Economic Impact Analysis of the Reduction in Sugar Tariffs Under the ASEAN Trade in Goods Agreement: The Case of the Philippine Sugar Sector

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Virginia Tech. Global Issues Initiative

The objective of this paper is to examine the potential effects on the Philippine economy as the government fulfills its sugar commitment. The paper utilizes three simulation models in the analysis: The GTAP model; a Philippine CGE model; and a Philippine poverty and income distribution microsimulation model. The GTAP model is used to analyze the trading interactions between the Philippines and the rest of the ASEAN member countries and the rest of the world. The Philippine CGE model, which provides details of the economy including several household groups, is used to analyze the effects on the local sugar and the sugar-using downstream industries and the rest of the production sector, while the poverty microsimulation model which utilizes data from the national household survey is used to analyze the effects on poverty and income distribution in the Philippines.