Agriculture-sector Policies and Poverty in the Philippines: a Computable General-Equilibrium (CGE) Analysis
AbstractThe Philippines has undertaken substantial trade-policy reforms since the 1980s. However, the poverty impact is not very clear and has been the subject of intense debate, most crucial of which is the likely poverty effects of liberalizing the highly protected agricultural sector. A CGE micro-simulation model is employed to estimate and explain these impacts. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, the prevalence of cheap, imported inputs reduces the domestic cost of production, benefiting the outward-oriented and import-dependent industrial sector as their output and export increases. The national poverty headcount decreases marginally as lower consumer prices outweigh the income reduction experienced by the majority of households. However, both the poverty gap and severity of poverty worsens, implying that the poorest of the poor become even poorer.
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Bibliographic InfoPaper provided by PEP-MPIA in its series Working Papers MPIA with number 2006-09.
Date of creation: 2006
Date of revision:
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Agriculture; International trade; Poverty; Computable general equilibrium; Micro-simulation; Philippines;
Find related papers by JEL classification:
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O15 - Economic Development, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
This paper has been announced in the following NEP Reports:
- NEP-AGR-2006-06-10 (Agricultural Economics)
- NEP-ALL-2006-06-10 (All new papers)
- NEP-CMP-2006-06-10 (Computational Economics)
- NEP-DEV-2006-06-10 (Development)
- NEP-INT-2006-06-10 (International Trade)
- NEP-MAC-2006-06-10 (Macroeconomics)
- NEP-SEA-2006-06-10 (South East Asia)
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