Poverty Effects of the Philippines’ Tariff Reduction Program: Insights from a Computable General Equilibrium Analysis*

Abstract

A computable general equilibrium micro‐simulation model is used to assess the economic and poverty impacts of tariff reduction in the Philippines. Tariff reduction induces consumers to substitute cheaper imported agricultural products for domestic goods, thereby resulting in a contraction in agricultural output. In contrast, tariff reduction reduces the domestic cost of production, benefiting the outward‐oriented and import‐dependent industrial sector. The national poverty headcount decreases marginally as lower consumer prices outweigh the nominal 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.

Changes in land requirements for food in the Philippines: A historical analysis

“…The physical trade balance, however, changed in the late 1980s, turning the country from a net exporter to a net importer of agricultural products (Kastner, 2009). The nation's WTO membership and related lowering of trade barriers may have played a crucial role in this development (Cockburn et al, 2008).…”

MICROECONOMIC REFORM AND INCOME DISTRIBUTION: THE CASE OF AUSTRALIAN PORTS AND RAIL FREIGHT

“…MMRF represents each region in bottom-up form, giving region-specific commodity prices, 5. Examples of CGE models with fully integrated individual households include Cockburn (2006), Cockburn, Corong, and Cororaton (2008), Cogneau and Robilliard (2000), Plumb (2001), and Slemrod (1985). factor returns, and factor usage.…”

“…Examples of CGE models with fully integrated individual households include Cockburn (), Cockburn, Corong, and Cororaton (), Cogneau and Robilliard (), Plumb (), and Slemrod ().…”

Integrated Computable Simulation Approach

“…To illustrate the approach, this paper focuses on two specific applications - Cockburn (2006) and Cockburn et al (2008) -which fully integrate of 3,388 and 24,797 households for Nepal and the Philippines, respectively, without sacrificing the disaggregation of factors, sectors and products required to capture the links between macroeconomic shocks and poverty and income distribution.…”