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.

Briefing Paper: Social Protection in the Philippines

This paper was presented at the United Nations Development Programme inter-regional workshop titled "Social Protection in an Insecure Era: A South-South Exchange on Alternative Policy Responses to Globalization," Santiago de Chile, 14-16 May 2002. This paper identifies the most critical problems and issues regarding Philippine social protection. It begins with a definition of social protection, […]

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 ).

Agriculture: protection and underdevelopment

In contrast to manufacturing, the Philippine agricultural sector
received increased protection during the latter 1980s and the 1990s.
Thus, the nominal rate of protection (NRP) for rice increased from an
average of -4% during 1970-79 to 19% during 1990-94 and 68% during 1995-1998. Similarly, the NRP for corn increased from 24% during 1970-79 to 78% during 1990-1998. The NRP for sugar increased from 5% during the 1970s to 84% during the 1990s. The NRPs for pork and chicken increased from 6% and 34%, respectively, during the 1970s to 44% and 84%, respectively, in 1995. (See David 1999, p. 11). The rise in the nominal rate of protection is also reflected in the effective rates of protection estimates. Specifically, agriculture overtook the erstwhile leader in effective rates of protection by late 1990s (Medalla 1999).