045 Admiral Village Talon III Las Piñas City

HIGH SCHOOL DEPARTMENT

Senior High School Grade 12

ABM 1- Bill Gates

Applied Economics
Import and Export Liberalization

Submitted by:

Ballesteros, Vhea D.
Baradas, Charles Vincent M.
Reyes, Sophia Eirene M.
Santillan, Trisha Anne B.

Mentored by:
AR Anthony G. Salvacion, LPT
 I. Case Background

Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between
nations. These barriers include tariffs, such as duties and surcharges, and nontariff barriers, such as licensing rules and
quotas. Economists often view the easing or eradication of these restrictions as steps to promote free trade.

The push for trade liberalization in the Philippines was primarily due to the failed protectionism and import
substitution strategy implemented in the past. Trade liberalization is expected to improve the allocation of resources and
bring domestic prices closer to world price, which are in turn expected to deliver sustained economic growth and
development. However, with the mixed experience of different countries that have undergone trade liberalization, a
recurring question is whether trade liberalization enhances productivity and economic growth, help reduce income
inequality and alleviate poverty in a developing country.

Over the period 1980-2000, the Philippines implemented an impressive program of trade liberalization to reduce
the overall level of protection and reduce tariff dispersion. Average tariffs fell from over 40 percent to around 8 percent
over these two decades The first phase began with the implementation of the first tariff reform program (TRP 1) during
1981-1985, which reduced the maximum tariff from 100 percent to 50 percent and reduced average nominal tariffs from
42 percent to 28 percent Economic and financial difficulties put continued reforms on hold until the implementation of
TRP Il in 1991-1995. with the result being tariff rates clustering around three bands 10 percent, 20 percent, and 30 percent.
The last round of liberalization, TRP III, launched in 1996, had the goal of a uniform tariff rate of 5 percent by 2004

This series of reforms resulted in significant changes in the structure of the economy. The ratio of exports and
imports to GDP rose sharply, indicating the increasing openness of the economy and its integration with the world
economy. The share of manufactured goods in total exports increased from 25 percent in 1981-1985 to 90 percent in
1996- 2001. This was accompanied by an improvement in indicators of the competitiveness of manufacturing industry,
especially export-oriented industries.

However, recent tariff reversals threaten to undermine these gains. In early 2003, scheduled tariff liberalization
was put on hold and tariffs were kept at their 2002 levels. Then, in November 2003, tariffs for many sectors were rolled
back to their 1998 levels Meanwhile, as indicated in table 1, effective protection rates in agriculture and manufacturing
remain quite high, at around 14-15 percent, and the 2003 rollback has actually caused the effective protection rates to
become higher than they were in 1998 Dispersion also remains high. Effective protection rates for machinery, for example,
are around 4 percent while those for food processing are nearly 32 percent. Market access issues in agriculture also remain
unresolved: quantitative import restrictions persist for rice; the implementation of the minimum access volume
arrangement; effectively restrains imports, especially of pork and poultry products as well as sugar; and certification
requirements from the Secretary of the Department of Agriculture further restrict imports of fish and fish products.

On February 14, 2019, President Rodrigo Duterte signed into law the Republic Act (RA) No. 11203 or an Act
liberalizing the importation, exportation, and trading of rice, lifting for the purpose the quantitative import restriction on
rice, and for other purposes". The law amends RA No.8178 or the Agricultural Tariffication Act of 1996 and replaces the
quantitative restrictions (QR) on rice imports with tariffs.

The Implementing Rules and Regulations (IRRs) of RA No. 11203, as contained in Joint Memorandum Circular
(JMC) 01-2019, were approved on March 5, 2019. A 350,000 ton-rice TRQ will be levied a 40 percent duty. Out-quota
tariffs are at 180 percent (or the tariff equivalent based on the WTO Agreement on Agriculture upon the expiration of the
waiver of the special treatment for rice, whichever is higher.)

At present, a few TRQ products have achieved unified in-quota and out-of-quota tariff rates, including chicken,
frozen or chilled (40 percent); turkey livers, frozen or chilled (40 percent); potatoes, frozen or chilled (40 percent); and
roasted coffee beans (40 percent). Currently, there is an additional specie safeguard duty in place for chicken meat, which
effectively double the rate of out-of-quota tariff protection. Administrative Order (A.O.) 9 of 1996, as amended by A.O. 8
of 1997 and A.O. 1 of 1998, established rules for implementing TRQs and allocating import licenses.
 II. Time Context:

The Philippine’s membership in the General Agreement on Tariffs and Trade on 1980s have produced a timeline of
government steps towards beneficial policy or trade reforms, programs and further agreements on Trade Liberalization.
Such reforms have been subject to the purpose of eliminating the harmful trade protectionism that had sent global trade
down 65 percent during the Great Depression; and so, the Philippines has adapted this system from 1980s up to the
present. In line with this, the table below shows the policies and progress our country has undergone since 1950s up to
2003.

Period Policy Reform Policy Description

 Import Substitution Phase -Protectionist measures such as high tariffs,
import quotas & other non-tariff barriers
 Restrictive Investment Policy -Restricted foreign ownership to 40% in
nonpioneer industries; 100% eligibility for
foreign investment subject to Board of
Investments’ approval
-Complicated investment incentive system
1950s- Growth Stability
1970s  Import-driven and industrial  Import and exchange controls
Investment-led  Decontrol of imports and foreign
 Debt-driven growth; later in the 1960’s, exchange restrictions/deficit financing
investment-led growth  Devaluation; floated peso
 Debt-driven growth; greater export-  IMF credit facility; massive construction
orientation spending thru government barrowing;
 Debt-driven and export-led growth export diversification
Policy Reform Policy Description
Unilateral Trade Liberalization Period -Trade Reform Program (TRP) I: reduced tariff
range from 70-100% to 0-50%
-TRP II: reduced tariff range to 3-30%
-TRP III: further tariff changes towards a 5%
Investment Liberalization uniform tariff
-1987 Omnibus Investment Code (Board of
1980s- Investments)
1990s -1991 Foreign Investment Act
-Creation of Philippine Economic Zone Authority
Multilateral/Regional Trade Liberalization (1995), Subic Bay Metropolitan Authority (1992),
& Clark Development Corporation (1993)
-GATT-WTO (1995)
-AFTA-CEPT (1993)

Growth Stability
 Growth Objective postponed in favor  IMF stabilization/structural adjustment
for stability due to serious economic program pushing for trade
crisis liberalization; Market oriented
 Investment-led growth; industrial exchange rate; devaluation;
revitalization; restoration of free deregulation of interest rates; foreign
enterprise system exchange rationing; moratorium on
 Export and investment-led growth debt repayment; debt restructuring
  Import liberalization; tariff reform;
financial liberalization; privatization;
removal of restrictions on foreign
investments.

 Deregulation of industries; further

trade; financial and investment
liberalization and privatization;
rehabilitation of energy and water
resources sectors.

Trade Reform Description

1980 Tariff Reform Program I EO 609 and EO 632-A -TRP 1 reduced the level and dispersion of tariff
(January 1981) rates from a range of zero to 100 percent in 1980
to a range of 10 percent to 50 percent and
removed quantitative restrictions beginning in
1981 and ending in 1985
1990 EO 413 (July 1990) -EO 413 aimed to simplify the tariff structure by
reducing the number of rates to four, ranging
from 3 percent to 30 percent over a period of
one year, but was not implemented.
1991 Tariff Reform Program II EO 470 (July 1991) -TRP II reduced the tariff range to within a three
percent to 30 percent tariff range by 1995
1995 Tariff Reform Program III EO 264 (August 1995) -EO 264 further reduced the tariff range to three
percent and ten percent levels, reduced the
ceiling rate on manufacture goods to 30 percent
while the floor remained at three percent, and
created a four-tier tariff schedule: three percent
for raw materials, 10 percent for locally available
raw materials and capital equipment, 20 percent
for intermediate goods, and 30 percent for
finished goods
EO 288 (December 1995) -EO 288 modified the nomenclature and import
duties on non-sensitive agricultural products
1996 EO 313 (March 1996) -EO 313 modified the nomenclature and
increased the tariff rates on sensitive agricultural
products
RA 8178 -RA 8178 lifted the quantitative restrictions on
three products and defined minimum access
volume for these products
1998 EO 465 (January 1998) -EO 465 corrected remaining distortions in the
tariff structure and smoothened the schedule of
tariff reduction in 23 industries identified as
export winners
EO 486 (June 1998) -EO 486 modified the rates on items not covered
by EO 465
1999 EO 63 (January 1999) -EO 63 adjusted the tariff rates on six industries
Freezing of tariff rates at 2000 level until 2001
Policy Reform Policy Description
2000s Trade Facilitation -Customs reforms (since mid-1990s)
-Revised Kyoto Convention (2009)
 -National Single Window (2010)
Regionalism/Bilateralism through Free Trade -China-ASEAN (2004); ASEAN-Japan (2008);
Agreements ASEAN-Korea (2006); ASEAN Australia New
Zealand; ASEAN-India
-Japan Philippines Economic Partnership
Agreement (2007)
-ASEAN+3, ASEAN+6 Talks
Trade Reform Description
2001 EO 334 (January 2001) -EO 334 adjusted the tariff structure towards a
uniform tariff rate of 5 percent by the year 2004
EO 11 (April 2001 -EO 11 corrected the EO 334 tariff rates imposed
on certain products
2002 EO 84 (March 2002) -EO 84 extended existing tariff rates from
January 2002 to 2004 on various agricultural
EO 91 (April 2002) products
-EO 91 modified the tariff rates on imported raw
materials, intermediate inputs, and machinery
and parts
2003 EO 164 (January 2003) -EO 164 maintained the 2002 tariff rates for 2003
covering a substantial number of products
EO 241 (October 2003) EO 264 (December 203) -EO 241 and EO 264 adjusted tariff rates on
finished products and raw materials and
intermediate goods, respectively.
III. Point of View:
 Bureau of Trade Regulation and Consumer Protection

The Bureau of Trade Regulation and Consumer Protection under the Department of Trade and Industry is an
agency which holds responsibility on matters in trade regulation aligned with the Protection of Consumer Rights and
Interests which is needed when possible ray of inflation arises. This agency is also committed in developing policies and
programs aimed at sustaining the growth and development of the Philippine economy. Current head of the BTRCP is
Director Victorio Mario A. Dimagiba that holds responsibility on such Consumer Protection matters.

 Department of Agriculture

According to worldexports.com, agricultural products are one of the fastest-going among the Philippines’ top 10
export categories; and if there is one thing our country is known for, it is our capability to export quality agricultural
products such as rice, bananas, pineapple, coconut and the likes. As our country continues to adapt the import and export
trade liberalization, the Department of Agriculture must arrive with innovative ways of meeting each country’s demands,
when it comes to agriculture-related products. In doing so, the Department of Agriculture should suggest the
implementation of a systematic and long-term strategy in developing and promoting exports of raw and processed
agricultural products. This would require achieving economies of scale in on-farm production that would generate
sustained quantity and quality of export products. The private sector’s role will be essential in developing and promoting
agricultural products. At present, the Philippines only has two agricultural products that earn at least $1 billion per year
in export receipts: bananas; and coconut products (mostly in oil form). Thus, promotion of export products is a necessity,
with the provision of the sector’s acting secretary, Sec. William D. Dar, the only Filipino who led a global agricultural
research institute — the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), in India, serving for an
unprecedented three five-year terms, from 2000 to 2014. He left a legacy benefitting millions of farmers in India, Africa,
and other dryland countries, including the Philippines.
  Development Budget Coordination Committee

The DBCC was created on May 14, 1970 through the Executive Order No. 232 creating the Presidential
Development Budget Committee (PDBC) and enumerating its functions and objectives— primarily, its role is to review and
approve the macroeconomic targets, revenue projections, borrowing level, aggregate budget level and expenditure
priorities and recommend to the Cabinet and the President of the consolidated public sector financial position and the
national government fiscal program. The Committee is composed of the principals of the four member agencies and is
chaired by the DBM Secretary. There is also an Executive Technical Board (ETB), which serves as the clearing-house of the
DBCC and consists of the Undersecretaries and Directors of the DBCC member agencies.

The members of the DBCC have the following specific responsibilities:

 DBM – resource allocation and management

 DOF – revenue generation and debt management
 NEDA- overall macroeconomic policy
 OP – Presidential oversight

Specifically, the DBCC is mandated to recommend for Presidential approval the level of the annual government
expenditure program and the ceiling of government spending for economic and social development, national defense,
general government and debt service; Recommend to the President the proper allocation of expenditures for each
development activity between current operating expenditures and capital outlay; and Recommend to the President the
amount set to be allocated for capital outlay under each development activity for various capital or infrastructure projects.
Thus, DBCC plays a highly significant role in the implementation and careful execution of the import and export trade
liberalization, mainly in the aspect of proper budget allocation and management. In line with this, the proposed budget
for 2020 has been released, wherein the 2020 National Budget will focus on the programs and projects under the LEGACY,
which stands for Law, public, order and safety; Education and social protection; Good governance and justice; Agriculture,
environment, natural resources and risk resiliency; Construction and economic development; and Youth and the
marginalized— this proposed budget in fact is a good starting point when it comes to giving priority to the actual needs
of our agricultural sector, which is one of the aspects our government must oversee. Therefore, DBCC together with
numerous sectors, must collaborate and come up with one conducive proposal on how to fully attain a stable economic
status for the long run with the aid of the implementation of import and export trade liberalization in our country.

 Department of Labor & Employment

Since trading does not only focuses in exchanging of products, but also services, DOLE or department of labor and
employment really involved in the case of trade liberalization. In the area of labor and employment, OFW's remittances
really helps the economy of the Philippines as they bring a huge amount of money into the country through remittances
and that is the main reason why we need the assistance of this private sector in their expertise regarding these concerns.
The Department of Labor & Employment (DOLE) is the premier Regional Office responsible for the implementation of
policies and programs that promote gainful employment opportunities, develop human resources, protect the welfare
and advancement of workers, and maintain harmonious industrial. Together with Silvestre "Bebot" Bello III, the current
Secretary of the Philippines' Department of Labor and Employment and concurrently Presidential Adviser on the Peace
Process. Bello was appointed by President Rodrigo Duterte to replace Rosalinda Baldoz in the secretary ship. Bello was a
former Justice Secretary, Solicitor General and representative of 1-BAP party-list during the 16th Congress of the
Philippines.

 Department of Trade and Industry

The Department of Trade and Industry Bureau of Import Services (BIS) is one of the agencies that is responsible in
taking part of a successful improvisation of the Trade Liberalization as it has been linked to accommodate industries,
whether in local or national, related to importation. It is an agency under the Department of Trade and Industry which is
responsible to undertake activities related to the implementation of legislations which provide assistance to Philippine
industries confronted by trade remedy actions, dissemination of information on imports to stakeholders and adopt sound
import policies, programs and guidelines. The current director of The Bureau of Import Services is Atty. Luis M. Catibayan,
which is responsible as the front liner in handling such matters.

 International Monetary Fund

One of the main dilemmas our country has faced in the 1980s was the balance of payment crisis which is why our
country has settled with the General Agreement on Tariffs and Trade; together with various private sectors, International
Monetary Fund helps to reduce global poverty, encourage international trade, and promote financial stability and
economic growth. In fact, IMF has three main functions: overseeing economic development, lending, and capacity
development. Through economic surveillance, the IMF monitors developments that affect member economies as well as
the global economy as a whole. The IMF lends to its member nations with balance of payment problems so they can
strengthen their economies. The group also provides assistance, policy advice, and training through its various technical
assistance programs. Thus, IMF has contributed a lot in our country’s economic growth and stability since then, which was
spearheaded by Mr. Yongzheng Yang , the IMF’s Resident Representative to the Philippines. Prior to that, he was the IMF’s
Resident Representative in Pacific island countries from 2010 to 2014 and served as the IMF’s mission chief for Papua New
Guinea and Samoa. He has also worked on countries in Africa and Central Asia, as well as on IMF policies toward low-
income countries. Before joining the IMF in 2001, he taught at The Australian National University and the Macquarie
University for 10 years.

 Members of the Judiciary Branch of the Philippine Government

Out of the three branches of Philippine government, the legislative branch comprised of two chambers, namely
the House of Representatives which is the lower chamber and the Senate which is the upper chamber, works primarily to
introduce, review and pass legislation. The legislative branch of the government is the only branch of the government that
can pass new laws. The Senate fulfils its role as a check on government by scrutinizing bills, delegated legislation,
government administration, and government policy in general. It does this by way of procedures utilized in the Senate
chamber itself and through the operation of the Senate committee system; and so, this branch of the government is highly
responsible to pass legislations that would act as a support system for those group of people that may or may not be
directly affected by the proposed shift of trade system.

 Philippine Statistics Authority

Republic Act 10625— through this law, Philippine Statistics Authority was created on September 12, 2013; this
sector serves as the central statistical authority of the Philippine government on primary data collection and is solely
responsible with preparing and conducting periodic censuses on population, housing, agriculture, fisheries, business,
industry, and other sectors of the economy; collecting, compiling, analyzing, abstract and publishing statistical information
relating to the country’s economic, social, demographic and general activities and condition of the people; and
collaborating with departments of the national government including GOCCs and their subsidiaries in the collection,
compilation, maintenance and publication of statistical information, including special statistical data derived from the
activities of those departments, corporations and their subsidiaries; and so, this sector must work hand-in-hand with the
departments mentioned in this case study to ensure that our country will still be able to meet our countrymen’s needs
despite the rapid change in the export demands our country will soon be facing due to the enhancement of our trading
system. Together with the PSA’s head, Lisa Grace S. Bersales, the newly-appointed National Statistician and head of the
Philippine Statistics Authority (PSA), which in fact is also the former vice-president for planning and finance of the
University of the Philippines (UP) System and erstwhile dean of the UP Diliman School of Statistics.

 President of the Philippines, Rodrigo Roa Duterte

The President is the Head of State and Head of Government, and functions as the commander-in-chief of the
Armed Forces of the Philippines. As chief executive, the President exercises control over all the executive departments,
bureaus, and offices. Rodrigo Roa Duterte KGCR, also known as Digong and Rody, is a Filipino politician who is the 16th
and current President of the Philippines and the first from Mindanao to hold the office. He is the chair of the ruling PDP–
Laban party. Recently, President Rodrigo Duterte asked the Senate to immediately pass three bills, which he said were
needed to spur the country's economic growth. In a letter addressed to Senate President Vicente Sotto III, Duterte called
for the "immediate enactment" of amendments to the Public Service Act, Foreign Investments Act, and the Retail Trade
Liberalization Act. Duterte said the measures were needed to "provide a more conducive investment climate, increase job
opportunities, foster more competition and further spur the country's economic growth."

 World Trade Organization

The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of
international trade between nations. This organization that mainly leads and promotes the equalization or fairness of
economic trading systems is directly responsible for guiding matters on agreements proposed by participating members
on trading which will be imposed as well in agreements proposed by the Philippines. The committee member that is
responsible in managing and advising the administrative functions of the World Trade Organization is the present Director-
General of WTO,Roberto Carvalho de Azevedo.

IV. Statement of the Problem:

“The Philippines’ transition from Trade Protection to Trade Liberalization”

Over the years of the Philippine trading systems, reforms are sought after and enacted as a ladder to
economic growth and stability. With government intervention such regimes are implemented to take corrective
actions to the economic crisis that arisen due to economic models such as trade protectionism linked with the
cause of great depression in the Philippines that had been dominant in the Philippines, three decades after World
War II. After Philippines, in membership with the General Agreement on tariffs and trade, transited from trade
protection to trade liberalization gradual changes in economic growth and advances took place as it bought the
Philippines to a more competitive and resilient position.

This case study aims to present the transitions of the Philippine trading systems from trade protection to
trade liberalization. This study highlights the beneficial economic changes of the trade liberalization require to the
Philippines economic advancement and stability.

V. Objectives:
 Must: Highlight present infographic on beneficial changes in economic condition/ state of the Philippines from
1980s to 2019/ present in application of the Trade Liberalization.
 Want: Fortify advancement of Trade Liberalization in the Philippines through consumer knowledge and in
condition of security of production on exports and producer protection and rights especially on agricultural
sectors.
VI. Areas of Consideration:

STRENGTHS WEAKNESSES
 Machineries and Equipment, which the Philippines  The Possibility of increased rate of unemployment in
highly needed in good quality production, will be local businesses especially infant industries is left
bought at a lower cost unsupervised or lacked support from the government
 Businesses, whether in local or national, in the
Philippines will be highly active in economic activities  The implication of the idea of Trade Deficit, as imports
especially in innovation as competition rises will have a decrease in its prices due to lessened
tariffs, quotas and trade barriers
OPPORTUNITIES THREATS
 local products other than main export products have  Recession of countries that may result in pauses on
the chance to be exposed to the global market imports needed by the country
competition such as wood from tree species only
found in the Philippines  Insufficient Income as a result of Trade Deficits
 The development and production of good quality
products or exports that can penetrate the global
 market competition such as rice products.

VII. Alternative Course of Action:

 Reduction in all forms of import barriers and export subsidies on a nondiscriminatory basis across all commodities.
 Proper cooperation and adaptation of different government sectors in our country on implementing trade
liberalization.
 The protection granted under such actions should only be in the form of tariffs, and any tariff increases should be
temporary and digressive.
 Vigorous retaliation against unfair trade practices. Making it impossible for countries to increase their export
markets by engaging in unfair trade practices will eventually eliminate such "beggar—thy-neighbor" activities,
since the instigators will have nothing to gain by these actions.
 Advocate more effective measures to facilitate the adjustment of workers and capital owners in import—injured
industries to ease the pressures for selective protection.
 Broadening the scope of trade covered by GATT rules.
o The first rule, while recognizing that it is important for member countries to follow open and liberal trade
policies, permits them to protect domestic production from foreign competition, provided that such
protection is extended only through tariffs and is kept at low levels.
o The second rule provides for the reduction and elimination of tariffs and other barriers to trade through
multilateral negotiations. The tariffs so reduced are listed on a tariff-line basis in each country’s schedule
of concessions. The rates given in these schedules are known as bound rates. Countries are under an
obligation not to increase tariffs above the bound rates shown in their schedules.
o The third rule requires countries to conduct their trade without discriminating among countries from
which goods are imported or to which goods are exported. This rule is embodied in the most-favored-
nation (MFN) principle. An important exception to this rule is permitted in the case of regional preferential
arrangements.
o The fourth rule is known as the national treatment rule. It requires countries not to impose on an imported
product, after it has entered their domestic markets on paying customs duties at the border, internal taxes
such as sales or value-added tax at rates higher than those levied on a similar domestic product.
VIII. Recommendation:

As we studied about the impact of trade liberalization, we found out the beauty and positive effect of it. We will
recommend to pursue or continue the trade liberalization because of its good points, it will help our country to achieve
its economic growth and stability. Trade liberalization can improve efficiency and innovation; trade liberalization drives
competitiveness that every country needs. When everyone follows the same rules-based system, there is less opportunity
for cronyism, or the ability of participating nations to skew trade. Trade liberalization also increases access to higher-
quality, lower-priced goods, cheaper imports, and trade liberalization means more growth and that’s what we need.
Moreover, developing countries would gain more from global trade liberalization as a percentage of their GDP than
industrial countries, just like America and Mexico, before they created NAFTA or North America Free Trade Agreement,
these two countries are also part of third world countries or developing countries. By the help of trade liberalization,
they’ve achieved economic growth that lead them to became first world country. Peru has also opened up trade with
nations that brought it modernization and steady economic growth and they believe that protectionism is harmful so they
encourage everyone to join or continue rather, with the wave of trade liberalization. Take note, Peru is also considered as
a developing country. If there’s some facts that proves that trade liberalization has a positive impact and beneficial,
therefore we should pursue this program; and as one of the developing countries, trade liberalization will be beneficial
for us. Government could also benefit tremendously in terms of enhanced credibility and its commitment to reform if it
resumes this program. Continuing to implement AFTA commitment to take advantage of increasing regional opportunities
would also be beneficial in the long run. At the same time, it will be important for the government to reduce its non-
discriminatory tariff rates to minimize trade diversion and prevent the emergence of large spreads between preferential
rates for AFTA and those for other trading partners.
 However, imposing Trade Liberalization has its two sides, the successful implementation of the regime is what the
country strive to achieve. Hence, the course of action that we strongly recommend is Proper cooperation and adaptation
of different government sectors in our country on implementing trade liberalization. Government sectors or Agencies and
officials that have been mentioned to be responsible to take matters on trading, should develop smooth communication
flow with each other. In this way efficient and effective planning would be achieved in implementing and improvising
Trade Liberalization in the Philippines. For we strongly believe in the saying that was once said by Schermerhorn in 2012,
the system of shared actions, values, and beliefs that develops within an organization and guides the behavior of its
members which explains that in order for the implementation to be properly executed, the government itself must
establish first an efficient and effective plan on trade liberalization by proper cooperation of government agencies and
officials mentioned. In this way we avoid the risks that has experienced not only once in the implementation of trade
liberalization over the past decades.

IX. Conclusion:

Over the past decades of the Philippine Trading System, economic models such as the Trade Protectionism and
Trade Liberalization are two consecutive models which are found to evidently mark on the difference of its effects on the
economic growth and stability of the Philippines. After the beneficial changes of shifting from Trade Protectionism to
Trade Liberalization in the Philippines, results from studies and articles shown indicates that the Philippine economic
condition has improved over the past years, with increased production and innovation as imported products has helped
in export production and satisfaction among variety of products on Filipino consumers as well as the openness and smooth
trading process of exports among other countries.

However, weaknesses and threats are observed in the long run of Trade Liberalization such two main flaws are
increased rate in unemployment and trade deficits which late government officials have struggled and failed to support
and attend with solutions as the Philippine government has also faced issues, corruption and the likes. Furthermore, trade
liberalization and free trade agreements are sought by many countries to participate in as well as the Philippines up until
now.

Thus, this case study encourages Trade Liberalization in the Philippines, with its known benefits, to be improve
and improvise its agreements such as detected threats and weaknesses will be minimized. Proper Implementation,
Secured Plan and Protection should be assessed well in fortifying Trade Liberalization in the Philippines. In addition,
Consumer and Producer knowledge and education on trade systems such as trade liberalization should be worked out by
spreading awareness through media and traditional communication media.

X. Plans of Action:

Name of Activity Responsible Person/ Duration Budget Allocation

Government Agency
1. Increase investment spending and ₱4.2 Billion
strengthen the country’s institutional Department of Finance (30% of Department of
Interminable
and regulatory environment. Finance’s annual budget,
₱14,000,000,000)
2. Complementary policies that shape the business environment must be addressed including investment in the
following aspects:
a. Human capital ₱68.440 Billion
(40% of Department of Labor
Department of Labor and Employment’s proposed
Interminable
and Employment budget of ₱171.1 Billion
according to the Department of
Budget and Management)
b. Infrastructure Department of Public ₱340.375 Billion
Intermediate
Works and Highways (35% of ₱972.5 Billion)
 c. Quality of governance ₱279.11 Billion
(38% of Office of Institutional
Quality Assurance and
Office of Institutional Governance’s proposed budget
Quality Assurance and Interminable of ₱734.5 Billion
Governance (38% according to the
Department of Budget and
Management)

d. Improvement of investment Development Budget ₱4.2 Billion

climate Coordination (30% of Development Budget
Interminable Coordination Committee’s
Committee annual budget,
₱14,000,000,000)
e. Enhancing the country’s level of ₱306 Billion
competitiveness (45% of Office of the National
National Economic and Economic and Development
Development Authority and Department of
Authority and Interminable Trade and Industry’s proposed
Department of Trade budget of ₱680.3 Billion
according to the Department of
and Industry Budget and Management)

3. Strengthen domestic parts and ₱740 Million

suppliers sector and deepen their (20% of the Department of Trade
linkage with domestic large enterprises and Industry’s proposed budget
Department of Trade
Intermediate of ₱3.7 Billion
and multinational companies. and Industry according to the Department of
Budget and Management)

4. Diversify the export base of electronics ₱370 Million

in the manufacturing industry. (10% of the Department of Trade
and Industry’s proposed budget
Department of Trade
Intermediate of ₱3.7 Billion
and Industry according to the Department of
Budget and Management)

5. Establish strategic industrial policy and

₱185 Million
carefully designed subsidies that would (5% of the Department of Trade
contribute to the improvement of and Industry’s proposed budget
Department of Trade
country’s competitiveness such as Interminable of ₱3.7 Billion
and Industry according to the Department of
innovation and research and
Budget and Management)
development activities and human
resource development.
6. Since the Philippine economy’s output Department of Labor ₱30.798 Billion
structure is characterized by large and Employment and (18% of Department of Labor
services sector, additional fund for this and Employment’s proposed
Philippine Overseas Interminable
budget of ₱171.1 Billion
aspect must be applied. Employment according to the Department of
Administration Budget and Management)
7. Since the three major product group is
₱3.696 billion
comprised of electronics, garments and (14% of Department of Science
textiles and auto-parts, supplementary Department of Science and Technology’s proposed
Intermediate
machineries for the production of these and Technology budget of ₱26.4 Billion according
products must be bought since these to the Department of Budget
and Management)
are the labor-intensive commodities.
8. Additional equipment and services to ₱2.8 Billion
ensure no amount of illegal goods are Bureau of Customs Interminable (20% of Development Budget
Coordination Committee- Bureau
 imported in and exported out of the of Customs’ annual budget,
country must be acquired. ₱14,000,000,000)

9. Although Philippines is one of the major ₱95.7 Million

consumers of rice globally, our country (10% of the Philippine Rice
is still a net importer of it; and so, an Philippine Rice Research Institute and
International Rice Research
extensive research on what type of Research Institute and 2020-2030 Institute’s proposed budget of
palay must be planted in order to International Rice ₱957 Million
accumulate all the needs either of the Research Institute according to the Department of
Filipinos or countries for export as well. Budget and Management)

10. Reinforcing the Rice Competitiveness

Enhancement Fund (RCEF) which aims
to provide farmers with rice farm Department of
machineries and equipment for Agriculture and
Interminable ₱10.0 Billion
mechanization; develop, propagate, National Food
and promote inbred rice seeds, expand Authority
rice credit assistance; and support,
agricultural extension services.

References:

• https://www.britannica.com/topic/beggar-thy-neighbor-policy

• https://www.econlib.org/library/Enc/Mercantilism.html

• https://drive.google.com/file/d/1LyvIaZeHONv447_3LL_N4vQ9kJ5IL1EN/view?usp=sharing

• https://www.google.com/amp/s/businessdiary.com.ph/7980/new-hybrid-rice-sl-18h-gives-hopes-farmers-
stable-income-p100000-p200000-per-ha-250-300-cavan-yield/

• https://www.mordorintelligence.com/industry-reports/philippines-hybrid-rice-seed-market

• https://www.dti.gov.ph/international-commitments/asean/pntr#what-is-the-pntr

• https://www.revolvy.com/page/Executive-departments-of-the-Philippines?cr=1

• https://en.m.wikipedia.org/wiki/Member_states_of_the_World_Trade_Organization

• https://www.wto.org/english/tratop_e/tpr_e/tp114_e.htm

• http://www.bworldonline.com/content.php?section=Weekender&title=benefits-of-trade-liberalization-for-phl-
quantified&id=107970

• https://www.weforum.org/agenda/2016/05/world-free-trade-areas-everything-you-need-to-know/

• https://www.mercatus.org/publications/trade-and-immigration/benefits-free-trade-addressing-key-myths

• https://www.worldbank.org/en/topic/trade

• http://www.yourarticlelibrary.com/economics/world-bank-its-objectives-and-functions/23534

• http://documents.worldbank.org/curated/en/117941468166157010/Trade-liberalisation-global-economic-
implications

• https://en.m.wikipedia.org/wiki/Department_of_Trade_and_Industry_(Philippines)

• http://www.pntr.gov.ph/about.html
• https://www.dti.gov.ph/pntr

• https://businessmirror.com.ph/2019/09/05/all-out-trade-liberalization-vs-trade-production-calibration/

• https://www.jstor.org/stable/41288817?seq=1

• https://en.m.wikipedia.org/wiki/Economy_of_the_Philippines

• https://www.jstor.org/stable/25773842?seq=1

• https://scholar.google.com/scholar?client=ms-android-oppo&um=1&ie=UTF-8&lr&q=related:m1tRYvKkoA-
ZkM:scholar.google.com/

• https://www.pids.gov.ph/press-releases/370

• https://www.tandfonline.com/doi/abs/10.1080/17487870.2011.642579

• http://winglobal.ca/multinational_and_bilateral_trade_agreements_and_their_effects_on_your_business/

• https://www.tutor2u.net/economics/reference/free-trade-agreements