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Assessing Competition in Philippine Markets

Author

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  • Rafaelita M. Aldaba

    (PIDS)

Abstract

This paper reviews the current empirical literature on competition and market structure of Philippine industries. It shows that weak competition is one of the fundamental factors that explain limited growth, productivity, and employment in the economy. Philippine experience has shown that reforms such as trade liberalization, deregulation, and privatization, while necessary, are not sufficient to foster effective competition. The success of these reforms depends on the creation of a competitive domestic market environment; which is in turn determined by the interplay of behavioral, regulatory and structural constraints along with the broader aspects of competitive infrastructure. With the removal of many regulatory barriers, the economy is already substantially open. However, competition in many industries has remained limited due to structural factors such as large capital and economies of scale requirements, lack of middle and medium enterprises leading to a hollow industrial structure, and weak linkages of SMEs with large enterprises. In agriculture, regulatory barriers still exist while in infrastructure, the capacity and independence of our regulators are still evolving and need to be strengthened. Maintaining a competitive environment requires coordinated policies to implement continued liberalization and deregulation in tandem with the necessary support measures that will address the structural obstacles to the entry and growth of domestic enterprises. These efforts should be pursued jointly with well-functioning competition and regulatory agencies.

Suggested Citation

  • Rafaelita M. Aldaba, 2008. "Assessing Competition in Philippine Markets," Microeconomics Working Papers 22607, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:microe:22607
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    Citations

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    Cited by:

    1. World Bank, 2011. "Philippines," World Bank Publications - Reports 27384, The World Bank Group.
    2. Yap, Josef T. & del Prado, Fatima & Balboa, Jenny D., 2010. "Achieving the ASEAN Economic Community 2015: Challenges for the Philippines," Discussion Papers DP 2010-20, Philippine Institute for Development Studies.
    3. Aldaba, Rafaelita M., 2012. "Trade Reforms, Competition, and Innovation in the Philippines," Discussion Papers DP 2012-06, Philippine Institute for Development Studies.
    4. Jenny D. Balboa & Fatima Lourdes E. Del Prado & Josef T. Yap, 2010. "Achieving the ASEAN Economic Community 2015 : Challenges for the Philippines," Governance Working Papers 23089, East Asian Bureau of Economic Research.
    5. World Bank Group, 2014. "Policy Options for Liberalizing Philippine Maritime Cabotage Restrictions," World Bank Publications - Reports 24801, The World Bank Group.
    6. Magno, Cielo & Guzman, Ricardo Rafael S., 2019. "Drug price sensitivity among physicians in a developing healthcare system: Evidence from the Philippine market for statins and beta blockers," Economic Analysis and Policy, Elsevier, vol. 62(C), pages 268-279.
    7. Maureen Ane D. Rosellon & Josef T. Yap, 2010. "The Role of the Private Sector in Regional Economic Integration : a View from the Philippines," Governance Working Papers 23107, East Asian Bureau of Economic Research.
    8. Vidanes, Mary Joyce N., 2017. "Impact of Trade Liberalization on Research and Development (R&D) Expenditures in the Philippines," Journal of Economics, Management & Agricultural Development, Journal of Economics, Management & Agricultural Development (JEMAD), vol. 3(1), June.

    More about this item

    Keywords

    competition; market structure; regulation;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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