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Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines

Author

Listed:
  • Celia M. Reyes

    (PIDS)

  • Alellie B. Sobrevinas
  • Joel Bancolita
  • Jeremy de Jesus

Abstract

The study aims to assess the impact of rising prices of rice and fuel on poverty in the Philippines. In particular, the variations in the potential effects among different group of households were analyzed using household level data. Results of the study confirm that the impact of increasing prices of rice and fuel vary across different groups of households depending on the sector of employment, level of urbanity, income group and geographical location. In fact, there are losers and gainers from the recent increases in the prices of rice and fuel. In response to higher prices, households adopted different coping mechanisms, some of which are damaging and counter-productive in the medium- and long-run. The Philippine government has also responded by implementing programs that would mitigate the negative impact of soaring prices. It is recommended that household level data for all households in the community, such as those being generated by the community-based monitoring system (CBMS) being implemented by local government units, be used to identify eligible beneficiaries through some proxy means test model. This would help reduce leakage of program benefits to the non-poor as well as ensure that the poor benefit from these programs.

Suggested Citation

  • Celia M. Reyes & Alellie B. Sobrevinas & Joel Bancolita & Jeremy de Jesus, 2009. "Analysis of the Impact of Changes in the Prices of Rice and Fuel on Poverty in the Philippines," Development Economics Working Papers 22687, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:develo:22687
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    References listed on IDEAS

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    1. Intal, Ponciano Jr. S. & Garcia, Marissa C., 2005. "Rice and Philippine Politics," Discussion Papers DP 2005-13, Philippine Institute for Development Studies.
    2. Christopher B. Barrett & Paul A. Dorosh, 1996. "Farmers' Welfare and Changing Food Prices: Nonparametric Evidence from Rice in Madagascar," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 656-669.
    3. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
    4. Budd, John W, 1993. "Changing Food Prices and Rural Welfare: A Nonparametric Examination of the Cote d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 587-603, April.
    5. Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
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    Cited by:

    1. Abd Azis Muthalib & Pasrun Adam & Rostin Rostin & Zainuddin Saenong & La Ode Suriadi, 2018. "The Influence of Fuel Prices and Unemployment Rate towards the Poverty Level in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 8(3), pages 37-42.
    2. Mehta, Aashish & Jha, Shikha & Quising, Pilipinas, 2013. "Self-targeted food subsidies and voice: Evidence from the Philippines," Food Policy, Elsevier, vol. 41(C), pages 204-217.
    3. Borines, M.G. & de Leon, R.L. & McHenry, M.P., 2011. "Bioethanol production from farming non-food macroalgae in Pacific island nations: Chemical constituents, bioethanol yields, and prospective species in the Philippines," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(9), pages 4432-4435.
    4. Indra Maipita & Wawan Hermawan & Fitrawaty, 2012. "Reducing Poverty Through Subsidies: Simulation Of Fuel Subsidy Diversion To Non-Food Crops," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 14(4), pages 349-366, April.
    5. Mehta, Aashish & Jha, Shikha, 2014. "Pilferage from opaque food subsidy programs: Theory and evidence," Food Policy, Elsevier, vol. 45(C), pages 69-79.

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    More about this item

    Keywords

    poverty; community-based monitoring system; impact analysis; prices; rice; fuel; coping mechanisms; pass-through rates; net benefit ratio;
    All these keywords.

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation

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