A Proposed Method of Correcting the Construction Entries in the 2006 Philippine Input-Output Table

The construction of national input-output (IO) tables follows internationally acceptable standards such as the United Nations Systems of National Accounts (UN SNA) and European System of Accounts (ESA). These standards are used to ensure tractability and coherence between country tables. The 2006 Philippine IO table published by the Philippine Statistics Authority (PSA) assumes that the construction sector does not provide any input to the production of output for any economic sector. With the booming infrastructure development in the Philippines, this assumption that intermediate demand for construction output has a value of zero is unreasonable. This study proposes a corrective approach to determine the entries for the construction sector by utilizing the sectoral shares of intermediate demand from the 2000 Philippine IO table. This yields a more realistic inter-industry transactions matrix that will provide better insights for economic planning and impact analysis

Mitigating Emissions Associated With the Production of Traded Goods

The environmental impact of international trade is a concerning issue in the fight against climate change. Trade liberalization—combined with globally fragmented environmental policies—is often associated with the formation of pollution havens. This is because trade enables emissions leakages, which is defined as the outsourcing of emissions-intensive production to countries with weaker environmental regulations. Therefore, literature on this subject has suggested that a globally coordinated policy response is necessary to mitigate the impact of trade on climate change (Aichele & Felbermayr, 2012; Ben-David et al., 2020; Felbmermayr & Peterson, 2020). However, some studies have found that unilateral policy actions have no tangible effect on the volume of emissions associated with trade and, in some cases, the reduction of emissions volume associated with trade (Baylis et al., 2014; Kumar & Prabkahar, 2016; Hoekstra et al., 2016). This policy brief aims to provide insights on unilateral or multilateral actions countries can take to mitigate the impact of embodied emissions associated with the production of traded goods

Philippine Structural Transformation - With or Without Maharlika

It appears the Maharlika Investment Fund (MIF) is a fait accompli. As we write, our finance officials are in New York and Toronto, pitching the MIF to international bankers and representatives of Middle East sovereign wealth funds. This means once President Marcos, Jr. affixes his signature, a newly-created Maharlika Investment Corporation (MIC) will pool, before the year is over, PhP 75 billion in seed capital from the LandBank and Development Bank of the Philippines. With a further PhP 50 billion plus two full years of dividends from the Bangko Sentral ng Pilipinas (BSP), its nine directors, all presidential appointees, will be able to invest in tradable commodities, overseas instruments, and local development projects to earn dual bottom line returns — financial and social — for the country

Economy-wide impact of water reallocation decision in a small open economy

This study examines the economy-wide effects of water reallocation decision. It takes off from the point that the existing surface water supply cannot be increased by tapping groundwater or building new dams which could take years to construct and operationalize. Thus, the available surface water supply must be reallocated to pursue certain policy objectives. This requires rigorous empirical analysis to ensure that such decision can improve or inflict the least negative impact on lhe economy. In line with the results of existing literature, this study has attempted to test the hypothesis that water reallocation can produce negative impacts not only on the sectors whose water supply is reduced but on the entire economy as well. In testing the hypothesis, the study focuses on one policy objective: accelerating induslrialization that requires a reallocation of water from the agricultural sector to the industrial sector. It uses a small CGE model for an open economy with water being explicitly included as one of the factors of production. The simulation results suggest that withdrawing some amount of water and transferring ii to the industrial sector to support a rapid industrialization of the economy can indeed produce a negative impact on the economy. This may well be a reflection of the structure of the Philippine economy in which key manufacluring sectors such as food processing and beverage sectors are heavily dependent on agricultural outputs as their primary inputs. The results, which appear consistent with existing literatures, send signals to policymakers to look at the economy-wide impacts of water reallocation policies. Future work on the issue of water reallocation decision can perhaps yield better insights when more disaggregated data become available to warrant the use of a larger CGE model with less constraints

A qualitative analysis for flood risk indexing in Malabon City

Malabon City in the Philippines, which consists of 21 Barangays (Districts), needs proper assessment of flooding for the city has been adversely affected by rainfall, high tide, and simultaneous events of rainfall and high tide for more than two decades. Both local and regional government agencies have put in place structural as well as non-structural measures to alleviate the flooding and its damages however it has been observed that up to this time these adverse effects still exist.The study attempts to do a risk-based analysis-based on the study of the city\u27s flooding events due to rainfall, high tide, and simultaneous events. It uses a methodology based on the study of Kannami (2008) for measuring flood risk in each barangay, where risk is a function of Hazard, Vulnerability, Exposure, and Capacity. The results show that of the 21 barangays, the two (2) barangays that are consistently most exposed to flood risk are Catmon, and Tanyong while the barangay that has been consistently least exposed to risk is Flores. The results also show that out of the four (4) factors (Hazard, Vulnerability, Exposure, and Capacity) Exposure contributes most to the Flood Risk in the barangays.To reduce the exposure to the risk of flooding in the barangays of Malabon City, the study recommends the use of risk-based analysis that includes both structural and non-structural measures to alleviate flooding and its damages to the residents. The flood risk indices and the radar graphs produced in this study give an objective assessment of which barangays should be given more attention in terms of programs aimed at alleviating the effects of flooding and which among the components that contribute to flood risk be addressed first especially when resources of the local government are limited

Uncertainty analysis of business interruption losses in the Philippines due to the COVID-19 pandemic

In this study, we utilize an input–output (I–O) model to perform an ex-post analysis of the COVID-19 pandemic workforce disruptions in the Philippines. Unlike most disasters that debilitate physical infrastructure systems, the impact of disease pandemics like COVID-19 is mostly concentrated on the workforce. Workforce availability was adversely affected by lockdowns as well as by actual illness. The approach in this paper is to use Philippine I–O data for multiple years and generate Dirichlet probability distributions for the Leontief requirements matrix (i.e., the normalized sectoral transactions matrix) to address uncertainties in the parameters. Then, we estimated the workforce dependency ratio based on a literature survey and then computed the resilience index in each economic sector. For example, sectors that depend heavily on the physical presence of their workforce (e.g., construction, agriculture, manufacturing) incur more opportunity losses compared to sectors where workforce can telework (e.g., online retail, education, business process outsourcing). Our study estimated the 50th percentile economic losses in the range of PhP 3.3 trillion (with telework) to PhP 4.8 trillion (without telework), which is consistent with independently published reports. The study provides insights into the direct and indirect economic impacts of workforce disruptions in emerging economies and will contribute to the general domain of disaster risk management

Assessing the effects of trade on employment: An assessment toolkit

Employment is a key driver for development as it constitutes a bridge between economic growth and poverty reduction. People and households get out of poverty most often by moving into more productive and decent jobs or improving existing jobs. Placing the aim of achieving full and productive employment at the heart of development policy is therefore critical for reducing and eventually eliminating poverty, reducing inequality and addressing informality. This is also now globally recognized with the adoption of Sustainable Development Goal (SDG) 8: “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all” The European Commission (EC) and the International Labour Organization (ILO) both recognize that, in order to achieve SDG 8, it is critical that full and productive employment be at the heart of development policy. In the “New European Consensus on Development”, the EC emphasizes the importance of targeted policies in developing countries to promote the engagement of citizens - especially the youth, women and potential migrants - in social, civic and economic life and to ensure their full contribution to inclusive growth and sustainable development. International trade has been advocated as a means of achieving sustainable development. Paragraph 79 of the Addis Ababa Action Agenda states that “with appropriate supporting policies, infrastructure and an educated work force, trade can also help to promote productive employment and decent work, women’s empowerment and food security, as well as a reduction in inequality, and contribute to achieving the sustainable development goals”. However, creating more and better-quality jobs through international trade requires a coherent policy framework aimed at generating and upgrading employment. This policy framework should be based on a clear and shared understanding of how trade policy and other policies complementary to trade (e.g., sectoral, skills, infrastructure, investment, exchange rate, etc.) are expected to affect employment. In this regard, the EC and ILO have jointly initiated a project entitled “Strengthening the Impact on Employment of Sectoral and Trade Policies”. This innovative project includes developing methods and capacities to determine the effects of trade and complementary policies on employment. This project, being implemented in nine partner countries and working with national governments and social partners, aims to strengthen the capabilities of country partners to analyse, design and implement sectoral and trade policies and programmes for more and better jobs. This toolkit is one in a series of project publications that aim to capture the tools, methods and processes developed under this project as well as the findings from implementing these in the nine partner countries. By doing so, the experience and learning of the project can be disseminated to other countries and partners for their benefit, thus encouraging the integration of global and national employment objectives into sectoral and trade policies and consequently supporting the global employment agenda and the achievement of SDG 8

Determining the factors and barriers affecting female labor force participation in the Philippines

While the gender gap in the Philippines is slowly closing in terms of wage, labor force participation (LFP) for women have remained much lower than that for men especially in decent work, despite legal and legislative initiatives that are meant to encourage them to enter the labor force. This study investigates how context-specific barriers – legal, social contexts, and norms, may be hampering female LFP. This study conducts a preliminary investigation into these barriers using the Philippine Labor Force Survey. We find that women have lower participation in decent work. Education is associated with greater access to decent work. The same association is found for separated and annulled women, but married women and those with children face a penalty to their LFP, which may be attributed to household duties, family-related work, and higher school enrolment. However, results are sensitive to how decent work is defined, and in an alternative specification, children and married life may encourage the pursuit of stable, higher-paying, tenured type of jobs for women. Equality between husband and wife in terms of education and age may lead to higher participation in decent work as well