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STUDY GUIDE FOR MODULE NO. 5

Nature of Development Planning and Related Concepts

MODULE OVERVIEW

Module V deals with the nature of development planning and it includes pertinent concepts pertaining
economic development planning. Economic planning of the developed and developing countries are also
briefly discussed and compared in relation to economic growth.

Furthermore, the framework of planning; principles in economic growth; Philippine development

process; legal basis of planning, planning parameters, and the basic principles in Philippine development
planning are extensively discussed in this module.

MODULE LEARNING OBJECTIVES

At the end of the semester, the students will be able to:

a. discuss the framework of planning;

b. identify the principles in planning economic growth;
d. discuss the Philippine development process, legal basis of planning, and planning parameters; and
e. explain each of the basic principles in Philippine development planning.

The Framework of Planning

Experience in South America, Africa and Southeast Asia has shown that whenever planning of the
economy is done the steps taken include the following activities:

Assessment of the national aspirations. This is a step that governments that have newly come to
political power usually take in order to give the semblance of real concern for the general welfare. The
gathering of information on what the people expect or would like to have by way of improving their lives is
thus taken for whatever they are worth in planning. Sometimes this token exercise actually yields
information that become useful in plan formulation. In most instances, however, it produces nothing more
than giving the planners an idea of how high or low is the aspiration of the people, compared to what the
government and the private sector can achieve with the resources at hand (Lewis, 1969).

Survey of existing economic conditions. The survey of current conditions is a way of looking back at
what changes have taken place since the inception and the end of the last plan, as well as to find out how
the last plan performed. The information gathered can be useful for improving the previous plan,
introducing new features into the succeeding plan and to be of use in explaining the background of the new
plan (Cairncross, 1965). Since the previous plan may have been monitored as to the changes in population,
the GNP, investment, savings, consumption, government expenditures, taxation, balance of payments and
the performance of the different economic sectors. The survey really takes the form of assembling
secondary information that have been banked by government offices or by private organizations.

Development objectives. The plan objectives are derived from the situation and the problems that
have been identified and for which solution need be provided. In many instances the same problem gets
stated and restated over the years. A review of the development objectives of countries in South America,
Southeast Asia and Africa reveals the following common objectives:

1. reduction of poverty;
2. reduction of underemployment and underemployment;

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3. provision of economically relevant infrastructure;

4. increase of agricultural productivity;
5. equitable distribution of land;
6. establishment of new and necessary industries;
7. attraction of foreign investments
8. promotion of export-oriented industries;
9. transformation of the economy to be more industrial that agricultural; and
10. acceleration of the growth of the GNP.

An analysis and interpretation of these objectives points to economic growth with redistribution of
wealth; to more employment and higher income; to increased domestic production and the attainment of a
favorable balance of payment; to the stabilizing agriculture and enhancing industrialization; to utilizing
accumulated capital in domestic industries, to providing the requirements for development; and to
improving the quality of life. The implications of the plan objectives serve as the causal background of
government plans and programs for which public funds are assigned and to serve as targets for the private
sector.

Government policies and programs. The commitment of government funds to the projects and
programs that are to spur growth and development is a major aspect of development planning. A large part
of the funds is to be placed on government infrastructure development which is intended to facilitate the
growth of industries and to provide services to the people. Among these are roads and bridges, ports and
harbors, fish ports and food terminals, drainage and irrigation, public buildings and services facilities.

At the same time the plan contains programs for social and economic services like education,
training, health care, peace and order, environmental management, housing, communication,
transportation, and cultural development which are shown to require the use of public funds (Movery and
Resenberg, 1989).

The projects and programs of government are for execution of lines agencies of the national
government or to be done by local government with national government support through shared proceeds
of the tax laws. Some of the projects and programs are assigned to attached agencies of the national
government (Lewis, 1969).

Targets for the private sector. As the larger part of the economy is private in a market economy, the
growth and development process rests upon the undertakings of private individuals and business
organizations who invest in productive activities in agriculture, industry, commerce and services. The
government is able to exert influence in the attainment of targeted rates of growth in the private sector
through the use of incentives intended to induce private sector response.

There are instances when the plan is well facilitated by incentives that generate adequate response.
There are also times when the incentive preforms miserably and is met by the private sector by cold
indifference. The plan that uses tax exemption may only reduce tax collection without producing much
growth effect. Tax exemption that has little impact on business profitability or is too complicated to follow,
will not actually generate more investment. The use of subsidy as contribution of government to private
sector projects might serve as a good incentive but is detrimental to those firms that cannot be entitled to
tax exemption paper or subsidy because they are treated differently (Bernstein, 1975).

The setting of targets on the growth of the private sector is a great exercise in the protection of
growth. It has behind it a keen study of past trends and the projection of response due to changed policies.
The different sectors are considered and quantitative growth of each is nailed down as targets but no matter

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how well the analysis has been done, the significance of the targets is that they are only informed guesses.
The array of imponderable factors behind their non-attainment is awesome. At best they serve as good
propaganda for development.

The targets set for the private sector are results of studies of gains and losses in the different
industries which buy and sell to another, import and export products, generate income and savings, pay
taxes and absorb investments in response to policy. The output of each industry is totaled and their overall
total becomes the target for the whole private sector in terms of contribution to the growth of the GNP.

The method of setting up private sector targets has progressed from listing of projects and priorities
to construction growth models that can work under some policies. These targets however become elusive
when held against the private motives of the private sector who can shift resources where they think they
can do better for themselves (Israel, 1991).

Macroeconomic plan formulation. There is always an effort to see the whole rather merely the
different parts of the public and private sectors whenever planning for development is done. It is for this
reason that a macroeconomic plan is evolved. The public and private sectors are interrelated. The output of
one is the need of the other. When their interrelatedness is mapped out and the data are assembled the
image of the plan to be made for the whole economy can be drawn.

There are different lines of thinking on how large the public sector should be. One is that it should
limit itself to what the private sector should be as large as it needs to be to lead the private sector to a
development path. This then leads to difference in development principle of growth from internal resources
or growth induced by the use of borrowed funds from external sources (Gill, 1965).

The interrelatedness of the parts of the private and public sectors moreover requires that whatever
is mutually projected for them should coincide and be consistent in the plan otherwise there shall be
confusion. However, consistency of the plan should not be mistaken for accuracy. The plan variables can in
fact be consistently inaccurate depending on the human factor of optimism or conservatism in the planning
process. In addition, the policy to carry the plan through its implementation could be inadequate or
inappropriate for the intended outcomes of the plan (Gray, 1975).

The plan depends on the tax revenues; the availability of foreign credit; the investment of the
private sector; preference of the private sector to invest in one area or another; the passage of enabling
laws and government budgets; and private response to business incentives. The macroeconomic plan is
actually an indicative plan of the situation of the economy in the future and the indicative quantities therein
are forecasts.

In the less developed countries, the control over the economy along the plan for development is an
opportunity for government to reduce risks arising from lack of coordination. Left alone, the private sectors
would take unchartered course and probably find themselves pursuing uneconomic activities. On the other
hand, the record of government for wasteful, inefficient and corrupt action has given credence to the
argument for less government control. What government should do in relation to the plan then must be to
accomplish the projects and programs for the public sector and serve as a model to the private sector, while
emphasizing facilitation rather than control of private business (Myrdal, 1957).

Macroeconomic Policy

Through the plan and its private sector targets, the government aims to induce people to do what is
deemed beneficial to the nation. They are induced to invest, prefer certain activities over others, adopt new
machines and methods or even move about within the geographic boundaries. To do this government must

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adopt policy that the private sector may generally accept (Qayum, 1975).

The primary aim of government policy in development is order in society and the offices of
government. Before any other policy could be given attention, policy concerning these matters must take
precedence. Such policy are primary end-means policies which make possible the effectiveness of all policies
for development. The vital end-means policies are those that concern the provision of electric power,
transportation, communication, refrigeration, irrigation, fertilizer production, banking services, security and
commodity exchanges, trade promotion and manpower training (Biven, 1966).

The response and growth of the private sector will be slow or fast depending upon the kind and
effectiveness of government policy which can help private sector formation. Policies do not ensure success
but absence of policy leads to confusion and dim-witted action. A poorly structured policy is better than
none because it at least indicates what is desirable to do.

Components of Plan Strategy

Development planning is a search for production possibilities using the available resources in the
economy. Several strategies to plan the growth of the economy are as follows:

1. Identify the critical resources. There are economic resources available to a country for its growth.
These may be in the form of deposits, the skills of the population, stock of capital, new technology, or
geographic advantage. These resources do not come to every country in the same volume or magnitude so
they have to be allocated so that meaningful interrelation may arise.

2. Identify the growth sectors. The pattern of growth of the economy is not expected to be always
balanced. The industries will vary in their rates of growth and some geographic areas will grow faster than
others. As it is important to promote the growth of fast-growing industries and areas over others that grow
slowly, growth centers in industry, such as mining or manufacturing, or specific cities in the different regions
should be designated as centers or sectors of growth. Critical resources should be poured into such sector or
center to get development impact.

3. Forecast the sectoral growth. The growth of the different sectors depends upon their
environment of growth and the inputs placed in them. An economy cannot grow equally in all its sectors
because of unequal opportunities and because of the operation of the economies of scale. Some industries
grow more rapidly than others because of self-enforcing tendencies which make them attract new
investments. They may, however, accelerate only up to a certain point when the resource base become over
exploited. Slow growth would follow unless the base is enlarged. This is true in the growth of canning
industry as affected by the extent of the fishing ground.

The combination of factors that interdepend in an industry indicates the production possibility of
that industry. Every industry will, thus, have a percentage of growth by this process. The mix of all industries
in the economy given their respective weights will give the economic growth rate. Although the course of
growth seeks out and tackle the production possibilities through the market, planning their growth will put
the economy on course of attainment (Cammover, 1972).

4. Prioritize the areas of growth. Since every economy has resource limitation or areas of low
production possibility, it is imperative that the plan strategy be accompanied by prioritization of the areas to
be given emphasis so that they will become the bases of vigorous growth. The government is supposed to
put in its share in developing the prioritized areas and because the major participation is by the private
sector, the government should toss in a set of inducements. It is for this prioritizing that in development,
there are what economists call lead sectors or industries.

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5. Choose the economic benefic path. The development strategy is designed to attain national
benefit goals which might be more economic or social in effect depending on the choice of the political
leadership. In the mature and developed economy where the income of the labor sector is adequate to
sustain a high quality of life, the benefit is in terms of the basket of social services that growth can provide.
In the developing countries, the path of economic benefit is in land reform, low cost housing, and the
alleviation of poverty in general. It is for this reason that the developing country has to address the more
basic needs than those given emphasis by the developed countries. While the benefit package from the
economy in a developed country is for optimal benefits, the intent in the developing country is to cover the
essential areas even if the benefits could only be at the minimum (Kohler, 1968). The pursuit of growth
targets in economic terms may even be deterred by social benefit objectives as in the failure to use land for
industrial estates because of the effort to distribute land to former tenants.

6. Provide the enablers of growth. The programs in a development plan are the means to provide
the enablement for the growth of the various sectors of the economy. Such enablers are infrastructure,
education, training and economic support services, as well as policies for the promotion of industrial
development that are set up by the government. The enablers provided by the private sectors are the
enterprises, facilities in the financial system and product development in industry which contribute to the
realization of industrial development objectives. In view of the fact that private sector action in providing
enablers to economic growth is the result of government incentives and regulation, there must be patently
strong promotional policies provided by government (Myinth, 1965).

Principles in Planning Economic Growth

There are principles that govern and permeate development planning and which planners should
observe so that the plan can be set in proper perspective. Among the most important are the following:

1. rate of saving determines the rate of economic growth. Economic growth is not and cannot be
planned for immediate impact. Present actions have future effects thus the plan should be oriented to
providing growth of savings which cannot take place in a one-year cycle. The plan must generate profit and
bigger profit to the enterprise and wages must rise in real terms in the labor sector so that saving will take
place. The increase in the rate of saving will increase the volume what enterprises and household can
channel to investment and capital formation. In this respect the rate of saving increases the capacity of the
economy to grow (Wildavsky, 1974).

2. Real wage rates determine capital intensity in industry. Real wage which is the money value of
wages adjusted by the price index is a factor that affects the intensity of capital in the industry and in the
whole economy. When the real wages increase the corresponding effect is to increase the use of capital
goods like machines and equipment and to decrease the absorption of labor in the industry. If the pressure
of the labor union becomes so strong as to drive real wage above the marginal product of labor in the
output in some industries, the intensity of capital has to be increased and the number of units of labor is
reduced.

The economy cannot grow substantially when the number of the unemployed is large. At the same
time the use of labor-intensive methods tends to place labor productivity at the lower level with consequent
effect of low wage rates. Planners must therefore set up a strategy to maintain a balance between labor-
intensify and capital-intensify in industries. In the developing countries, unnecessary investment in labor-
saving devices such as material moving conveyors only to reduce the employment of labor may increase
unemployment even when cheap labor is available.

3. Overvalued domestic currency induces unemployment. There are times when the currency of a

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developing country is over-valued vis-à-vis the currency used in foreign trade. This may happen due to the
effort of the monetary authority to maintain a particular parity of exchange. Importation of capital goods,
which will hike productivity of labor and at the same time tend to reduce employment in the economic
sectors will be easy hence the substitution of machines for labor. This becomes aggravated by the
importation of raw materials from foreign sources which are made comparatively cheaper by the overvalued
domestic currency. Employment in domestic raw material production is thus also reduced.

4. Size of the market limits growth. The rate of growth of the output of a country is limited by the
size of its domestic and foreign market. The planning of the growth of industries should consider whether
there is a space in the domestic market can be increased. This is based on the idea that production will be
expanded only when the output can be sold. The growth of the economy is delimited by the market, hence
the plan for growth should be made with planned export market expansion and the deepening of the
domestic market (Pack, 1986).

5. Infant industries require protection. Whether the economy is developing an industry on the basis
of its natural resource, as in mining, or making use of its human skills, as in ready-to-wear manufacture, the
inception of the industry requires government protection. Such protection is most needed when the other
countries of the world have been ahead in their development of the same industry as to be able to sell low
priced finished products (Chenery, et. al., 1986). Protection is provided by tariff that will equalize cost
between the newly established domestic industry and the sources of import. In some cases, the protection is
through tax exemption or the grant of subsidy to the industry. Once the planners have identified a lead
industry to be developed, they can plan the growth of that industry with the measures for protection (Bryce,
1960).

6. Economic growth rate must exceed population growth rate. The effort to improve the quality of
life of the people in a developing country has to be a two-pronged action. The first is the generation of high
GNP through production and trading activities which are based in the market system. The other one is
through the effort to reduce the rate of population growth which requires social and clinical approach. Both
actions are not immediately attainable in the early stage of the plan because the first requires investments
and capital formation while the latter has to be worked out for practical acceptance and practice by the
people. A high population growth rate tends to nullify growth income of a lower rate. For example, a 2,3 per
cent rate of population growth has negative effect to per capita GNP when the GNP growth is only 2 per
cent. The ideal is the attainment of increasing GNP growth rate and a decreasing population growth rate.

7. Structural Unemployment and Underemployment. Structural unemployment and

underemployment arise from manpower and job creation mismatch. Every development plan has a
manpower budget which is the allocation of skilled manpower to set up the physical plant and later on for
the rendition of service or to produce the commodity outputs. The main concept of the manpower
otherwise development projects, for which there is no manpower supply with the required skills, may be
aborted or scaled down. When there is a lag in job creation while the educational and training machinery
grind out of new graduates, there is a surplus in the structure of manpower. The acceleration of job creation
must be planned to provide jobs for the unemployed and the underemployed. As it is more immediately
possible to acquire equipment than to produce engineers, job creation can be made to catch up, depending
on available resources. Technological change sometimes creates demand for new skills which can be
provided after a span of time.

8. Wage gaps create social classes. The effort to raise the income of the lower income groups is not
an independent matter for planners. It is interrelated with the existing middle-income group. When the gap
between the two groups widens the quality of life in terms of food, clothing, shelter, health and education
begin to vary even when the government undertakes social amelioration steps (Budd, 1966). In a country

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with high rate of unemployment, the gap is difficult to reduce because of the pull-down effect of
unemployment on the wage rate. On the other hand, the use of more capital good in production would have
the effect of increasing income of those employed and reducing the level of employment. A good plan has a
feature for narrowing the wage gap between the lower income and middle-income groups (Samuelson,
1985). The ideal of course is for the formation a larger middle-income group through higher productivity of
labor.

9. Congestion creates diseconomy. Economic growth is necessarily accompanied by population

convergence in some centers where the interrelated factors are to be found and no function. Population
convergence likewise expands the market base of the country. However, the overpopulation of a particular
center of growth creates diseconomies of congestion and exhausts the economies of concentration.
Planning should therefore provide for better services and infrastructure in the countryside to retain the
population and encourage dispersed investments, while improving but not expanding the services in the
already congested areas. Incentives for investments should be tied to the wider geographical distribution of
productive capacity and the dispersal of employment opportunity. This is as important in the less developed
economy as in the advanced economy. Experience has shown that exhaustion of the economies of
concentration takes place in centers with population in excess of 500, 000.

10. Basic industries and civil order are growth enablers. Planning priority needs to be placed on basic
industries such as power, water, transportation and communication so as improve the condition and the
ground for investment and production. The private sector looks for the existence of the basic industries
which enable other industries to function. If an enterprise will have to provide such requirements as power
and water, there can be major disincentive for them to invest (Hagen, 1986).

The Philippine Development Planning Process

The country’s development plan for 1992 to 1998 was placed on the road through Memorandum
Circular No. 2 issued by President Fidel V. Ramos on July 17, 1992. This issuance directed the formulation of
the Medium-Term Philippine Development Plan (MTPDP) and the Medium-Term Public Investment Program
(MTPIP) for 1993-1998. The highlights of this issuance were as follows:

1. The NEDA shall coordinate the preparation of the plan;

2. The plan shall be jointly formulated by the executive and legislative branches;
3. The plan shall be based on the medium-term plans and programs of all government
instrumentalities, including local government units (LGUs)’
4. The plan format shall cover goals/objectives, strategy/policy framework, the key measurable
targets, and a descriptive list of priority list of priority development programs and projects;
5. The investment plan should go with the main plan and the priority subsector activities (PSAs) shall
be stated;
6. There shall be regional development plans which will be integrated into the national plan; and
7. The private sectors shall be consulted in the planning process.

The Legal Basis of Planning

The master policy and mandate for the formulation of the national development plan is Section 9 of
the Philippine Constitution of 1987 which provides the independent economic planning body headed by the
President which Congress will establish shall “recommend to Congress, and implement continuing,
integrated and coordinated programs and policies for the national government”. The same provision
provides for consultations with the private sectors and local governments. It also provides that “until the
Congress provides otherwise, the NEDA shall function as the independent planning agency of the

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government”.

The NEDA was organized by way of Executive Order 230 under the aforementioned constitutional
provision. The functions and powers of the NEDA and the NEDA Board were set. Aside from the formulation
of the socio-economic development plan, the NEDA is mandated to formulate public investment programs
and to monitor and evaluate plan implementation.

Planning Parameters

As explicitly expressed in Executive Order No. 230, the planning parameters that bear on
development planning in the Philippines are as follows:

1. Pursuit of objectives of growth with equity. This means that while the plan should emphasize the
increase of production and investments, the distribution of wealth should be given emphasis. In this term,
the less economically capable will be given greater access to the fruits of development.

2. Integration of policies, plans, programs, and projects of all sectors of society. This parameter
makes for the formulation of a holistic plan that will enable the plan to address the different segment of
Philippine society as a whole.

3. Participation by and consultation with concerned private sectors, community organizations,

beneficiaries and local government units. This is a needs assessment parameter that augers for the
prioritization of programs and projects along the needs of the participative groups (Chenery and Srinivasan,
1988).

4. Inclusion of perceived needs of the localities in the formulation of regional and national targets
and in the framework of national strategies. This will have the effect of ensuring that the plan is
comprehensive in its approach to development.

5. Coordination and consistency of the priorities, policies, plans, programs and projects of the
national, regional and local levels of government. This parameter is to preclude disjointed planning that may
be wasteful due to overlapping of action in some activities while leaving some areas unattended.

6. Linkage between development planning, programming and budgeting. This parameter makes for
making the planning process fully rounded by the inclusion of time and fiscal allotments in the plan. These
are features that render the plan more easily interpreted for implementation (Cowan, 1973).

Basic Principles in Philippines Development Planning

1. Bottom-up and participatory planning. This principle makes for the carrying out of planning and
programming processes consistent with local autonomy.

2. Synchronized planning and budgeting activities. Every plan is of paper character with respect to the
projects and programs However, it is the budget that provides the motive force to plan implementation. The
investment program that goes with the plan makes the plan workable.

3. Private participation and consultation. The acceptability of the plan is enhanced when the plan allows the
private sectors to propose policies and projects during the planning process. In view of such participation,
the formulation of incentives for the private sectors are fine-tuned in the programs and projects of the plan.

4. Involvement of special planning. There are special areas that have planning bodies of their own and the

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plans of which need be integrated into the national plan. Among them are the planning bodies of the
Autonomous Region of Muslim Mindanao, the Cordillera Autonomous Region and the Metro Manila
Development Authority.

Planning Vision

Expressed in a capsule, the vison of the plan is in the five objectives as follows:

1. Poverty alleviation. This is a common plan objective of poor countries whose level of development
has not brought about the eradication of poverty.

2. Reduction of inequality. This objective gives strength to agrarian reform which is the biggest single
scheme for bringing about social justice.

3. Generation of productive employment opportunities. This is an objective that bears on the

infusion of government funds and of private sector investment to job creating enterprises.

4. Comprehensive human development. This objective is on the improvement of education and

training, complemented by health care.

5. Attainment of sustainable growth. This refers to the establishment of projects and programs that
will widen the base for growth in the future especially with respect to the preservation of the ecology and of
the resource base in nature.

Plan Policies

The Medium-Term Philippine Development Plan has the accompanying policies:

1. Pursuit of world competitiveness. This is a policy of product improvement in manufacturing and

the enhancement of skills through education and training.

2. People empowerment. This is the provision of adequate protection and promotion of human
welfare in the process of development.

3. Investment in technology and people. This refers to raising human productivity through the use of
technology and the development of labor capacity to work in capital-intensive production.

4. Mobilization of domestic and external resources. This refers to the effort to generate savings in
the domestic economy and if necessary, also of funds borrowed from abroad.

5. Observance of fiscal, monetary and trade balance management. This is to optimize the
effectiveness in government spending, in the control of credit and the money supply, and of promoting
exports.

6. Economic openness and competition. This is to reduce the barriers to trade through deregulation
of imports and the inflow of investments from the foreign countries.

7. Adoption of high value-added technology. This is to improve the structure of production and
wages.

8. Deepening of agricultural and industrial capability. This is to improve the productive capacity in

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agriculture and industry through tested methods and with machines suited to the Philippine setting.

9. Consideration of the environment and the ecology in the development. This points to the
reduction of damage to the environment while pursuing.

10. Broadening the development span. Development should spill over to the countryside.

The Public Investment Program

The fiscal aspect of the plan is contained in the Public Investment Program, which consists of two
parts. They are Public Investment List (PIL) and the Priority Subsector Activity (PSA). The PIL is prepared
every year for the succeeding year. To determine which of the ongoing or new projects will form part of the
PIL for a given year, a prioritization is followed. Those prioritized are funded and included in the annual
Priority Projects Fund (PPF). The projects in the PPF are funded either by the national government or by
Official Development Assistance (ODA).

The PIL is useful to proponents and donors in the determination of which projects to consider. It also
set aside those that are to be done in the distant future hence no duplication of projects may take place. On
the other hand, the PSA are technical assistance and capital forming activities. These are not specific
projects but are statements on how investments will be allocated. An example is “To provide electrification
to the interior towns of Northern Samar.” is a PSA. As the PSA is a list of priorities, it provides flexibility may
even lead to reprioritization in response to changed condition in the economy.

The projects covered by the investment program may be for capital outlays for physical structures
and equipment. They can also be for training and non-formal education. Also included are projects for
research, feasibility studies or infrastructure design.

Projects are funded from different sources like the Public Works Act, the General Appropriations Act,
Internal Cash Generation of the Government Owned and Controlled Corporations, and the Official
Development Assistance, which are grants or loans from foreign sources.

LEARNING ACTIVITY 1

1. Of what value is the assessment of the people’s development aspiration in the planning of the economy?
2. How can the development plan address the idea of sustainable economic development?

SUMMARY

To achieve sustainable economic development, economic planning should be taken into

consideration. There are steps and activities to follow in order to arrived with the most sought-after economic
policies that contribute to economic growth and development of the country. There are principles that govern
and permeate development planning and which planners should observe so that the plan can be set in
proper perspective.

In the Philippines, the master policy and mandate for the formulation of the national development
plan is Section 9 of the Philippine Constitution of 1987 which provides the independent economic planning
body headed by the President which Congress will establish shall “recommend to Congress, and implement
continuing, integrated and coordinated programs and policies for the national government”. The same
provision provides for consultations with the private sectors and local governments. It also provides that
“until the Congress provides otherwise, the NEDA shall function as the independent planning agency of the
government”.

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Executive Order No. 230 explicitly expressed the planning parameters that bear on development
planning in the Philippines. There are basic principles in Philippines development planning such as bottom-
up and participatory planning, synchronized planning and budgeting activities, private participation and
consultation, and involvement of special planning.

REFERENCES

Azanza, Patrick Alain, et.al. 2000. Economics, Society and Development. Philippines. Kayumanggi Press, Inc.

Fajardo, Feliciano. 1990. Economics. Quezon City. Rex Book Store.

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