Template-Type: ReDIF-Article 1.0
Author-Name: Stella Quimbo
Author-Workplace-Name: UP School of Economics
Author-Name: Xylee Javier
Author-Workplace-Name: UP School of Economics
Title: Rethinking the taxation of compensation income in the Philippines
Abstract: The current individual income taxation structure of the Philippines significantly violates several norms of equity, with wage and salary workers (wsws) being disproportionately burdened by income taxes. An important source of inequity is the phenomenon of Òbracket creepÓ resulting from the failure to adjust tax brackets by inflation. Another is the failure of a large number of the self-employed to pay the right taxes.Ê
We show that while inflation-adjustment of tax brackets results in revenue losses, an expansion of the tax base, a simplification of the income tax structure, and a reduction of tax rates can plug this leak. Using data from the merged 2013 Labor Force Survey and 2012 Family Income and Expenditures Survey, we estimate a set of tax rates that largely offsets the revenue losses from inflation-adjusted tax brackets. A key behavioral premise, supported by a multivariate logit analysis, is that the likelihood of paying income taxes increases with lower effective tax rates. Under the personal income tax structure proposed here, 36 percent of the income tax burden would be borne by the 2 top tax bracketsÑa seven percentage-point increase over the current share. Implementing these tax reforms, however, requires improvements in tax administration to accommodate the potential expansion in the tax base.
Classification-JEL: H24, H26, D63
Keywords: income tax, tax compliance, equityJournal: Philippine Review of Economics
Pages: 1-22
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/914/814
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:1-22

Template-Type: ReDIF-Article 1.0
Author-Name: Peter Julian Cayton
Author-Workplace-Name: UP School of Statistics
Author-Name: Dennis Mapa
Author-Workplace-Name: UP School of Statistics, and UP School of Economics
Title: Time-varying conditional Johnson Su density in Value-at-Risk methodology
Abstract: Value-at-Risk (VaR) is a standard method of forecasting future losses in a portfolio of financial assets. An alternative method of estimating VaR using time-varying conditional Johnson SU distribution is introduced in this paper, and the method is compared with other existing VaR models. Two estimation procedures using the Johnson distribution are developed in the paper: (1) the joint estimation of the volatility; and (2) the two-step procedure where estimation of the volatility is separated from the estimation of higher parameters, i.e., skewness and kurtosis. Empirical analyses of the two procedures are illustrated using data on foreign exchange rates and the Philippine Stock Exchange index. The methods are assessed using the standard forecast evaluation measures used in VaR models. Modeling procedures where estimation of higher parameters can be integrated in VaR methodology are introduced in the paper.Ê
Classification-JEL: C22, C58, G12, G32
Keywords: time-varying parameters, Generalized AutoRegressive Conditional Heteroskedasticity models, non-normal distributions, risk management, financial econometrics
Journal: Philippine Review of Economics
Pages: 23-44
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/915/815
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:23-44

Template-Type: ReDIF-Article 1.0
Author-Name: Roehlano Briones
Author-Workplace-Name:  Philippine Institute for Development Studies
Title: Impact assessment of national and regional policies using the Philippine Regional General Equilibrium model
Abstract: For the Philippines, a quantitative analysis is more useful for policy if it incorporates regional differences in welfare and economic structure. However, owing to the absence of key regional data, existing computable general equilibrium (cge) models offer limited analysis of regional effects or national impacts of region-specific interventions. This study formulates a regional cge model that overcomes these limitations. The applications of the model showed the following: (1) completion of the tariff reform program in agriculture will contract some import-competing sectors in lagging regions, but will improve welfare across all regions; (2) productivity growth in agriculture can more than offset these contractionary effects; (3) investments in marketing infrastructure promise significant pay-offs, though with a trade-off between the size and spread of welfare gains across regions; and (4) combining trade reform with marketing infrastructure investments slightly mitigates some of the contractionary effects from the former.
Classification-JEL: C68, M390, Q180, R130, R580
Keywords: computable general equilibrium, regional economics, agricultural development, marketing infrastructure, trade liberalization, welfare impact
Journal: Philippine Review of Economics
Pages: 45-76
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/916/818
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:45-76

Template-Type: ReDIF-Article 1.0
Author-Name: Josemaria Gabriel Agregado
Author-Workplace-Name: UP School of Economics
Author-Name: Jose Maria Marella
Author-Workplace-Name: UP School of Economics, UP College of Law
Author-Name: Toby Monsod
Author-Workplace-Name: UP School of Economics
Title: Does judicial quality matter for firm performance?
Abstract: A sound legal environment is said to be good for business to the extent that it protects property rights, enforces contracts, and ensures the consistency of policies. By lowering uncertainty and contracting costs, a better judiciary is expected to encourage business investments. We test if this hypothesis holds in the Philippine setting by examining whether and how judicial quality is significant to firm-level growth. We construct a quantitative measure of judicial quality, a Judicial Quality Index, using principal components analysis on a diagnostic survey dataset of judges across 13 regions, and we use this in a regression analysis of firm-level growth using data from micro, small, and medium enterprises across 34 Philippine cities.Ê
We find that higher judicial quality has no independent effect on firm growth. But it does reduce the effect of ÒbribesÓ or informal payments, which are typically offered by firms to overcome inordinate delays in government processes or to gain an advantage in business. It therefore makes a positive but indirect contribution to firm performance. In the presence of a better quality judicial system, there is a less compelling need for firms to engage in informal payments to Ògrease the wheels of commerceÓ.Ê
Classification-JEL: C38, C36, D02, D73
Keywords: new institutional economics, principal components analysis, firm growth, judiciary, corruption, bribery, Philippines
Journal: Philippine Review of Economics
Pages: 77-94
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/917/816
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:77-94

Template-Type: ReDIF-Article 1.0
Author-Name: Sarah Lynne Daway
Author-Workplace-Name: UP School of Economics
Author-Name: Geoffrey Ducanes
Author-Workplace-Name: UP School of Economics
Title: A note on the effects of remittances and overseas migration on some Philippine statistics
Abstract: The Philippines is peculiar in that a significant portion of its population is dispersed globally, sending remittances that have exceeded 8 percent of its gross domestic product (gdp) in recent years. For the last two decades, the country has enjoyed a steady flow of remittances from overseas Filipino workers, which has not only provided an additional source of disposable income to domestic households but has also served as a buffer against economic downturns. This note shows that standard gdp accounting and current labor statistics may inadequately account for remittances and overseas migration, especially their corresponding welfare consequences. A better valuation of welfare and living standards requires alternative measures that would better capture the migration phenomenon.
Classification-JEL: E01, J21, F22, F24
Keywords: remittances, migration
Journal: Philippine Review of Economics
Pages: 95-116
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/918/817
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:95-116

Template-Type: ReDIF-Article 1.0
Author-Name: Marina Fe Durano
Author-Workplace-Name: UP Asian Center
Title: International migration and occupational licensing: an empirical exploration
Abstract: Occupational licensing has been found to inhibit the geographical mobility of professionals. Previous studies in this area have used data on interstate mobility of professionals in the United States. This work reconsiders occupational licensing in the context of international migration rules. This relationship is relevant under the discussions on the Movement of Natural Persons in the General Agreement on Trade in Services. A conditional logit model and a nested logit model are used to study the relationship between the two types of regulation. The results verify the greater importance of immigration rules over occupational licensing in determining the probability of choosing a destination country for potential foreign providers of engineering services.Ê
Classification-JEL: F22, F14, J44, J61, K23, K33
Keywords: trade in services, professional services, international migration, occupational licensing, conditional logic model, nested light model
Pages: 117-142
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/919/819
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:117-142

Template-Type: ReDIF-Article 1.0
Author-Name: Rosa Maria Alonso I Terme
Author-Workplace-Name: Up School of Economics
Title: Book Review: PikettyÕs Capital in the twenty-first century
Abstract: 
Classification-JEL: 
Keywords: 
Journal: Philippine Review of Economics
Pages: 143-156
Volume: 51
Issue: 1
Year: 2015
Month: June
File-URL:http://pre.econ.upd.edu.ph/index.php/pre/article/view/920/820
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:52:y:2015:i:1:p:143-156