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Philippines-Japan Free Trade Agreement: Analyzing Its Potential Impact Using a Computable General Equilibrium Model

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  • Yasutake, Taeko

Abstract

This study analyzes the potential impact of the Philippines-Japan Free Trade Agreement (FTA) on the Philippine economy in case of the Philippines' discriminately unilateral tariff reduction on import from Japan using a computable general equilibrium model for the Philippine economy. The result of the assessment of this study indicates that even only a reduction of tariff rates on imports from Japan would expand the Philippines' import from Japan and in total by 2.36-8.58 and 0.35-0.61 percent, respectively. Consumer welfare measured in Compensated and Equivalent Variation increase in all of 5 households classified by income level, not in a proportional way for each household however. More favorable impact on all households would be expected if not only a tariff reduction but also other factors such as liberalization of foreign investment are included in the agreement.

Suggested Citation

  • Yasutake, Taeko, 2004. "Philippines-Japan Free Trade Agreement: Analyzing Its Potential Impact Using a Computable General Equilibrium Model," Discussion Papers DP 2004-40, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:dpaper:dp_2004-40
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    File URL: https://www.pids.gov.ph/publication/discussion-papers/philippines-japan-free-trade-agreement-analyzing-its-potential-impact-using-a-computable-general-equilibrium-model
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    Cited by:

    1. Wignaraja, Ganeshan & Lazaro, Dorothea & DeGuzman, Genevieve, 2010. "FTAs and Philippine Business: Evidence from Transport, Food, and Electronics Firms," ADBI Working Papers 185, Asian Development Bank Institute.
    2. Lazaro, Dorothea C. & Wignaraja, Ganeshan & De Guzman, Genevieve, 2011. "Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines," Philippine Journal of Development PJD 2009 Vol. XXXVI No. 2, Philippine Institute for Development Studies.

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