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Philippine Productivity Dynamics in the Last Five Decades and Determinants of Total Factor Productivity

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  • Llanto, Gilberto M.

Abstract

Various studies showed that total factor productivity (TFP) has not been a source of growth in the Philippines. It seems that factor accumulation, which is not a sustainable source of growth, has underpinned Philippine economic growth. Studies have also shown that the sustained growth of developed countries has ridden on the back of technological advances rather than on increasing use of factor inputs. Total factor productivity improvement is the only route to sustain economic growth in the long run. After a brief review of economic growth and productivity dynamics of the Philippine economy in the past fifty years, the paper provides an estimation of the determinants of total factor productivity and labor productivity. In the light of the empirical findings reported in this paper, some policy levers present themselves as critical in improving productivity growth in the economy. Investments in education, more government expenditure for improving human capital, greater openness of the economy, and macroeconomic stability are indispensable.

Suggested Citation

  • Llanto, Gilberto M., 2012. "Philippine Productivity Dynamics in the Last Five Decades and Determinants of Total Factor Productivity," Discussion Papers DP 2012-11, Philippine Institute for Development Studies.
  • Handle: RePEc:phd:dpaper:dp_2012-11
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    References listed on IDEAS

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    1. Magnoli Bocchi, Alessandro, 2008. "Rising growth, declining investment : the puzzle of the Philippines," Policy Research Working Paper Series 4472, The World Bank.
    2. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    3. Bautista, Romeo M., 1993. "Trade and agricultural development in the 1980s and the challenges for the 1990s: Asia," Agricultural Economics, Blackwell, vol. 8(4), pages 345-375, June.
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    Cited by:

    1. Yuyan Tan & Yang Ji & Yiping Huang, 2016. "Completing China's Interest Rate Liberalization," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 24(2), pages 1-22, March.

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    Keywords

    total factor productivity; economic growth; Philippines; labor productivity growth; openness;
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