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Impacts of the Southeast Asian Financial Crisis on the Philippine Manufacturing Sector

Author

Listed:
  • Lamberte, Mario B.
  • Orbeta, Aniceto Jr. C.
  • Cororaton, Caesar B.
  • Guerrero, Margarita F.

Abstract

This study examines the impacts of the Southeast Asian financial crisis that struck in July 1997 on the Philippine industries and their responses to such crisis using firm level data from a sample of 541 manufacturing establishments. The survey results clearly show that the capacity utilization rate of the Philippine manufacturing firms started to decline even before the crisis struck in July 1997, and that it continued to drop as the crisis deepened. Thus, the current capacity underutilization rate may be attributed to both cyclical and structural factors. The results of this study do not provide a clear evidence on the existence of a supply-side credit crunch during the crisis period. The significant drop in capacity utilization rate and output of firms during the crisis period would have required a large labor lay-off. However, to minimize the laying off of labor, firms resorted to other means, such as reducing workweek or days, applying forced vacation leave and freezing salary increases, to save some jobs. The study recommends that the government institute some measures to stimulate aggregate demand for 1999. Both monetary and fiscal policies are required to support such expansionary policy.

Suggested Citation

  • Lamberte, Mario B. & Orbeta, Aniceto Jr. C. & Cororaton, Caesar B. & Guerrero, Margarita F., 1999. "Impacts of the Southeast Asian Financial Crisis on the Philippine Manufacturing Sector," Discussion Papers DP 1999-09, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_1999-09
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    Citations

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    Cited by:

    1. Orbeta, Aniceto Jr. C., 2000. "Human Resource Aspect in the Medium-Term National Action Agenda for Productivity (MNAAP)," Discussion Papers DP 2000-22, Philippine Institute for Development Studies.
    2. Assaf Razin, 2001. "Comment on "How Japanese Subsidiaries in Asia Responded to the Regional Crisis: An Empirical Analysis Based on the MITI Survey"," NBER Chapters,in: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, NBER-EASE Volume 10, pages 309-310 National Bureau of Economic Research, Inc.
    3. Mario B. Lamberte, 2001. "Comment on "How Japanese Subsidiaries in Asia Responded to the Regional Crisis: An Empirical Analysis Based on the MITI Survey"," NBER Chapters,in: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, NBER-EASE Volume 10, pages 304-309 National Bureau of Economic Research, Inc.
    4. Beja, Jr., Edsel, 2009. "The Philippines on debt row," MPRA Paper 16553, University Library of Munich, Germany.
    5. Lamberte, Mario B., 1999. "A Second Look at Credit Crunch: The Philippine Case," Discussion Papers DP 1999-23, Philippine Institute for Development Studies.
    6. Milo, Melanie S., 1999. "Contagion Effects of the Asian Crisis, Policy Responses and their Social Implications," Philippine Journal of Development JPD 1999 Vol. XXVI No.2-c, Philippine Institute for Development Studies.
    7. David, Cristina C., 1999. "Constraints to Food Security: The Philippine Case," Discussion Papers DP 1999-31, Philippine Institute for Development Studies.

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