Template-Type: ReDIF-Article 1.0 Author-Name: Edita A. Tan Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Interlocking Directorates, Commercial Banks, Other Financial Institutions and Non-Financial Corporations Abstract: The paper documents the interlocking directorates of banks with other financial and nonfinancial firms which belong to the top 1,000 corporations in the Philippines. Within the interlocked group of firms are the large conglomerates of leading families. Additionally, there is interlocking within major banks. The paper argues that interlocking is an innovation for obtaining rent or privileges that were created by policies. Interlocking facilitates the lobbying process. This possibly explains the difficulty of implementing structural reforms in the country. Journal: Philippine Review of Economics Pages: 1-50 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/136/461 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:1-50 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph Y. Lim Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Rural Finance in the Philippines: Lessons from the Past and Prospects from the Future Abstract: The paper focuses on the relationship between overall macroeconomic policy and rural finance to cover the credit gap for agricultural production. Several laudable measures have been proposed by the Agricultural Credit Policy Council (ACPC), including intensifying rural savings mobilization, using CALF to guarantee agricultural loans from the financial sector, programs to increase agricultural productivity and support for credit cooperatives. These are being undermined, however, by macroeconomic policies such as 'tight' money, which restricts credit, restrictions on bank entry into rural areas, low savings deposit rates, lack of investments in rural infrastructure, stagnation in the implementation of agrarian reform, and a weak government bureaucracy in rural areas. Journal: Philippine Review of Economics Pages: 51-90 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/137/462 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:51-90 Template-Type: ReDIF-Article 1.0 Author-Name: Maria Socorro Gochoco Author-Workplace-Name: Associate Professor, School of Economics, University of the Philippines Diliman Title: Are Money, Interest Rates, Output and the Exchange Rate Cointegrated? Implications for Monetary Targeting Abstract: This study examines the relationship between various monetary aggregates and real income, the 91-day Treasury bill rate, and the nominal exchange rate using the Engle and Granger cointegration method. The idea is that the choice for a monetary target should be controllable by the Central Bank and must have a stable and predictable relationship with variables of interest to policymakers. The results show that only M1 is cointegrated with real income, the 91-day Treasury bill rate, and the nominal exchange rate taken together. Overall, the results imply that M1 is the best choice for a target variable. Journal: Philippine Review of Economics Pages: 91-101 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/138/448 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:91-101 Template-Type: ReDIF-Article 1.0 Author-Name: Benjamin A. Endriga Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Fixing the Money Stock vs. Fixing the Interest Rate: A VAR Model Abstract: The "instrument problem" in monetary policy has centered on the question of whether controlling the money stock or fixing the interest rate is more preferable in terms of higher and more stable output. The former policy implies a stable price level but less investments due to a fluctuating interest rate; the latter implies a more stable investment climate but a volatile price level. This paper examines the conditions under which either of the two policies would be more suitable for the case of the Philippines. This study uses monthly data on money supply, output, prices, interest rates, and exchange rates for the period 1981-1991. A vector autoregressive model based on a work by Christopher Sims (1980) is used to estimate the parameters. The regression results show that a money-target regime seems to be more appropriate for the Philippine case as a result of the price effects of money-stock changes and the non-significance of the interest rate coefficients in the output equations. Journal: Philippine Review of Economics Pages: 102-121 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/140/450 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:102-121 Template-Type: ReDIF-Article 1.0 Author-Name: Florian A. Alburo Author-Workplace-Name: Professor, School of Economics, University of the Philippines Diliman Title: Political Economy of Liberalizing Foreign Trade: Philippine Experience Abstract: The Philippines has had a long history of liberalization experiences. They span a wide range of policy direction from a regime of full decontrol to a mixture of restrictions and free trade. Perhaps this explains why the country has not been able to hold on to a trade direction that has been sustained on a long-term basis. Four liberalization episodes have been described in this paper not in terms of the technical character of the trade sectors but of the processes that went into their evolution and their eventual fallout. Several forces are identified as impinging on these processes: the overall political ethos; the executive and legislative branches of government; the bureaucracy; external forces of the IMF and the World Bank, among others; various vested interest groups; and coalitions among them. These forces have marshaled a variety of tactics to pursue their causes from lobbying to exaggerating the extent of injury to the economy from liberalization drives. The argument of this paper is really to suggest that liberalizing foreign be immediate given the political economy of it which would attempt at delay or postponement. If there has to be a protracted timetable, such should not be long enough for political forces to mount a resistance. In a transition from import-substitution to export orientation and freer trade, immediacy is even more critical since vested interests are more powerful. In a transition from a closed economy to an open, outward-looking regime, immediate liberalization is also argued both to prevent the emergence of strong vested interests and organized resistance, and to send an unmistakable signal of commitment. In fact, other than possible opposition from the bureaucracy and state-operated enterprises there would hardly be any opposition to a liberalization drive by the party-in-power itself. Of course, it goes without saying that accompanying reforms and other policy measures are equally important and pursued in tandem with trade liberalization. These would include some economic growth, and institutional support for industries of comparative advantage, among others. Journal: Philippine Review of Economics Pages: 122-140 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/139/451 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:122-140 Template-Type: ReDIF-Article 1.0 Author-Name: Emmanuel S. de Dios Author-Workplace-Name: School of Economics, University of the Philippines Diliman Title: Parcellised Capital and Underdevelopment: A Reinterpretation of the Specific-Factors Model Abstract: Where capital markets are undeveloped and political differences among capital owners predominate, capital becomes "parcellised" and is, for all intents and purposes, "specific" to the parcel. The familiar specific-factors model then becomes applicable. Parcellisation results in lower output and wages. Openness to world capital markets accentuates these effects as well as leads to the paradox of capital flight even from a capital-scarce country. Unproductive rent-seeking activities to defend one's parcel and to acquire others' lead to a Cournot-Nash equilibrium which may be Pareto-inferior. Journal: Philippine Review of Economics Pages: 141-154 Volume: 30 Issue: 1 Year: 1993 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/141/449 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:30:y:1993:i:1:p:141-154