Agriculture-sector Policies and Poverty in the Philippines: a Computable General-Equilibrium (CGE) Analysis

Caesar B. Cororaton and Erwin Corong

Working Papers MPIA from PEP-MPIA

Abstract: The Philippines has undertaken substantial trade-policy reforms since the 1980s. However, the poverty impact is not very clear and has been the subject of intense debate, most crucial of which is the likely poverty effects of liberalizing the highly protected agricultural sector. A CGE micro-simulation model is employed to estimate and explain these impacts. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, the prevalence of cheap, imported inputs reduces the domestic cost of production, benefiting the outward-oriented and import-dependent industrial sector as their output and export increases. The national poverty headcount decreases marginally as lower consumer prices outweigh the income reduction experienced by the majority of households. However, both the poverty gap and severity of poverty worsens, implying that the poorest of the poor become even poorer.

Keywords: Agriculture; International trade; Poverty; Computable general equilibrium; Micro-simulation; Philippines (search for similar items in EconPapers)
JEL-codes: D58 E27 F13 I32 O13 O15 O24 O53 Q10 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-dev, nep-int, nep-mac and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:lvl:mpiacr:2006-09

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