Volume

No. 3

III

lib II

MayII I

June 1987

Agrarian Reform
in the Philippines
i

I mm

The

'
'
! EDITOR'S NOTE: No other tsme since the EDSA revolution has _ bitterly polarized
the Philippine society than the proposed agrarian reform program. A_ we go to press_
the President is on the verge of signing a land reform order amMst emotional condemnations by both the landless and landowners, The landless,..its supposed beneficiary,
spearheaded by the militant peasant organization, the Kilusang Magbubuldd ng Pili.
pinas (KMP) have denounced the "watered down" version of the Comprehensive
Agrarian Reform Program (CARP) as no better than the failed Marcos-initiated progrant On the other hand, the landowners have issued an impassioned threat of civil
disorder should the order be signed and implemented
In a more ob/ective tone, Dr. MaLAgnes R. Quisumbing, our guestwriter for this
issue, tries to sort out the conflicting issues and interests based from her numerous
exposure on the land reform ism_ Dr. QuisumbingtsatpresentAssistantPro[essorat
the University of the Philippines' School of Economics. She has done varied studies
on Philippine agriculture and development, and of late, co.authored the section on
land reform in An Agenda for Action for the Philippine Rural Sector by the Agricultu_l Policy and Strategy Team; and again a co-tmthor o1"the raonogrffph In Search of
a Land Reform Design for the Philippines done this year by the UP Los Baffos AgriculturalPolicy Research Program.
Dr. Quisumbing reiterates her belief that land reform must be enacted before
Congress convenes in July. One notes that even the conservative Catholic Church
has thrown its support to this stand..But beyond the question of when looms a.btgger
concern: Will it be a genuine land reform? Political observers believe that the answer to
this indicates the course which the Aquino government is and may have been taldng
since it was swept to where it is now by the original people power,

ISSN 0115-9097

present administration has empha-

rural development as a,focal point of its

development
strategy. Agriculture has
been viewed as the sector which will
lead both short-term recovery and longrun growth. However, the prospects for
sustainable growth in the agricultural
sector are hampered by the highly skewed
distribution of landholdings which constitute a barrier to social and political
stability as well as to the dual goals of
equity and efficiency. More specifically,
an agriculture-led, employment-oriented
development strategy without a significant land reform program will not lead to
a strong positive impact on the rural
poor, nor will it lead to sustained broadbased rural development (Day/d, 1986:
1.4). Moreover, the agriculture growth
process itself runs the risk of exacerbating
that inequality, since benefits from new
technology, irrigation, and market infrastrueture tend to be capitalized into higher
land values, to the benefit of present
landowners. Finally, the existing insurgency problem can be traced to the
people's perception of social injustice,
and this will only worsen ff redistributive
structural refo-fius are not undertaken.

CONTENTS

Page

Agrarian Reform in the Philippines ....................................................

PIDS Working Papers ................................................................
P I DS Staff Papers

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DEVELOPMENT
I
il

RESEARCH,NEWS
i in n

......

MAY

- JUNE 1987.
IIIIIIII

" operations. Thereibre, the exemption of

"'
land under landlords' direct administra,i.'.
'_.:'
_':Oaf
'
tion had the effect of reducing labor
_'"_:_t oommlrc/M.._la._/s,a
input per hectare below an optimum
_" _'_
"_(i_,. '__!ii'
level. Second, the limitation to rice and
, _)J
. ,

=,
corn land induced landlords to divert
their land to other crops. Third, regula.
.
." .
,.._
,.,
tions on tenancy contracts (especially the
Previous administrations have, in
prohibition of share tenancy)and control
fact, recognized the importance of land
on land rent reduced the incentive of
reform as a policy issue. This is evidenced
landowners to rent out their land in small
by its continued presence in the econoparcels, thus decreasing potential employ,
mic and political agenda since the period
ment of landless workers (Hayami,
of Commonwealth. However, the actual
1987b). Finally the encouragement of
redistributive impact of previous proglarge-scale plantation agriculture served to'
rams have been limited for several
perpetuate a form of production organireasons. One reason is that prograrns have
zation which is not suited to a landremained essentially the same over the
scarce, labor surplus economy like the

of the 1950s, and the 1972 shift from a

democratic to an authoritarian regime.)
While it is true that political motivation is
certainly a crucial factor in agrarian
reform, it is likewise true that in the
medium
and long-term,
there
are
objective economic realities which are
essential to make agrarian reform sustainable. Thus, agrarian reform must be
viewed not only as a political nor
counter-insurgency
tool (which would
lead to piecemea_ and short-term efforts)
but as a part of a broader development
strategy for the agricultural sector.
This paper aims to present and
clarify some economic issues related to
agrarian reform. It begins, by reviewing
data on Philippine rural poverty and its

past
years, land
(i.e. government
chase thirty
of tenanted
and its resaleputto
tenants (Winfel, 1983]), and has not been
responsive to the changing economic and
political realities of the grassroots. Aside
from the focus on tenanted land, previous
programs have been further restricted to
grain crops (i.e. rice and corn) on the
argument that the inclusion of export
crops traditionally grown on plantations
may disrupt production and endanger an
importatit source of foreign exchange
earnings. At the same time, the Marcos
administration
pursued policies which,
encouraged the development of large-

relationship
tenurialthepatterns;
proceeds to todiscuss
issues ofIt the_
agri.
cultural heterogeneity, economies of scale
and tenurial arrangements. Later, policy
directions under the Aquino administration are cited, namely, the Agrarian and
Natural Resources Reform Provision of
the 1986 Constitution, and the proposed
Comprehensive Agrarian Reform Prog.
ram (CARP). Finally, some policies which
would provide incentives for an efficient
and equitable pattern of land distribu.
tion in the Philippines and supportive of
agrarian reform are discussed.

scale plantation agriculture and the entry

of foreign investment into the agricultural
sector. Thus, whatever efforts were tnade'
toward redistribution of land ownership
in rich and corn were counteracted by
policies which served to increase asset
concentration ,in the plantation sector
(Quisumbingand.4driano,1987).
The combinatiori'of those two conflitting policy directions also served to
create biases against the efficient utilization of land for increasing employment
and labor income. First, the limited
application
of previous programs to
tenanted land created a strong incentive
for landlords
to evict tenants
and
cultivate their land under direct administration. Labor input and hence, agricultural output and labor income per
hectare, are usually higher in smalJ family
farms than large farms, based on hired
labor, because of the inherent difficulty
in supervising wage laborers for spatially.
dispersed and ecologically diverse farm

Philippines.,
Another reason lbr the lukewarm
impact of previous programs is the predominant political motivation without
adequate consideration
of the underlying economic factors which enable
agrarian reform to be an economicallyviable proposition. Previous regimes have
often introduced land reform policies as
stop gap measures to appease political
unrest - witness the past administrations'
implementation of land reform policies
only during crisis periods (e.g. the peasant
unrest in the 1930s. the Huk movement

Table 1. 'Total Number of Familiesby Broad Industry Group

(National Standard); Third Quarters,1980-1983
(in thousands)
Average
Annual
Growth
industry Group
1980
1981
1982
1983
Rate (%)
Philippines
Agriculture
Non-agriculture
Bottom 30%
Total
AgricultUre
Non-agriculture

8677

8894

9111

9382

2.4

4897
3780

5042
3852

5120
3991

5346
3982

3.0
1.8

2599

2666

2771

2812

2.5

2124
475

2184
482

2217
514

2310
493

2,8
1.3

6078
2773
3305

6228
2858
3370

6380
2903
3477

6525
3036
3489

2.4
3.1
1.8

Other Income
Groups
Agriculture
Non-agriculture
Source: NCSO
IIIIIII

'DEVELOPMENT
.....

RESEARCH
,

NEWS

MAY -JUNE

Rural Poverty and Land Tenure

Patterns1

Table2.

RegionalPoverty indicators,1983 and 1985.

1983z

A distributional policy such as land

reform is best understood when situated
in the context of the poverty situation in
the rural areas. Following the 1983
NEDA Development Planning Committee
which classified the bottom 30 percent of
the income bracket as poor, a cursory
view of the rural poverty situation is
needed.
Table I provides data on the number

191152

URBAN
Region

NCR Metro Manila

RURAL

Proverty

Poverty

Provorty

Poverty

Poverty

Poverty

line 3

incidence

line

incidence

line

incidence

(inP)

(%)

(inP)

(%)

(inP)

1%)

840

11.2

3,282

44.1

....

1. Ilocos

678

40.3

3,093

56.2

2,139

51.1

of families for agricultural and nonagricultural income groups, broken down

into poor and non-poor families for the

2. CagayanValley

678

43,i

2,897

48.6

2;092

55.6

3. Central Luzon

696

27.4

3,153

45.2

2,104

43.8

eriod 1980 to 1983. As of the third

uarter of 1983, there are over 5.3
million families in the agricultural sector,
representing 57 percent of total popula.

4.
5.
6.
7.

768
660
696
732

31.3
42.7
50.5
48.1

3,048
2,625
3,069
2,426

50.6
62.3
65,0
58.9

2,174
2,047
2,249
1,818

59.1
76.0
76.2
73.4

tion.

8. EasternVisayas

654

33.00

2,733

70.1

1,822

70.5

9. Western Mindanao
10. Northern Mindanao

768
678

40,1
38.6

2,650
2,952

61.6
65.7

2,025
2,022

66.0
66.3

11. Southern Mindanao

12. Central Mindanao

738
666

33.3
28.4

2,998
2,624

59.6
56.8

2,079
2,161

62.8
67.0

39.0

3,021

52.1

2,066

63.7

Over 82 percent

or 2.3 million

families in this sector belong to the

bottom 30 percent income bracket.
The annual growth rate of the
bottom 30 percent income bracket
families is higher at 2.8 percent compared
to the 1.3 percent annual increase of their
non-agricultural counterparts. In general,
we can conclude that from the absolute
number
of families and population
growth rates,-the agricultural sector has
experienced a substantial increase in
poverty incidence relative to the rest of
_he country,

Such

_ecause

it

a view, however,
is not

based

1987

...........

on

is limited
an

absolute

neasttre of deprivation nor does it con;ider regional variations

in poverty
incidence. A regional analysis of poverty
would be more usefial in identifying key
factors related to rural poverty,

Southern Tagalog
Bicol
Western Visayas
Central Visayas

PHILIPPINES

1WorldBank

(1985),

2Inter-agency
Working Group on Poverty Determination (1986).
3A
per capita poverty line multiplied by 8 to make comparisions consistent with the
1985. The poverty line was computed based- on rice expenditure
sufficient to meet
calorie-requirements
blown up to a food threshold and a total threshold. See World Bank
(1985) fnrdetails.

Table 2 presents alternative estimates

of poverty incidence in 1983 and 1985,
based on the National Census and
Statistics
Office (NCSO) Integrated
Profile of the Rural Poor
Survey of Houseb.olds (ISH); computed
by the World Bank (1985) for 1983, and
the Inter-Agency Working Group on
Regional analysis of poverty
is- Poverty Determination (1986) for 1984o
important
because poverty
incidence
What is immediately apparent is that the
varies markedly across geographic regions.
World Bank poverty lines are conservative
It is also essential in identifying priority
compared to those adopted by the Interareas for intervention. The identification
Agency Working Group, and this tends to
of regions with high poverty incidence,
underestimate
the poverty
incidence
however, must be taken only as a first
figures. In previous studies on the Philipstep because
of wide intraregional
pines, the World Bank has also tended to
variation (e.g. between provinces and
use conservative poverty lines; and this
municipalities),
practice has been criticized by Mangahas

(1985). Bearing these caveats in mind, let

us proceed to Table 2. The data for 1983
show that regions with the highest
poverty incidences are Western Visayas
(50%),
Central Visayas (48%),
Bicol
(43%),
Cagayan Valley (43%), Ilocos
(40%)
and Western Mindanao (40 % ).
The lowest poverty incidence rates are
in Metro Manila (11% ) and Central
Luzon (27%).
Rural-urban breakdowns based on
1985 data show that poverty incidence is
highest in the rural areas of Western
Visayas (76.2%), Bicol (76.0%), Central
Visayas
(73.4%),
Central Mindanao
(67.0%),NorthernMindanao(66.3%),and
Western Mindanao (66.0%). The regions

DEVELOPMENT
_.

RESEARCH

NEWS

--

III

Figure
19.83

"!

III!/

MAY -JuNE

..

BIIIIIII ii

I. Regionol Poverty Incidence

i11

Rotios
1985

39.o _'----------_

1987

iii iml

.P.HI L.

PHIL.

_i S2J

NCR
1

jI 44.1
_+:'_56,2

I
i

Io

2
1I-2_!
40.3 |

NCR

'

4.3.I _

+_"

1
ILOCOSt

"
f31.3

V_; " .

5
BICOL

NCR

8. I _

,,,

LUZON

5o5i

TAOALOG

,,

L_

EASTERN

_.....

',

10

33..

"""

11

60

40

I
.

iL
.

20

_-

Percent

""

,*_

.....
_65.7

1:..1 _

_59.6

...

' 2b

WESTERN MINDA

"w=

10

-- -

I
+

_ _ _-_62.3

q_

38.6 _

l
.

L_]50.6

.5

SOOTHER, _

33. 0

I
,

'

.... _=i 48.e

CENTRAL

42.7 t4

VALLEY

-_-.'::'

-"

" 4b " dO
Percent

470

.8

"

dO

/
12

11

CENTRAL
MINDANAO

SOUTHERN
MINDANAO

with the lowest rural poverty incidence

are Central Luzon (43.8%) and Ilocos
(51.1% ).
Agricultural incomes are substantially lower than non-agricultural incomes.
It comes as no surprise, therefore,
that a
greater number of families in the bottom
30 percent of the income distribution are

Table 3. ComparativeIndex of Mean Family Incomeby Type of Family

(all families -- 10O) 1980-1983.

. in

agriculture. A more detailed picture

can be obtained by examining an index

Types of family

T h i 1981
r d Q u1982
a r t 1983
r
1980

F o u r1981
t h
1980

All Families

100.0

100.0

100.0

100.0

100.0

100.0

100.0

66.0

64.2

65.0

64.1

70.2

64.8

85.7

76.7

Palay
Corn
Coconut

67.4
56.4
59.7

64.3
49.6
55.2

64.4
46.2
57.5

61.3
44.1
75.0

81.5
51.7
58.7

75.7
38.1
49.2

97,2
40.6
76.6

109.3
40.6
70.8

Sugarcane
Other Crops

15.4
67.4

Agricultural

of income by occupation as compared

with the national average (See Table 3).
Except for livestock and poultry operators, incomes in the agricultural sector are
generally below the national average.For
example, agricultural wage laborers
received 55.6 percent of the national
average income in 1983.
More recent data from the 1983 ISH

IIIII

il

101.6
63.4

180,6
63.0

92.2
56.9

166.5
52,4

322.9
49.4

76.3
54.2

91.3
62.2
44.3

127.9
66.4
50,5

101,4
58.4
55.6

113,8 109.4
63.8
61.5
63,2
48.1

110.8
71.5
60.6

Non-agricultural

143.1

144.7

135,5

162.2

i-

142,2

144.6

144.3

100.0

299.6
127.7

LivestockandPoultry 112,6 114.3

Fishing
66,6
72.3
AgriculturalWages
50.8
50.0
andSalaries

permit us to analyze the breakdown of

poverty incidence by main source of
,

Operators

Q 1982
u a r t e1983
r

129.3

 DEVELOPMENT
iiiii iiiilIIIi

RESEARCHNEW

Table 4,

MAY--JUNE

Area of Farms, by Type and Tenure of Operator

Philippines, 1971,
(percentage distribution)

% of
total
physical
farm
Type of Farm

1987

Tenureof farma
Ow=led
Fully
Part
Ow_md
Bwnar

Rentedor Leased
For share
For fixed
money/
produce

100.0

62.9

11.0

16.3

1.9

1.6

4,1

2.2

Paiay
Corn

31.3
17,6

49.8
69.5

15,9
8.1

23.0
18.2

4.6
0.3

1.3
2.3

1.5
0.5

3.8
1,2

Coconut

25.3

73,9

7.2

14.6

0.2

1.O

1.8

1.3

Tobacco

n.s.

53.8

17,3

23.4

1.4

1.2

--

2'.9

Sugarcane

4.3

48.4

18.1

10.9

2.7

0.6

16.2

3.0

Citrus

a.s.

45.4

4,5

15.1

0.1

ns.

33.5

1.4

All types

Runt free

Other t'orms
Ma==ager
Opera_ed

O[her_

Vegetable

0.2

62.0

12.0

17.2

3,6

2,1

0.4

2.9

tuber, roots and bulb crops

0.8

80.4

5.1

8.3

0,4

3.0

0.7

0.2

Coffee

0.6

36.5

4.1

4.6

0.2

2.6

0.8

1.3

Abaca

0.8

76.9

8.3

8.9

0.1

1.4

3.0

1.3

Banana

0.7

63.5

6.0

7.2

2,8

3.2

16,1

1.2

Pineapple

0.2

3.5

0.6

2.1

0.5

0,4

92.8

0.8

Other fruits

0.3

7.37

6.1

7,9

0.6

1.9

8.5

1,3

Chicken

n.s.

64.4

9.8

10.8

4.6

0.6

5,5

4,3

Hog

0.3

60.8

15.2

11.4

1.'1

1,5

8.1

1.9

Cattle

0.5

50.5

8.6

2.8

2,8

2,1

31.9

1.4

Others

12.9

71.5

9.9

9.9

0.6

2.2

4,0

2.1

As a percen_a!leof to,at fann are_ devoreclto a specific crop n.s. meansie_'sthan 0,09 percent.
Source: NCSO, 1971 Censusof Agricu/ture, Philippines,
percenc in 1981. With respect to palay,
the percentage
of farm area under owneroperated
status
(both
categories)
inincreased from 65.7 percent to 68.1 percent from 1971 to 1981. However, the

owners decreased
from 77.6 percent to
75.3 percent while that rented or leased
increased
f'rom 1.8.5 percent
to 19.6
percent.
/t is relatively easy to shift land
out from corn to avoid ir_clusion in OLTP

highest

percentage
of palay'farm
area which was
rented
or lease increased
from
27.6
percent .to 29,4 percent.
Furtlaermore,
while the percentage
under snare tenancy

because corn production

does not require
so nmch semi-perrnanent
land improvements as does paddy
rice cultivation,
A more dramatic
deterioration
occurred,

pineappie)
is more difficult because of
change % category deimitionso
Many of
these were reported as marJager-operated
in the 1971 cextsus; this category hasbeen

decreased,
the leasehold
percentage
increased. This is consistent witb. the scheme
to shift from share tenancy to leasehold
operations,

in coconut; a drastic decline in percentage

of owner-operated
farms
t'roln
81.1
percent
to 73.8 percent;
a marked
increased in share and leasehold tenancy
trom 14.8 percent to 214.9 percent. The
trends
in tenure
status
of corn and
coconut
fames are alarming, since these

el_nmated
in _he later census, and it is
u.nciear where
the category
has been
absorbed.
One approach would classify
manager-operated
farms
under
those
leased for a fixed amount
of money/
produce;
this
is consistent
with
the
leasing
of large tracts
for plantation

crops, which have t'he highest propoltion

of tenanted farms, are also those with the

purposes from the NatiorJal Development

Corporation.

The
supposed

situation
in corn, which was
ro 'be under the Operadon Land

Transfer
Program
(OLTP),
worse.
Corn
area operated
2[

JI

is

slightly
farm

by

llll

II
lllll [

(e.g.

poverty

An analysis
totgacco,

incidence,

of the commercial
crops
sugarca_te,
bar_ana and

IIIIIIIII
I

DEVELOPMENT

RESEARCH

__

NEWS

'..............

MAY -JuNE
In I I I

ill|l I

nimBI I

1987
ii

Table 6 Sample Typology of Farm Enterprises and Crops in the

Philippines.
Demand
Supply

Peasant Foods
(Consumed primarily within
the agricultural sector,
subsistence crops)

IMPORTS

wheat products

DOMESTIC

(wage-labor)

enterprise

Non-capitalist
enterprisc

plantatio_

]_conomic Issues in Agrarian

Reform

Industrial/Luxury
(for Industrial use or
consumption by high
income groups))

Exports

feed grains
milk

PRODUCTION

Peasant Enterprise

Capitalist

Consumed by wageearners;available
on market

The Need for a Comprehensive

Program

A genuiile land refonu program,

being a question of just distribution of
returns to land and natural resources,
should :not be viewed as specific to any
crop, to type of tenure, or economic size
of operational landholding (David, 1986:
1.5). The pitfalls of confining agrarian
refoma to specific crops or to particular
tenurial forms not only create incentives
for evasion, but also lead to neglect of
crops/forms of productive organization
where inequality is more pronounced,
However, one of the difficulties of formulating such a comprehensive scheme is
the underlying
heterogeneity
of the
agrictfltural sector,
The agricultural sector is ciaaracterized by different production and marketing arrangements across crops: Following
de Janvry (1981), a typology of form

rice, corn,
root crops,
vegetables

livestock (backyard)

coffee,.
tobacco,
abaca

rice
(G.O. 47)
corn

palm oil
commercial

sugar

coconut

coconut
(as coconut oil)

sugar (for Industrial

use)

enterprises can be made based on: (1) the

mode of production to which they belong
(primitive community,
semifeudal, or
capitalist); (2) their respective status in
the labor market, (whether family or
hired labor is predominant); and (3) the
degree of control they exercise over the
state. The typology of farm enterprises
can then be interfaced with a typology of
crops based on conditions of supply and
demand. Supply comes from imports and
domestic production, the latter coming
from capitalist and peasant enterprises
where the differentiating variables are
jointly the scale of production and the
use of hired labor. Demand- conditions,
on the other hand, provide a basis for the
classification of crops into four categories: peasant foods, wage foods, industrial and luxury crops, and exports, based
on geographic locus of disappearance, the
weight of the crops in the consumer price
index, and the share of the crop marketed.
A typology of the agricultural sector
would show the diversity of production
arrangements in the.Philippines as shown
in Table 6. For example, rootcrops, rice,

livestock

(for industrial
use)

pineapple
banana
rubber
sugar

coconut
(as copra)

corn and vegetables are typically ga'own

on small-scale peasant farms, while cornmercial farms and agribusiness corporations (e.g. those growing bananas and
pineapples for export) would be classifled as capitalist enterprises because of
large scale operations and the use of wagt_
labor_ There are also non-capitalist plantations such as those in sugar and coconut,
where the predominant arrangement is
tenancy or wage labor, the latter being
differentiated from capitalist enterprises
due to the existence of other social and
institutional ties between the worker and
the landlord (as in the hacienda system
of Negros). The technical requirements
for each crop as well as its labor institutions may be different so that a single
agrarian reform scheme may not be
uniformly
applicable.
However, this
does not negate the need for the redistribution of land ownership and access to
rental income from land. Due to the
difference in production-marketing
arrangements across crops and variations in
patterns of land ownership, which may
have cultural and ecological bases (e.g,
tribal and communal lands), land reform

DEVELOPMENT

RESEARCH

NEWS

MAY -JuNE
I
HIH III I

programs must be flexible in design and

implementation. Thus, attention must be
given to various institutional arrangements under which this can take place,

for custom flowing; sugar planters in

Negros say that a farm size of 50 hectares
enables efficient use of such large-scale
machinery. However, this bottleneck for
small holders can be solved through the
use of the custom-plowing service of
B. Economies of Scale
tractors, which is readily available in the
sugar areas of Batangas and Bukidnon,
where both small and large sugar planters
The loss of economies of scale is coexist. Thus, diseconomies of scale
often used against the extension of land need not be inherent to small farms so
reform to the plantation sector. It is long as a viable rental market for
often argued that parcelling out or machinery and other support services
dividing the operational unit may disrupt exists,
production processes, with detrimental.
Data from sugar farms also indicate
effects in productivity. This argument is that small farms may be more costbased on two premises: First, land efficient in producing sugar (Habits,
reform is equated to the subdivision 1977). Table 7 shows that small sugar
of operating units, and second, significant
farms incur the least cost to produce
_economies of scale exist in the plantation
one picul of sugar. The cost per picul
sector. However, both arguments do not even increased for longer farm size carehave convincing empirical evidence in
gories. Furthermore, a comparison with
their favor. First, land reform involves the other sugar-producing Asian countries
redistribution of ownership, and is not reveals that the Philippines has extraequated with the subdivision of the
ordinarily large farms. The Philippines
operational unit. In this case, the loss of
is an anomaly since almost half of its
economies of scale is moot and academic,
total sugar cane area consists of farms
since the farm enterprise will still be
exceeding 50 hectares in size, while farms
operated as a large unit, though owner- smaller than 5 hectares account for
ship will be democratized. Second, the
99 percent of sugar cane farms in
existence of economies of scale in agri- Taiwan, 99 percent in Japan, 635 perculture is subject to question. Recent
cent in India, and 72 percent in Pakistan.
studies (e.g. Hayami and Ruttan, 1985,
Habito points out that if other countries
Ch. 6; Hayami, 1987a) have shown that, have done well with predominantly small
although increasing returns in agricultural
sugar cane farms, there seems to be no
production tend to prevail in high-wage
economies that demand large-scale capital
equipment to save on labor, agriculture in
low-wage
developing
economies
is
generally
characterized
by constant
returns or even scale diseconomles. Even
in the case of commercial crops such as

reason why the Philippines, cannot. If

economies of scale do exist m processing
and marketing activities, small farmers
can still take advantage of these through

A recent study based on field obserrations

(H_ami,
Quisumbing
and
Adriano, 1987) has concluded that scale
economies do not exist in the production
of most tree crops such as coconuts,
coffee,
and cacao. Production
and
marketing of these crops require neither
large-scale machinery nor central management, both of which could be pos_ible
sources of scale economies. In the case of
sugar, however, scale economies seem to
be linked to the use of large-scale tractors

contract farming schemes or collective

ownership.

C.

TenurialArrangement

A major issue in the land reform

debate is whether or not the government
should impose the type of tenure relations on land reform beneficiaries. For
example, the shift from share tenancy to
leasehold tenancy was instituted on the
grounds that: (1)sharetenancyisinefficient compared to fixed rent (leasehod
tenancy) or wage labor; (2)share tenancy
is the most exploitative form of production relations; and (3)the tenant should
be liberated fromhis "feudal bondage" to
the landlord.
Despite the popular appeal Of such
arguments, however, restrictions on the
form of tenancy may have negative implication and may, in fact, be unfounded.
First, theoretical studies have shown that,
all other things being equal, in the presence of risk and uncertainty, sharecropping is equivalent to a combination
of fixed-rent of fixed-wage contracts
(Newbery, 1977, Reid, 1976). Empirical
studies in the Philippines(e.g.Ministryof
Agrarian Reform, 1983) also show no
significant
productivity
differences
between tenure categories, while farm
practices, farm inputs and irrigation are
variables which do affect farm production. Thus, singling out tenanted farms on
the basis of the inefficiency argument is
not justifiable. Second, assuming that
labor income is the major source of

......

sugar, scale economies appear to exist

only in processing activities but not in
farm production itseff.

JlJ m,

Table 7. Sugar Production Costs for Different Farm Sizes.

-..................
Farm Size

AverageCostper Picul (_'1

"

.....
Small

farms

( IO hectares

Medium forms

(between

Large

(above

farms

_ :_=_

and below)

IO7.50

IO to 50 hectares)

50 hectares

124 .OO

120 .OO

$ouroe of basic data : PHILSUCOM_ A :5aheme for the Rationalization of the Philippine SuE(If
I_dustry,1985, InHablto(1987).

................

_,,

'

IIIII I

1987
II IIiIII

IIIII

II

llllll

." li_

II III
lllIllllllll

DEVELOPMENT

RESEARCH

NEWS

10

MAY

income for the tenant and agricultural

generate enough cash income, or to avail.

accruing the
to land
be shares
more
laborer,
share or
of capitaT'may
labor vis-a-vis
crucial in defining "exploitation"
than
the form of tenancy itself. That is, other
forms of production organization which
are not characterized by tenancy may
even result in lower employment and
labor income, and may even have higher
concentrations in asset ownership. Per-

their
desirecredit
to sources
becomehaveleaseholders
of outside
expressed
(Hayami, Quisumbing
and Adriano,
1987:9). Thus, it may be wiser to make a
transition to leasehold status optional,
Furthermore, ' it is crucial that support
services be part and parcel of a land
reform strategy, (e.g. extension services
to increase the skills and productivity of

! "." .' .""::':i'i.

i::':'.::'!'
'/.!.:.
'"" '"'
' :.:..".ii.i:i._,
:::i.. :tlf
.......
"'"""
'

haps the most obvious example would be

wage labor on sugar plantations and
capitalist enterprises like multinational
agribusiness plantations. Third, since rural

the farmer_beneficiary, and credit programs) to enable him to purchase necessary production inputs.
"

.wottldil

product and factor markets are imperfect,

the landlord (ff he is not an absentee)

i!:':'"
......

may
as the conduit
credit
neededserve
to purchase
productionfor inputs,
Abolishing the social and economic

.
'....

.".

i'"..'.

other

institutional

arrangements

may

have detrimental effects on the viability

of the small farmer. Fourth, the issue of
landless workers, who would be excluded
from a tenure-based identification of land
reform
beneficiaries,
is completely
neglected. Finally, .restrictions may lead
to even more inequitable production
arrangements.
There is an increased
incentive to evict tenants (and substitute
hired labours) to avoid inclusion in land
reform, thus reducing the amount of
employment and labor income,

...............
"'""':'

1987

i
.:i..'"'i;
";'"i.i'"":".!'.
')" ' ''!":'"'"i'i"!'"i"i:i
comzng:".:
. ,:elite",,
..''.'.

....'....'

gro
':th_

'

'

.. .......

': ::i':i.'.:
"''
...i.". :..
'..
''
.:'...
'..i.i.:.'iiiii.
'...ii
'''''''
:.'

:
..

institutions of tenancy without providing adequate support services through

- JUNE

Ill

'..:....:i.!.:):....ii'
..; workers to a _,.lU..t
._in the utilization
...: resources" (Article
Moreover, the

share from their labor

of marine and f.ishing
XIH,
Section 7).
.
Constitution also pro=

..........:.:.._
vides the legal framework for the implei.'.':.

"..:.:

mentation aspects of th.e progr_n. In

particular, the Constitution provides that:
!.'";.'":":'
..:'.""ii'i"."'".:
'" :' (1) The progam
should, ensure landowners of "just compensation" for all
their lands which have been affect by
land reform; (2) Congess may prescribe
Recent Development on
the retention limit hased on a number of
Agrarian. Reform 2
criteria ranging from "ecological, developmental,
or equity considerations";
One of the major differences of the
(3) incentives for voluntary land-sharing
proposed agrarian reform program from
schemes shall be provided by the state;
its predecessors is that it is mandated in
(4) One of the state's primary fimctions
the 1986 Constitution. Unlike previous
in the program is to ensure that the
land reform policies, the scope and
physical and marketing infrastructures

!::.i'.'
"' ...'..:.":i
"".'':":'.'.!'::.'i..':::..i:'."..'.':.i'".[".".:":":"'"'"
............... .:i:"7.:
'("."..: coverage of the proposed program are sti-

essential to the production

"'..'..i..:...."'._

pulated in the newly ratified Constitution. Article XIII, specifically Sections 4

to 8 stipulatedthat all agricultural lands,

tion of the agricultural commodities

shall be adequately provided; (5) Participation by all parties who will be affected

regardless of the crops being cultivated

or their legal categories, (i.e., public or.
private) shall be covered by the agrarian
reform program. The potential coverage
includes some 12 million hectares of cul".'i_.'"" tivated lands and four million hectares
:':"" of uncultivated and idle lands affecting
approximately
30
million
farmers,

by the program should be elicited in the

formulation
of the agrarian reform
scheme; and (6) The eovernment should
develop mechanisms which will encourage
landowners to invest the proceeds of the
program to agribusiness/industrial undertakings.
Some critics (e.g. Lard, 1.986) point

.':':"':..':"'
'
"::.:the ;._-scial":"and

ol,,:,renancy
adequate,

'.:!.........:..:.:".

sup,..i.i

The above arguments do not imply

that tenurial
change is undesirable,
Rather, these suggest that legislation, of
tenurial changes without the provision of
other . support
mechanisms
may be
counterproductive.
For example, the
often.legislated abolition.of share tenancy,
may not be beneficial to the farmer who
-is short of cash. On the other hand, share
tenants who have already been able to

regular farmworkers and their respective

families as beneficiaries,
The Constitution also provides that
the principle of agrarian reform shall be
applied to the disposition and exploitation of natural resources especially those
suitable for agricultural purposes. Like.
wise, it empowers the government to
formulate provisions which protect the
rights of subsistence fishermen and fish-

and distribu-

out that the abovementioned

clauses
could restrict the equitable distribution
of all agricultural croplands and natural
resources. For instance, if just compensation were equated to the market value
of the agricultural lands (which is the
interpretation of the Constitutional Commission), then the redistribution of lands
to small farmers and farmworkers will not
jibe with the true spirit of. the land

DEVELOPMENT

RESEARCH

NEWS

11

MAY -JuNE

1987

IIIII11
reform program. Rather, such a redi.stribution would 0e equivalent to an
exchange act_vi_y in a land market.
Further, since majority of the prospecCive
beneficiaries of this program (i.e. the
small farrn growers and farmworkers)
belong to the lowes'c income rung of the
country, a land price that is no different

visions would be substantially watered

down.
This is one of the reasons why the
present govermnent is trying to produce
a land ret0rm package which already
derans the concepts and the mechanics
for irnpierrlenting the agrarian reform
proga-am. The essential components of

can be implemented under RA 3844 and

LOI 227, or und_ the series of Executive
Orders regartiing sequestered lands.
Among the three programs which
will affect privately-owned agricultural
lands (i.e. Programs A, B and C), Program
C encompasses the largest hectarage as it
involves some 3.5 million hectares or

from its markec value would certainly be

beyond the financial reach oi these beneficiaHes,

this program are discussed 'below.

approximately 35 percent of total land

retorm areas (See Table 8). This ranks
second to the area classified under
Program D (it should be pointed out that
the latter program is concerned with
public and not privately-owned lands).

Another loophole m this Constltutional legislation pertatr.s to the t'etention

limit. Not only is Congress accorded
much leeway m terms of identifying the
appropriate land ceiling but more amportantly, another seccionintheConsutution
stipulates hectarage limits for public agricuhuraliands that can de owned or leased

"Agrarian reform must

viewed

not

only

be

as a political

nor counter-insurgency tool but

as a part of a broader development
strategy
for the agriculllgrai sector, ""

area

by private corporat:ions an.d Filipino

individuals. Specxiicaily, Article XIII of
the newly-ratified

Constitution,

section 3

Ot the 3.5 million hectares in Program C,

lands categorized as plantations utilizing
wage labor account t'or 2.33 million
hectares, or 61 percent. The remaining

Comprehensive

Agrarian Reform

(CARP)

consists

of

562,000

hectares

of

tenanted rice and corn retained areas and

957,000 hectares of tenanted non-rice
and corn areas. There is a concensus however, that the haciendas and agribusiness

states that:

Progrmn

"Priva_e corporarzons or associations

may not hold such alienaole lands of the
public' domain except, by lease,, for a
,period nor exceeding rwen_-five years,

The proposed Comprehensive Agrarian Reform' Prograrn is the cornerstone

of the Aqumo Adrmnistration's
land
refbma strategy. Although the CARP is

plantations
are the most politicaUysensitive, since there is no existing land
reform legislation covering plantation
agriculture.
Lastly, Program D involves the
distribution of five million hectares' of

renewable Ibr not more than twentyfive years, renewable ]br not more than
twenty-live .years, and not to exceed

still currently being examined (especially

the mechanics of its implementation and
possible sources of financing), the form

pubhc alienable and disposable lands

suited for agriculture, and which can be
reformed under Commonwealth Act 141

one thousand hectares in area. Cin'zens

of the Phii'ippines may l'ease not more

and content of the program have akeady

been developed.

and Executive orders issued by President

Aquino.

than five thousand nectua'es, or acquire

not more than twelve hectares thereby'by
purchase, homestead, or grant, "' (underscorings added),

The CARP, which will affect

approxnnately
11.1 million hectares of
agricultural lands (or roughly one half of
the total area of arable lands), is intencted
to take effect between 1987 and 1992.

Although this section incl.udes a conditional clause which particularly takes into

The CARP is divided into four programs,

based on the land category covered and

accoun_ the '_rqtiirernei:tts of agrarian

retorm '_ (refer to paragraph 2 of section
3), the past experience of the country is
replete with instances whereby private
foreign and domestic corporations as well
as local individuals were able to augment
their landholdings by using a sindiar
Constitutional
stipulation
(refer
to
ArticZeXIIin the 1915 Constitution).
Lastly, if"the mechanics of the laud
refoml program were letI fbr Congress
to decide, its actual implementation may
be considerably delayed. Moreover, it"
Congie_s will be dominated by people
coming front 'the landlord and elite group,
then one could expect that the redistributive potential of the land reform pro-

its proposed time frame. Table 5 provides

a description of these programs.
The first phase (Program A) calls
for the completion of Operation Land
Transfer under P.D. 27 as well as the
implementation
of the landed estates
program. This covers some 1.3 million
hectares of tenanted rice and corn lands,
or 12 percent o1" the total proposed
reform area. Program A can be undertaken under existing laws.
Program B involves the expansion of
land relbrm to idle and abandoned lands,
and lands that will be expropriated. The
affected land area is estimated at 939,000
hectares, 18 percent of the total land
reform area (.See Table 8). This program

The Department of AgrarianReform

(DAR) plans to implement Programs, A,
B, and D in 1987, leaving the controversial Program C tbr implementation in
1989. The terminal year for the completion .of the four programs is set at 1992,
the year when President Corazon Aquino
ends her six-year term.
At present, the Cabinet Action Cornmittee is finalizing the mechanics of the
CARP before Congress is convened in
July 1987. The purpose is to define this
program and. begin its implementation
prior to the convening of Congress; it is
hoped that its immediate implementation would reduce dramaticaUy the
backlog (in terms of time and finances)
that would result ff Congress .were left
to design the agrarian reform pl'ogram.
Currently, however, the Committee
is still laced with several constraints,
primarily
financial in nature. It is
estimated that some P63 billion would

DEVELOPMENT

RESEARCH

NEWS

12

......

II

Table 8. The Four Programs of the

ComprehensiveAgrarianReform Program
(CARP)

PROGRAM
CATEGORY

Program A

LAND
DESCRIPTION

TARGETAREA
Area
Percentto
Ithoumndh_=tares}
total

Tenanted rice
and corn lands
under P.D. 27
-

Program B

1,300

11.7

722
11
562

6.5
n.s
5.1

939

8.5

189
300
50
300
100

1.7
2.7
0.4
2.7
0.9

Landsnot yet
covered by DAR
Lands covered by EPs
Lands covered by LCs

Private lands
- Idle and
abandonedlands
- Foreclosed lands
- Sequestered farms
- Voluntary offers
= Lands to be expropriated

Program C

Plantations, etc.,
which are
privatelands
-

'

land administration
2,333
-- Tenantedrice and corn

Program D

1987-1989

land with the retention

limit
Tenanted non-rice and
corn croplands

land census, and P5.4 billion for other

operational and administrative expenses.
In terms of funding sources, the
Committee hopes to finance 59 percent
of the CARP's cost through foreign loans
whi/_ the remaining 41 percent shall be
generated from the domestic economy.
At present, the Committee, with the
assistance of the Inter-Agency Tas_
Force, is carefully examining various
mechanisms of obtaining funds from both
foreign and local institutions/sources at
the lowest cost possible.
There is also the question of just
compensation for landowners. This issue
is intimately linked to the subsidy which
the government is willing to fund and is

Some Suggestions for Acting

21.0

562

5.1

957

8.6

5,000

45.1

1987-1989

Public A & D
land suitablefor
agriculture ("handog
titulo"), DAR settlements, or logged-over
lands, areasof cancelled/

TOTAL lands

11,091

of Basic Data:
Gerardo Bulatao's
during a PIDs Media Forum

IIlIIIIlI

be required to finance the four programs.

Land transfer acquisitions alone would
cost the government about P28 billion (or
44 percent of the total financial cost of
the CARP, assuming the state will subsidize 20 percent of the total land cornpensation value. The total expenditures
include the following: P13.0 billion for
credit services, P5.6 billion for extension
services, P8.0 billion for the agro-forest
development projects, P3.0 billion for

capable
of financing, as well as its
i
affordabillty from the perspective of the
prospective beneficiaries.

IIII

At this point, there is no question,,

that there is a popular demand for 11I
genuine
agrarian
reform
program.
National public opinion polls (Mangahas,
1987) consistently show the sentiment of
the majority as: (1) the extent of land
reform under the Marcos regime was
insufficient (64% ); (2) most would
approve the extension of land reform
coverage to all crops (67%), tenure forms
(65%), natural resources (61%) and public lands (62%); and (30, 60) percent of
the respondents are willing to pay a tax
to Finance an expanded land refbrm
program.
However, land reform is still an
urgent and unresolved issue. While a
majority (63%) are satisfied with government efforts on land reform so far, only

expired PLAs, TLAs,

FLAs, andunnecessary
and civilian reservations

Source

1987

Haciendasunder

Public alienable
and disposablelands
suitable for
agriculture
-

1987-1989

3,852

.,

TIME
FRAME

MAY -JUNE
II II II

100.0

half (51%)
think that government has
done better in this area than the Marcos

discussion of the Ace/erated

Land Reform Program
on Agrarian Reharm held lastFebruary
I3, I987o

III

administration, and two-fifths (39 %) felt

that there has been no change yet. Finally, two-thirds (65%);
would like the

DEVELOPMENT

RESEARCH

NEWS

13

IIIII I IIIIIIlll
President to enact land reform legislation
right away to include Hacienda Luisita
and not wait for Congress. All these
results are indicative of the urgency of
an accelerated land reform program and
tile special need for the President's family
to participate in it (Mangahas, 1987:4).
The comprehensive nature of the
proposed agrarian reform program is a
marked departure from its predecessors,
Given current political realities and budgetary constraints, however, the likelihood of the dilution of the program's
redistributive intent increases with each
day's delay in the promulgation and
implementation
of land refoml legislation. Political pressure from land groups
demanding exemption from the program,
_i_ increase in the proposed seven hectare
cenfion limit, and more generous modes
of-compensation
is mounting. Furthermore, there is a growing tendency to
leave the implementation details to Congress. Unfortunately, history has shown
that Congress tends to adopt a less redistributive stance towards land reform legis-

MAY -JUNE

lation. Thus, at this moment perhaps the

most formidable barrier to land reform
would be the landed elites who stand to
lose their economic and political bases
due to land reform.
Notwithstanding
politieally-motivated opposition to the program, land
reform will not succeed in bringing about
a substantial improvement in efficiency
and equity unless it is supported by
policies designed to reduce incentives
to hold land for speculation or hoarding
as,well as to increase incentives for labor
use.. Certain policies can be implemented immediately, such as a ceilhlg on
aggregate landholdings, a progressive land
tax and the deregulation of tenancy
contracts as a complementary measure
to the proposed prognun. Finally, to
ensure the success of land reform, its
rules must be simple, transparent, and
uniform. Complex regulations and inclusions of numerous clauses for exceptions
will reduce the chances of effective
implementation.
Moreover, it will encourage activities from landed elites and

1987

the bureaucracy to seek "institutional

rent at the expense of the poor who have
little legal knowledge (Hayami, QuisumbingandAdriano,
1987:15).

NOTES
1This section is based largely on two
papers, namely Quisumbing and Cruz
(1986) and Mangahas and Quisumbing
(1.986).
2This section is taken from a review
of past land reform programs and accomplishments in Quisumbing and Adriano
(1987).
3Based on the presentation
Gerardo
Bulatao, Undersecretary
Planning, Department of Agrarian
form, at the Philippine Institute
Development Studies' Media Forum
Agrarian Reform, 13 February 1987.

PIDS WORKING PAPERS

W.P. #8309
=

Economic
Incentives
and
vantage in the Philippine
Arsenio

W.P, #8401

BalisacarL

Interseetotal

Forest

Land

National
W.P. #8403

Policy
ment.

W.P0 # 8502

in

Management

Land

Use.

Adolfo

the

Philippines,

in the

Context

of

Revilla,

Jr.

W.P. #8405

W.P. #8406

W.P. #8407

W.P. #8601

Migration and Ma

cations.

Effects

of

Watershed

Trade Liberalization
Experience
pines,, 1960-84. Florian Alburo

lnte_Tated

Summary

Factors

Affecting

Survey of
Philippines.

rket

in the Philip,
and Geoffrey

Report:

Population

Ptes-

the

Choice

of Location:

Foreign and Local Firms in the

Alejandro
N. Herrin and Ernesto

M. Pernia.

Implications
for Upland
Development.
Ma.
Concepcion
Cruz.
Tenme, Technology
and Productivity of Agro.
for_txy
Schemes. Ana Doris Capistrano and
Sam Fujisak,_
Environmental

the Budget Deficit in the Philippines.

Remolona_

sure and Migration - Implications

for Upland
Development.
Ma. Concepcion Z C_ruz.
W.P. #8603

Pressure,

Financing

Industry.

Shephera_
W.P. #8602

The Impact of Government

Policies on Forest
Resources Utilization. Gerald C Nelson.
Population

A Review of Welfare in the Coconut

Sylvia N, Guerrero.

EliM.

Issues on Commercial
Forest Manage.
Cerenilla A, Cruz and Marian Segura.

delosAngele_
W.P. #8404

W.P. #8501

Capital Flows and Balanced Agro-

Industrial
Development
Manuel S. J. de Leon
W.P. #8402

Comparative
AdCotton
Industry.

W.P. #8701

Macroeconomic
Adjustment
1983-85. Manuel F. Montea

W.P. #8702

Costs of A_icultural
Credit in the Philippines:
The Short-Run
Effects of Interest Rate Deregulation.
Cueva_

Modifi-

Irma

in the Philippines:

Corales

and

Carlos

E.

Wilfredo P. David.

W.P. #8408

Management
ation: The
Galvez.

W.P. # 8409

Workshop

and Cost of Watershed Reforest.

pantabansan
and Magat, Jose A,

Papers

on "The

Consequences

of

Small Rice FarmMechanizationin the Philip-

W.P. #8703

W.P. #8704

Can the Informal Lenders Be Co*Opted into

Government
Credit
1Programs?
Emmanuel
F. Esguerro.
Comparative

Bank Study:

MarioR Lambert

A Background

Paper.

of
for
Refor
on

::1987
::

::

:: info_al:

::

ers: as _0fiduits:i:The:paperdkscusses
....

::

:i:
:::::::::
::::::::: : ::: ::
::::::
::
....
: ::::::::

:
:

.....
::::

....

_-

:: ....
: : :
:: : ::ReSults: of the
:showed that
::;:::::::: ;: ::
the generally
:
::high :rate:::0f :recovery 0f :governmem,
: : funds und:er:fiie
istbe high:
::::::: :
: : : ::penaity: rate: 6f 42 percent for all past due
comparativeiy higher
reason:
::
is: :the USe::of entities ::other: than banks
: to extend:Credit:to farmers:: : .........
:
:basic prJn_

...............
::
....... ......

.....

ii:ciplesi:and:pr0cessess
at work
: because
of
: rnraifinancial:marketsi that::are
One:is:tile
naturalin : savings
financial mobilization
support the?_
got from
ieciaiJzationlamong:rural:lenders accord-goVernment:and
Central Bal_k; lnc0n!: :::::
:
t61their:iC0nlpetition:
advantage, of
trast, KBs brancl'_esdid: intensive savings:: :
Which:the division oflab0r:between funds i mobilization drive in regi.r_ns:ontside the
....

one as, i National.notable

find.'mg:is
However :o_
benefits t0 be:gained:fr0m linking credit
rating:near: the NatiOnal Capital: Region
: transactionS: m other :m_rkets. The ad,
operate like branches of KBs. The:strong::
:: vantage :of the i:informal lender over the
competitive
eavirolm_ent
could

::::

::: ii: :: :t

:: :::::::: :: .....

:::: ::::::: : ::::: ::::

:more: el:-

I_1

.....

::::

i::

formal iender is that the former does not : compelled them to operate as efficiently:.:
i:s:g0od: for both. as:
::
...........
of the: tfiree finantiial

.......

........

clientele inthe Philippines ::: :::

:
: :: :
....
Primary data were::coitected fr0m a::
Sample of rural banks, brafiches of privaie
: commercial banks and vrivate:: develop:
:ment banks. Analysis Was mailflYbased ::
on secondary and more aggregative data,
::
fhe fi_dings could aid Jr_formulating the
research design for the comparative bank :
studies.::
: ........
.......
Results Showed that the performance
i
: 0if these financial instituti0ns is
some
:i
way: conditioned by the.:_oper_ng:pollcy:
framework i:e,_ RBs and PDBs did little
: ::

:::

_'.IN'/A

::
......

:::

ibfis::::::
co,mpr:ise: an: impi

ais0 ::::

: :: ::.....

:::: :

........
:

::::::: :
corn: ::,

:with:
....

::::
:

: ,
::Phdippme

........
:::: performance: :::of
::::c0:nduits:oi
_e:r:fo6iises:::

Ad]unct Research
.......
Fellow;Energy
and EnvironmentalPolicyCenter,
i ]oh n E Kenned F:ScI_O0Iof:
:
GoVemment, Harvard University :

: ::

:
P

Research Fe!lowi Philippine ::

Insti_ te:.for Developme:nt S mdie_and :::::::::: : :: :
:: :
: i ::: :

:::
:::i
:

..........
:,

.....

Project:: :
This :paper uses: a simple:m0del:t0: :::::: :::::
estimate both..... the .....
, n
:
the
elastlm,les of demand,: for e!eetrmity ma
(RiBs): developing eCOnOmy:
: :
:
implications: for: eiectricity :pricing :policy :: ::
:banks:
refo_si: The specific :c_,tactetistics: of : :
its i: electrlcit 3

spiectswb,ch: t sold
....

: :ii

....

p g

...........

i
...............
.....
.........

SeCretariat:
and the ASEAN Col_u_nittee
:::i::onTrade atidTouriSm Participants came
'
:::academe, gOver_m_ent::sector:
S:
r0f lndustries::i
.... I
i
:
'tl_e most:sueces_thl

organlzatior_s

Board approach; lhnit exclusion list: use

a differentiated appr0ach peculiar to" the l
eonC'rete C0ndffions Of member com_tries;
Jower: doi_iestlC)
c0ntent
requirement;
standstill
and e_ent_ilal
rol:lback
of con-

The Ptailippme institwte fbr Develop_il

ment St-t_dies (IDk_;)
"P _' 'together with The
Agricultural
t.redit
Pohcy
Louncit.
"
' ...._ " .......
(ACPC),
andh01d
'the a Ohi0:
State
University:
(OSU); witJ
two:day
workshop

:: use: of process : requh'ement; nontariff: barriers periodic assessment of::

"Rural Financial Markets Research," on:

19..20 August,. 1987. The venue f0rl the:

.....

i:
:

mong develop::
use o!ASEAN industrial : workshop is ihe Operations Room of:
In: his:rep0rt, he: noted: : cooperation
to increase complimer tar_-NEDA
sa: Makati Builomg, Amorsoto St., : : :
esia;Mala_;i : _ies' and esiablisttrnent of a DeveIo _nent : LegazpiVNage, Makati ....
Ba._k of Asean_ ....
......:....
::
....... :

..........

:newly:industriaiizing
countrk S)
at::rio:st dyfmrnic :rates iri .the seven_ :
.....
iel e:ighties,: however

......
An

in-house

sem.inar )o

discuss a
_F

from page: i4) ........

......
analysis:. The demand

The Society for lnternationa_ Deveiopmentl (SID): is holding its 19th World

::Manila Electr ic: cam;:

Conference ::on: "POverty:: DeVelopment

:i:
cOilec{ive Survival':, 01i:Marcli 25..29

Completed research study On "mancmg

Public Sector De_eioprnent Expenditure:::
in the Philipp:mes, 1975.1985," will. be

:
i

held on Augast ?, 1987 at the NEDA sa

::
Makati Bldg, ]?his seminar will be the first i

Tile sub-: o/f a series t00e presented by Dr. Rosario

are G. Manasan, prir;cipal i_vestigator of
Poverty
study: ........ : :
:
......
:
i crisis in the:Th:rd World and the Lessons :

:
ii

::

:electlrici:tY:!
_:::priee

Viron::
:and :to: a certain::extent:i:
tique::0
national:.
....f tile NOn:Gover_maental System;
.....
Marc:h:27:Pubiic ReSponsibilities andthe:
ifiSe
...........

price:: :Role
if:

of::tile State; March

The PISS,: together with

Development Resea_'ch '_center-_:
(IDRC):is t_oldh_g a Workshop ion the:

CoUective:

_.YpJand Resource PoLicy:ProgaoaunPro:

i :i ject members:to present tlieia,preiin'iina-t'y
i
_slwillbe:: reports
and to: alloW project membersl :
)g::in:Devel0pinent and
and selected participants to make recom: i : : ::
GraSsroots:

:mendations
finaliz,

: before project:

results: a*;6::

PIDS STAFF PAPERS

1.

S.P. #8201

An Analysis of Fertilizer in the Philippines.

Cristina C David and Arsenio M. Balisacar_

2.

S.P. #8202

(printed also in J. P.D. 1981).

Credit and Price Policies in Philippine

3.

S.P. 4#8203

culture. Cris'tina C David.

Government
Policies and Farm

Mechanization

4.

S.P. #8204

5.

S.P. #8205

6.

S.P. #8301

Banks. Mario 1_ Lamberte.

Exchange
Rate Flexibility

and

intervention

Policy in the Philippines. 1973-1981.

Filologo
Pante, Jr.
On the Use of the DRC Criterion in Selecting
Projects. Erlinda M. Medalla.

7.

S.P. #8302

8.

S.P. #8303

9.

S.P. #8304

Monetary Aggregates
and Economic
Activity.
Mario R. Lambert_
Effective Protection Rates and Internal Indkect

S.P. #8305

Taxes in the Philippine

Setting.
ManasarL
Response to Balance of Payments
1970s,
Powen

11.

S.P. #8

12.

S.P. 4#8402

13.

S.P. #8403

14.

101

Korea

and

the

Rosario

A Study of Philippine Real Property

Ca3_tano W. Paderanga, Jr.
Public Enterprise
in the Philippines
A Definitional
and Taxonomical
Rosario G. Manasan.

Development

15.

S.P. #8405

Survey of Expetience. EditaA.

Tar_
Derived
Protection
for Nonffaded
Product. Erlinda M. Medalla.

:16.

S_P. #8406

l7.

S.P. #8407

18.

Finance

and

State

findings

I !tions, ongoing and forthcoming

I PIDS is a non.stock, non-profit
tute's program to disseminate

21.

S.P. #8504

22.

S.P. #8505

23.

S.P. #8506

24.

S.P. # 8507

S, [nta[, Jr.
Philippine Export

information

to promote

and Terms

iV[..

of Trade Instabi-

the Philippines.
Monres, Rodol.

ture of the Capital Markets:

Case. Mario B. Larabert_

The Philipph-,.e

The Rural Banking

System:

S.P. #8509

Mario B. Lamberte
Social Adequacy

and

Economic
Internal

Need

Economic

The Philippine

PerStrue-

for RefOrms:-

Effects

of

Case: Mario B.

27.

S.P. #8601

. 28.

S.P. #8602

29.

S.P. #8603

A Macroeconomie

S.P. #8701

prises in the Philippines,

1975-1984.
Rosario
G. Manasart
Revenue Performance
of National Government

Prirnary
30.

the utilization

Erlinda

Food, Fuel and Urbanization in

Ale]andro N. I-lerrin, Manuel E
fo F. Florentino.
Rural Development
Experience:
spectives. RobertE.
Evensor_
Financial Liberalization
and the

researches

31.

S.P. # 8702

32.

S.P. #8703

Impact of BOI Incentives on Rate of Return,

Factor
Prices and Relative
Factor
Use: A
Comparative
Analysis of Incentives Under the
Omnibus Investments
Code of 1981 (P.D. 1789)
and
the Investment
Incentive
Policy
Act
(B.P. 391). Rosario G. Manasan.
Financial
Reforms
and Balance-of-payments
Crisis: The Case of the Philippines. Eli Remolona and Marto Lamberte.

PHILIPPINE
or related

of research

Overview

of Public

Enter-

Taxes,
1975-1985.
Rosario
G. Manasan and
Rosario G. Querubin
Rural Financial Markets: A Review of lAterature. Mario B. Lamberte and Joseph Lira.
Residential Demand for Electricity
and Pricing
Policy Implication
in a Developing Economy:
The Case of the Philippines. Clodualdo R, Francisco.

DEVELOPMENT

studies done by other institutions.

projects wllich are of interest to policymakers,

planners, administrators
government
research institution
engaged in long.term policy-oriented

The views and opinions published

studies or PIDS papers contained

Note.

lity, 1965-1982. Ponciano S. lnral, ,h.

Methodology
for Measuring
Protection
and
Comparative
Advantage.
Erlinda M. Medalla
and John H. Powe1:

S.P. # 8508

in i982:
Exercise.

t_om PIDS-sponsored

Empirical

A Decomposition
Analysis of Philippine Export
and import Pexformance,
1974-198Z Ponciano

Social Security:
Lamberte.

publication

and recommendations

S.P. #8503

26.

Taxation.

Banking:

NEWS

20.

H,

Modelling the Effects of Devaluation on Prices_

Output and the Trade Balance: The Philippine
Experience. Mb_ Cecilia Gonzales.
The Development
Bank of the Philippines and
the Financial
Crisis, A Descriptive
AJmlysis.
Mario B. Lamberte.
The Protection
Structure, Resource Flows and
the Capital-Labor
Ratio in Philippine Manufae-

S.P. #850i

I]: highlights

John

Estimating
the Shadow Exchange
Rate, the
Shadow Wage Rate and the Social Rate of
Discount
for
the Philippines.
Erlinda
M.
M edalkz

S.P. #8404

S.P. #8502

25.

G.

Crisis in the

Philippines.

19.
Agri-

in the Philippines. Cristina C. David.

Shadow Prices of Goods and Resources in the
Philippines: AnAssessment.ErlindaM.
Medalla.
Aal Analysis of the Behavior of the Commercial

10.

tuxing: A Short
Medalla.

PIDS s_in_rs,

publiea-

and researchers are also announced.

research. This publication
is part of the Insti-

findings.

here are those of the authors and do not necessarily reflect those of the Institute. Inquiries regarding any of the
in this publication,
as well as suggestions and comments are welcome. Please address all correspondence
or inquiries

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