IDEAS home Printed from https://ideas.repec.org/p/fpr/tmddps/22.html
   My bibliography  Save this paper

Income effects of alternative trade policy adjustments on Philippine rural households: a general equilibrium analysis

Author

Listed:
  • Bautista, Romeo M.
  • Thomas, Marcelle

Abstract

Three types of trade policy adjustments to deal with an unsustainable current account deficit are examined in this paper for their economywide income and equity effects, based on the results of simulation experiments using a CGE model of the Philippine economy. Gross domestic product (GDP) expectably decreases with import rationing and less markedly, with the imposition of a general import surtax; by contrast, adjustment through the reduction of tariffs leads to a larger GDP. The latter result, however, is counterbalanced by a substantial loss in government income. With respect to the distribution of income gains (and losses), the additional market distortions and rent-seeking that accompany the implementation of import rationing heavily discriminate in favor of Metro Manila households, whose average income is the highest among the five household groups distinguished in the model. Moving to a general import surtax represents an improvement in that non-Metro Manila households are penalized less. However, these first two policy options are deemed inferior to tariff liberalization which yields larger income benefits to small-farm and "other rural" households relative to the more affluent Metro Manila, other urban, and large-farm households.

Suggested Citation

  • Bautista, Romeo M. & Thomas, Marcelle, 1997. "Income effects of alternative trade policy adjustments on Philippine rural households: a general equilibrium analysis," TMD discussion papers 22, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:tmddps:22
    as

    Download full text from publisher

    File URL: http://www.ifpri.org/sites/default/files/publications/tmdp22.pdf
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Reimer, Jeffrey J., 2002. "Estimating the poverty impacts of trade liberalization," Policy Research Working Paper Series 2790, The World Bank.
    2. Rodriguez, U-Primo E., 2007. "State-of-the-Art in Regional Computable General Equilibrium Modelling with a Case Study of the Philippines," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 20(1).
    3. Elena Ianchovichina & Alessandro Nicita & Isidro Soloaga, 2002. "Trade Reform and Poverty: The Case of Mexico," The World Economy, Wiley Blackwell, vol. 25(7), pages 945-972, July.
    4. Obeng, Camara Kwasi, 2014. "Impact of import liberalisation on poverty: a dynamic computable general equilibrium and microsimulation analysis for Ghana," MPRA Paper 58182, University Library of Munich, Germany.
    5. Reimer, Jeffrey J., 2002. "Estimating the poverty impacts of trade liberalization," Policy Research Working Paper Series 2790, The World Bank.
    6. Jennifer Mbabazi, 2002. "A CGE Analysis of the Short-run Welfare Effects of Tariff Liberalisation in Uganda," WIDER Working Paper Series DP2002-114, World Institute for Development Economic Research (UNU-WIDER).
    7. Bittencourt, MaurĂ­cio Vaz Lobo & Kraybill, David S. & Larson, Donald W., 2006. "Consequences Of Trade Liberalization On Poverty And Income Distribution In Brazil," 2006 Annual meeting, July 23-26, Long Beach, CA 21128, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Thomas W. Hertel & Jeffrey J. Reimer, 2006. "Predicting the Poverty Impacts of Trade Reform," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 2, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fpr:tmddps:22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ifprius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.