Template-Type: ReDIF-Article 1.0 Author-Name: Renz Venielle Lamayo Author-Workplace-Name: University of the Philippines Title: Consumer profiling, price discrimination, and consumer privacy Abstract: This paper considers a monopolist who exercises first-degree price discrimination by acquiring consumer data to infer reservation prices. The monopolist uses profiling technology to obtain consumer information whose cost is a function of the fraction of consumers it profiles. We first describe the market equilibrium where consumers do not have access to privacy technology that prevents the monopolist from acquiring their data. The paper then introduces a costly privacy technology that allows consumers to prevent their information from being obtained and used by the monopolist. Equilibrium analysis shows two important results that depend on the level of privacy costs. With sufficiently cheap privacy technology, we show that the monopolist profiles fewer consumers compared to when privacy is not an option for consumers. This reduces the incidence of price discrimination in the market. However, if privacy cost is sufficiently expensive, the monopolist profiles the same fraction of consumers as in the case when privacy was not an option. In this case, privacy technology does not reduce the incidence of price discrimination. Regardless of the level of privacy cost, however, the availability of privacy technology to consumers induces the monopolist to set a higher uniform price level for consumers it was not able to profile. Also, regardless of the cost of privacy, this combination of strategies on profiling and uniform price level reduces the incentive of consumers to use the privacy technology and results in an equilibrium where no consumers choose to privatize. Thus, in equilibrium, privacy technology only acts as a deterrent, and can only function as such, against aggressive consumer profiling and price discrimination if its cost is sufficiently low. Classification-JEL: L12, D42, D82 Keywords: price discrimination, monopoly, consumer privacy Journal: Philippine Review of Economics Pages: 1-26 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1067/1009 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:1-26 Template-Type: ReDIF-Article 1.0 Author-Name: Adrian Matthew Glova Author-Workplace-Name: University of the Philippines Author-Name: Roy Hernandez Author-Workplace-Name: Bangko Sentral ng Pilipinas Title: Forecasting currency in circulation with the central bank balance sheet Abstract: Currency in circulation (CIC) is an important variable in monetary policy as it affects liquidity and guides the currency issuance operations of central banks. This paper proposes a novel approach to forecast CIC using central bank balance sheet variables, namely assets and liabilities other than currency issued. The balance sheet approach is able to generate monthly CIC forecasts as opposed to demand-for-currency models anchored on quarterly Gross Domestic Product (GDP). This allows for more responsive currency policy, particularly during crisis periods when precautionary motives intensify—reflected in a decoupling of GDP and CIC—or when spikes in currency demand arise due to heightened transaction motives. Dynamic time series regression models are estimated to operationalize the balance sheet approach and are compared to baseline predictive methods such as Error-Trend-Seasonality (ETS) models, Autoregressive Integrated Moving Average (ARIMA), and seasonal naïve methods. Results show that including balance sheet variables significantly improves the predictive ability of CIC models in terms of mean absolute percentage error (MAPE) and root mean squared scaled error (RMSSE). These findings hold across multiple training and test sets through time series cross-validation, suggesting stability of forecast accuracy results. Classification-JEL: E41, E47, C22 Keywords: currency in circulation, central bank balance sheet, time series analysis Journal: Philippine Review of Economics Pages: 27-55 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1068/1010 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:27-55 Template-Type: ReDIF-Article 1.0 Author-Name: Asami Takeda Author-Workplace-Name: Hokkaido University Author-Name: Jonna P. Estudillo Author-Workplace-Name: University of the Philippines Title: Impacts of access to electricity on employment and household income growth in Cambodia Abstract: This study examines the impacts of access to electricity on household welfare in terms of employment and income growth in Cambodia. To correct for the endogeneity of electricity, we introduce two instruments: (1) population density at village level; and (2) distance between the center of the village and the nearest electricity substation point. Results show a strong and positive effect of household access to electricity on the probability of participation in wage employment and self-employment in the nonfarm sector. Access to electricity contributes to total household income growth through the growth of household nonfarm income. Evidence shows that electrification has facilitated the shift of household livelihood away from self-employment on farms and to wage work in the nonfarm sector, which eventually served as the main driver of household income growth. Classification-JEL: J21, O13, Q4 Keywords: access to electricity, employment, household income, Cambodia Journal: Philippine Review of Economics Pages: 56-76 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1069/1011 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:56-76 Template-Type: ReDIF-Article 1.0 Author-Name: Angelica Maddawin Author-Workplace-Name: National Graduate Institute for Policy Studies (GRIPS) Author-Workplace-Name: Asian Development Bank Institute Author-Name: Kazushi Takahashi Author-Workplace-Name: National Graduate Institute for Policy Studies (GRIPS) Title: Do cash transfers mitigate risks and crowd out informal insurance? Evidence from a randomized experiment in the Philippines Abstract: This study evaluates the impact of a Conditional Cash Transfer (CCT) program on risk mitigation and informal insurance systems among poor Filipino households during exposure to negative income shocks. CCTs can reduce dependence on informal arrangements by increasing beneficiaries' income, making them more resilient to shocks and less reliant on informal networks. Conversely, it can reinforce informal arrangements by enhancing the financial capacity of eligible households, enabling them to lend money to others during shocks. Theoretical outcomes can thus be ambiguous. Using a sample of 1,415 households from 130 village clusters randomly assigned to treatment and control groups, intention-to-treat (ITT) estimates suggest that CCT has unintended consequences on risk mitigation and positive spillover effects on the informal system. Beneficiaries’ medical expenses and borrowings from the informal system increased during shocks. Additionally, increased lending support was observed among ineligible households in treatment areas, along with a decrease in their borrowings from the informal system. Classification-JEL: O1, P36 Keywords: cash transfer, informal insurance, income shocks Journal: Philippine Review of Economics Pages: 77-111 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1070/1012 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:77-111 Template-Type: ReDIF-Article 1.0 Author-Name: Joseph Capuno Author-Workplace-Name: University of the Philippines Author-Workplace-Name: Department of Economy, Planning and Development Title: Pulling up from the depths of poverty: Do the Pantawid Pamilya cash transfers to the poor reduce their consumption expenditure shortfalls? Abstract: With its emphasis on incentivizing beneficiary households to invest in the health and education of their children, the Philippines’ Pantawid Pamilyang Pilipino Program (4Ps) is expected to reduce future poverty. Yet, the cash transfers provided under the program have impacts on the household’s current income and consumption, and therefore, on contemporaneous poverty status. While the transfers may be inadequate to lift the poor out of poverty, these could pull them up from the depths of poverty. Using a panel dataset, we estimated the elasticity of the region-level income gap and poverty gap, both based on per capita consumption expenditures, with respect to 4Ps indicators, controlling for other factors. In general, the poverty gap is not responsive to 4Ps indicators. In contrast, the income gap is sensitive to changes in the total 4Ps cash transfers, with the effect moderated by the poverty incidence in the region. The policy implication is that, among the 4Ps beneficiaries, the poor could be granted greater cash transfers to pull them up from the depths of destitution. Classification-JEL: D12, H53, I38 Keywords: conditional cash transfers, household income, household consumption expenditures, poverty gap, income gap, Philippines Journal: Philippine Review of Economics Pages: 112-126 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1071/1013 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:112-126 Template-Type: ReDIF-Article 1.0 Author-Name: Maria Socorro Gochoco-Bautista Author-Workplace-Name: University of the Philippines Title: A macroeconomic perspective on economic resilience and inclusive growth in the Philippines Abstract: With its emphasis on incentivizing beneficiary households to invest in the health and education of their children, the Philippines’ Pantawid Pamilyang Pilipino Program (4Ps) is expected to reduce future poverty. Yet, the cash transfers provided under the program have impacts on the household’s current income and consumption, and therefore, on contemporaneous poverty status. While the transfers may be inadequate to lift the poor out of poverty, these could pull them up from the depthsThere are at least two distinct but not equally important ways to understand what economic resilience means: one is focused on minimizing deviations of output about its trend and the quick return of output to trend following shocks, while another emphasizes the invariance of the underlying trend of output growth itself to shocks, including the ability to raise potential output despite shocks. The Philippine economy cannot be regarded as resilient using either definition. Anemic growth and the lack of economic resilience in the Philippines are primarily due to the inability of the government to make sufficient and quality investments in critical public goods such as climate change adaptation, health, education, and IT connectivity. The main reason for the lack of public (as well as private) investment is the presence of weak institutions and poor governance, characterized by a political economy process which provides many opportunities for rent-seeking behavior that benefit a narrow set of interests, and where adherence and sensitivity to the rule of law is lacking. Overcoming the problem of weak institutions and poor governance requires a change in the incentive structure faced by key institutions, with clear criteria and targets set and performance tied to tenure in office, so as to make government officials more accountable to the people. It requires a populace that demands accountability, transparency in motives and processes, and timely delivery of intended outcomes from the government, and an unwillingness to accept and trade off short-term token benefits for necessary investments to make growth robust, sustainable, and more inclusive. A well-informed and vigilant populace that demands adequate provision of quality public goods and services from the government is key. of poverty. Using a panel dataset, we estimated the elasticity of the region-level income gap and poverty gap, both based on per capita consumption expenditures, with respect to 4Ps indicators, controlling for other factors. In general, the poverty gap is not responsive to 4Ps indicators. In contrast, the income gap is sensitive to changes in the total 4Ps cash transfers, with the effect moderated by the poverty incidence in the region. The policy implication is that, among the 4Ps beneficiaries, the poor could be granted greater cash transfers to pull them up from the depths of destitution. Classification-JEL: O4, O5 Keywords: economic resilience, inclusive growth, public goods, institutions, governance, rent-seeking Journal: Philippine Review of Economics Pages: 127-160 Volume: 62 Issue: 1 Year: 2025 Month: June File-URL: https://pre.econ.upd.edu.ph/index.php/pre/article/view/1072/1014 File-Format: Application/pdf Handle: RePEc:phs:prejrn:v:62:y:2025:i:1:p:127-160