would be signing new manning contracts, either with their existing agents or with other agents. This gives an opening for manning agents to present themselves to companies with existing ties with other agents and probably pull out with new ships. 1) Market to Japanese Shipping Companies. Make connection either through networks or directly from Lloyds Fairplay Shipping Directory. 2) Market to Other Shipping Companies from other countries. Market through Networks or through Shipping Conferences worldwide. Market Segmentation Main Unit (Sea-based) The industry could be generally classified according to the types of ships serviced as mentioned in the previous section (passenger ships, cargo ships, oil tankers). Expertise in one category of ships could differentiate a company, but only to a small extent. The types of ships where agencies are able to be differentiated are oil tankers and passenger ships. Other than these two types of ships, supply of seafarers are generally considered similar and a lesser degree of expertise or differentiation could be seen by customers. ABCs fleet of manned ships is currently comprised of 70% Oil Tankers and 30% General Cargo Ships. It is recommended that the company, though having had a lot of experience manning several different kinds of vessels, prioritize on searching for Oil Tanker companies to increase their fleet size while still marketing to the other players that are encountered in the shipping conferences and directory marketing trips.

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Land-based Unit (Concentric Diversification)

Landbased Deployment 2005
Professional and technical related workers 22%

Household and related workers 30%

Other Skills 1%

Skilled workers 47%

As depicted in the graph above, the highest percentage of land-based OFW new hires deployed last year were under the category of skilled workers (46.93%). These include factory and construction workers, dressmakers, building caretakers and electrical workers. The next two categories, which include household workers, and professional and technical workers, are close together at 29.93% and 22.29% respectively. In terms of salary, professional and technical workers net a much higher salary, followed by skilled workers, and then household workers. Because revenues in the land-based recruitment industry are received as a percentage of each deployed workers salary, the highest amount of revenue that a recruitment agency can get per worker deployed would come from the deployment of professional and technical workers. Philippine Land-based Deployment New Hires 2005
Occupational Group A. Professional and Technical Related Workers Teachers Nursing Personnel Civil Engineers MedTech Mechanical Engineers Draughtsmen Dental Assistants Aviation Related Workers Other Professional Workers 2005 63,941 789 674 625 524 452 442 344 211 59,880 % Contribution 22.49%

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B. Skilled Workers Construction Workers Factory Workers Building Caretakers Sewers and Embroiderers Wiremen Electrical Tailors and Dressmakers Other Skilled Workers C. Household and Related Workers D. Other Skills Total New Hires

133,420 30,078 39,477 12,607 4,452 2,991 2,906 40,909 85,088 1,836 284,285

46.93%

29.93% 0.65% 100.00%

Upon closer examination of the number of newly hired workers deployed for the year, the researchers find implications in that the higher yielding workers (professional and technical) have a much lower number of workers deployed for each occupational category (teachers, nursing personnel, etc.), with each category not reaching 1,000 new hires for the year. Under the categories of skilled workers and household workers, on the other hand, the number of newly hired workers deployed per subcategory is much higher because of the less specialized job descriptions. This gives a number of implications about how the land-based market is segmented and how land-based agencies are to proceed in the industry: Agencies that specialize in deploying certain subcategories of professional and technical workers such as nurses would have a higher yield per worker deployed, but would have a hard time reaching a high level of deployment since the annual deployment for these types of workers only reach the hundreds for the whole Philippines. Agencies that focus on skilled workers and household workers would have an easier time reaching a higher level of deployment, with a marginally lower yield per worker. This implies that although agencies first customers would require one particular kind of worker, it would be advisable for land-based agencies to have a pool of several different categories of workers in order to cater to a wider range of clients and be more successful in the industry. It is also important to note that while skilled workers and household related workers are both less specialized than the technical categories, one big difference is that household workers are more susceptible to exploitation. The researchers notice this as more and more features on print and on Television narrate the plight of Filipino domestic helpers abroad. With these in mind, it is recommended that the company gather a large pool of technical, professional and skilled workers, marketing for clients to deploy both categories of workers. These two categories of workers could help the companys profitability in two different ways. Pooling and marketing for skilled workers would present the company with opportunities for larger and more stable deployment, 106

though giving less return per worker deployed. This would help the company establish a stable cash flow that would defray its expenses. Marketing for technical and professional workers, on the other hand, would give the company less deployment, but a much higher return per worker deployed. This would help the companys chances for growth because of its higher profitability, and in the end, could be the cash-generating segment for overall profits. References: Baltic and International Marine Council and International Shipping Federation. BIMCO/ISF Manpower Update. 2005. CIA World Factbook. The Central intelligence Agency. Jul 2006 <https://www.cia.gov/library/publications/the-world-factbook>. CNN.COM. 6 Nov 2003. Cable News Network. Aug 2006. <cnn.net> International Maritime Organization. International Maritime Organization. Dec 2006. <www.imo.org>. Lloyds Register Website. Lloyds Register Fairplay. Dec 2006. <www.lr.org>. Migration Policy Institute (MPI) Home Page. Migration Policy Institute. Dec 2006. <www.migrationpolicy.org>. National Statistics Office, Philippines Official Website. National Statistics Office. Jul 2006. <www.census.gov.ph> The Philippine Overseas Employment Administration. Annual Report. 2005.

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ABOUT THE AUTHORS

Prof. Celito F. Arlegue is currently the Executive Director of Council Of Asian Liberals And Democrats. He finished his Master of Arts in International Studies from the University of the Philippines in Diliman. He is a part time faculty of the International Studies Department. Prof. Ernida Ancheta-Tolentino graduated in 2004 from the University of the Philippines in Diliman with her MS in Physical Education. She is a full time assistant professor for the Physical Education Department. Prof. Caryl Charlene E. Jimenez completed her Master of Business Administration from the University of Santo Tomas in 2006. She is currently the Department Chairperson of the Business Administration and Entrepreneurship Department. Prior to San Beda College Alabang, Prof. Jimenezs work experience were from industries related to manufacturing, export trading, retail and administration. Prof. Allan Capulong completed his Master of Arts in Entrepreneurship from the Asian Institute of Management in 2008. He is an alumnus of San Beda College Alabang and a part time faculty member for the Business Management Department. He is the CEO of Homewell Development Corp. Prof. Antonio Herrera is a part time faculty for the Business Management Department. He is an alumnus of the SBCA High School. He completed his Masters in Business Administration from the Ateneo de Manila University in 2007.

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