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Total Factor Productivity in the Philippines

  • Cororaton, Caesar B.
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    The paper presents estimates of total factor productivity (TFP) from 1967 to 2000. It was observed that while TFP growth was mostly negative in the last thirty-five years, its contribution to economic growth improved consistently from – 1.76 percentage points in the middle of 1980s to +0.41 in 1998-2000. This is the period when major economic policy reforms were pursued vigorously. In spite of the increasing share of skilled labor to the total, its contribution to TFP growth is observed to have declined through time. This may imply deterioration in the quality of education necessary for productivity improvement. This may also imply the negative effects of brain drain as a result of massive Filipinos working abroad. Efficiency improvements seem to have been gained from the movement of labor out of agriculture. Sound macroeconomic fundamentals, and opening up to foreign trade and investment are two critical factors affecting TFP growth. Spill over effects are observed to be far significant from the growth in industry than in agriculture and service sectors.

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    Paper provided by Philippine Institute for Development Studies in its series Discussion Papers with number DP 2002-01.

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    Length: 34
    Date of creation: 2002
    Date of revision:
    Handle: RePEc:phd:dpaper:dp_2002-01
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    1. Austria, Myrna S., 1998. "Productivity Growth in the Philippines After the Industrial Reforms," Discussion Papers DP 1998-26, Philippine Institute for Development Studies.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
    3. Cororaton, Caesar B. & Caparas, Maria Teresa, 1999. "Total Factor Productivity: Estimates for Philippine Economy," Discussion Papers DP 1999-06, Philippine Institute for Development Studies.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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