EC 1992: Its Impact on Trade and Investment in the Philippines

One of the recent European developments is the plan of creating a single market implying the removal of obstacles to trade in goods, services, capital and labor. Hence, it is worthwhile to examine the impact of such move to a small country like the Philippines, the growth of which depends largely on foreign trade and investment. Analysis indicates the intensification of trade and market competition, which in turn, have positive impact on electronic component of Philippine exports. This move also represents a huge market for the country’s products. To benefit from EC 1992, the Philippines has to take the initiative to diversify and start looking for fresh markets.trade sector, liberalization, investment, European market

Regulatory Policies and Reforms in the Power and Downstream Oil Industries

This paper looks at the regulatory reforms in the electricity and downstream oil industries, two important inputs to the production process that were heavily regulated by the government. While electricity has strong externalities as well as economies of scale and scope, the oil industry does not exhibit natural monopoly characteristics nor does it display economic features that would warrant government regulation. The paper also analyzes the economic theories underlying these reforms: why is regulation necessary, what are the different forms of regulation, and how can these policy reforms bring about competition? It also identifies the emerging issues and problems associated with the regulatory reforms. Given our little experience in the effective use of public regulation in a market-driven setting, research is needed to provide a deeper understanding of these issues within the context of our economic, institutional, and political structure. This is necessary in order to come up with possible approaches to overcome our weaknesses and shore up weak administrative and enforcement capacities.electricity and power, economic regulation, regulatory reform, downstream oil

Cancun and Its Aftermath: What Does It Mean?

When the WTO talks in Cancun broke down last September, anti-globalization groups and NGOs around the world rejoiced. However, the author of this Policy Notes cautions that the collapse is no reason to celebrate because it only means that every country would suffer, with some having to suffer more than others. In the end, they claim that the real losers are the developing countries, especially the smaller and weaker ones. Why? What are the more telling issues? Read more in this Notes.World Trade Organization, tariff reduction, competition policy, agricultural subsidies

Why Cement Prices Remain High despite Zero Tariffs

Trade reforms, in particular reduction and/or removal of tariffs on imports, are aimed to bring about lower prices of certain goods. In the case of the cement industry, though, despite the government’s imposition of zero tariffs on cement imports, the price(s) of cement continued to rise unabatedly. Why? What explains this? Read on...Philippines, cartel, cement industry, cement prices, zero tariff

EC 1992: Its Impact on Trade and Investment in the Philippines

One of the recent European developments is the plan of creating a single market implying the removal of obstacles to trade in goods, services, capital and labor. Hence, it is worthwhile to examine the impact of such move to a small country like the Philippines, the growth of which depends largely on foreign trade and investment. Analysis indicates the intensification of trade and market competition, which in turn, have positive impact on electronic component of Philippine exports. This move also represents a huge market for the country’s products. To benefit from EC 1992, the Philippines has to take the initiative to diversify and start looking for fresh markets.trade sector, liberalization, investment, European market

Regulatory Policies and Reforms in the Power and Downstream Oil Industries

This paper looks at the regulatory reforms in the electricity and downstream oil industries, two important inputs to the production process that were heavily regulated by the government. While electricity has strong externalities as well as economies of scale and scope, the oil industry does not exhibit natural monopoly characteristics nor does it display economic features that would warrant government regulation. The paper also analyzes the economic theories underlying these reforms: why is regulation necessary, what are the different forms of regulation, and how can these policy reforms bring about competition? It also identifies the emerging issues and problems associated with the regulatory reforms. Given our little experience in the effective use of public regulation in a market-driven setting, research is needed to provide a deeper understanding of these issues within the context of our economic, institutional, and political structure. This is necessary in order to come up with possible approaches to overcome our weaknesses and shore up weak administrative and enforcement capacities.electricity and power, economic regulation, regulatory reform, downstream oil

PLDT-Sun Acquisition: Good or Bad?

Will the recent PLDT acquisition of Digitel (Sun) lead to better benefits for the general public in terms of the telecommunications aspect? How will it affect overall competition in the industry? This Policy Note examines the situation more closely.competition, Philippines, climate information, communication, telecommunications sector, telecommunications companies, mergers and acquisitions

The Autobus Is Leaving...Can the Philippines Catch It?

How ready is the Philippines' automotive industry to face the zero tariff environment under the AFTA by 2010? And is the industry prepared for the globalization process? This Policy Notes calls for immediate government action in crafting temporary adjustment measures as well as the formulation of a comprehensive program--in coordination with the industry--to help the industry in this situation.globalization, automotive industry

Impact of Trade Liberalization on Wage Skill Premium in Philippine Manufacturing

The paper aims to examine how trade liberalization affects wage premium at the firm level. Using effective protection rate as trade proxy, the paper assumes that in the face of increasing competition, an import-substituting firm may decide to remain at the low value-added stage of the production process which requires relatively less skilled workers and suggests a decline in the wage premium. On the other hand, a firm may move away from the product whose protection rate has fallen and shift and expand toward a higher value-added activity. This would require relatively more skilled workers suggesting an increase in the wage premium.The main findings of the paper show that: First, trade liberalization lowers the wage premium. A firm responds to import competition by shifting to the manufacture of products with lower value added and importing intermediate inputs rather than producing these within the plant. Second, using ASEAN tariff rates as trade proxy, the same results are obtained, however, when ASEAN tariff is interacted with skill intensity, the results show that tariff reduction on skill-intensive products is associated with rising wage skill premium. Third, firm characteristics such as skill intensity, firm size, and capital labor ratio matter in assessing the impact of trade reform on the wage premium. Lastly, exports are associated with increasing wage premium at the firm level the higher their skill intensity. In the literature, greater openness is associated with skill-biased technological change with export-oriented and technology-intensive activities as channels

Assessing the Competitiveness of the Philippine Auto Parts Industry

The development of the Philippine automotive parts and components sector is critical to the automotive assembly industry. The availability of competitive parts and components that are locally manufactured can significantly contribute to boost the competitiveness of the assembly sector. Given the current state of small and medium manufacturers, making them internationally competitive and linking them with regional production networks are major challenges. Less competitive firms will have to contend with reduced market shares and eventually bankruptcy. The few remaining competitive ones need to define their strategies and the market position that they want to pursue. The government has an important role to play in the firms adjustment process. While increasing economic integration represent market opportunities, penetrating the export market is not easy and does not come automatically. As the firms search for internal ways and exert effort to improve their competitiveness, this must be complemented with active government support