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V01,Xl No.3




The country's continuous grip on land reform as the ordy way to develop is not doing the country any good. How much attention, resources, time and energy have been spent on the land reform program? Have we ever met even the minimum target of land distribution? Of the tillers who were able to acquire land, how many of them experienced a better life?


.......Inside -.,

LookingBeyondtheLandIssue T

hese questions should be directed to those who continue to regard land reform as the panacea to all our economic problems. Understandably, becausethetigersof East Asia-Japan, Korea and Taiwan-had genuine land reform program as one of the most impor tent prerequisites to development, we also assume the same pattern for our country. But given the present political set-up in the country, genuinelandreformwouldbeverydifficultifnot impossible. So, is there any other way to develop? This has been one of the issues discussed in the Symposium on Structures and Reforms for Rural Development in the Philippines held on 17 March 1993 at the Asian Institute of Tourism (AIT)Hotel. SponsoredbythelnstituteofDeveloping Economies fiDE-Japan), in cooperation with the University of the Philippines' School of Economics (UPSE) and PIDS, the Symposium tackled the final reports of the members of the study group on the IDE project in the Philippines."

*For the past two years, three projects have been commissioned by the IDE with UPSE and PIDS. These are on: (1) privatization and deregulation; (2) decentralization; and (c) rural industrializa tion, the subject of this symposium, photo credit: Philippine Development (NEDA) ILl





This symposium was divided into three sessions. Session I focused on the present rural development as well as agricultural credit policy with Dr. Arsenio Balisacan (UPSE) and Dr. Gilberto Llanto (PIDS) as speakers. Session Ii discussed about migration issues and agrarian reforrn withDr.CynthiaRoseBautista(UPDepartment of Sociology) and Mr. Katsumi Nozawa (IDE). The third and last session centeredonenvironmentalissuesasweUas the role of non-government organizations (NGOs) in rural development with Dr. Marian S. Delos Angeles (PIDS) and Dr. Alex Brillantes, Jr. (UP College of Public AdministraUon). Moderators for the three sessions were Dr. AnicetoOrbeta,Jr.(PIDS),Dr.JosephLim(UPSE) and Dr. Epictetus Patalinghug (UP College of Business Administration). _ To page 2

4 HealthProjectSeminar Series Continues 6 PIDSto Start its Economic DatabaseSystem _UNCTADIntroduces MICAS _ EO8: BoonorBaneto theCorn-Livestock Industry?

While most of us continue to regard land reform as the panacea to all our economic ills, experts

have awakened

to the reality that the coun try has to veer away from this politically-impossible


Rural Industrialization: Looking Beyond the Land Issue this. Recent Trade Liberalization looks Are tariffs and quantitative restrictions really expounds necessary?on RP's into tl_e im pact of EO 470 and other quantitative restrictions, Meanwhile, four stud ies under the PIDSDOH Health Care Financing Project are included in this issue. Good news for researchers! PIDS is about to begin with its economic database system. In addition, a new commodity analysis and information system is being introduced by UNCTAD to the Philippines. PIDS, together with the National Security Council (NSC) and National Security Training Center (NS'I'C), spearheaded a seminar and workshop to familiarize the users With the MICAS, the project's name. Finally, this is,sue features the controversy behind EO 8 and the corn-livestock industry. Our guestwriter, Dr. Crlstina C. David, said that the "proposed higher tariffs and longer adiustment period against the short- and long-term more. II III IIII I

interests of the corn and livestock sector itself." Read on for I






ii I


and: medium-i

: : : :cess:la_r:ig _ing absorbed by the inf6r;: ::........ ........

:that will reduce poverty,

i :::::: i : i:

ance (ODA)projects Sh0uld::payi:more attention t0 overall sect0ral policies, em-i: : phasize institutional development and lxeneficiaryparticipation;containasmuch

facili for. i




!;an :: urban are:as:or ::altemafive::pattito: .... devei0pment for a: i like the Philippines i: :: _en be fOufid:::i::::: :i:::: : ;with gli:im;:i:i: : : .... i::[:: :::Tliep_r_ access of::tlie to social :: i in:the rural:areasi:: : tion i::i i: i:::::_rviees_ g!!0u!d al_ be:iniproved, Hukl : :iOn:tlie:::0[her:side:of tile fenee;ithe:: iman capiial: developinent enhances the : ::: hence; :: preVei_t_ :the to:econOmic develop" i ::: : sect6r:i::frOm::: vigoroUSly :: ::ment: Ci_armeiii_g:resourcesto socialserv5 :[: Forinstance;: :i::ices:may: n!!¢:bring inl immediate gains : :infra !, :eOncentra ted in: :::butin the longrrun wiil prOve to be wise:


........ :




enerate: i_forma tion

all:::: ....... :riOt: ............ .....


political: .... ......

ippi,,eDevel@menl(NEDA) ......... ....... .......: :i ii Tlie Strong pre_raee Of [ i non-government .... :[[ orga niza tions such a S cooperatives are increa_ i: ingly being felt in the i: mainstream of develop::ment_

: :: :


: :

: :




.... i

.... [


: :ii : il_egovernment : sl'_otdd institnte polieies : that are conducive to the development of the rural:economy.






the Recent Trade Liberalization in the Philippines"byPIDSResearchAssociate Elizabeth Tan. Ms. Tan presented the the study's Pulong preliminary Saliksikan saresults PIDS during on 17 March. ]he Promise of EO 470


RP,,RecentTradeLiberalization U_

Increasing tariffs and q_:tantitative restrictions slacken trade. There is, thereforej a need to evaluate the short-run and medium-term " _ o t:the F_hHippln_:s " "- °- _ ' recent _:r_Ae nnpa,J, liberalization

Executive Order 470, issued on July 20, 1991, contains significant changes in the country's tariff policy, reflecting the effort to further impose tariffreforms, ltisaresultofaone-year consultation by the government with the private sector, Table 1 shows the phasing of tariff reforms under EO 470 from 1991 to 1995. The executive order moves toward a more neutral tariff policyby (1) reducing the number of commodity lines with high tari ffs and (2) increasing the number of those commodities with low tariffs. Under the 40 percent tariff level, thenumberofcommoditylinesis •--


reduced from 485 in 1991 to zero by 1995; those of commodities with 50 percent rates fall from 1,173 lines in 1991 to 208 by 1995. On the other hand, there is a rise in the number of commodity lines in the lower tariff levels, Commodity lines with 10 percent tariffs increase from 1,589 lines in 1991 to 1,957 by 1995. Similarly, the number of commodities with 20 percent tariffs rises from 970 lines to 1,036 while commodities with 30 percent tariffs increase from 978 lines to 1,971. Quantitative Reslriction_ There are cases where the amount of protection conferred on a particularcommodityorsectorismore


Effective Protection Rate (EPR) is a concept that measures the net protection conferred on a product or industry by taking into account the tariffs imposed on both the input and output. It is the percentage excess of domestic value added made possible due to protection over free trade valueadded, if no trade barriers are present,



uch is the aim of the study, "Assessment of the Impact of

_,,_,, _"*_ (_)

*Implicitratesarenominalprotectionrates ontopoftariffs. Theyincludedomestictaxesthat

exert a protective

effect on commodity.

appropriately captured by the quantitative restrictions (QRs) imposed. Supply restrictions drive a wedge between the domestic price and the world price. To capture these restrictions on protection, implicit tariffs"are derivedbyprice comparisons, wherein the domestic price (Pa) is expressed as a ratio of the world price (Pw)of a comparable commodity. The excess of Pa over P v¢ measures the overall protective effect. Ms.Tancomputedtheaverage implicit rates using book rate and price comparisons for the years 1990 and 1995 and their corresponding rates of dispersal. Her results show that the overall weighted average implicit rate computed for the entire economy for 1990 is 17percent. It drops to 14percent by 1995. There is also a decline in the rate of dispersal from 15 percent to 11 percent, indicating that the implicit ,,." 7_;_a,_:'_


Table1 Frequency Distribution ofTariffRates ,o. of .s L_,,,, x.o. 4re ,,.o. 413 Year 1 Year 2 Year 3












-, s xo zs ao 2s zo 3s 40 4s so

0 4_ za_s o lawo 1==6 7 544 2 1,_z

159 z =os7 o _oos o =zo= o o o o

277 _z zso9 z 9_o 3o ,_. o _85 o 11_

277 zz zgvz _ _43 3o 85o xo= _76 _4 _z

304 _6 194o _ _ss zoa 104a 47 6_7 o 5ol

304 _6 zgs7 z= 91a z32 zoz3 6== _2 o 49_

2e5 x6 z957 =G lo36 19 _.,Tz o o o =00










ing_ : ::.........

:::one Can

:::fou rth:qu in tile:: thali::25 p e rcent: of .....

in-:: :::i:


May- June 1993

PIDSto StartitsEconomic Database Systemp]e ouse data simultaneousl the EDStwill bethe implemented in a network environment.

Tlme-saving...accessibility... convenience.., in gathering and processing of data? Well, try PIDS' economic database system (EDS) where you can get, analyze and store instant data with just a few keyboard strokes,

The Institute's

sists of an information

bank where the

sources samplingdesign the data are and discussed. Initially, theof EDS win be operatedin personal computers. However,iftoo thedata in theinformationbankare large, the EDS will be transfered

to an environment

larger capacity to process


he first series of Pulong Saliksikan sa PIDS for themonth of March focused on the Institute's

dated, time-series stored online, primary stored offline.


To facilitate the operation of the EDS, theManagementInformationStaff (MIS) of PIDS developed a strategy configuring both hardware and software environment. To allow more peo-


Held on 24 March 1993 at the NEDA saMakatiBuilding, the in-house seminar introduced the new database

PIDS Economic Database Structure Chart

The EDS provides screen display which is easy to use as well as

A number of users can retrieve as many variables and observations at the sametimeandcanlinkthemtogetherin a file. A build-up mechanism to increase the data stored in the computer is also incorporated as well as security and backup and recovery tools to facili-


tration. Thelatterincludes



also allows users to create, and update the retrieve information con-

I u_._

depending on databases the access tained in the level. Desired informa-


• opened in a file. More_ tion can EDS be printed or ver, the also pro-








_: _

_ [ .'_, [ i_ I

1 [ /

_ -_

type of data


clude and exments compressed of the system inpanded retrieval of data, univariate ofstatistics, sum_ analysis data using mary/frequencies, simple sions. The data to be tabulations andbe regresanalyzed can linked with a data analysis software while the irpresentation is through the use of graphs which can also be



willbestoredintheEDS. However, other types of data may also be in- "

quently accessed and up-


linked with data pre_ntation software.

the so-

priority is given on the data which are fre-



[ _,T_A....ST.m. 1 ___._-

,A_I[J_ L___


data, and offline entryandonlineupdateofthe transfer and accounting.

. :_ .:


rides interfaces with other systems for presentation and analysis of data.

there is a high demand for them. provided Nevertheless, cluded that

and procedures that are easy to use as well as validation, reliability indicator and systems adminis-

_0.0,1c _,,sE svsT_j [

tools for retrieving the neededinformation from



tare the use of the EDS. The EDS also includes screens

all database in the Insti-

In general,

with a


system which aims to coordinate, create and maintain acquisition tute.

EDS con-


_-_ ___

___L_ _----_

Afterhave thebeen seminar, questions raised regarding thevalidationof


. --_ ___ TE.-]L_

_ ,--_

in-charge of this task--the researcher or the MIS peoprimary data. Whowillbe ple? Is the present EDS _

T,, p, gc "I9




hand. :Asa result, itmay

not be of use



........ ............... ; ,, ...... ....... : ::::Ca:rta


......... policies in: developments in infom_ation technoli and to help in tak- i ogy make:it possible for developing countries to profit from economies of :I ............... scale in the collection, organization and

analysis of information. However, it is Moreover, SinceCOnsultantsare: : very difficult for developing countries only called u mnspecific to establish and maintain an informa. : e,: there is:: tion baseon a wide range of commodi- : .... ..... tiessince this is a cOmplex and expen- : : in: the and tl_ere is usu, : sive process. ThiSis where the software retain and system called MiCAS comes int O the: i






workOnt on: since

...... NSC; :Dr:i i

: :

i:i:: ii



i4_):un&,rsecretary:Rinneo T. Hernandez,D_7,utyDirector-General. National:Security: S6miorEcotwmist;LINCTAD;Hon:]o,_T.Almonre,Directar-General, :_,,d:Hon:RomanO.Gavino,Director-General; National: t(NICA), dlscusstheimpactoJMICASln

thecounry's .... ......... commodity:

SPECIAL.............. .............................. .............. _ vides temporary higher tariff proxecutive order NO. 8 (EO 8) protg_don for industries expected to be adverselyaffectedbytheremovalofquantiiative trade restrictionsunder thecountry'soveralltradeliheralizationprogram, In the _ of corn imports, which have been historically controlled by the Nalional Food Authority (NFA), EO8 s_ipulares an initial tariff of 75 percent to be gradually reduced to50 percent by 1996. Althoughlivestockandpoultryproducts are not generally subject to quantitative trade controls, they have been included in EO 8 in response to the proposed higher tariffs on corn, the single most

Department of Agriculture (DA) argues provide higher trade protection. The that the tariff provision on corn is not sufficient to protect domestic producers from foreign competition, instead, it proposes an even higher tariff of 125 percentoveranextended 10-yearadjustment period. It also proposes a higher tariff on feed wheat to prevent its use as a substitute for corn. As a consequence, livestock producers and feed millers are lobbying for tariffs on their respective products higher than those stipulated in EO 8 tooffset the proposed higher tariffs on corn and feed wheat. There are also moves to differentiate tariffs between

E( B®©n orBanetotheC • • i • • • • • • • i s • • • •• s • • •

important item in their cost of production. Tariffs on chicken and eggs are raised fromS0percent to 100percent and

low and high quality beef to accommodate

"...theproposedhighertariffs m_tof_ovi,_,_.-,im_sfrom3Opercent interests of andlongeradjustmentperiod m60p_t. ByZ996,th_al_tobemeat proceswill not only be againstthe _a_ly,_uo_to50w_t. so,_. interest<'of ,#ie ,/ country's againsttheimplementaiionofEO8have In recentweeks,strong objections ers Producin the



economic recovery andthose

beenraisedby various producers.Most manufacturingsectorhave been relao_them prefer to retain the quantitative tively less hostile to EO 8. However, if ofconsumers'butalsoagainst_de con_,in the belief that these changesinthecorn-livestocktariffprovi-

the short- and long-term interestsof thecorn-livestock sectoritself." • I I I • s i I s • • • i i • I I I I • • i

_ons,am bythe government, then these allowed will inevitably lead to either a more generalaccommodationof other

producersor retention of quantitative trade restrictions, negating the overall encebetweendomesticpriceandbolderwice thrust of trade liberalization by the new (converted at theofficialexchangerate)caused administration. Moreover, differenlial by tariffs or quanlitalive trade restrictions, _YJPR measures theneteffect oftradeinter- tariffs for wheat according to use and for vetttionsintheoutputand inputmarkets, ltis the meat according to quality will only propercentagedifferencein grossvalue added at motegovemmentcorruptionbecauseof domestic and border prices, difficulties of monitoring. As a compromise in the interim, EO 8's provisionson


.., ofNov_=_' lit2.



';"_',_.$ J._"V'_.')_4./"_A'//fj711" _"_IA_''e'g'_/. '''/'_i''il''/lgJ''Zli'_ili_l. //.6"g_:l" ")":/'_

cornand livestock have been suspended for further study until March 1993.

to estimate the net nominal and net effective protection ratesto takeaccount of the indirecteffects of theovervaluation of the

Ironically,the fearsexpressed by the DA, farmers, and producers of livestock and mixed feeds are largely unfounded, The shift from quantitative trade restriclions to use of tariffs does not imply lower protection. And less protection doesnotnecessarily|eadtolowergrowth rates. Infact, the proposed higher tariffs and longer adjustment period will not only be against the interest of the country's economic recovery and those of consumers', but will also be against the short-andlong-terrninterestsof thecorn-

domestic currency due to both theindustrialprotectionsystemanddisequilibrium in balance of payments.

¢i'_"x" _/'Yl"';'7717if9_Ii ""

Tablelpresentstheprotectionrates forcornandotherfeedingredients. Note that the initial tariff rate for corn stipulatedinEO8ismuchhigherthanwhathas been historically provided under quantitative controls. Even the stipulated tariff of 50 percent by 1996 is only about the sameastheNPRfor1990,thehighestfiveyear average NPR achieved over thepast ,=- To page_0

) 8. orn-Livestock Industry?* livestocksectoritself. Indeed, the

#.4C. DAVID .RCH FELLOW ' -' .... --


sary,and will only delaytheachieveprovisions ment of world of the

Table1 NominalandEffectiveRatesofFeedIngredients (%) _..--

competitiveness and sustainable

__ 1980 _

Nomhal Protection Rate Effectiv_ Ptotectlon Rate EO 8 1990 1992 1996 1980 _ 1990 •

growth of the sector, precisely the aims of trade liberalization. Com

Structure of.Protoction To analyze the direct effects of trade pOliCy oneoonoixdcincentivesin thecomli_>_, the nominal (NPR)1and effective{BPR)_protectionratesfor livestock ]mx_ucts and feed ingredients are examined





comparison with the agriculture and manufacturing sectors and theproposed tariffs in EO 8. Border prioL_ are corP vetted by<> the equilibrium exchange rate

48 (50)

Soy_=_ meal

17 (50) 59

Coprameal Vlsh/meat meal

-4 5


wheatf=eda_r_ _,;1_,o_=_ _im.,l= for hr¢ediag Mix__,









3 3 lO, 3


Figur*s in W_thesis refer _, book lariff rate. =L.S, C.abeailla, "Economic Incentives and Comparative Advanlage in the Livestock Indusl.-y," Pros Working Paper No. 83-07. Makati: Philippine h_stitul_for Development Studies, 1983. ,u. w. Ro_egrantand L. A. Gonzales (¢d.). The Corn [.a'veslock Seclor: Performance and Policy Implications, IFPRI and Philippine Department of Agriculture, December 199[.


May - June 1993

four decades of quantitative trade controis on. corn. In the 1970s and early 1980s, theNFRforcornaveragedordyto about 20 percent,

modity standards. In fact, the fear that the implementation of EO 8 will lower incentives for corn production has no basis.

While the protection rate for corn increased in the1980s, NPRs for soybean meal, fish arid meat meal, chicks, and breeding animals declined to three percent. NPR for soybean meal was as high as 60 percent around 1980 when the NationalFood Authority (NFA) still had a monopoly on their imports. By 1990, the N-PR for corn is the highest among feed ingredienls. Indeed, NPR and EPR for corn are much higher than the average for total agriculture and even those for the manufacturing sector. Clearly, the DA's proposal of a 125 percent tariff over a 10 year phase down period is excessive by historical and inter-com-

Table 2 shows the protection rates for livestock and poultry. As with corn, poultry p rgducts are highly protected despite the lowering of tariffs from 70 to 50 percent for chicken and from l00 to S0 percent for eggs in the 1980s when the trade liberalization program began. Because average NPRs on feed ingredients are generally lower than the NPRs for poultry products, EPRs are nearly double their NPRs. These figures declined in the late 1980s, but they continue to be higherthantheaverageoftheagriculture andmanufacturingsectors. Furthernxire, when the effects of the overvaluation of domestic currency is considered, net ef-

Table 2 Nominal and Effective Protection Rates of Chicken, Eggs, Pork, Agriculture and Manufacturing Nominal Protection Rate 1980 _

Chicken Eggs Pork

85 (70) 37 (100) 6

(10) Agriculture Manufacturing


1990 _

54 (50) 46 (50) 6 (30) 17_ 29 _

Effective Protection Rate

EO 8 1992






1980 _

1990 _

155 to 241

80 to 123

7 to 19

66 to 118

-20 to 17

-20 to 17 18_ 53 _

Figures in parenthesisrefer to book tariff rate. 'L. S. Cabanilla, "Economic Incentives and Comparative Advantage in the Livestock Industry," PIDS Working Paper No. 83-07. Makati: Philippine Institute for Development Studies, 1983. _M.W. Rosegrant and L. A. Gonzales (ed.). The Corn Livestock Sector: Performance and Policy Implications, IFPRI and Philippine Department of Agriculture, December 1991. _L.Medalla, "Impact of EO 470 on the Protection Structure." Unpublished paper, PIDS, 1992.



fective protection remains quite high at priceswillincrease. Atthesametime, the 50 percent, . hitJ_erhog and poultry prices will only lower domestic demand, hindering the In contrast, there is only a small growthnotonlyoftheHvestock/poultry differencebetween domestic and border sector but of the corn industry as well. prices of pork even with the increase in tariffsfrom10 to 30percent in the1980s. Performance of the Corn-livestock BPR also remained zero between 1980 $_'to_ and 1990 as more stringent controls on corn imlx_rt offset the gains from the The widespread belief that lower trade libemlization in soybean meal, fish tariff protection has detrimental effects meal, andihreeding animals. Evidently, on growth of domestic production is tariff proi_-_ion for pork is redundant largely negated by the trends shown in since the country has a comparative Table 3. The growth rate of gross value advantage in hog pcoduction (Cabanilla added in livestock and poultry acceler1983; Gonzales and Pere_ 1991). How- ated in the 1980s as protection rates deever, policy distortions in the exchange clined for poultry and remained essenratesand corn prices have made the hog tiaily the same for hogs. In fact, the industryartificially uncompetitivein the livestock and poultry subsectors experiworld market, enced thehighest growth rateamong the ma_oragricultural commodities during Efforts to protect the livestock and this period. poultry sector against higher tariffs on corn under EO 8 will all the more frusGross value added in corn grew tratepossibilitiesforhogexportsastrade morerapidlythanothermajorcrops. But liberalization will be stalled and corn ,r To page12

Table 3 Growth Rates of Gross Domestic Product (GDP) and GrossValue Added in Agriculture (GVA) by Commodities (%)

GrossDomestic Product GrossValue Added Crops Rice tom Coconut Sugar Livestock andpoultry Livestock Poultry



6.3 4.9 7.1 4.5 5.4 7.6 , 2.1 3.3 1.6 0.6

-0.6 1.7 1.3 1.6 3.1 -2.4 -3.2 6.5 3.7 2.5


4.5 2.5 0.5. 1.2 4.3 -2.9 4.8 8.4 9.2 5.1

Sourceof basicdata:PhilippineStatisticalYearbook,variousissues. 11

IAa,y- June I,!t93

growth ratein the 1980s was lower than in the 1970s despite the increase in its nominal protection rate. These patterns simply suggest that the performance of thecomsectordoesnotdependsolelyon the degree of trade protection. Indeed, tradelibaralizationitselfmaybeexpected tospurgrowthasincreasedcompetition promotes adoption of technological and management innovations,

The performance of the comqivestock sector may be explained by growth trends in relative output and inputpricesasweUastheproductivilyof various components of the sector. In Figures 1 and 2, the trends in domestic and world prices of chicken, eggs, and pork and of feed ingredients - corn, soybean meal, and fish meal - are presented. There were no available time seriesdatao_ domestic prieesof soybean

Figure1 DomesticWholesalePriceof CornandWorldPriceofCorn, SoybeanMealand Fish Meal, In RealTerms _,o,x(_eo.,oo) ,_o_(_0._00)

_and fish meal. Since these items are , mostly imported, their prices are dii rectly related to trends in world prices, ]exchange rate, and the degree of trade



Ipro tio..




_oo......................... /,

the livestock/poultry sector. Domestic input became pricesprices of chicken andmore porkfavorable increasedfor in


I sol


o, ....







0,' .....







.. _ ,,._. _--'_'X,/ "_

,,' ..... prloe

Figure2 DomesticWholesaleandWorldPriceofHogs,ChickenandEggs,

rate based on price comparison did notshowany change.

in RealTerms o_

Thelivestockand pou_t_,sector also benefitted from the relatively favorable domestic prices of feed ingredients due mainly to the depressed world agricultural commodity markets as evidenced by the sharp drop in ; world prices of feed ingredients. Dej spite the peso devalual_on and greater


IM;4d¢ (1980-100)



_o _° ,co


Ch,o_.,",, '......."0"



_o ,,,o


thatrelative and

in their real world price in dollars becauseof the sharp devaluations in the exchange rate from about P7 to P20 during the 1980s. These could not have been due to the changes in trade protection because tariffsfor poultryproducts decreased substantially during this pe_riod. Althoughtariffsforporkincreased i: to 30 percent, imports of pork are insignificant and nominal protection

_0_ ..........



DOmestic price




........ World price


mestic corn prices in the 1980s was import controls on corn, average dosignificantly lower than in the 1970s. Domestic prices of soybean and fish meal in real terms must have become even more favorablebecause, as noted , earlier, their NPRs.decreased substanfiaUy.

_///J///._7/,_i_," if• iF-

_ "if'-

_."_ _;Y_ _:"_ f_;_"."_b_-!_"__ ," ,.;_;_.,x ;.;_'_ ;;;;_ ;_;_s_ __,_, 7,> _; _i_;,i'.!__.s_2;_,_i',;,,'._7_;_y_,_;_,_:i_,i";,_,:',;",_,; ,,!;_._;;'_'_._;_>_'_'_'_:_'_:_i_'_._:_.;._._._._._;_;_ _ "/.-11

if • " I

_ "#

1 I

• il• "ill"

• il: "tl--

i':;;_/<?,_._,:.;_-7;_vd/,///_:_;;.'.:_',_._7_;_.: ," ', .:,_i_k;X_x,'.g,_.';."_2;_:,;'.il//._;';:::< .,; ;;'."_ x.._<,_?_:;,_;_';_:;.X_.;. :_,_:_: ./;>-;:: _;;?,_,_n_,,_.?,_..::,.,.{_ ,!'7.;;: ........ ,;' ,,;:'_&"..JK_,,,'.'77_}.,"?_.",_,_7"_,s;_?_;_:,V;;"m':,:<>:_'7.? ,'?i?"i;?,_',_%>_,,_i;_,_',

# _,//_./'9_2_ _

_,_,';; _; ";;_';_ ?, _;;;;:;_',');!_ _. _'_ 7;;; :>_;>_ :" ;_;;_

The relatively strong performance of the corn-livestock sector must undoubtedly be also due to improvements in productivity. Because of liberal iraport policy on chicks, breeding animals, and veterinary products, rapid intemational transfer of new technologies erabodied in these inputs was greatly facilirated. Private sector innovations, particularly in animal nutrition and higher management efficiency through contract farming and economies of scale, among others, have also been important. In the case ofcorn, the introduction and spread of hybrid!seeds developed by the privale sector and open pollinated high yielding varieties developed in the universitlesand theDA significantlyraised yields in the farms,

?X,. _ _,,',._4 "_,,'_" _.,'_ _ :;;s; _77,'.!;

_?," "_ "_., :_/;.'sZ->>,'_ "_ :', ;_ ;+_<' '_: :'_ _:.' ;" _.; _' 's _'_ +_ '?." ::_ _>_ _-:' s_s_+ '_" _"?_> 7;?" ."; ";_ ;" ;:"; ";; _": '? :_._>s;_.";'_ ' .'_/,; _."S _X::_ ;_@7

manded fallmore than proportionately to the rate of increase in prices. Conversely, decreases in livestock prices will more than proportionately raise quantifies demanded and hence increasegrossrevenues. Policy-induced increases in domestic prices of livestock products, therefore, are not necessarily beneficial to the industry, especially if economies of scale in production exist. Demand for corn is also price elastic, unlike other food staples such as rice(TableS). This is due mainly to the indirect effects on demand from the livestock industry which, as noted above, is characterized by price elastic demand of its products. As has been

Nofure of Demand for Corn and Uv_ock

_ To page 1,1


Sustained growth of the corn-livestock sector depends crucially on the achievement of world-competitiveness,

IncomeandPriceElasticitiesof Demandfor Pork,

theperformanceoftheoveralleconomy, and the rate of productivity growth in the different components of the sector................. A world competitive corn-livestock Income class industry can potentially tap the vast Commodity I world market, because domestic demand is necessarily limited. Populahicome elasticities lion grows only by 2.3 percent and this Pork 1.4 rate is expected to decline. Because of Beef 2.0 the nature of the demand for corn and Chicken 2.1 livestock products, prospects for accelEggs 1.8 erating growth in domestic demand depend primarily on rapid growth of per capita income and lower prices of Price elasticities

Beef,Chickenand Eggs by Sector and Income Class


Urban Ill

1.2 1.4 1.4 1.2

0.8 1.1 1.0 0.8

0.4 0.7 0.7 0.3

2.2 0.6 2.4

2.1 1.9 0.6 2.2

1.4 1.8 0.4 1.5

1.0 1.0 0.3 0.7




Rural I]l]


Beef Pork

-1.3 -1.7

-1.5 -1.6

-1.4 -1.6

-1.4 -i.5

-1.4 -1.6

-1.5 -1.6

-1.5 -1.5

-1.3 -1.4

Unlike other agricultural cornmodities_income and price elasticities of livestock products are highly elastic

Chicken Eggs

-1.3 -1.5

-1.5 -1.6

-1.5 -1.6

-1.4 -1.6

-1.4 -1.5

-1.5 -1.4

-1.3 -1.4

-1.3 -1.5

(Table 4)1 That is, an increase in per capita in(_omeinducesa more than proportionat_e growth in demand for livestock products. On the other hand, gross revenues from livestock production decline as prices of livestock products increase because quantities de-

Source: Bouis, H. E. "Food Demand Elasticitiesby Urban and RuralPopulationsfor the Philippines" in M. W. Rosegrantand L. A. Gonzales (eds). The Corn Livestock Sector: Performance and Policy Implicalions. IFPRIand Philippine Departmentof Agriculture, December 1991.




May' - June 1993

V'.':;.',s;.,;i.:;;'_..'...";q . ,.../;;.;.;.<..;,.,;._,. ;,:,;..;.,<;..';.s.,.,-,k _. _/..'..:. • . ..:':,.;;.;...;': ;(s.f,;_.;;.7/.;.,;;.;.;.);:.s;_._![@__/, ..... ....;;.,.¢H,$/.,...i.z,.>dz/.,.;_.;.;;?s$,_;j,;._.:.j._,,.;.d.;_.:;,../..', ;;p;.;,:;;;;._.;/..;;.. ;.>,/.. ,;..:. ....:.:..;......s..: .,.;._;,.:_.._ .s..s.,;.'-...;.,..,;;S_.;..,;.e;_._,,._,_ '_"_

_d_'.'s, _i '7., _7_i_Ji_





,'>.,@.¢i;_j.;,;.7._ _]_"b'_7.1i'."._f. 7._J J_J;J!if{ !;..;'i..',i:,7!,i'J.;.s,;is;'.;. _;!}JJi'.' i}i,.'j_',.";}{;.4s. ",;_.i! fJi?'..'.'." _7.7._...':i_ !f._.,._.4] _.'.,.:,¢_ }_'_._

Table 5

IncomeandPriceElasticitiesofDemand forCorn by UrbanandRuralSectors andIncomeClass

Income class

..... Income Urban

elasticities Rural


-0.30 -0.80

-0.4 -0.4

Price elasticities Urban Rural ..... -1.6 -1.5 -1.5 -1.2


-0.60 -0.02

-0.9 -0.8

-1.2 -0.9

-1.1 -1.1

Source: Bouis, H. E. "Food Demand Elasticities by Urban and Rural Populations for the Philippines" in M. W. Rosegrant and L. A. Gonzales (eds.), The Corn Livestock Sector: Performance and Policy Implications. IFPRI and Philippine Department of Agriculture, December 1991.

• • • • • • • • • • • • • • • • • • • • •

"Unfortunately, the




much on


the case over the past decade, future growth in domestic demand for corn will be derived solely from increases in demand by the livestock sector as the income elasticity of corn, an inferior staple food, is negative. Thus, policy induced higher corn prices will also not necessarily benefit the corn sector in the long-term because of its ad-

too little on policies to increase productivity and lower cost..."


;..._--..;,---=. , ,.,




tic product, gross value added in agriculture, agricultural exports, and food production per capita in South and SoutheastAsiain the 1980s.Although

theothercountries, including

the tiger

economies of East Asia - Japan, South Korea, Taiwan, and now China- did start out with similar strategies, those which quickly shifted to more open trade policies by reducing reliance on trade protection and exchange controls grew the fastest (Krueger 1992). Second, by reducing the overvaluation of the peso, trade and foreign exchange liberalization will improve world competitiveness of the various components of the sector because both feed ingredients and livestock products are internationallytraded. It will particularly be advantageous to the hog sub-sector in which the country has been consistently found to have a comparative advantage in production (Cabanilla 1983; Gonzales and Perez 1991). Trade liberalization should also mean a tariff for corn equal to the average tariff of 20 to 30 percent, which will further ensure the profitability of exporting hogs, and possibly even poultry products. Moreover, a livestock/poultry industry geared towards the export market will locate closer to thewhere source livestock of feed ingredients, Mindanao, can be directly exported, thereby saving the

Trade Uberalization and the CornLivestock Sector

marketing from cost of transporting feed ingredients Mindanao to Manila.

Thethetrade liberalization thrust benefits corn-livestock industry in at least three ways. First, trade policy reforms are essential for economic recovery which is, in turn, crucial in accelerating domestic demand for corn° = = = = ° = _' • • = = ° = = = = ° = = livestock products. There is now consensus in the literature that the prolonged import substitution strategy through high trade protection was mainly responsible for the poor performance of the Philippine economy, As shown in Table 6, the country had the lowest growth rate in gross domesDEVELOPMENT RESEARCH NEWS 14


:I_:..:;f 7,'.*:_; fh".;'Y;. _;. ,!7.;_',..j_.'_lj.'.//.'.._d;_i_. j,,D.'g,," "j._l_,.;z,j;Mf_)2,,,,.:._)_

verse try. effects on the livestock indus-


interventionpolicies and

,, ,--:

Third,controls by shifting fromprotection quantitafive trade to tariff and removing the need for a bureaucracy to administer the controls, government revenues and savings will be generated. These can be reailocated towardsagriculturalresearchandmarket infrastructure to increase productivity and lower marketing cost, particularly for corn. Public expenditure for corn research relative to its contributions to gross value added is one of the lowest in agriculture. Such underinvestment is also indicated by

• --


;_;2_; ",;;!_j;;.__;;_ i;; ".4_;_/.;2;y.?9 .';?_._I;_



5>';5:;.__/;;._ ;;;_A,',_/.4";,,'; Z',;?_:P_ •• ' ,,i*,,,/,,'i,×I,( ,,,,,x,,u,,%,z,,,,

,_, :,_,, ,._.,,.,,

the fact that government expenditure for corn research is less than 20 percent than that of Thailand where crop area planted tocornisonlyabouthalfthatof the Philippines. And not surprisingly, average yield inThailand isabout twice as high. Note that adoption of improved or high yielding varieties is only about 30-40 percent in the Philippines compared to 100 percent in Thailand. A Lesson to Learn A key lesson to learn, therefore, is that the industry's position with respect to the trade and price protection debatemust notbebased onlyon shortterm, commodity-specific gains. The effectson theoverall economyand cornpetitiveness in world markets must be considered because these have pervasive and long-term effects on the sustainability and rate of growth of the total feed-livestock sector. Furthermore, because the profitability of corn andlivestockproductionisintertwined, policy options must be evaluated on the basis of overall feed-livestock efficiency considerations, that is, where our short-term and long-term comparatire advantage lies. After all, the livestock/poultry sector contributes more than twice the gross value added of corn. Policy Implicotions The following are recommended to policymakers and planners: a) complete the trade liberalization process in the soonest possible time; b)adoptauniform tariffamong feed ingredients, livestock and pouitry products equal to the degree of the . peso overValuation of about 20-30 percent; _ c)usevariabletariffschemefor corn and other commodities subject to

Table 6 Average Growth Rate of Agricultural Value Added, Gross Domestic Product, Food Production Per Capita, Agricultural Exports in South and Southeast Asian Countries. 1980-1990 (%) Agriculture




per capita


2.8 4.9 0.5 +1.9

6.6 3.9 6.0 -5.4

Indonesia Malaysia Thailand Philippines

3.2 4.0 4.0 2.1

5.3 5.2 7.6 1.1

India Pakistan

3.0 4.1 4.6

5.6 6.5 4.6

1.7 0.4 0.9

-2.5 6.0 4.3

2.6 2.3

3.8 3.9

-0.9 -1.4

4.0 0.4

Nepal Bangladesh Sri Lanka

Source:AdaptedfromR. M. Bamista,"Tradeand AgriculturalDevelopmentin Asia: Achievements m the 1980s and Challenges forthe 1990s."1992.

wide price fluctuations in the world market, and d) accelerate public expenditures for technology development in the feed-livestock sector, particularly corn.

.:-°.%.:. References

Unfortunately, the government has relied too much on price intervention policies and too little on policies to increase productivity and lower cost (research, extension, infrastructure) in addressing thedevelopment of thefeedlivestock sector. The latter is more effective in reconciling the conflicting objectives of increasing farm incomes and lowering price to livestock producers and consumers.. There is also the mistakenbeliefthatloweringpriceprotection on corn will adversely affect incomedtstribution.Livestockproduction is in fact labor intensive, and a major proportion of livestock particularly pork is contributed by backyard producers. Moreover, any possible adverse equity effects wbuld be shortterm in nature, because labor is mobile across industries and region, and land use can be changed. ¢" IS

Bouts,H.F."FoodDemandElasticities by Urban and Rural Populations for the Philippines" inM.W.Rosegrant andka. Gonzales,The cor.-_vr_c implications.

g_ct_r:eerformance and Policy

International FoodPolicy Re-

search Institute _99_. and Philippine Department ofAgriculture,

CabantUa, L S."Economic IncentivesandcornparativeAdvantagetntheLivestocklndustry."PIDSWo_kin$ 83-07.Makati: Philippine InstitutePaperNo. f¢_Development Stud-

tes,1983. Gonzales,kA. andN.D.Pere_ WheEconomics of Hog and Poultry Production" In M.W. Rosegr_tandLA.Gonzales,


stock Sector: Performanceand Policy lmpli,_.

ti_s. IFPRIandPhilippineDepartment of Agrictature, 1991. Krueger, A.O.'PolicyLessonsfromDeveiopment Experience sInce the Second World War." Paper presented attheADBConference on Development Economics, Manila, October

12-1s,1992. _day- june _993

as :::

p set:up

microen terpri ses an d cx_ra tires where: : :i :i investments Of migrant households : the labor of other community members: :::







h:ad::_n:atempora_y : _omea de:facto:







theii:_armers for:

i..... farm-::


: some::.,

:::::::::::::::: ::::

the fleclin:: :i i: : e World market,: :: : ;: :abam: :

;::_pat: ::::::::::::::::::::::::: ::::::::: _: : fiildings

her study: Wi

:::::: Ms:



energies ::: andw0rk hard dlscl* prevent ;try hasl: to:: be:i: )mmunityZ: :: emment. prom0te

:en ......

.... : ::::;:

: ...........



............ ............


in ,prot_fing: _heir own turf" through coalitions in order to any possible dlwde and rule" Likewi._; fl_ere is also a need to :: NGO/PO:aCC0untability. : ::: Finaliyl tlie ievel0f NGO-PO: p.fl_ere:isant_d forNGOsto

:i : ....

:ts in the up-:: :avoid Communicatinga patronizingattiq : rude: to: the POs,: a:tendency Of many stand

i:: :: : i::Stud; recbmmendS:tt_a6ran_cfion :file ,bureauc-

:: empOwe_ent:whic hcan onlybe ized when _S become:_lf-reliant


real- : and






: ........ _ : ....... RosarioG Manasan etal

::: (lltlOllal:susplClOii

i :_een

,,,,:_,_,_, ,_,,,i_,_,:, :ii;

botla sectors.






271 pages .....

.... :



:with::::thei:w0rid, i:: tt_eentire .....:ii economyi :3: :itheav:

::: i : :erage EPR using book rates drops from:: ..... 22percent in 1990 to 18percen t by 1995. ...... EPRs using price: comparisons also ..... : show a decrease of approximately four i percent; their dispersal rates have a smaller decrease. Thi s pattern is ob-:: ii served for most sectors and is expected : because of the reduction of tariffs in EO .... 470 and:the:gradual:lifting of QRs: : Regarclless what:method i s used;:: :i EPRs for:1995 decrease from their 1990:: levels, Tl_e:only exception to this pat-: : tern isin ttie wood and wood products i : i_,ie Informa_io,, Agolcy sec tot, which increases from 19percent ,¢re_lit:__,t, il

to 23 percent.







.... :


i::i::::i :::i!::ii:ii_i_ii:::::::i r{::7::T_!:77:i::i:::::::::7::ii::i:::7:::i:::i7 : The lrates for:importables :are:higher :i H0weVer, Ms, Tan noted tllat i i RPs Recent, , c _Rsare ,sstill a h'gl 1 80 : ......... {i!i:: : : : : theyear 1:)95El ....... (FrOmpage ............................... ..... perct_nt . for paper, rubber,, leather _ , and .... .... .... ...... .... r:::: : ::: aiso identified a Sri plasticproducts :Also,EPRs computed : rates:amongsectorshavebeennarrowed ::culturei::dlemicals alid:diemical prod : by using :price. comparisons exceed a i : ....

downi: i::i:;

hundred percent: for the following sec--ii : : :i: and ii tors:nonametallicmineralproducts>and : : : ....... :: i:rt:generalitheim :trans P 0rt:e -q ui P me:nt,..... as sectors with machinery/including electrical and : .... P licltanddis; ..... : .... . persal rates: have: decreased for: all:sec: :higherimpliCit:ra:tes:fr0m pricecomtransport equipment. : .........

:::: and:::: .......

y i

tion ::: :: : ...........

:: : : :: :


exportables is glaring itnd becomes: i : more pronounced :for certain SecfOrs ::: when:EPRsare calculated from price :: effeCt:on the:EPR struc: :: comparisorLs. Ms. Tan noted how the ::: : ; :tUrecanbeanal zed:Ms Tan:ased two existing trade regime continues to com : :: fergreaterprotectioiitoimport-com......... ........ m:eth0dst0calcUlateEPRsa:(l)b : , .... Yusing : ....... :i:::bookra_es::in::theTariff:and:Customs petingactivitiesrathertlianexport:pro: ::Codeand(2)bydenwngatanffequlva _ ducmg ones. < :,: : i :


::::::: : :::::::::::::::::::::::::

percent:t0 31:percen_i::::lent0fa c0mmodi_


(i.e:;cOmparing its :i:

:siCians:and;mostespecially;:imrseshave --:_"=:=:= .................. : ..... :tO:::




:P :r0feSSiOhs .


:: _ppos_te _s:true for medical techno!o 7 : : gists and : pharmacists in which the I : Philippines , has:an abundance ....But by : ....

new:i:ifuturenet:st0ek(0fhealtbw0rkers) for the:ye.,_r::2000j:h0w:everi the:country than thepresen[ will need a lot of:dentiSts:i nurseS, mid......... , the: total stock; ...... ii:iwi yes an:dphy sicians.:Xl_esemanpowe r :alth: manp0wer ::and:iS 0uiStripped:by tt_e/eakages from i:requirements: w_erebased on the rate of ..... )ut= ::the:: totalstock¢ such as:international: morbidity:ineidence, degreeofdelega"i Which reduce the :outfl0ws;and:natural attnfioii:(caused :: ti0n and ::SUbstitution of health:workSi

:: :.... i: : :i : ::



Ma '- June 1993

PIDSto Start...

the EDS as well as its software appli- _-


(Frompage 6)

cation. She provided handouts on the design and structure of the EDS, data dictionary, screendesignsforfilemanagement, data retrieval, systems administration and utilities as well as economic database classification and a list of identified databases available at the Institute. MIS Director Crescencio Joveilanos discussed the design requirements as well as its implementation. Copies of the handouts as well as the guidelines for the creation and maintenance of the EDS

(From page 7)

capable of validating data? The possibilityoflinkingtheInstitute'sEDSwith those of other government institutions was also discussed. Can the Institute's EDS import and use data from other institutions and vice versa? Auser'smanualfortheInstitute's EDS will be prepared by MIS. Another seminar has also been suggested to discusscoilectionandvalidationofdata, Meanwhile, the Institute's EDS will be finalized and presented to other offices for further comments and suggestions.

are available at the Institute's MIS. Dr. Dalisay Maligalig, PIDS Research Fellow whose area of specialization is statistics, was consul ted on the devel-

EDS Systems designer, Susan Ramos, discussed the concept behind

opment and dissemination EDS. (AL)

higher demand for specialists relative to general practitioners. Also, among thespecialists, thefieldsofpulmonary, surgery, pediatrics and ophthalmologycontinue to growabundantly. Such marketsituationsarepredictedtopersist until the end of the decade. Similafly, the number of physicians, nurses, dentists and midwives in the public health sector are not sufficient to meet the demands of the population in rural health units, schools and industries, The results for hospitals, however, remain inconclusive,

especially those in rural areas. Note that medical charges affect the supply of medical manpower. The higher the fees, thehigher the financialrewards to medical workers. Hence, more individualswillbeenticedtojointhemedical profession,

To a certain extent, the integration of traditional healers in the country's health service system chn also increase the country's stock of health manpower, The pervading regional maldistribution of health workers can be remedied by increasing their cornpensation and benefits. Aside from higher salaries, health workers should also be provided attractive incentives aswell. Examples of these are income

Correctivemeasures. Bearing these findings in mind, a major health care finance program is ideal for the people ii


i i



to other information systems, for instance, national agricultural or mineral information systems.

of the

The existing mismatch between the supply anddemand of health workers makes it imperative for decisionmakers to increase the supply where there is excess demand and to decrease the supply where there is excess supply. To increase the number of physicians, nurses and dentists, enrollment should be raised in order to increase the production of health program graduates and reduce the tendency of most medical professionals to go abroad,

Eighty percent of health workers and medical professionals are concentrated in hospitals and clinics except for pharmacists where 65 percent are working in drugstores and pharmaceutica] industries. Eighty-nine percentofhealthprofessionalsworkin rural areas where 66 percent of these are midwives. As expected, a great number of health workers serve in the National Capital Region (NCR) except midwives. Relatively, the Philippines suffers from inadequate health manpower resources that can respond to the needs of the people as compared with other Asian countries,

Asidefromprovidingdatabase information on international commodities, MICAS will open the doors to other UNCTAD information systems such as SMART, containing detailed country linked data on tariff and nontariff measures and TRAINS which will enable the user to formulate initial marketing strategies. Furthermore, the system will have an open-ended architecture, which will allow users to link it

,_ To page 20

tax exemption, better career opportunities, and trainings or work experiences that can be credited to Master in Public Health (MPH) courses as in the case of doctors. Also, the number of rural health units (RHU) should not only be increased but improved as well to uplift their present standards. The government can also require the new licensees to devote 2-3 years of rural service and that the one year internship be extended to three years where most of it is served in the rural areas. To be effective, these policy recommendations need the concerted efforts and coordination of government agencies. Thegovernmentshouldspearhead intersectoral health action to increase the number ofprofessionalsin the medical and other allied professions at the national level. Concomittanfly, an adequate and upto-date information on health resourcesis needed to guide the government in its health plans, decisions and actions. (FME)

,, o •.



o ....

Service through policy add


. o ..

• ° • . •.,

FeSOaFch . ° • °. ......


° °.


UNCTADInltoduces,,. (From page 19) .................................... A User-Friendly


In the initial stages of implementation of the global and national projects, MICAS system will be stored on hard disk drives, and updates will becarried out throughdiskettes sentby mail. As the system grows, other storage methods such as optical disks will be employed and updates will be carried out through direct data communication. At that time, it will also be possible to increase the frequency of updates for critical parameters such as prices and marketing information. Participating countries will be encouraged to verify, updateand complete information on their commodity sectors. Country information that otherwise might not be available will thus


May- June1993

enter the international reporting system. Such information will be entered in a standardized format that facilitates comparability between countries and across commodity groupings. The UNCTAD secretariat will have the ini-

consumption as well as markets for sugar products by country and the names, production facilities and capacity utilization of every company involved in sugar production.

tial responsibility for assuring standardization and comparability of infermarion, and will also carry out its own updates. The UNCTAD secretariat will also cooperate with existing international and regional organizations, both public and private, specializing in one or a number of commodity sectors in order to obtain information available to these organizations,

In fact, demonstrations of MICAS in 15 Asian countries including India, China, Japan and thePhilippines, have shown the potential usefulness of the system, says Mr. Jay Colebrook, incharge of the Project. Many of these countries haveasked that the systembe installed in their countries once completed. The Philippine government is one of them.

Instant Information

Thus, together with other government agencies, PIDS spearheaded an overview seminar on 29 April 1993 to present the final version of the MICAS Project. This was immediately followed by a one-week training on 30 April - 7 May 1993 of the core group of participants coming from the govern째 ment and private sectors. (AL)

With just a few keyboard strokes, a policymaker pondering on the options for further processing of sugar, for example, can see on the screen's display the most recent figures on worldwide tradein sugar and sugar products, trends in production and


NEDAsa I_kati Bldg., 106 Amorsolo SL, Legaspi Village 1229 Makati,MetroManila


PhilippineInstitutefor DevelopmentStudies(PIDS)






, ,,,,,




,, ,,,,,=,,,


Vol. Xl

No. 3

May - June 1993

EdffodalBoard:Dr, Potciano Intal..rr.. Presi,l,*ot; Dr. Marlo/.,amberte, Vice.Presidcat;Ms. Jennifer Lia,,ton, Din_tar for Rese=rchIafo_n=alica;Mr. IsaacPwm Ill, Director for Opcratiol;sandFinAnce; Mr. Crescencio Jovellanos, Director for Manage. ,,,cat lnfonaatioa, S_I: ]enn_er fig.,ton. EAitor.i.-C_ief; Anne IJamoso, Issue Editor; Corazon Dex-,,sido. Ma. Lourdes Salcedo, Su_ Ann Taparan, and Francis Egcaias, ContributingEditors;ALlarnoso, Layout and D_ign; Laila Garcia, Subscription;Necita Aquino. Delia Romero, Galieano Godes and Federico Ulzcm_t, CiJnculalioo; Valentina Tolentino and Anne Cleofaa,Exchange.

DEVELOPMENTSTUDIES (PIDS). Ithighlights findingsandrecommendations ofPIDSresearchandimportant policy issuesdiscusseddudngPIDSseminars. PID$ is a nonstock, nonprofitgovernmentresearchinstitution engagedinlong-term,policy-odanted research. Thispublicationis pall of the Institute'sprogramto disseminateinformationin orderto promotethe use of rmarch findings. The views and opinionspublishedhereare those of theauthom anddo notnecessarilyrelied those Ofthe Institute.Inquidesregaling any of the studies contain_ in thispublication,or any of thePIDS papers, as well as anysuggestionsorcommentsonthepublicationare welcome. Pleeseaddressall relatedce_espondance and inquiries to: ResearchInformationStaff (RIS) Philippine Institute for DevelopmentStudies (PIDS) Room304, NEDA sa MakatlBuilding,106Amorsolo Street Legespl Village,1229 MakaU,Metro Manila Telephone Non.884059and 865705;Teletax No. (632)8161091 Re-antemdasseconddassmail at theMakatiCentralPostOfficeon Apd127,1987.Annualsu_cdption ratesare: Pg0.0OforprivateIirmsandindividuals;Pa0.00 for students,libraries,academicandresearchinstitutions; and $16.00 forforeignsubscdbem.All ratesare inclusiveof mailingandhandlingcosts.Pdcesmaychangewithout pd_ notice.