Template-Type: ReDIF-Article 1.0 Author-Name: Arsenio Balisacan Author-Email: ambalisacan@up.edu.ph Author-Workplace-Name: University of the Philippines School of Economics Author-Name: Sharon Piza Author-Workplace-Name: Asia Pacific Policy Center Author-Name: Dennis Mapa Author-Workplace-Name: University of the Philippines School of Statistics Author-Name: Carlos Abad Santos Author-Workplace-Name: Asia Pacific Policy Center Author-Name: Donna Odra Author-Workplace-Name: Asia Pacific Policy Center Title: The Philippine economy and poverty during the global economic crisis Abstract: Anecdotal evidence permeates accounts on the impact of the global economic crisis (GEC) on Philippine poverty. This study systematically assesses the evidence and recent data. It adopts a somewhat eclectic approach, applying regression and decomposition techniques to trace the GEC impact on GDP and its major components, constructing panel data from nationally representative household surveys to trace the changes in household welfare during the crisis, and combining national income accounts and household survey data to simulate the differential effects of the crisis across population groups and social divides. Empirical findings suggest that although the Philippine economy did not slide to recession during the GEC, the impact of the crisis on the economy and poverty across population groups was nonetheless severe—and may linger for many years to come. Classification-JEL: I3, O16, O53 Keywords: poverty, economic growth, global economic crisis, Philippines Journal: Philippine Review of Economics Pages: 1-37 Volume: 47 Issue: 1 Year: 2010 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/644/3 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:47:y:2010:i:1:p:1-37 Template-Type: ReDIF-Article 1.0 Author-Name: Benjamin E. Diokno Author-Email: bediokno@up.edu.ph Author-Workplace-Name: University of the Philippines School of Economics Title: Philippine fiscal behavior in recent history Abstract: The Philippine national government had large and unsustainable budget deficits in the 1980s. But after a brief period of near-balanced budget in the mid-1990s, large deficits have reemerged in recent years. What explains the poor fiscal performance of the Philippines in recent years? Was it the result of unfortunate events, macroeconomic shocks, or misdirected fiscal policy? The large public-sector deficits in the early 1980s and those in recent years have similarities and differences. Both episodes of deficits occurred during periods of soaring oil prices, high interest rates, and volatile foreign exchange rates. Both episodes were also associated with low tax effort. The gains from the 1986 tax reform program during the middle years were lost in recent years because of discretionary changes. Over time, spending priorities changed. Marcos focused on infrastructure spending, while Aquino and Estrada focused on social services. Investment in physical infrastructure has a positive effect on fiscal balance. It makes private investment more productive, reduces transactions costs, increases the profitability of private-sector businesses, and thus expands economic output. Classification-JEL: H11, H5 Keywords: Philippine fiscal system, tax reform, investment in public infrastructure Journal: Philippine Review of Economics Pages: 39-87 Volume: 47 Issue: 1 Year: 2010 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/645/4 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:47:y:2010:i:1:p:39-87 Template-Type: ReDIF-Article 1.0 Author-Name: Donghyun Park Author-Workplace-Name: Asian Development Bank Author-Name: Gemma Esther B. Estrada Author-Workplace-Name: Asian Development Bank Title: Foreign exchange reserve accumulation in the ASEAN-4 : challenges, opportunities, and policy options Abstract: The ASEAN-4 countries—Indonesia, Malaysia, Philippines, and Thailand—have large and growing stocks of foreign exchange reserves. The region’s reserves now comfortably exceed levels required for traditional liquidity purposes. This has led to calls for a more active management of reserves, which would yield higher risk-adjusted returns. In this paper, we examine the various opportunities and challenges associated with more active, profit-oriented management of reserves in the ASEAN-4. We also draw on the experiences of well-established sovereign wealth funds to suggest directions for policymakers in their quest for higher returns, which will contribute to national welfare by augmenting fiscal resources. Classification-JEL: F31, F32, F21 Keywords: foreign exchange reserves, foreign investment, ASEAN Journal: Philippine Review of Economics Pages: 89-108 Volume: 47 Issue: 1 Year: 2010 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/646/5 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:47:y:2010:i:1:p:89-108 Template-Type: ReDIF-Article 1.0 Author-Name: Santos José O. Dacanay III Author-Workplace-Name: College of Social Sciences, University of the Philippines Baguio Title: The evolution of cost and profit efficiency of Philippine commercial banks Abstract: The paper aims to analyse the evolution of cost and profit efficiency for Philippine commercial banks during the period 1992-2004. It has been observed that cost inefficiency increased after liberalization in 1994 and further shot up after the Asian financial crisis. Profit efficiency, on the other hand, is steadily declining, from above the 90 percent mark prior to liberalization to 84 percent in 2004. The evolution of efficiency scores clearly shows that Philippine banks experienced declining profit and cost efficiencies. Two hypotheses can be suggested to explain these evolutions, following Berger and Mester [1999]. First is the increasing quality of bank services hypothesis due to competitive pressures, which led to higher costs of production and lower profit margins. Second is the “quiet life” hypothesis. Threatened by new competitors, the banks have opted for defensive strategies instead of reducing their costs. Classification-JEL: I3, O16, O53 Keywords: poverty, economic growth, global economic crisis, Philippines Journal: Philippine Review of Economics Pages: 109-146 Volume: 47 Issue: 1 Year: 2010 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/647/6 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:47:y:2010:i:1:p:109-146 Template-Type: ReDIF-Article 1.0 Author-Name: Carlos C. Bautista Author-Email: ccbautista@gmail.com Author-Workplace-Name: University of the Philippines College of Business Administration Title: Subjective poverty thresholds in the Philippines Abstract: Subjective poverty thresholds in the Philippines are derived from a 2003 household perception survey data set. The thresholds are computed using data on the minimum income question and actual income from the survey of 1,200 households. The estimated thresholds are shown to be much higher than the official poverty thresholds and more in line with the United Nation’s millennium development goal threshold of US$ 1 per day. Classification-JEL: I32 Keywords: Asia, Philippines, self-rated poverty, subjective poverty line, minimum income question, millennium development goals Journal: Philippine Review of Economics Pages: 147-155 Volume: 47 Issue: 1 Year: 2010 Month: June File-URL: http://pre.econ.upd.edu.ph/index.php/pre/article/view/648/7 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:47:y:2010:i:1:p:147-155