Crossroads (Toward Philippine economic and social progress)
Philippine Star, 6 February 2013


2013 marks the 40th year of the National Economic and Development Authority (NEDA) as the country’s national planning agency for economic and social development.This set me to reminisce on its origin and early years. I was privileged to have organized NEDA from its infancy and led it until mid-1981. Those were important formative years for this agency endowed with a bold name, an Authority. As for me, those years represented a significant part of my public career in the government service.

Institutional framework before 1973. Before NEDA was created, the main national planning agency was the National Economic Council (NEC). Often, the NEC was referred to as the highest economic policy council in the nation.

The chairman of the NEC occupied a senior cabinet position. He served, on paper, as the President’s economic adviser and so, he also occupied a main presence in important government committees on economic matters. Of course, the President had many economic advisers.

Most importantly, the NEC chairman presided over a governing council composed of high government economic officials (the Central Bank governor and the chairman of the Development Bank of the Philippines), four senior legislators of the Republic (two each from the House and Senate chambers, representing the majority and minority party interests, who were often the chairmen of the major economic committees of the two chambers), and three private sector members appointed by the President.

Early experience in a high economic council. I was keenly aware of all these because in mid-1970, I was appointed chairman of the NEC by President Marcos. I had an exalted office with major responsibilities, but my NEC staffing had a lot to be desired.

Three offices staffed my work. The Office of National Planning, which was in charge of the national economic work; the Office of Aid Coordination, which assisted me in the allocation of development assistance; and the Office of Statistical Coordination, which prescribed national statistical standards and estimated the national income accounts.

The demands of my new responsibilities put me on the spot. The weakest part of my staff was the one that dealt with essential work on the national economy. The best of NEC economic staff had migrated to other parts of government or the private sector or had moved to international organizations.

My solution was to build a small group of economic consultants to backstop the chairman’s office. This group was my quick response support to speed up the economic and planning work. Almost immediately, I was able to provide a good market for government employment of graduate students in Economics at my office. I had a quick stable of MA and PhD level minds assisting me. Most of them were my bright former students at the UP School of Economics.

The NEDA, a Constitutional creation. When the Constitutional Convention had finished its work, just as martial law was declared in 1972, President Marcos adopted the constitutional recommendations to create the NEDA. President Marcos chose me to head the NEDA as director general. (To establish parity with economic ministers of other countries, I was later appointed Minister of Economic Planning.)

The most important change was in terms of the NEDA board and its chairman and members. The President became the chairman of the NEDA Board and its members the principal ministries undertaking the delivery of economic and social services. The head of the technical body of NEDA was vested in a director general who had not only cabinet rank but was made also vice-chairman of the Board. He was the equivalent of the CEO of the government planning body.

Strengthening the coordination of the government economic machinery was needed. Major departments that prepared plans and implemented various elements of the government program were put under an in institutional framework in which they had to work together. The President who was methodical about the work of the various departments could monitor the activities of these departments through the coordinating machinery established. It also helped enormously that he headed the NEDA so that government economic plans could be discussed directly under him as he met with the NEDA board.

There was more to this set up. Under the NEDA agencies, it was now possible to organize working committees at the technical level among the agencies concerned with specific phases of work. One of the early efforts undertaken was, therefore, to organize the technical working committees. The Development Budget Committee was already established before the NEDA’s creation, but we housed it within this framework.

The following committees were created to act as standing committees to coordinate the working staffs of ministries and their agencies: the Investment Coordination Committee; the Infrastructure Committee; the Tariffs and Trade Committee; and The Social Development Committee. Each of these committees began to function and deal with work programs at the technical level.

Armand Fabella, the chairman of the Government Reorganization Commission, talked with many of my colleagues in the government to help design the NEDA. He and I had many discussions about how to make a more effective NEDA.

Staffing the government and the NEDA. Any government agency is only as good as its staffing. Even when it has good leaders, overall performance suffers when the staff is weak. Strengthening the staff was of the highest priority.

The NEDA of 1973 was freed from salary standardization in the government. At that time, wages in government were badly out of line with the private sector, as they are still today. This gave the NEDA added flexibility in hiring.

Two economic agencies – NEC and PES (Presidential Economic Staff) were abolished to make way for NEDA’s birth. NEC was the older of the two institutions. The PES had a fresh group of younger recruits into government. They were mainly organized by sector project work. Those who worked with the aid coordination unit and the statistical coordination unit were hired into NEDA almost integrally. Many of those in the NEC chairman’s consultancy group were absorbed into the staff of the NEDA.

Staff training and recruitment. I asked the UP-Wisconsin economic development training program to accommodate for two years 20 young recruits in each year for NEDA trainees. Economics Dean Jose Encarnacion was very supportive. I instructed the recruitment office of NEDA to screen only the best from graduates from four of the best universities in the country.

Those chosen were given full scholarship stipend, including living expenses and tuition and book costs to allow full-time study. I assured those who successfully completed the program a job at NEDA. I used development aid money to finance these scholarships so that no budgetary, government and seniority issues arose.

As it turned out, the trainees were highly motivated. NEDA took most of them into the staff. I did not object to those who opted to join other government agencies. This was probably the most innovative recruitment programs in government at the time.

Under strict rules of training, this approach would not have been possible. My own assessment was that if NEDA could not hire them, other government offices would. As it turned out, all my dreams were fulfilled in this hiring program. In fact, some of the new hires also served other parts of the government, some even in the Department of Foreign Affairs.