Browsing by Author "Lim, Daren S."
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Item Restricted Comparative advantage of rice production and achieving self-sufficiency in the Philippines(2008-03) Lim, Daren S.; Mangubat, Maria Lourdes Carissa B.The Philippines' rice sector's performance has, for some time, been declining and is having difficulty keeping up with the increasing demand. During the 1970s post-Green Revolution era, the Philippines was able to achieve self-sufficiency, yet government policy was inadequate to maintain a level of efficiency, thereby making the Philippines a net importer. The Philippines is known to have had comparative advantage in rice production since domestic resources and arable land were widely available. However, in recent years, its productivity and efficiency levels have been overtaken by its Asian neighbors. This study looks in to the performance of the rice sector over the recent decade. Assessment of comparative advantage through the domestic resource cost ratio (DRC) and shadow exchange rate (SER) shows that the Philippines may still have the potential to achieve higher efficiency levels. Two methods were used to estimate the SER: one method assumes present market conditions to hold in the long run, while the other assumes the economy to move towards free trade. Under both assumptions, it is found that the country still possesses comparative advantage. Furthermore, analysis of the rice markets shows that although domestic production still satisfies most of the demand, Filipinos are consuming more than the country can produce domestically, thus the need to import rice. The government must formulate and implement sound policies to fully exploit its potential.