RICHMOND KEITH N.

SIMEON
MAE 628: Development Economics
13 January 2019

“What is the most important lesson you’ve learned in your life, and how would you apply it
to your time as Miss Universe?”

Catriona Gray answered by saying that she has worked a lot in the slums of Tondo,
Manila and there she witnessed how life was difficult for some. While she sympathized
with some Filipinos living in that condition, Catriona said that she would always look for
the beauty in it.

“I’ve always taught myself to look for the beauty in it, to look for the beauty in the faces of
the children, and to be grateful. I would bring this aspect as a Miss Universe to see
situations with a silver lining, and to assess where I could give something, where I could
provide something as a spokesperson. If I could teach also people to be grateful, we could
have an amazing world where negativity could not grow and foster, and children would
have a smile on their face. Thank you,” Gray said.

Sincere as it would look like, but the thinking of Ms. Gray seems to be exemplifying the
common Filipino attitude towards poverty—and that is to earn for a living just for a day
and let fate do its way tomorrow. This attitude breeds the culture of “tiyaga lang” where
a family’s goal is just to sustain basic needs for a day without trying to make long term
solutions. These families would now add up to the long-time poor population of the
country also known as chronic poverty situation.

This mentality should not be tolerated because it might lead to generations being
contented with what poverty situation is right now. This might be deep seated in our
culture and tradition worst, poverty might be a norm. It would be very damaging to the
economy if poverty still exist even after industrialization and economic reforms have
been made.

Poverty should end. This is consistent with the United Nations’ Sustainable
Development Goals which is to end poverty and its appendages such as food hunger,
malnutrition, lack of sanitation facilities etc. Therefore, each of us must start with
having a mindset that being poor is not good and we, as individuals must strive better
through hard work to lift ourselves from poverty. The same is true for the government
by prioritizing poverty alleviation programs like massive funding for health, education,
and agriculture.

Reference:
Magsambol, B. (2018). “Problematic, romanticized: Netizens hit Catriona Gray’s winning
answer.” Rappler Online.
RICHMOND KEITH N. SIMEON
MAE 628: Development Economics
19 January 2019

37% still consider themselves as “always poor”—Chronic Poverty

The proportion of Filipino families who consider themselves poor declined in the fourth
quarter, according to a new Social Weather Stations survey, marking the first such
decline in two consecutive quarters according to Philippine Star’s headline last week.

This could be seen as a positive response of the Filipinos living below the poverty line.
Over the past years, poverty has been declining which could be attributed to various
poverty alleviation programs launched by the government such as 4Ps, Pantawid Pasada
Fuel Program, CIDSS-Kalahi etc.

Results of a December 16 to 19 SWS poll of 1,440 adults showed 50 percent — or an

estimated 11.6 million families — consider themselves “mahirap” or poor, down by two
points from 52 percent (estimated 12.2 million families) recorded in the September
survey.
Of the 50 percent who classified themselves as poor, 7 percent were “newly poor” while
6 percent were “usually poor,” SWS reported. The remaining 37 percent said they were
“always poor.”

The 37 percent among the respondents who said they were “always poor” signifies the
chronic poverty dragging the country’s economy down in the course of history. This
proportion is still large, and the government could not afford to be satisfied with short
term poverty surveys. Hence, better programs need to be crafted to alleviate
poverty.

Nonetheless, these surveys could give indicators to the immediate planning agencies of
the government for short term poverty alleviation programs.

Reference:
https://www.philstar.com/headlines/2019/01/12/1884491/116-million-pinoy-
families-consider-themselves-poor-q4-sws#SY0XxKRUPq0som2w.99
RICHMOND KEITH N. SIMEON
MAE 626: International Economics
13 January 2019

Philippines seeks balance trade with Indonesia

The Philippines may impose stricter trade measures against Indonesia after the ASEAN
neighboring country decided not to ease up on its protocols and open their market
access.
Agriculture Secretary Emmanuel Piñol said the trade negotiations between the two
countries did not yield positive results for the Philippines last month.
“This also dampened our interest to further open our market to Indonesia. This is not
something like a tit-for-tat, but we might be stricter because the trade balance is grossly
tilted in favor of them,” Piñol said.
Government data showed that Indonesia exports $1 billion worth of agricultural
products to the Philippines mainly palm oil, while allowing only a measly $50 million of
exports from the Philippines.
The Philippines used to export a huge volume of horticultural products to Indonesia,
including shallots and tobacco, but restrictive import policies imposed tilted the trade
balance in favor of Indonesia.
“We are not trying to engage them in a trade war, but it should not be a one-way affair
and we are neighbors in the first place,” Piñol said.
Because of this, the government is now studying other trade measures including the
imposition of quantitative restrictions and tariffs for palm oil exports.
The very basic principle in international trade is to have a comparative advantage for
every trade a country enters into. That is to have at least a fair terms of trade where
trade deficit do not happen.
Heckscher-Ohlin theory encapsulates twelve (12) assumption for such theory be held.
One of these is the assumption that trade between two nation must have no trade
restrictions such as but not limited to tariffs and transportation costs. Since H-O Theory
holds when all of these 12 assumptions are satisfied, that is two nations entering into
trade will be both better-off and will consume at a higher indifference curves, then the
case of Indonesia and Philippines tends to be not consistent with the theory.
It is best therefore to do the measures prescribed by the Department of
Agriculture to impose trade restrictions such quantitative restriction and
tariffication. This is to at least send an implicit signal to Indonesia that trade must be
equal with the Philippines hence, we should meet halfway.

Reference:
https://www.philstar.com/business/2019/01/09/1883388/philippines-seeks-
balance-trade-indonesia#VRliDUJPO8STZmqL.99
RICHMOND KEITH N. SIMEON
MAE 626: International Economics
19 January 2019

The Senate transmitted on Tuesday to the Office of the President the harmonized
version of Senate Bill 1998 and House Bill 7735, or an "Act Replacing the Quantitative
Import Restrictions on Rice with Tariffs, Lifting the Quantitative Export Restrictions".
President Rodrigo Duterte's economic managers have identified rice tariffication as one
of the means that would help address soaring inflation.
The measure would create the Rice Competitiveness Enhancement Fund (RCEF) as a
special rice safeguard duty to protect the rice industry from sudden or extreme price
fluctuations.
"One of the key features of the bill is the creation of the Rice Competitiveness
Enhancement Fund, which shall consist of initial appropriation of PHP10 billion a year
until all duties collected from the importation of rice can replace it," said Senator
Cynthia Villar, sponsor and principal author of the bill.
The Senate agreed on setting the RCEF at a minimum of PHP10 billion a year for six
years, and tariff revenues in excess of PHP10 billion shall be appropriated by Congress
based on a menu of programs in the rice tariffication law.
The fund will be utilized to provide different forms of assistance to the country's rice
farmers, such as the development of inbred seeds and rice farm equipment, and skills
enhancement.
Villar noted that the staple grain is the only agricultural commodity in the country that
has quantitative restriction (QR), limiting the inflow of imported rice in the country.
Assuming a smooth transition of this law-to-be bill from the old laws on Philippine
international trade, this bill seems to improve the rice production sector of the national
economy. Since the government became lenient in rice importation these past years
during the Duterte administration, local farmers would be benefited from this bill.
Rice importation is very ironic in the case of our country. Philippines is massively
agricultural country, which is expected to be producing its own rice for its people, but
we still have to import from our neighboring ASEAN countries. This importation really
stabilizes the rice prices since imported rice is a lot cheaper that those locally produced
but hurts the local farmers who find themselves losers after trade. It is best to prioritize
our own produce because the majority of our lands are agricultural, and majority of the
rural poor engage in rice farming. Hence, strengthening the local rice industry will
empower our local farmers.
This bill therefore is timely and must be signed into law.

Reference:
http://www.pna.gov.ph/articles/1059084