Template-Type: ReDIF-Article 1.0 Author-Name: Dante B. Canlas Author-Email: dbcanlas@upd.edu.ph Author-Workplace-Name: University of the Philippines School of Economics Title: Probing GDP, employment and unemployment : A Little Forensic Macroeconomics Abstract: The paper examines the behavior of the growth rates of real GDP, employment and unemployment in the recent past decade and a half based on the estimates of levels taken from the National Income and Product Accounts (NIA) and the Labor Force Surveys (LFS). Real GDP per worker exhibits extreme volatility and seems to deviate from its expected pro-cyclical nature. When linked to the monetary accounts, real per capita GDP suggests a surprisingly low elasticity of money demand with respect to real GDP. Moreover, the recently revised method for determining the employed and unemployed in the labor force tends to exclude a significant number of the working age population from the labor force. The findings suggest revisiting the estimation procedures with the end in view of improving the accuracy of the NIA and the LFS. Classification-JEL: E01, E24 Keywords: national income accounts, employment, unemployment, labor force Journal: Philippine Review of Economics Pages: 1-9 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/186/596 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:1-9 Template-Type: ReDIF-Article 1.0 Author-Name: Gerardo P. Sicat Author-Email: gsicat@skybroadband.com.ph Author-Workplace-Name: University of the Philippines School of Economics Title: The statistical system and the national income accounts Abstract: No abstract Classification-JEL: C8 Keywords: national income accounts Journal: Philippine Review of Economics Pages: 11-19 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/187/597 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:11-19 Template-Type: ReDIF-Article 1.0 Author-Name: Rosemarie G. Edillon Author-Name: Sharon Faye A. Piza Author-Workplace-Name: Asia-Pacific Policy Center Title: Poorer but less poor : notes on the Philippine poverty trends 2000-2003 Abstract: This paper attempts to shed light on the debate sparked by the seemingly conflicting trend from 2000 to 2003 where we note a decrease in real incomes accompanied by a decrease in poverty incidence. A comparison of income and expenditure figures across space and over time gives us two important lessons: The first is that in order to have a radical impact on poverty reduction, we really need to bring the economy to a higher growth path. The second is that lapses in economic performance, even if only momentary, are costly in terms of poverty reduction efforts. We recommend that a comprehensive poverty alleviation program should include a macro growth strategy, efforts to improve linkages between the high-growth and broad-based sectors of the economy, and measures to address vulnerabilities among those who will graduate out of poverty. Classification-JEL: I32, N35 Keywords: poverty, growth, welfare, Philippines Pages: 21-36 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/188/599 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:21-36 Template-Type: ReDIF-Article 1.0 Author-Name: Diwa C. Guinigundo Author-Workplace-Name: Bangko Sentral ng Pilipinas Title: An official core inflation measure for the Philippines Abstract: Many countries routinely publish a "core" or underlying inflation rate alongside the "headline" inflation rate. In February 2004, the National Statistics Office (NSO) began publishing an official rate of core inflation for the Philippines, defined as the rate of change of headline CPI after excluding selected food and energy items. This paper provides some background in the construction of the new measure and attempts a preliminary evaluation using a few simple statistical tests. The analysis suggests that, compared to alternative measures of core inflation (such as a trimmed mean and weighted median measure), the NSO core inflation measure is more stable but appears to be less correlated with future inflation. This implies that other core inflation measures may also provide useful additional information in the assessment of future price developments. Nevertheless, the NSO core inflation measure is an important step toward addressing the policy need to identify long-term or permanent movements in the path of inflation. The new series will also help build public understanding of both the inflation process in the Philippines and the medium-term orientation of macroeconomic policy. Classification-JEL: E31, E60 Keywords: inflation, core inflation, Philippines Journal: Philippine Review of Economics Pages: 37-53 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/189/600 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:37-53 Template-Type: ReDIF-Article 1.0 Author-Name: Francisco G. Dakila, Jr. Author-Name: Ma. Digna G. Paraso Author-Workplace-Name: Bangko Sentral ng Pilipinas Title: Monetary transmission mechanism in the Philippines : the interest rate channel Abstract: The transmission mechanism of monetary policy explains how monetary policy works—that is, how economic and financial variables respond to monetary policy actions. In view of the complexity of the transmission process, properly identifying the process as it works in the Philippines requires considerable effort and volume of work. In the context of inflation targeting, for example, an understanding of the monetary policy transmission mechanism is essential to understanding what monetary policy can and should do and at what point in time actions should be undertaken to contain or offset disturbances that could threaten the achievement of the inflation target. In this paper, we concentrate on the interest rate channel. We present initial estimates, obtained from general-to-specific modeling, and validate the results using a vector error correction model. The results confirm expectations that an increase in the 91-day Tbill rate generates a lagged reduction in the level of fixed capital formation and a decline in GDP growth, which is strongest about four quarters after the interest rate shock. However, the results also show that there is likewise an initial increase in the inflation rate; by the eighth quarter, however, inflation falls below the baseline. We view our results as an initial step in a research program that seeks to specify the various channels of monetary policy impact. Classification-JEL: E31, E52 Keywords: inflation targeting, interest rate, monetary policy Journal: Philippine Review of Economics Pages: 55-80 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/190/602 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:55-80 Template-Type: ReDIF-Article 1.0 Author-Name: Ma. Corazon J. Guerrero Author-Workplace-Name: Bangko Sentral ng Pilipinas Title: Operational issues in the implementation of risk-based supervision framework Abstract: With the objective of the Bangko Sentral ng Pilipinas (BSP) to achieve and maintain a safe and sound banking system, the focus of regulators shifted from traditional supervision to risk-based supervision. This approach calls for changes in the supervisory environment such as enhanced supervisory tools, refocused on-site inspection process, reoriented human resource, and risk-focused prudential regulations. The BSP adopts risk-based supervision to compel banking institutions to be more risk-oriented through the evaluation of management practices, policies, and procedures in the context of managing potential risks. As a result, banking institutions can provide the best banking services and products with the highest return of investment at a minimal risk. Classification-JEL: G28 Keywords: risk-based supervision, risk-focused supervision, risk-focused examination, risk-based examination Journal: Philippine Review of Economics Pages: 81-87 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/191/601 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:81-87 Template-Type: ReDIF-Article 1.0 Author-Name: Olivia A. Vital Author-Name: Lucia C. Laquindanum Author-Workplace-Name: Bangko Sentral ng Pilipinas Title: Asset price bubbles : implications on and approaches to, monetary policy and financial stability Abstract: Under an inflation-targeting regime, the central bank's primary responsibility is attaining price stability. With the large fluctuations in asset prices, being closely linked to financial and macroeconomic instability, monetary authorities have recognized the harsh effects of asset price bubbles on the economy. Asset price bubbles (sharp changes in stock, property and foreign exchange prices) have resulted in both financial and foreign exchange crises, as witnessed in Asian economies in the late 1990s. Marked changes in asset prices were evident in the Philippines in the run-up to the Asian crisis in 1997. The extent of their effects on the real economy and the banking system has yet to be quantified. It was observed, however, that household consumption, investments and inflation, moved broadly with asset price changes. Indicators showed that the direct effect of asset price swings on the banks' financial condition was limited. The indirect impact from the loss of investor confidence was reflected in the decline in the asset quality and capital adequacy ratio of banks. Monetary authorities addressed the overall deterioration of the economic environment rather than the volatility of asset prices. The best safeguard against asset price reversals is an environment conducive to growth, which includes price stability and financial stability. Classification-JEL: G12 Keywords: asset price bubbles, inflation, price stability, macroeconomic activity, financial stability Journal: Philippine Review of Economics Pages: 89-109 Volume: 42 Issue: 1 Year: 2005 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/200/604 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:42:y:2005:i:1:p:89-109