Poverty in the Philippines Essay

7343 Words Aug 8th, 2010 30 Pages
The Philippines is one of the three countries granted exemption in 1995 from the removal of quantitative restriction (QR) on rice under Annex 5 of the World Trade Organization (WTO) agreement. Japan and South Korea are the other two countries. The exemption will expire on December 31, 2004. The primary objective of the paper is to look at the possible poverty and distributional effects of the removal of the QR and the reduction in tariffs on rice imports. In particular, the paper attempts to analyze the following issues: (a) Do the poor share in the potential gains from a freer market for rice? (b) What alternative or accompanying policy measures may be needed to ensure a more equitable distribution of the potential gains
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The variance and other parameters of the distribution are estimated using data from the national household survey and are assumed fixed in the analyses, while the first moment of the distribution is altered using the results from the CGE model. The papers of De Janvry, Sadoulet and Fargeix (1991) and Decaluwe, Dumot, and Savard (1999) and Decaluwe, Party, Savard, and Thorbecke (2000) employed this approach. The present paper applies this second approach, but uses the actual income distribution from the 1994 FIES.
The paper is organized in seven sections. The second section discusses the government policies in the rice sector and the production structure of the sector, including prices. The third section looks at the current issue on food and poverty. The fourth section discusses in detail the model used in the analysis, including the parameters, the elasticities and the model structure at the base. The fifth section gives a description of the poverty and distribution measures used in the analysis. The sixth section outlines the various policy experiments conducted and discusses the results. The last section summarizes the results of the experiments and draws insights for policy.
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