An Analysis on the Influence of Market Access and International Trade on the Philippine Agricultural Sector: A Heckscher-Ohlin Approach

Purpose: The study aims to evaluate the applicability of the Heckscher-Ohlin Theory by examining the impact of market access, international trade, labor force participation rate, and agricultural land area on the Philippine agricultural sector. Methodology: A quantitative research method was used in this study, which employs the Ordinary Least Squares (OLS) regression analysis, along with several diagnostic tests. The study adopts a time-series approach, using data from the Philippines spanning the period 1991 to 2021 at the national level. Findings: Results show that improved market access and international trade significantly drive agricultural growth in the Philippines by offering farmers better opportunities and expanding access to larger global markets, thereby boosting productivity and economic development. Meanwhile, the labor force participation rate and land area for agriculture show positive but statistically insignificant relationships with the sector. Contribution to Theory, Policy and Practice: The study recommends that policymakers prioritize securing stable import channels for essential agricultural inputs to enhance the competitiveness of the Philippine agricultural sector. By focusing on trade agreements that reduce tariffs on key imports such as fertilizers, machinery, and seeds, policymakers can help reduce production costs for local producers, making them more competitive in the global market. This approach not only supports export growth but also contributes to long-term economic development by fostering a more efficient and sustainable agricultural sector.