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Hooley's results are shown in Table 2. On the whole, the results of the study showed that "over the period 1956-1980, TFP decreased by 0.15 percent annually. Since 1975, TFP..hasbeen declining at an alarming rate of 2 percent or more per year. Forthe manufacturing sector as a whole, the data paint a very clear picture--one of slow TFP growth during the late fifties and sixties, unmistakable retardationafter 1970,with rates of advance after 1975assuming significantly larger negative dimensions. When certain additional adjustments for labor quality improvements are made, the average rates are uniformly lower for the entire period as well as for all subperiods." There is, however, a few set of productivity studies estimated recently by the Philippine Institutefor Development Studies (PIDS)under the project Development Incentives Assessment (DIA) on selected Philippine manufacturing industries. The productivity analysis, however, did not focus on TFP growth, but on a related concept called technical efficiency (TE).1 There are a number of approaches to TE estimation. In the PIDS-DIA project, the TE methodology applied was a static linear programming, deterministic approach. This approach, however,entails a major weakness that results in a bias in the estimates of technical efficiency coefficients.2 Furthermore, although the PIDS-DIA estimates were done recently, the period under study was rather outdated, 1983 and 1988. Technical efficiency coefficients for six industries are available in the PIDS-DIA study. Based on the technical efficiency coefficients, the major conclusion of the studies are: (1) Packaging Industry. "Technicalefficiency in the packaging industry appears to have declined between 1983 and 1988. Even the metal-based subsector, which was the only gainer in terms of technical efficiency between 1983 and 1988,was not efficient.At the plant level, the proportion
1, To be discussed in detail in the section on Framework of Analysis. 2, The technical efficiency measures using this approach are susceptible to extreme obserrations and measurement errors according to Forsund et aL (1980) and Kalirajan"(1994),