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Annual cost of current rice price policy: P27B

The intentions of current rice price policies in the Philippines are
eminently laudable. But there is a vast gulf between policy intentions
and actual effects. For the past 30 years, the National Food Authority (NFA) has implemented the country’s rice price strategy – one often described as: “Buy high, store long, sell low.” Per Presidential Decree 4 (1972), only NFA may import or export rice. Given this monopoly, the NFA builds up rice stocks by importing milled rice or procuring paddy (unhusked rice or palay) from local farmers.

Poverty vs injustice in war on terrorism

Recently, University of South Carolina professor Donald Weatherbee
delivered a lecture at De La Salle University regarding US-Southeast
Asian relations in the post 9-11 security environment. During the open forum that commenced, a Philippine foreign ministry official asked about the visitor’s views on the roots of terrorism after emphasizing that the current administration recognizes the link between the war on terrorism and the war on poverty. From the ensuing discussion, I gathered that many of our distinguished colleagues and professors share a similar view about poverty and terrorism.

Lowering unemployment by hiking minimum wage

For most economists, the idea of increasing the minimum wage is taboo. Raise the idea and one instantly gets tagged for being a leftist. Mention the thought and everybody jumps on one for defying the law of supply and demand. Tinker with it and one supposedly endangers the
health of the economy by increasing the rate of unemployment.

Planting rice is costly

The cost of producing rice in the Philippines is uncompetitive. Why?
Because rice is very expensive in the Philippines. Filipino consumers
suffer rice prices that are double to triple those borne by Thai or
Vietnamese households.

Competition policy: Why does it matter

As most developing countries and economies in transition legislate
their competition laws, it becomes fashionable to talk about competition policy. What exactly is competition policy and why does a country need it? Isn’t trade liberalization enough to ensure competition? Wouldn’t competition lead to cutthroat rivalry that would eventually result in the death of domestic firms and domination by large firms as feared by some sectors in society?

Macroeconomic constraints and politics

Behind the failure of the Philippines to adjust more effectively to the
demands of a more open economy is a government that faced a severe budget constraint especially in the latter 1980s and early 1990s as an aftermath of the economic crisis of the early 1980s. The share of debt service to total government expenditures during 1986-1992 averaged 39%, although this dropped substantially to 19% during 1993-1999. The high debt service burden in the latter 1980s and early 1990s has prevented the country to be more aggressive in its infrastructure program in view of the inadequacy of counterpart funds for the official development-assisted projects. The share of government infrastructure expenditures to GDP averaged 3.3% during 1986-1999. This share is lower than a number of East Asian countries. For example, the average share of infrastructure investments to GDP during 1990-1992 was 4.6% in China, 4.3% in Indonesia, 5.8% in Malaysia, 4.3% in Thailand and 4.6% in Korea (Kohli, 1994 ).