Fiscal Incentives Revisited

This short paper attempts to clarify some of the issues and provide suggestions for reforms in the fiscal incentive system. In particular, it focuses on the Investment Incentive System embodied in the Omnibus Investment Code. The paper attempts to provide some estimate of revenues forgone, specifically from income tax holiday under different assumptions. It urges that the government should be aware of these costs, be very choosy in granting incentives, and should make sure that social benefits from preferred activities compensate for the costs. Toward this end, the paper proposes a two-tiered approach for reforms--generic and special incentives.investment incentive system, fiscal incentives

Philippine Trade Policy: Reflecting on its Effects on the Environment

How have our trade and industrial policies affected the environment? Have they led to increased environmental degradation? Citing empirical support, the author looked into how the trade policy reforms undertaken in the past decade have affected the country's environment.trade sector, environmental issues, environmental management

Environmental Impact of Trade Policy Reforms on Pollution Intensity

The paper attempts to provide a theoretical analysis as well as some indicators of the linkage between trade policy and the environment. It looks at what has happened to the share of manufacturing industries by pollution classification overtime and finds tat the share of non-pollutive/non-hazardous industries has grown over the years covering the period of trade reforms. It also analyzes the impact of trade policy on the environment using a simulation model, which predicts what happens to pollution intensity with and without trade reforms. The results indicate some positive impact of trade reforms on the environment and that the Philippines should pursue its greater trade liberalization and implement the corresponding environmental measures.trade reforms, pollution, environmental issues, trade policies, environmental management

Fiscal Incentives Revisited

This short paper attempts to clarify some of the issues and provide suggestions for reforms in the fiscal incentive system. In particular, it focuses on the Investment Incentive System embodied in the Omnibus Investment Code. The paper attempts to provide some estimate of revenues forgone, specifically from income tax holiday under different assumptions. It urges that the government should be aware of these costs, be very choosy in granting incentives, and should make sure that social benefits from preferred activities compensate for the costs. Toward this end, the paper proposes a two-tiered approach for reforms--generic and special incentives.investment incentive system, fiscal incentives

Fiscal Incentives Revisited

Pointing out that fiscal incentives have costs that must be compensated by net benefits to society, this Policy Notes recommends a revisit of the government's policy and scheme on fiscal incentives and suggests limiting the number of preferred areas in the Investment Priorities Plan (IPP) to a few focused areas at a time.investment incentive system, fiscal incentives

An assessment of trade and industrial policy, 1986-1988

This paper attempts to assess the state of trade and industrial policy and analyze the reforms which have been implemented during the first three years of the Aquino Administration. Specifically, the study covers the period from 1986 to 1988. AS such, _he major policies in the area of Trade and Industry, with focus on the important policy reforms, are identified. These are then evaluated with respect to: (a) how consistent they are to stated objectives and, when relevant, other national objectives, and (b) their impact - qualitative and, when feasible, quantitative - on certain important economic variables. The paper is divided into four sections to cover the four main policy areas in Trade and Industry. The first section reviews and assesses the trade policy situation, presenting and evaluating the reforms undertaken in tariff poli:cy and import liberalization program. It also examines some proposed policy changes, adopted or otherwise, to gauge the: liMely policy direction the government would take. Their COnsistency With stated and other national objectives is discussed. The second section deals with the exchange rate policy and its impact on trade and industry. The third section evaluates the 1987 Omnibus Investment Code (OIC), particularly with respect to its impact on factor prices and incentives to exports. Finally, the fourth section describes and analyzes the major export promotion schemes aside from the export incentives provided in the 1987 01C under the Board of Investment (BOI)

ASEAN Rules of Origin: Lessons and Recommendations for Best Practice

Rules of Origin (ROO) set the criteria in determining the nationality of a product and where a product was made. The importance of ROO has increased in the past years as more countries engage in Free Trade Agreements (FTAs) and begun treating goods differently according to where the product was made, along with trade-specific preferences or restrictions to the imported good once its origin is determined. This study is done to cull the lessons from ASEAN's experience in determining and implementing the Rules of Origin. It draws the important lessons and makes recommendations for best practice that would contribute to the cooperation and integration efforts in the region. The paper examines the various design and implementation practice in ROO regimes, focusing on RTAs where the ASEAN is involved. The paper presents findings from recent studies on the cost of ROO compliance and the FTA utilization rates. It concludes with recommendations on simplification of ROO and some reforms on administrative procedures, bringing in the development country dimension, and some general guidelines to follow to improve ROOs.Rules of Origin, Free Trade Agreements, ASEAN.

Shadow prices of goods and resources in the Philippines : an assessment

When market imperfections are present, which is often the case for the less developed countries including the Philippines, observable market prices do not usually indicate true valuations of goods and resources to society. An alternative method of valuation is thus needed in the economic evaluation of projects° This is the role of shadow prices --- prices which would reflect social costs and benefits and the use of which would lead to proper selection of projects and thus improved welfare. This paper summarizes the existing estimates of shadow prices of goods and resources in the Philippines_ These include a) implicit tariffs_ b) the shadow exchange rate, c) the shadow wage rate, and d) the social rate of discount and the shadow price of capital. The methodologies and assumptions used in the estimation are explained_ Moreover, some policy implications of the results are derived

"No" to Policy Reversal: Backsliding in Tariff Policy Can Do More Harm than Good

In recent months, growing evidence has shown that there seems to be an apparent trend for backsliding or reversal of the government policy on tariff reduction. Why is this happening? And what is its implication? The authors claim that backsliding in the government's tariff policy can do more harm than good--this Notes explains why.trade liberalization, trade reforms, tariff reduction, tariff policy