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Item Restricted Money demand and savings in an open economy(1990-01) Sutarto, Budi Herry; Gochoco, Ma. Socorro H.This study attempts to specify and estimate money demand and financial savings functions in an open economy framework. The price forecasting equation and the equation for the money demand and financial savings are estimated jointly with cross equation parameter constraints. A stability test is also performed to see the potential structural change in both money demand and saving equations after the monetary reform. The price forecasting equation is specified based on the information set available as to the movements of prices, money supply, income and interest rates in the past. The demand for money is specified as a function of gross domestic product, domestic real interest rates, expected inflation rates, terms of trade, and interest rate differential. In addition, the savings function is formulated to depend upon gross domestic product, domestic real interest rates, expected inflation rates, interest rate differential, and the number of branch office of banks. The model is deduced from a portfolio model of the financial market using quarterly data. The price forecasting equation is estimated using ordinary least squares (OLS) technique. The joint estimation of money demand and savings equations with respect to price equation are estimated using a seemingly unrestricted regression technique. The empirical results show that demand for money is affected not only by changes in domestic variables such as income (GDP), domestic real interest rates and the expected price but also by fluctuations in terms of trade and foreign interest rates. Thus, ignoring the effects of foreign variables not only leads to misspecification of the demand for money, but also to the implicit conclusion that monetary authorities have very little room to offset capital mobility induced by changes in domestic or foreign interest rates or terms of trade. The elasticity of the demand for money with respect to the explanatory variables indicate the strength of the counteracting forces among them. It is found that domestic interest rate elasticity of money demand is greater compared to foreign interest rate elasticity. This suggests that domestic monetary policy remained sufficiently effective to guard the foreign monetary movements. This finding is in contrast to the supply- sider's view that domestic monetary policy is fairly ineffective to changes in foreign monetary developments. Meanwhile, the long-run elasticity of money demand with respect to income is recorded greater than unity, indicating that the monetization process is likely to occur slowly due to the lack of people's banking habit. There may be little or no economies of scale in holding money because of capital market imperfections. The speed of adjustment of M1 and M2 can be categorized as a slow adjustment. Approximately only 4 percent of the discrepancy between the actual and desired demand for narrow money is eliminated in one quarter, and 6 percent in the case of demand for broad money. This refers to scarcity of alternative financial assets. The coefficient on the foreign interest rate is also found to be larger than the coefficient on the domestic interest rate in the savings equation, implying that the effect of changes in the foreign interest rate on savings is more sensitive than that of changes in domestic interest rate in portfolio decision. It follows that domestic interest rate management has to be directed to narrow down the gap between foreign and domestic interest rates. The growing number of banks is found to be highly significant in affecting the domestic savings rates.Item Restricted Thai textile export quota allocation system(1990-01) Noppawan, Swaengkij; de Dios, Emmanuel S.The Thai textile industry has developed from import substitution to export expansion through government promoting investment and foreign investment since the late of 1980s. It has played an important role in Thai economy as the leader in export earnings, value-added, and a major source of high employment. In view of major export earnings, Thai textile exports have faced protectionism in the developed importing countries, particularly the United States and Europe, in t he form of quota restriction. This thesis attempts to investigate the effect of quota restriction under the MFA on total factor productivity, diversification of Thai textile exports, and quota utilization rates in Thai textile industry. In order to study those effects, the Multi-Fiber Arrangement (MFA) and bilateral agreements Thailand made with the US, EC, Sweden, Norway, Canada, Finland, and Austria markets are reviewed. In addition, quota restriction had caused exporting countries to establish quota allocation distribution systems. Therefore, the study was also made on Thai textile quota distribution rules and examine the allocation systems in Hong Kong, Korea and other ASEAN countries. The terms of quota restriction under the MFA have allowed textile exports from developing countries, including Thailand, to penetrate through restrained markets under particular growth rate. Therefore, it is supposed that quota restriction might affect total factor productivity (TFP) of Thai textile exports after being restricted by that export constraint, when comparing to the TFP before the implementation of the quota restriction. Also, the quota may encourage the restricted exporting countries like Thailand, to move into less or non restrained categories and to tap new non-restrained market. In other words, it may induced diversification effect. With the trend of more difficulties in the expansion of Thai textile exports to foreign markets (especially the US and EC) due to high quota utilization rates; increased protectionism, particularly in the US market, high competition from other exporting countries, both dominant and lower-cost ones; there should be more emphasis on diversification of Thai textile exports to non-quota markets and products, and to higher value-added products through upgrading, so that those problems can be overcome and Thai textile export earnings can be increased. Also, more efforts should be made in using the quota which is still underutilized. Finally, an improvement in technical progress, advanced knowledge and investment in human capital are required in order to increase productivity and export earnings of Thai textile industry.Item Restricted Demand for credit of the agrarian reform beneficiaries in region 3: a choice between formal and informal capital markets(1990-02) Riconalla, Niels Patrick C.; Quisumbing, Ma. AgnesThis study is an attempt to determine the variables influencing demand for credit of agrarian reform beneficiaries from formal and informal markets. Specifically, the study aims to show how different types of agrarian reform beneficiaries' borrowing behavior is affected by the price that informal lenders are willing to pay for their output, the effective cost of credit in the formal and informal sources and the value of land as collateral. In addition, the study aims to develop and estimate econometrically a model of the demand for credit from formal and informal capital markets. The econometric exercise shows that differences in land tenure are not important in the total loan demand of sample agrarian reform beneficiaries. The results further show that the price that informal lenders are willing to pay for the output by the agrarian reform beneficiaries is not a significant determinant of the total loan demand. The effective cost of credit yielded contrasting results. The formal effective interest rate is not a factor considered in the total loan demand, but the informal effective interest rate is negatively related to total loan demand. Similar results were also obtained in the estimation of the sample agrarian reform beneficiaries' probability to borrow from formal and informal capital markets. While differences in land tenure and output price are not important factors to consider, the results reveal that EP holders are better able to self-finance their investments. The effect of the formal effective interest rate on formal loan demand is significantly negative for all types of agrarian reform beneficiaries (except for CLT holders), while the negative effect of the informal effective cost of credit on formal loans is not only contrary to a priori expectations but also does not support the hypothesis of substitutability between formal and informal sources which states that the agrarian reform beneficiaries' probability to borrow from formal capital market is expected to be positively affected by informal effective interest rates. Meanwhile, with respect to informal loan demand, formal and informal effective interest rates are found to be insignificant except in the case of EP holders. The insignificant effect of formal effective cost of credit on informal loan demand corroborates the above cited finding that the two capital markets are not substitutes.Item Restricted Intra-industry trade and the role of MNCs in the manufacturing industry(1990-01) Elumba, Nancy P.; Fabella, Raul V.This study is an attempt to determine the extent of intra-industry trade in the Philippines using the National Statistics Office (NSO) trade data and the Philippines Standard Industrial Classification (PSIC) coding scheme. The focus of the study is the manufacturing industry. Intra-industry trade, or the export and import of products within the same industry, was earlier observed in industrialized countries although its existence in the LDCs was not ignored. The growing literature on this field has shown that intra- industry trade is not a matter of statistical aggregation, that finely disaggregated data do not make intra-industry disappear and that intra-industry trade measured at the 3-digit Standard International Trade Classification (SITC) statistics is already an "economically meaningful phenomenon". The study of intra-industry trade in the Philippines is an area that has not been explored much. In this paper, measuring intra-industry trade made use of the 3-digit PSIC and the corresponding NSO Product Standard Commodity Classification (PSCC) export and import statistics. A regression analysis was undertaken where the intra-industry trade ratios derived serve as the dependent variables. Industry characteristics such as scale economies, product differentiation, MNCs' export share and trade intensity were likewise determined and then used as the independent variables in the regression. The results show that intra-industry trade is significant in the Philippines and that the presence of MNCs play a significant role in Philippine trade. Moreover, there is an indication that intra-industry trade in the Philippines is increasing. Finally, it was observed that export performance and characteristics differ significantly between industries in manufacturing which should be taken into consideration in trade policy formulation.Item Restricted The effects of trade and exchange rate policies of Indonesian agricultural exports(1990-05) Yunus, Muhammad; Balisacan, Arsenio M.Using price effects analysis, the study shows empirically the effects of trade and exchange rate policies on incentives to agricultural export production. Empirical analysis is based on the analytical model used by Bautista (1987a). In general, this study finds that, to some extent, trade and exchange rate policies influence agricultural incentives. Using Indonesian annual data from 1960-1988, it is shown that the dominant sources of price bias against agricultural exports are trade policies, especially between 1867 and 1975 and more so in the early 1980s. Depreciation of domestic currency in order to offset the price bias was not successtu1ly implemented especially in the late 1970 and early 1980s the ambivalent effects of direct restriction to the export of traditional raw materials and the price of home goods increased faster than the original intention of the government which was to promote non-oil exports. Only the terms of trade movement had dominant influences on the real exchange rate overvaluation different from that of the hypothetical rate ( that is, unbiased trade policies when implicit tariff and implicit export tax are zero).Item Restricted Factors affecting employment choices of mothers with infants in urban Metro Cebu(1990-03) Gultiano, Socorro A.; Canlas, Dante B.Although the idea that child care obligations inhibit a mother from participating in the labor force is pervasively accepted, there is merit to be gained from a refinement of the hypothesis. Focusing on mothers with the responsibility of caring for a six-month old baby, this study examines the extent of influence child care has on mother's employment behavior in combination with other personal, household and community factors. Employment behavior is viewed as consisting of three choices: a) to work at home, b) to work away from home, and c) not to work at all. Data from a survey of 2,000 mothers in urban Metro Cebu and a multinomial logit framework of analysis are used in the study. At six months postpartum, the factors that influence a mother's work choice are: 1) the level of education she has attained, 2) her work experience, 3) her length of residence in Metro Cebu, 4) household income, 5) availability of substitute infant caretakers in the household, 6) community labor market conditions, and 7) the wage level of servants in the locality. These factors have a stronger impact on the decision to work outside the home than to work at home, relative to not working at all.Item Restricted Inflation: empirical tests of alternative models(1990-05) Perez, Celia M.; Lim, Joseph Y.The paper starts with the basic monetarist model of inflation, the Harberger equation, and then proceeds to explain how other models evolved. A total of six (6) equations were tested using 1971-1988 data from the national income accounts of the National Statistical Coordination Board. The results were consistent in showing that although money supply affects inflation, it takes some time to do so. Important supply side factors like import prices strongly affect changes in prices and output. A move away from monetarist specifications, therefore, seems appropriate for countries like the Philippines, where financial markets are still developing, and institutional, and even political factors are structural realities which must be addressed, in order effect higher output and higher productivity.Item Restricted Factors affecting utilization of maternal and child health care services in selected urban poor commnities: analysis from household survey data(1991-05) Abbu, Gloricris C.; Herrin, Alejandro N.The study analyzes health-seeking behavior of urban poor households with regards to maternal and child health care particularly prenatal and postnatal care, infant immunization and well-baby care. In particular, it seeks to examine the effect of information dissemination and motivational work by a network of barangay health managers and volunteer health workers on health care service utilization. The analysis, using the logit technique, reveals that visits to households by barangay health managers and volunteer health workers to provide information and to motivate mothers to seek needed health care services are important in determining health care utilization. After controlling for background socioeconomic factors, households who were visited by project health outreach workers (as well as other non-project health personnel) had a higher rate of modern health care service utilization than households who were not visited. If "Health for All by the Year 2000" is to be realized, health projects, particularly primary health care projects, should consider not only the provision of services per se but also the modification of household consumption decisions. Information dissemination and motivational work through the fielding of health outreach workers in the communities can be a significant factor in influencing household health-seeking behavior.Item Restricted EC-ASEAN relations(1991-01) Balaoing, Edylinda O.; de Dios, Emmanuel S.The prospect of a more unified and integrated European Community has revived old and persistent questions on what its implications might be on the welfare of non-member countries. This is one of the principal issues dealt with in this present study, focus being given to EC relations with the ASEAN. An analysis of past overall growth rates of EC and ASEAN market shares shows that the reinforcement of European integration could have adversely affected ASEAN countries. Indicators of trade diversion are observed particularly during the period of Spain's and Portugal's accession to the EC. This affected ASEAN's exports of manufactures such as wood products, electronics and textiles. The scope of trade diversion in EC-ASEAN trade is greatest in the product range of manufactures (SITC 6-8) as more overlapping of exports occur in those areas. On the other hand, the analysis of the changing patterns of ASEAN trade towards the exports of manufactures likewise revealed the probable areas where mutually beneficial exchange of tariff reductions could take place.Item Restricted Determinants of earnings in East Java, Indonesia(1991-03) Budhiarso, Ismail; Tan, Edita A.The objective of this study is to determine the determinants of labor earnings in East Java, Indonesia. Using Becker's theory as the basic idea, the theoretical framework of this study, therefore take off from traditional human capital earnings function proposed by Mincer (1970). This theory starts by assuming no environmental inequalities in order to avoid the effects of non-competitive forces on individual choice. The heterogeneity of labor incomes is based on the individual investment behaviour, and the basic source of heterogeneity is the length of training period. Training raises productivity, but the time spent in training necessitates postponement of earnings to later age. The trainee expects that his occupational incomes in the future will be sufficiently large to compensate for the cost training.