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This paper aims to review the impact of the various tariff legislations passed from 1998 to 2003 on the structure of protection in the Philippines. The paper finds that while the overall level of effective protection has declined, it has remained uneven as some selected sectors have continued to receive relatively high effective rates of protection. As such, the economic distortions that characterize our tariff structure have continued to prevail and have led to the inefficient use of resources. The tariff structure continues to favor the manufacture of highly protected import substitutes at the expense of exportables. Oftentimes, the favored sectors are intermediate goods like sugar, petrochemicals, float glass, and steel which are inputs to a lot of products. Since the tariffs on the inputs are higher than the outputs, the cost of production has remained high affecting the competitiveness of the user sectors. The large disparities in tariff protection has provided incentives for lobbying. Thus, sustaining the trade reforms and encouraging competition to promote efficiency and consumer welfare has been very difficult.

Citations

This publication has been cited time(s).

Aldaba, Rafaelita M, 2012 "Trade reforms, competition, and innovation in the Philippines" , Philippine Institute for Development Studies
Aldaba, Rafaelita M, 2012 "Surviving trade liberalization in Philippine manufacturing" , Philippine Institute for Development Studies
Aldaba, Rafaelita M., 2012 "Trade reforms, competition, and innovation in the Philippines" , Philippine Institute for Development Studies
Aldaba, Rafaelita M., 2012 "Trade reforms, competition, and innovation in the Philippines" , Economic Research Institute for ASEAN and East Asia (ERIA)
David, Cristina C., Ponciano Intal, and Arsenio M. Balisacan, 2007 "Distortions to agricultural incentives in the Philippines" , World Bank
Cororaton, Caesar B., 2008 "The Philippines: Shadow WTO agricultural domestic support notifications" , International Food Policy Research Institute (IFPRI)
Aldaba, Rafaelita M., 2005 "The impact of market reforms on competition, structure and performance of the Philippine economy" , Philippine Institute for Development Studies
Aldaba, Rafaelita M., 2012 "Surviving trade liberalization in Philippine manufacturing" , Philippine Institute for Development Studies
Cororaton, Caesar B., Erwin L. Corong, and John Cockburn, 2009 "Agricultural price distortions, poverty and inequality in the Philippines" , World Bank
Aldaba, Rafaelita M., 2005 "The impact of market reforms on competition, structure and performance of the Philippine economy" , East Asian Bureau of Economic Research
Corong, Erwin L., 2007 "Economic and poverty impacts of a voluntary carbon reduction for a small liberalized developing economy: The case of the Philippines" , Fondazione Eni Enrico Mattei (FEEM)
Corong, Erwin L., 2007 "Economic and poverty impacts of a voluntary carbon reduction for a small liberalized developing economy: The case of the Philippines" , Fondazione Eni Enrico Mattei
Cockburn, John, Erwin L. Corong, and Caesar B. Cororaton, 2008 "Poverty effects of the Philippines' tariff reduction program: insights from a computable general equilibrium analysis" , East Asian Economic Association

Contributor

Philippine Institute for Development Studies

Authors

Aldaba, Rafaelita M.

Keywords

tariff structure; effective protection rate; trade policies

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Jul 05, 2013

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Policy Reversals, Lobby Groups and Economic Distortions

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