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Subject: Economic stability ×

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    The appropriateness of inflation targeting as a monetary policy framework in the Philippines
    (2002-03) Chan, Diana; Salvador, Pearl Marie; Reside, Renato Jr.
    Background and Purpose. Section 3 of the 1993 RA 7653 or the New Central Bank Act pronounces that the primary objective of the Bangko Sentral ng Pilipinas (BSP) is to maintain price stability conducive to a balanced and sustainable growth of the economy. This is necessary for the adoption of inflation targeting as a monetary policy of the BSP. This paper aims to show the appropriateness of inflation targeting as a framework for monetary policy in the Philippines at present. Methods. The study evaluates the presence of prerequisites of inflation targeting in the Philippines. It attempts to forecast inflation using the moving average model. This model is compared to the model of Diwa C. Guinigundo of the BSP. The presence of other prerequisites is evaluated based on the criteria used by recent studies. The nature of the analysis is largely exploratory and argumentative. Results. Results show that some of the preconditions of inflation targeting are present in the Philippines. But certain necessary conditions should still be met before the adoption of inflation targeting. Inflation forecasts of the current BSP model shows that it has a good forecasting ability. While Central Bank's independence and credibility are predicted as determining factors of success in the presence of political uncertainties. Conclusion. Present conditions appear to be an appropriate time for the Philippines to adopt inflation targeting as a monetary policy. Though certain preconditions have been met, progressive procedures should still be made to sustain the success of inflation targeting. Provisions of prescriptive covenants will ensure the accountability of the BSP in the event that targets are not met. These institutional and structural changes are deemed necessary by the authors to sustain the success of IT.
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    The effects of economic stability on dropout rate across regions, 1989-1999
    (2003-10) Dongaban, Roscel B.; Valencia, Diamrose E.; Alonzo, Ruperto
    The paper measures the effect of economic stability through Gross Regional Domestic Product (GRDP), unemployment rate per region and regional education budget on the public schools' dropout rate per region for both elementary and high school level. Year serves as a controlling variable. The effects of these are also differentiated between National Capital Region (NCR), Luzon, Visayas and Mindanao. GRDP and unemployment rate are insignificant on both regressions for elementary and high school while fiscal budget for education and year are significant variables. Using the three dummy variables---Luzon, Visayas and Mindanao---only year is significant for elementary while year and Mindanao are significant for high school. Results show that economic stability hardly affects one's decision to drop out and regional budget for education somehow has an effect for both levels. However, year shows a strong effect on the dropout rate of elementary and high school. Year represents the situations and activities for the particular period, This includes the important economic and political happenings and natural events that affected not only a particular region but also the whole archipelago. Also, relative to NCR's, Luzon's, Visayas' and Mindanao's dropout rates for elementary and high school can better represent our model. The farther the area from NCR the higher is the probability to dropout as shown by increasing coefficients from Luzon to Mindanao.