Poverty in the Philippines

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Introduction

The Philippines is one of the three countries granted exemption in 1995 from the removal

of quantitative restriction (QR) on rice under Annex 5 of the World Trade Organization

(WTO) agreement. Japan and South Korea are the other two countries. The exemption will

expire on December 31, 2004. The primary objective of the paper is to look at the possible

poverty and distributional effects of the removal of the QR and the reduction in tariffs on

rice imports. In particular, the paper attempts to analyze the following issues: (a) Do the

poor share in the potential gains from a freer market for rice? (b) What alternative or

accompanying policy measures may be needed to ensure a more equitable distribution of

the potential gains from a more liberalized market for rice? (c) What is the transmission

mechanism in which the removal of the control may affect the poor? These are some

critical issues that the government may have to address as it implements market reform

and opens the economy for imported rice.

Rice is the staple food of about 80 percent of Filipinos, and therefore a major item in the

consumption basket of consumers. It is the single most important agricultural crop in the

Philippines, and therefore a major source of income of millions of Filipino farmers.

Because of its political significance, the government is heavily involved both in the supply

and distribution of rice to assure consumers sufficient and stable supply of rice at low

prices and to maintain a reasonable return to rice farmers with adequate price incentives.

One major policy instrument of the government at present is the control on imported rice

through QR.

A market reform in general and a removal of QR on rice in particular could have

economy-wide effects. In this regard, it is appropriate to analyze these types of issues

using a computable general equilibrium (CGE) model calibrated to national accounting

data. On the other hand, it is appropriate to study the effects of reforms on poverty and

income distribution using individual household data to capture the heterogeneity of

households. The paper integrates these two approaches. In particular, it specifies and

calibrates an agriculture-focused CGE model to a set of actual data and simulates the

effects of the removal of the QR on consumer prices and household income, and applies

these results to a set of individual household data in the Family Income and Expenditure

Survey (FIES) to compute the poverty and income distribution effects.

A number of studies in the Philippines have looked at policy issues concerning rice, but the

methodology applied is mostly partial equilibrium analysis. Partial equilibrium analysis

however underestimates the possible effects of the reforms because rice, being a major

agricultural crop, has many direct and indirect linkages with the rest of the economy.

Furthermore, most of the empirical work done does not extend the analysis to look at the

impact on poverty. While existing literature provides estimates of changes in consumer and

producer surpluses, as well as the Gini coefficient, it does not provide insights on the

effects on poverty and on the depth of poverty. This paper addresses this methodological

gap in the literature.

In the CGE literature there are two broad approaches to integrating a CGE model with a

national household survey to analyze poverty and distributional issues. One approach is

through microsimulation wherein the household categories in the model are the same as

the household categories in the national household survey. As such, this approach allows

for the heterogeneity of individual households during the numerical computation of the

equilibrium of the model. The papers of Cogneau and Robillard (2000), Cockburn (2001),

and Cororaton and Cockburn (2004) employed this approach.

The other approach is more of a recursive type. For a given policy shock, a CGE model

with representative households is used to estimate the change in the average income for

each household category and the change in prices. These changes are then applied to an

assumed income distribution of each household category (either lognormal or beta

distribution) to conduct poverty and distributional analyses. The variance and other

parameters of the distribution are estimated using data from the national household survey

and are assumed fixed in the analyses, while the first moment of the distribution is altered

using the results from the CGE model. The papers of De Janvry, Sadoulet and Fargeix

(1991) and Decaluwe, Dumot, and Savard (1999) and Decaluwe, Party, Savard, and

Thorbecke (2000) employed this approach. The present paper applies this second

approach, but uses the actual income distribution from the 1994 FIES.

The paper is organized in seven sections. The second section discusses the government

policies in the rice sector and the production structure of the sector, including prices. The

third section looks at the current issue on food and poverty. The fourth section discusses in

detail the model used in the analysis, including the parameters, the elasticities and the

model structure at the base. The fifth section gives a description of the poverty and

distribution measures used in the analysis. The sixth section outlines the various policy

experiments conducted and discusses the results. The last section summarizes the results of

the experiments and draws insights for policy.

Poverty – poverty in the Philippines – causes for poverty in the Philippines – some solution

that can solve the poverty in philippines – reasons and solutions for poverty for most

countries such as India and other countries …

Poverty

– poverty in the Philippines

– causes for poverty in the Philippines

– some solution that can solve the poverty in philippines

– reasons and solutions for poverty for most countries such as India and other countries

suffering from widespread poverty

one of the most recent question tonight is:

some solution that can solve the poverty in philippines”

to answer that question we first need to analyze sincerely but critiquely the various causes

for poverty in the Philippines as well as in most other countries.

poverty can be manifold – poverty in the Philippines can be divided by priority into

following causes:

– poverty in the Philippines caused by laziness to work harder and more hours

– poverty in the Philippines caused by lack of quality consciousness

– poverty in the Philippines caused by lack of love FOR God and thus FOR all his children

on earth

– poverty in the Philippines caused by abuse by rich ones

– poverty in the Philippines caused by mismanagement of government due to lack of

sincere interest for the benefit of ALL

– poverty in the Philippines caused by social injustice created by mankind / industry /

money world / investors / rich ones

– poverty in the Philippines caused by accidents / disasters / war / political instability

– poverty in the Philippines caused by personal karma

lets elaborate from top to bottom above causes of poverty:

Philippines – compared to many other countries is a VERY spoiled country – spoiled by

God far more than many other contries in this world. spoiled by having lots of natural

recourses readily available for minimum efforts – resources such as – agriculture potential,

agriculture resources, agriculture goods – food in all variations grow in abundance with

mostly easy work.

the Philippines as much as India are highly fertile for agriculture – resulting in many

farmers investing even less or no extra efforts at all to improve harvest or to improve

quality of agriculture products and efforts to expand period of possible harvest or increase

volume of harvest is widely missing.

farmers in central Europe – such as Switzerland, Germany and other similar countries with

though climate, limited period of productive growth in nature need to work hard for every

ton of agriculture product harvested – while here in the Philippiens all grows almost on its

own without any additional care needed. just sit and wait until mangoes, papaya, banana

and other fruits fall down by the tons – into your lap or card box …

whatever you seed with reasonable care – it grows nicer, faster and bigger than in most

other areas of this planet. fruits are more tasty, sweeter and larger than many other places.

you find a larger variety of any agriculture product than most places on this planet – almost

on any major islands of the Philippines.

But

lack of difficulties made the Philippino people lazy and SPOILED. European farmers had

to work hard to have a reasonable harvest of fruits or crop or dairy products – hence once

the harvest begins such hard working farmers honor their harvest and remember how much

work was involved to get harvest starting and thus such hard working farmers in harsh

climate zones keep on working hard to care for their land and keep growth ongoing.

as a result of such extreme laziness among spoiled Philippinos, we have even basic

products that COULD grow in abundance HERE in the Philippines – in such abundance to

produce for EXPORTS, … but even such typical local products are still being IMPORTED

from OTHER countries. such extreme products do include basic food like RICE – just very

recently a shipment of rice imported from USA arrived in the Philippines – a natural rice

producing land with plenty of water flooded areas during many months of tropical rainy