Template-Type: ReDIF-Article 1.0
Author-Name: Emmanuel Esguerra
Author-Workplace-Name: University of the Philippines
Title: Preface- Special issue on Industrial Policy
Abstract: Industrial policy, a term once eschewed in serious  discussions of development policy and strategy, is back in currency. This renewed interest is evident in the increasing body of both academic and popular literature that explicitly references the term in recent years. The Philippine Review of Economics initiated a roundtable discussion to take stock of the current state of knowledge on the subject, particularly as it relates to the Philippine experience. The articles in this issue were first presented during the roundtable discussion on October 17-18, 2024 held at the University of the Philippines School of Economics and revised for publication.
The Review thanks the authors of the papers for the revisions done on the earlier drafts and the discussants Ramon Clarete, Emmanuel de Dios, Raul Fabella, Hal Hill, Felipe Medalla, Mead Over, and Gonzalo Varela for their incisive comments which have also been included in this issue. We are grateful to the Philippine Center for Economic Development for supporting the initiative. We hope this issue provokes further discussion and research on the subject of industrial policy and its implications for the future of Philippine development.
Classification-JEL:
Keywords: preface, industrial policy
Journal: Philippine Review of Economics
Pages: iv
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://econ.upd.edu.ph/pre/index.php/pre/article/view/1052/994
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:iv

Template-Type: ReDIF-Article 1.0
Author-Name: Manuel Montes
Author-Workplace-Name: Society for International Development
Author-Workplace-Name: University of the Philippines
Title: Philippine industrial policy? Why not?
Abstract: Recent changes in trade policies in developed countries are sparking new interest in industrial policy programs. Among developing countries, failures against expected outcomes of structural adjustment programs in Latin America and Africa versus the perceived development successes of East Asia generate lessons about how different configurations of industrial policy can be more effective. This overview paper presents a definition of industrial policy and surveys the arguments for and against industrial policy. In the Philippine context, the consideration of industrial policy is a contravention of the state project since the 1980s to rely on an open trade regime as a key pillar of a development strategy. In the last decade, however, numerous legislative initiatives have sprung up to support industrial policy interventions. The papers in this volume represent updated thinking about industrial policy challenges and opportunities as they apply to the Philippine situation.
Classification-JEL: O25, O24, P11
Keywords: industrial policy, development, political economy, trade
Journal: Philippine Review of Economics
Pages: 1-21
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1053/995
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:1-21

Template-Type: ReDIF-Article 1.0
Author-Name: Felipe Medalla
Author-Workplace-Name: University of the Philippines
Title: Comment on "Philippine industrial policy? Why not?"
Abstract: [None]
Classification-JEL:
Keywords: industrial policy, commentary
Journal: Philippine Review of Economics
Pages: 22-23
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1054/996
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:22-23

Template-Type: ReDIF-Article 1.0
Author-Name: Josef T. Yap
Author-Workplace-Name: Ateneo de Manila University
Author-Workplace-Name: Philippine Institute for Development Studies
Author-Name: John Faust M. Turla
Author-Workplace-Name: University of the Philippines
Title: Industrial policy and complexity economics
Abstract: Mainstream theory underlying industrial policy highlights the neoclassical and structuralist approaches. The discussion on structuralist theories readily segues to complexity economics where industrial policy foments structural transformation by creating reinforcing feedback loops, particularly among manufacturing, exports, and investment. Empirical evidence is provided by applying panel cointegration analysis to investigate coevolution patterns among the following variables: investment-GDP ratio, exports-GDP ratio and manufacturing-GDP ratio. Econometric estimates show that there is indeed a long-run relationship that is bidirectional among the three variables. However, this is only a necessary condition for reinforcing feedback loops to materialize. Idiosyncratic factors in each country determine whether industrial policy has led to growth-oriented feedback loops. In the Philippines, despite interventions to boost manufacturing, no growth-oriented loop was established because of inadequate investment, particularly in infrastructure. Moreover, exports were hampered by the poor record in latching on to regional production networks. The Republic of Korea has had more success than Malaysia because it strengthened its innovation system. The missing link in Malaysia is own-technology creation.
Classification-JEL: L52, L53, O14, O25, O53, O57
Keywords: industrial policy, complexity economics, coevolution, feedback loops
Journal: Philippine Review of Economics
Pages: 24-52
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1055/997
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:24-52

Template-Type: ReDIF-Article 1.0
Author-Name: Raul V. Fabella
Author-Workplace-Name: University of the Philippines
Title: Comment on "Industrial policy and complexity economics"
Abstract: [None]
Classification-JEL:
Keywords: industrial policy, commentary
Journal: Philippine Review of Economics
Pages: 53-54
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1056/998
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:53-54

Template-Type: ReDIF-Article 1.0
Author-Name: Annette O. Balaoing-Pelkmans
Author-Workplace-Name: University of the Philippines
Author-Name: Adrian R. Mendoza
Author-Workplace-Name: University of the Philippines
Title: Mapping feasible routes towards economic diversification and industrial upgrading in the Philippines
Abstract: Using time series data from 1961 to 2023, we estimate econometric models to answer the following questions: 1) What factors drive economic diversification in the Philippines? 2) What role does industrialization play in broader-based diversification? and 3) What are the benefits of economic diversification in the country? The empirical results suggest that re-industrializing the domestic production base can significantly enhance economic diversification. Strategies that accelerate the growth of local industries, especially to catch up with the dominant services sector, are vital. Effective policies should focus on developing physical and human capital, improving connectivity, and fostering domestic innovation. This push for greater diversification is justified by its potential benefits on output and growth stability, and diversification and growth of exports. The paper also explores various routes towards economic diversification and industrial upgrading in the Philippines using the product space approach. The first route is directed towards leapfrogging to a more sophisticated economic structure in the product space. The second route points at climbing the value ladder within global value chains. The third route leads to the strengthening of the local industrial base that is heavily populated by small and medium-sized establishments.
Classification-JEL: L16, O14, O25, O33
Keywords: economic diversification, industrial upgrading, structural transformation, manufacturing, exports, product space, global value chains, SMEs, Philippines
Journal: Philippine Review of Economics
Pages: 55-81
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1057/999
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:55-81

Template-Type: ReDIF-Article 1.0
Author-Name: Hal Hill
Author-Workplace-Name: Australian National University
Title: Comment on "Mapping feasible routes towards economic diversification and industrial upgrading in the Philippines"
Abstract: [None]
Classification-JEL:
Keywords: commentary, industrial policy
Journal: Philippine Review of Economics
Pages: 82-84
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1058/1000
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:82-84

Template-Type: ReDIF-Article 1.0
Author-Name: Rafaelita M. Aldaba
Author-Workplace-Name: Department of Trade and Industry
Author-Name: Fernando T. Aldaba
Author-Workplace-Name: Ateneo de Manila University
Title: Industrial policy for innovation: why does it matter?
Abstract: This paper explores the relationship between industrial policy, innovation, and productivity in the Philippines. It argues that strategic industrial policies can promote innovation by incentivizing market-oriented research and development and commercialization, developing necessary innovation infrastructure, and fostering a skilled workforce equipped to work with new technologies and adapt to changing market demands. The paper also focuses on the importance of connecting innovation and entrepreneurship ecosystems, highlighting the challenges facing the Philippines in this area. It specifically analyzes the country’s startup ecosystem and recommends the establishment of Regional Inclusive Innovation Centers (RIICs) to facilitate collaboration among various stakeholders. Finally, the paper discusses the adoption and adaptation of artificial intelligence and Industry 4.0 technologies and their potential to drive productivity gains and transform the Philippine economy
Classification-JEL: O31, O32
Keywords: industrial policy, innovation, entrepreneurship, start-up ecosystem
Journal: Philippine Review of Economics
Pages: 85-109
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1059/1001
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:85-109

Template-Type: ReDIF-Article 1.0
Author-Name: Emmanuel S. de Dios
Author-Workplace-Name: University of the Philippines
Title: Comment on "Industrial policy for innovation: why does it matter?"
Abstract: [None]
Classification-JEL:
Keywords: commentary, industrial policy
Journal: Philippine Review of Economics
Pages: 110-113
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL:https://pre.econ.upd.edu.ph/index.php/pre/article/view/1060/1002
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:110-113

Template-Type: ReDIF-Article 1.0
Author-Name: Ramonette B. Serafica
Author-Workplace-Name: Exploring the prospects of services-led development
for the Philippines
Title: Exploring the prospects of services-led development for the Philippines
Abstract: The growing importance of the services sector has prompted an examination of possible pathways to maximize its impact, particularly on the quality of economic growth. Some emphasize promoting job creation and exports in the sector, in addition to ensuring that the services requirements of the rest of the economy are met. Others argue that the potential for services-led development depends on being able to replicate the features of industrialization by leveraging trade, technology, training, and targeting. There are also proponents of more active strategies on the demand side of labor markets. This paper discusses the interrelated issues the country must address in pursuing economic transformation through services. Priority actions include boosting productivity, expanding services outside the National Capital Region, implementing structural reform, strengthening exports of digital services, accelerating digitalization, and increasing innovation. For the Philippines, harnessing services to achieve broad-based and inclusive growth should be the essence of services-led development.
Classification-JEL: L80, L88
Keywords: services, development, exports, digital trade, structural reform, Philippines
Journal: Philippine Review of Economics
Pages: 114-138
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1061/1003
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:114-138

Template-Type: ReDIF-Article 1.0
Author-Name: Mead Over
Author-Workplace-Name: Center for Global Development
Title: Comment on "Exploring the prospects of services-led development in the Philippines"
Abstract: [None]
Classification-JEL:
Keywords: commentary, industrial policy
Journal: Philippine Review of Economics
Pages: 139-143
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1062/1004
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:139-143

Template-Type: ReDIF-Article 1.0
Author-Name: Dante B. Canlas
Author-Workplace-Name: University of the Philippines
Author-Name: Karl Robert L. Jandoc
Author-Workplace-Name: University of the Philippines
Title: Natural gas and transitioning to renewable fuels: considerations from industrial policy
Abstract: The Philippines is committed under the Paris Agreement to reduce greenhouse gas emission (GHG). In formulating its intended national contribution program, the government is starting with the energy sector by reducing reliance on coal as the primary fuel in electricity production as it transitions to the use of renewable fuels, such as wind and solar. Given the relatively high cost of renewables at this point, the Philippines is envisioning natural gas (NG), whether imported or indigenous, as a substitute fuel for coal in the interim. Some aspects of recent industrial policy approaches are considered to make this fuel substitution feasible.
Classification-JEL: Q4, O25
Keywords: natural gas, optimal investments, industrial policy, carbon tax
Journal: Philippine Review of Economics
Pages: 144-167
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1063/1005
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:144-167

Template-Type: ReDIF-Article 1.0
Author-Name: Ramon L. Clarete
Author-Workplace-Name: University of the Philippines
Title: Comment on "Natural gas and transitioning to renewable fuels: considerations from industrial policy"
Abstract: [None]
Classification-JEL:
Keywords: commentary, industrial policy
Journal: Philippine Review of Economics
Pages: 168-170
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1064/1006
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:168-170

Template-Type: ReDIF-Article 1.0
Author-Name: Ma. Joy V. Abrenica
Author-Workplace-Name: University of the Philippines
Author-Name: Anthony G. Sabarillo
Author-Workplace-Name: University of the Philippines
Title: How might China-US industrial policies affect the Philippines?: a quantitative exercise
Abstract: The recent industrial policy competition between the two economic hegemons, US and China, prompts developing countries to consider if and how they should respond. Using a multicountry, multisector Ricardian trade model with sectoral scale economies, we simulate different scenarios when a developing country like the Philippines takes a passive and active stance. We find welfare gains for the Philippines when it responds by implementing its own industrial policy, and welfare losses from inaction. Timing, however, matters. If the Philippines moved earlier before China and US engaged in industrial policy competition, the welfare gains are larger. Although the magnitude of gains is small, the results suggest an increased demand for industrial policy when the guardrails of the international trading system are lost due to the defiance of its benefactors.
Classification-JEL: F12, F13, F17
Keywords: Industrial policy, scale economies, new quantitative trade models
Journal: Philippine Review of Economics
Pages: 171-198
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1065/1007
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:171-198

Template-Type: ReDIF-Article 1.0
Author-Name: Gonzalo Varela
Author-Workplace-Name: World Bank
Title: Comment on "How might China-US industrial policies affect
the Philippines?: a quantitative exerciseâ"
Abstract: [None]
Classification-JEL:
Keywords: commentary, industrial policy
Journal: Philippine Review of Economics
Pages: 199-201
Volume: 61
Issue: 2
Year: 2024
Month: December
File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1066/1008
File-Format: Application/pdf
Handle: RePEc:phs:prejrn:v:61:y:2024:i:2:p:199-201