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: Philippine economic nationalism Abstract: Not seeing that the power of taxation of the state is the true expression of national patrimony in economic matters, the framers of the 1935 Constitution introduced provisions on the use and disposition of land and natural resources vesting exclusive rights of exploitation to citizens. This also meant restricting foreign investments in public utilities. The provisions were not revised but even elaborated in subsequent revisions of the constitution. These provisions set a train of restrictive economic policies that helped to compound the mistakes of early industrialization policies. By tying the hands of future generations of Filipinos to deal with specific economic issues in their own time, the constitutional provisions provided barriers against solving economic problems with realism as called for by changing times and exigency. Judged as the most likely to succeed in the early years after independence among many East Asian economies, the Philippines became the economic laggard among a group of highly performing economies during the second half of the last century. The brand of economic nationalism that was fostered was exploitative and heavily protectionist in character. It built an economic and political framework that discouraged competition, enhanced monopolies and inefficiencies by nationals, inhibited the growth of international trade, and hence postponed by a large margin of time the growth of economic specialization based on comparative advantage. A new kind of nationalism based on principles of competition and comparative advantage is needed. This will be helped greatly by the removal of stringent constitutional provisions that affect foreign investments. An enlarged regional free trade within ASEAN and accession to the World Trade Organization are factors that will help to sustain this new ethos, which will strengthen economic and national aspirations. Classification-JEL: O10, O14, P48 Keywords: economics and law, economic nationalism, trade and industry, Philippines, economic development Journal: Philippine Review of Economics Pages: 1-44 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/175/688 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:1-44 Template-Type: ReDIF-Article 1.0 Author-Name: Hazel Jean Malapit Author-Email: Author-Workplace-Name: Action for Economic Reforms Author-Name: Jade Eric Redoblado Author-Email: Author-Workplace-Name: Graduate Program, UP School of Statistics Author-Name: Deanna Margarett Cabungcal-Dolor Author-Email: Author-Workplace-Name: University of the Philippines College of Education Author-Name: Jasmin Suministrado Author-Email: Author-Workplace-Name: Center for Conscious Living Foundation, Inc. Philippines Title: Philippine Labor supply responses to adverse shocks under credit constraints : evidence from Bukidnon, Philippines Abstract: The ability of households to insure consumption from adverse shocks is an important aspect of vulnerability to poverty. How is consumption insurance achieved in a low-income setting where formal credit and insurance markets have been observed to be imperfect or missing? Using 2003 data from the Philippine province of Bukidnon, we investigate how labor supply is used to buffer transitory income shocks in light of credit constraints. We find that the most vulnerable households are those with little education and with few or no able-bodied male members. Appropriate policy responses include countercyclical workfare programs directed at households with high female-to-male ratios, households with high dependency ratios, and households with little or no education, as well as the provision of universal education and health care. These programs are likely to be effective in strengthening the labor endowments of households and improving their ability to cope with adverse shocks in the future. Classification-JEL: J22, J43 Keywords: labor supply, credit constraints, consumption smoothing, coping strategies, idiosyncratic shocks, Philippines Journal: Philippine Review of Economics Pages: 45-86 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/176/641 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:45-86 Template-Type: ReDIF-Article 1.0 Author-Name: Nikkin L. Beronilla Author-Email: Author-Workplace-Name: Institute for Popular Democracy Author-Name: Dennis S. Mapa Author-Email: Author-Workplace-Name: University of the Philippines School of Statistics Title: Range-based models in estimating value-at-risk (VaR) Abstract: This paper introduces new methods of estimating Value-at-Risk (VaR) using range-based GARCH (general autoregressive conditional heteroskedasticity) models. These models, which could be based on either the Parkinson range or the Garman-Klass range, are applied to ten stock market indices of selected countries in the Asia-Pacific region. The results are compared using the traditional methods such as the econometric method based on the autoregressive moving average (ARMA)-GARCH models and RiskMetricsTM. The performance of the different models is assessed using the out-ofsample VaR forecasts. Series of likelihood ratio (LR) tests—namely, LR of unconditional coverage (LRuc), LR of independence (LRind), and LR of conditional coverage (LRcc)—are performed for comparison. The result of the assessment shows that the model based on the Parkinson range GARCH (1,1) with Student’s t distribution, is the best-performing model on the ten stock market indices. It has a failure rate, defined as the percentage of actual return that is smaller than the one-step-ahead VaR forecast, of zero in nine out of ten stock market indices. This paper finds that range-based GARCH models are good alternatives in modeling volatility and in estimating VaR. Classification-JEL: C01, C13 Keywords: value-at-risk, Parkinson range, Garman-Klass range, range-based GARCH Journal: Philippine Review of Economics Pages: 87-99 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/178/643 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:87-99 Template-Type: ReDIF-Article 1.0 Author-Name: Mohammed Nishat Author-Email: Author-Workplace-Name: Institute of Business Administration, Karachi Author-Name: Khalid Mustafa Author-Email: Author-Workplace-Name: Department of Economics, University of Karachi Title: Philippine Trading volume and serial correlation in stock returns in an emerging market : a case study of Pakistan Abstract: This paper examines the relationship between aggregate stock market trading volume and serial correlation of daily stock returns from December 1991 to April 2006. The empirical results reveal that there is a first-order positive autocorrelation between future and present returns. The serial correlation becomes negative when present returns are weighted by a change in the trading volume. This indicates that the non-informational trade has a significant effect on prices and trading activity in Karachi stock market in addition to present returns, nonlinear volume, and volatility. The results implied that stock market return moved too much due to change in the fundamentals, aggregate expected returns, and changes in effective risk aversion of market participants. Moreover, the same results are found in pre-reforms period (December 14, 1991, to December 31, 2000), post-reforms period (January 01, 2001, to April 2006), before 9/11 events (December 14, 1991, to September 10, 2001), and after 9/11 events (September 10, 2001 to April 21, 2006). The test results for second-order autocorrelation indicate a positive and weak relationship between future and present returns as compared to first-order autocorrelation. However, it is positive when it relates to trading volume in the entire sample period and four subsample periods. This infers that the role of information is effective after two days, but non-informational role is less effective in this duration. Classification-JEL: C02, C22 Keywords: stock trading, autocorrelation, information Journal: Philippine Review of Economics Pages: 101-117 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/179/642 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:101-117 Template-Type: ReDIF-Article 1.0 Author-Name: Daryl Patrick Evangelista Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Philip Amadeus Libre Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Title: Electoral cycles in Philippine fiscal and monetary policy Abstract: Filipino politicians are frequently characterized as being driven by office-seeking motives. Despite this, surprisingly little systematic evidence is available to support the electoral-cycle hypothesis in the Philippines. This paper tests the real-world relevance of the longstanding belief in election economics by using intervention analysis or interrupted time-series analysis, a version of the classical multiple regression model, to determine the impact of elections on economic policies and economic outcomes. Time-series regressions confirm the presence of political business cycles in measures of fiscal policy such as total government expenditures and public construction spending. However, monetary authorities show no inclination to engage in pre-electoral expansion on their own. They respond to higher money demand near election periods by adjusting the domestic and foreign components of the monetary base to stabilize the growth of monetary aggregates. The net effect of fiscal policy manipulations on measures of aggregate economic activity is found to be negligible. Classification-JEL: O23, P16, C22 Keywords: political business cycle, monetary policy, fiscal policy Journal: Philippine Review of Economics Pages: 119-159 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/180/644 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:119-159 Template-Type: ReDIF-Article 1.0 Author-Name: Clarissa V. Buenaventura Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Ria F. Campos Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Title: Socioeconomic determinants of childhood injury Abstract: Accidents are the major causes of lifetime incapacity and premature deaths of children ages 1-14. While the country is winning in its fight against communicable diseases by showing a decreasing rate of mortality due to pneumonia, diarrhea, nutritional deficiency, measles, and tuberculosis (tb) of all forms in the past 30 years, the rate of mortality due to accidents has been constant and, at the turn of the century, increasing. This study aims to help in improving preventive actions against unintentional child injuries by identifying the socioeconomic risk factors for injury. Socioeconomic data from the records of trauma patients in the up Philippine General Hospital who applied for medical social service in the year 2006 were analysed using logistic regression. Results of the regression showed that male children living with only one adult and who have a younger, less educated mother are more at risk of getting injured. Paternal characteristics turned out to have an opposite sign than that of maternal characteristics, implying that older and more educated fathers offer less preventive efforts for child injury. Classification-JEL: J13, J18, C25 Keywords: child injury, risk, logistic regression Journal: Philippine Review of Economics Pages: 161-183 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/181/646 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:161-183 Template-Type: ReDIF-Article 1.0 Author-Name: Rachel M. Tanaka Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Title: Determinants of breastfeeding : the case of a Philippine urban barangay Abstract: This paper determines the factors that affect breastfeeding initiation and continuation in a low-income urban barangay in the Philippines based on a survey done in 2005. It incorporates the framework by Chatterji and Frick [2003] that considers how a mother maximizes her utility in each period. The odds ratios in this case show that family income, number of children, age, and the mother’s educational attainment and her belief in the superiority of breast milk determine whether a mother initially feeds her child with breast milk or not. On the other hand, continuation of breastfeeding is also attributed to these factors (except education) plus the number of children, the age of the last-born, and whether the last-born was fed initially with breast milk or not. This paper concludes that breastfeeding measures should therefore be aimed at promoting awareness among mothers of the economic and health benefits of breastfeeding and at supporting its initiation right after delivery. This form of human capital investment should be viewed as more important than incomegenerating activities, especially for mothers of high-income families who can afford to take a leave from work to feed their babies. Classification-JEL: D1, I10 Keywords: breastfeeding, human capital Journal: Philippine Review of Economics Pages: 185-204 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/182/647 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:185-204 Template-Type: ReDIF-Article 1.0 Author-Name: Kezia C. Bansagan Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Hazel Joyce C. Panganiban Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Title: The impact of family size on children’s school attendance in the Philippines Abstract: Much empirical work has been done to determine the effects of family size on the education of children. Using a sample from the October 2006 Labor Force Survey, this paper attempts to determine the impact of family size on children’s education as measured by school attendance while considering socioeconomic factors. Results have shown that family size is significantly and negatively correlated with children’s school enrollment. Even after controlling for family size and birth-order effect, the negative effect of family size on children’s school attendance is still robust. We also find marginal differences as the characteristics of the parents and birth-order effect are taken into the analysis. These results confirm the quantity-quality theory introduced by Becker. Classification-JEL: D1, J13, I20 Keywords: family size, schooling, human capital Journal: Philippine Review of Economics Pages: 205-234 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/183/654 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:205-234 Template-Type: ReDIF-Article 1.0 Author-Name: Vigile Marie B. Fabella Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Czarina Eva I. Oyales Author-Email: Author-Workplace-Name: University of the Philippines School of Economics Title: Democracy and poverty reduction Abstract: The past decade was witness to the rapid economic growth of countries whose political systems deviate from conventional democratic philosophy. Countries such as Taiwan, Singapore, and South Korea, among others, have become big economies rivaling major players like the United States and the United Kingdom. On the other hand, democratic, low-income countries have experienced relatively sluggish growth. In this paper, we explore the influence of democracy and political freedom on economic growth, utilizing poverty reduction as its indicator. We will focus on identifying the requisites of a functioning democracy within the context of developing nations that will enable it to effectively reduce poverty. Utilizing the 2-stage least squares method of estimation, our findings suggest that democracy, in general, has a negative influence on poverty reduction for developing countries. However, when complemented with trade openness, primary education, regulatory quality, effective governance, and voice and accountability, the outcome becomes positive. Classification-JEL: I30, O43 Keywords: democracy, poverty, 2-stage least squares Journal: Philippine Review of Economics Pages: 235-269 Volume: 45 Issue: 2 Year: 2008 Month: December File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/184/657 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:45:y:2008:i:2:p:235-269