MANILA CAMPUS
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February 2019
PHILIPPINE TRADE POLICY
TABLE OF CONTENTS
Abstract
List of Figures
1.1 Introduction
2.1 Protectionism
CHAPTER 3: METHODOLOGY
Technique
5.2 Conclusion
5.3 Recommendation
BIBLIOGRAPHY
APPENDICES
A. Interview Questions
B. Profile of Respondents
D. Informed Consent
PHILIPPINE TRADE POLICY
Abstract
This research aimed to determine the economic situation of the Philippines in terms of
imports and exports, to be able to distinguish whether the protectionist policy a failure
or a success and to identify the effects of protectionism in the trade policy of the
Protectionist Policy with regards to Trade. This research will provide the information
To gather the data needed, different references were used such as books, articles,
PDFs and website. This reviews the interview with ten respondents which include
LIST OF FIGURES
FIGURE
CHAPTER 1
1.1 Introduction
demoralize imports and counteract remote assume control of nearby markets and
An example of a protectionist policy is The Filipino First Policy which was initiated
the flag of the Filipino first strategy by Garcia Filipino representatives and
President Garcia (R. Constantino, 1970). In the expressions of Rodriguez in 1967 the
Filipino first arrangement leads Filipinos to put resources into new ventures with an
aggregate of 1.4 billion pesos. In addition, the ventures brought about monetary
development. Be that as it may, the resistance has contended that the said financial
In 2017, Philippine imports are greater than exports making the Philippines
protectionism not that effective. If it is found that there are unequal opportunities with
the export and imports of the Philippines, then it will result in heightened
that "With global economic integration at a halt, the world economy is adapting to
for Development Studies entitled “Global Uncertainty: Regional Headwinds and the
Philippine Economic Promise.” This was a seminar that tackled about Protectionism
Having said the Filipino first policy of the former president Carlos P. Garcia there are
several countries which currently imposes protectionist policies for example is the
United States in which according to Lucinda Shen in one of her articles in Business
insider on September 30, 2015 (See Chapter 2) the United States has the most trade
restrictions followed by India,Russia, Brazil, China, the European Union, and Japan.
Majority of this countries are top performing in terms of their economic situation.
A case study of Philippine Economic Protectionism, this study will further expound
the knowledge of both International Relations’ students and Lyceans. It will affect the
This study might be a significant contribution that could give important insights in the
Economic Protectionism has not been specified sufficiently. Thus, some important
During the course of olden times, protectionist arguments have been through by
unlike productions appears like protection share the same pleas of themes. Thorough
research for this is that there is an argument about protectionism and that it can save a
lot of jobs. Let’s put it this way, one of the examples here is when Americans
purchase imported Toyotas, on the other hand, US-produced cars that can lead to be
unsold and discharges the domestic automobile industry also follow. On top of that, if
Americans bargain chucks or textiles from South Korea or Taiwan, the millworkers in
On the other hand, even if it’s accurate when a domestic sellers purchase goods from
not believe that workers lay off their contracting sectors will not surely be reemployed
just because of expanding its sector. On top of that, public and private complications
carried nearby in trade, specifically the unemployment, outdated skills and economic
failure due to distant competition it might be important that these complications could
The first one is the way to simply prohibit imports then afterwards gave up the gains
from free trade. By doing so, a country acknowledges that it is willing to pay
premium prices to save domestic jobs in industries that could produce more efficient
overseas workers. The second one is the way to practically support the victims of free
trade by assisting the rehabilitation for occupations with a future. “More or less
May perhaps be in order so that some programs deal directly with the transition
In this paper, the researchers will look further to the conditions of Philippine
Protectionist Policy and how it will challenge the trading system locally. Generally
speaking, the researchers chose this topic to recommend what is the best way to
determining the policies and regulations in Philippine Trade, and also to help people
Research Problem
In the course of this study, this research will answer specifically the questions
stated below:
1. What will be the implications that bring about the possible establishment of a
2. What are the advantages and disadvantages of imported goods on the Philippine
Economy?
This research paper contributes knowledge to the Filipino people that the Philippine
foreign goods rather than domestic goods, the domestic producers suffer, making the
The policy protects domestic businesses from foreign competition through restriction
of international trade. There are effects that pose threats to the country’s economy,
such as the Philippines’ import of rice from countries like Vietnam and Thailand
which are ASEAN countries like the Philippines. The Philippines was known to be an
agricultural country yet the country imports agricultural goods from others rather that
This goes to show how the Philippine economy is failing. The country should not only
should make use of what it has and improve it to help the country’s economy thrive.
The Philippines should have a balance in trade and gain trade surplus or a positive
balance by exporting more and importing less and not have trade deficit or a negative
balance by exporting less and importing more, which is currently happening to the
country. This does not mean that trade is prohibited by the country; countries should
To know the most effective way in determining Philippine Trade Policy with
study to the current analysis methods used to predict costs and or benefits to
This will include (a) the government agency that is responsible for
Protectionism in the domestic and international market (c) the advantage and
disadvantage of imported goods in Philippine Economy and (d) the role of the
Philippine Protectionism in its economy and how it will help generate economic
CHAPTER 2
This section summarizes the project’s literature review, state of the art survey, or the
work done by other scholars in relation to the research problem. The variables in the
otherwise, Philippines exports more goods. In this chapter Protectionism, the types of
protectionist measures, the Filipino First Policy, and the countries which imposes
protectionist policies.
Protectionism
goods rather than domestic goods, the domestic producers suffer, making the
country’s economy suffer, it is the reason why some countries opt for protectionism to
save the country’s domestic businesses and to help promote the local goods and
the people and boost the country’s economy by having a good amount of man power.
Countries who implements protectionism also have advantages when other countries
import goods and services due to trade barriers such as tariffs and quotas. Focusing
PHILIPPINE TRADE POLICY
more on the domestic market helps the people in the local industries and also
helps promote the local goods in the country and outside, it helps the people by
having more jobs and getting the job done easier and faster and help partnership
by implementing it with the right strategy. With the policy, the country can utilize its
natural resources to help the country physically and economically without having the
worry of another country trying to exploit it. Countries who are implementing
protectionism can focus on the country more than having the trouble of maintaining
complicated trade relationships with other countries. Limiting imports benefits local
infant industries that are not that experienced when it comes to maintaining pressure
from the competition and may have a hard time trying to level against strong foreign
competitors. It is also stated in an article about Japan by adviser Ian Fletcher and
research director Jeff Ferry that, “The Japanese themselves certainly believe their
economic success has been due to protectionism. No one in Japan of any standing in
business, government, or academe believes that Japan’s success has been due to free
from foreign competition was probably the most important incentive to domestic
development that the Japanese government provided. The stronger the home market
cushion...the smaller the risk and the more likely the Japanese competitor was to
increase capacity boldly in anticipation of demand growth. This can give the firm a
international trade, it also has its disadvantages, a reason why some countries are
PHILIPPINE TRADE POLICY
exporting products to other countries who might also have implemented protectionist
policies to protect the local industries. It might damage the partnership and
relationship of one country to another and may even cause trade wars or trade conflict
preventing from happening. World Trade Organization exists to settle trade disputes
and avoid trade wars, with the growing protectionism, the number of trade disputes
increase every passing day. According to an article dated back in July 09, 2018 by a
news site called, Down To Earth, WTO fears that the organization will die due to
protectionism and members will lose faith in WTO; member states of the organization
Types of Protectionism
Tariff
Tariff is one of the boundaries in exchange and burdening on imports is its job. Tariff
door cost related with the creation of one great contrasted with another.
Numerous nations are probably going to amass underway of specific items and this
thought is named worldwide division of work. On the off chance that a state or
individual is similarly more capable in the creation of a decent than another state, at
that point say that it has a near preferred standpoint underway of that great. Similar
preferred standpoint estimates the adequacy in relations of qualified sums. Over that,
nations have confined methods for assets and level of aptitude in innovation they lean
position. Additionally, taxes are curving the market powers and it might keep
purchasers from
PHILIPPINE TRADE POLICY
Figure 1 below.
This sample, tariff is affecting the shift in the global supply curve upwards by the total
of the tariff. The level of imports will fall from QaQd to QbQc. The QaQd signifies
Quantity A and Quantity D. The government will also escalate the income, presented
by the blue shaded area. The level of domestic production will increase from 0
Quantity A to 0 Quantity B.
Quotas
Quotas have the impact of limiting the most extreme measure of imports permitted
into an economy. Once again, they diminish the measure of imports entering an
economy and increment the balance cost inside the market. The administration gets no
income from a quota, as it does with a tariff, except if it can set up a system of
Without quotas, the market price is P world, the quantity of imports is Q4-Q1 and
Quotas can cut back imports and facilitate domestic suppliers however; they will
cause higher costs for shoppers a decline in economic welfare and will cause revenge
Export subsidies
Export subsidies would allow the exporters to supply more product to the market than
the natural equilibrium would allow. International consumers will benefit fully from
the increased economic welfare as their purchase prices fall. This will lead to more
wages and job security for domestic employee, but taxpayers' bill stands. These
Domestic companies could turn trade into exports and ignore the domestic market.
The figure shows the impact of a subsidy. The supply curve is shifted vertically
downwards, resulting in lower equilibrium price and higher quantity. This figure
represents the subsidy effect. Such spending-switching policies are normally not
One example is India's country. On 2015, the Indian government, the world's second
largest sugar producer, announced that it would introduce a subsidy for the export of
raw sugar. This will involve offering export incentives for 1.4 million tons of raw
sugar as mills begin selling overseas surplus sugar to pay cane farmers.
A voluntary export restriction is where two countries agree to limit export volumes to
each other over the agreed period. This happens on many occasions, for example with
Japanese companies. Examples of exports are cars, TVs and videos in the 1990s.
Companies agreed voluntarily to this restriction because they thought it would help to
avoid more corrective restrictions, but it is sometimes in the company's own interests.
When Japanese companies had a major cost advantage over domestic producers, these
voluntary quotas meant they could charge significantly higher prices. The higher they
earn, the more limited product will be sold and profitability will be maintained or
improved.
PHILIPPINE TRADE POLICY
The Filipino First Policy was presented by the Nacionalista Presidebt Carlos Garcia,
favoring Philippine monetary interests over American interests. The impacts of the
the strategy was firmly restricted by the United States government and was described
Macapagal. Presently, the Filipino First strategy is not another thought. Filipino
reason situated associations, over a significant time span, have been supporting
monetary patriotism to free the nation from remote financial stranglehold and crash
Moreover, the said policy helped the country gain local investors during the years
1949 up until 1961 Accorcding to Pelorina in 2013 he stated that the Filipinos became
the prime movers of the total investments of the country. During the period from 1949
to 1961, Filipinos invested a total of P1. 4 billion in new enterprises; the Chinese P
435 million; the Americans, despite the effect of parity, accounted for P31 million and
the other nationalities for P28 million. This figure point to the fact that Philippine
economic growth for a decade after independence was largely the result of a policy of
party from the time of Garcia argued that growth during those time were also because
of War Damage Payment by the United States and also economic aid given by the
PHILIPPINE TRADE POLICY
said country. In addition, according to Snow in 1987 the opposition was not only
made up by Filipino politicians from the opposition party but also by foreign business
men namely the Americans and the Chinese. After the elections of which the Vice-
President at that time Diosdado Macapagal won the said elections, he vowed to end
the said policy and instead replace it with a five-year plan which aims to realize the
decontrol program with the end in view of “stabilizing the peso-dollar exchange”
(R.Pelorina, 1987).
There’s another country that would likely inflicts more protectionist measures to some
of data from the Global Trade Alert to show which country has presented the great
"Both tariff and non-tariff barriers have been accentuated to the regional focus of
trade by careful preference of limited trade openness, either in the midst of countries
Goods and services that restrict the flow of tariffs directly by making the price less
competitive and were more predominant prior to the World Trade Organization's
"Tariff rates in Eurasia are the lowest, thanks to freer cross-border trade promoted by
the European Union. For non-tariff barriers the preference brought a dawn of the
millennium as the WTO aggressively depressed the duty of tariffs. Non-tariff barriers
to trade have the 'charm' of not distorting price dynamics, but restricting trade
Although the number of countries imposing nontariff barriers declined during the
period of 1990-2013 (peaked in 2005), the total number of nontariff barriers imposed
on trade in fact, rose significantly (Figures 18 and 19)—the USA leads here—making
CHAPTER 3
Methodology
This chapter discusses the methods to be used in the qualitative analysis on the
ensures enough information about the Philippine imports and exports of goods and
services while considering whether or not the protectionist policy has been a failure or
a success which plays a big role in society and market as well. Thoroughly, semi-
in an embassy and a professor who are knowledgeable in terms of import and export
In this study, 2 professionals in the Protectionist Policy of the Philippines has been
participants are chosen based on their expertise on the topic. The professionals chosen
will be the participants of the study and shall provide responses that will determine
Ambassador.
collection mainly because interviews are useful for getting the story behind the
participants’ experiences. The interview can pursue in-depth information around the
topic.
Research Method(s)
This study utilizes qualitative approach which used applied qualitative research
design. According to Kothari, applied research design aims at finding a solution for an
specific problem as well (Bajpai, 2015). Policies such as concept mapping (Kane &
Trochim, Chapter 14) offer a designed instrument for locating input that can benefit in
designing a study.
PHILIPPINE TRADE POLICY
Conceptual Framework
Protectionist Protectionist
Policy Policy
Success Failure
For clearer understanding of the terms used in this study, below were their meanings:
ASEAN Integration – this refers to the 5 Southeast Asian leaders forming a union to
Protectionism – refers to the actions and policies of the government to restrict trade,
it is often with the intention of protecting local businesses and jobs from foreign
competition.
Trade – refers to the transferring of goods and services in one country to another
Free trade – refers to a policy eliminating discrimination against imports and exports.
Research Site
Intramuros in the City of Manila, Philippines. It was intentionally selected for the
following reasons: (1) Provide students, teachers, and staff with the enterprise-grade
communication and (2) productivity services they need with the power and flexibility
Respondents
The respondents of the study are professor, and an Ambassador. The researchers
intentionally selected these respondents for the following reasons: (1) these
respondents work within the divisions concerned in its respective industry and (2)
these respondents are knowledgeable enough for the trade of products in the
Philippines. For purposes of this study, several respondents from the government will
be interviewed.
PHILIPPINE TRADE POLICY
Research Instrument
The researchers used an interview schedule for their qualitative analysis. The
interaction to the respondent. Qualitative Analysis was used in this study. The
collected data was investigated according to the subjects present in the interview.
PHILIPPINE TRADE POLICY
CHAPTER 4
ANALYSIS OF DATA
In this chapter the outcomes of the data analysis are presented. The data were
paper.
“Protectionism can come under two classifications: Tariff and Non-Tariff. Tariff is,
you just increase the levy of the incoming imports, the Non-Tariff would come in in-
terms of loss to favor local production, local factories and local producers and
manufacturers.”
“It is important because you are going to suffer also since the other countries will
retaliate. You cannot do the protectionist measure and enforce it without any
“Now, if you are going to go into globalization, it must be including free trade and it
government that rules the whole globe, there must be the international law that must
“No. It’s not good to have trade barriers because it impedes the interchange of
“Take the trade war between the U.S. and China, the first provision of the World
Trade Organization is if you grant for Most Favored Nation Clause or if you impose
a protectionist policy against one, you must do it with all the others. You can have a
selective Most Favored Nation Clause but you cannot have a selective protectionist
policy, that is the provision of the World Trade Organization. You grant to one, you
grant to all.”
Table 2. Importing goods in Philippine Economy. Table no. 2 put forward the
between states or cities and propose a Post hoc Fallacy, assuming that if one
In this chapter includes the Permission letter, Informed Consent proof that the
Interview Questions
Question 1:
How long have you been in the service of government?
Question 2:
What are the types of protectionism that a country can use?
Question 3:
Do you think a country can use a variety of protectionist policy at once?
Question 4:
What was the protectionist policy here in the Philippines?
Question 5:
How effective these protectionist policies here in the Philippines?
Question 6:
Do you think protectionism would be necessary, if Philippines lowered down corporate tax
rate, less wasteful spending?
Question 7:
Do you think protectionism would help, in the long run?
Question 8:
Do you recognize that, by creating the ability to offer special favors to selected industries,
protectionism creates enormous opportunities for corruption?
Question 9:
Can you point out some nations that have prospered with protectionism, particularly when
compared to similar nations with free trade?
Question 10:
How will you see the future of Philippine protectionism?
PHILIPPINE TRADE POLICY
OBJECTIVE:
To learn and to perform the task that will be given in an organized and objective manner. To
be able to serve in the best way they will require.
ACADEMIC DETAILS:
• Bachelor of Arts Foreign Service major in Diplomacy from the Lyceum of the
Philippines University (2015 – present)
WORK EXPERIENCE:
• Worked as the Chairperson of Nihongo to the College of International Relations in
Foreign Languages Association from Jul 2016 to May 2017
• Board of Director for Public Affairs to the International Students Association from
July 2016 to May 2017
• Work as ESL teacher under Young Educators’ Guild from 2015 – present
SKILLS:
• Active at giving new ideas
• Has good communication skills, knows how to handle social situation and/or conflict in
a good manner
• Can work independently or as part of the team
• Knows how to manage time efficiently
ACHIEVEMENTS
• First Honorable Mention Awardee (2014- 2015)
OBJECTIVE:
To learn and to perform the task that will be given in an organized and objective manner. To
be able to serve in the best way they will require.
ACADEMIC DETAILS:
• Bachelor of Arts Foreign Service major in Diplomacy from the Lyceum of the
Philippines University (2015 – present)
WORK EXPERIENCE:
• Executive Director, LPU Project for Asian and International Relations, 2018-2019
• Director for HPAIR and External affairs, LPU Project for Asian and International
Relations, 2017-2018
• Director for Social Relations, LPU Project for Asian and International Relations,
2016-2017
• Director for Social Relations, LPU Project for Asian and International Relations,
2016-2017
• Associate Director for Logistics and Procurement, LPU Project for Asian and
International Relations, 2016-2017
SKILLS:
• Basic use of Microsoft word, Excel, and Powerpoint
• Basic french
PHILIPPINE TRADE POLICY
OBJECTIVE:
To develop excellent skills and to be able to learn the best that I can for future references.
ACADEMIC DETAILS:
• Lyceum of the Philippines University - Bachelor of Arts Foreign Service major in
International Trade (2015 – present)
AFFILIATIONS:
• Adminitstrative Officer – LPU UNESCO 2018-2019
• CIR Representative – LPU Environmental Society (2016-2017)
• Youth Leader – CFC Youth for Christ (2007-2015)
SEMINARS ATTENDED:
• 3rd Asia Pacific Youth Summit "Empowering young humanitarians in a fast-changing
world" – Red Cross (2018)
SKILLS:
• Can easily adapt in new environment
• Can efficiently manage time
• Good communication skills
PHILIPPINE TRADE POLICY
OBJECTIVE:
To strive towards personal & professional growth by embarking on new and challenging
assignments with an aim to bring about process improvements and provide additional value
to the assigned task.
ACADEMIC DETAILS:
• Bachelor of Arts Foreign Service major in International Trade from the Lyceum of
the Philippines University (2015 – present)
• Las Piñas National High School, Las Piñas City (2010 – 2014)
• Pamplona Elementary School Unit 1, Las Piñas City ( 2005 – 2010 )
WORK EXPERIENCE:
• Work as an Intern for Trade Specialist from Department of Industry and Trade-
Center for International Trade Expositions and Missions
SKILLS:
• Actively participates to group discussions
ACHIEVEMENTS
•
CHAPTER 5
The following chapter will conclude the study about protectionist policy. This will
present the summary of the research. The findings of the study will also be discussed
in this chapter. The scope of the following conclusions is limited to the theoretical
framework set upon by the researchers. Therefore, if these conclusions are applied to
analysis of the Philippines ' protectionist policy and how the integration of ASEAN
The objective of this study is, first, to determine the situation of the Imports
and Exports situation of the Philippines. Second, the study aims to identify the factors
of the imposition of a Protectionist Policy in the Philippines. Lastly, the study aims to
These objectives have led to the following statement of the problems such as, what
will be the implications that bring about the possible establishment of a Protectionist
Policy in the Philippine Economic strategy? Second, what are the advantages and
disadvantages of imported goods in the Philippines? Lastly what will be the effects of
Having said this, the researchers interviewed individuals from government agencies
concerning trade and economic decisions in the Philippines specifically from the
researchers in processing the data collated from the interviews with the respondents.
Lastly, the researchers were able to come up with a conclusion in relation to the study.
Conclusion
policies such as trade barriers is not good mainly because it impedes the interchange
of goods and international trading. Moreover, the respondent states that if countries
are to enter into globalization it must include free trade and it must be specifically
will never help in the long run due to the reason that other countries will retaliate and
respondents argue that the essence of globalization is the existence of World Trade
Organizations (WTO).
The respondents also took note that protectionism might create a huge
opportunity for corruption. In addition, the respondents have stated that there are no
countries in the present era who have prospered because of protectionism and that
The respondents also said that the Philippines has protectionist policy in many ways
Recommendations
concerns trade and economics that Protectionism should not be taken into
consideration due to the datum collected from the interviews. Moreover, the
reducing the favoritism in operating businesses due to the reason that it is not
protectionism that encourages growth but competitive firms that can produce goods
efficiently.
PHILIPPINE TRADE POLICY
Reference
Acacia, B. (2015, April 02). Published online: The miseducation of the Filipino
USA.
Bickman, L., & Rog, D. (July, 7, 2017). A Practical Approach: Applied Research
Fletcher, I., & Ferry, J. (2011). Japan, the Forgotten Protectionist Threat. Retrieved
from https://www.huffingtonpost.com/ian-fletcher/japan-the-forgotten-
prote_b_850269.html
Watch, E. (2017, March 9). Protectionism and the Philippine economy. Retrieved
from https://businessmirror.com.ph/
Pittsburgh, USA.
http://www.sanandres.esc.edu.ar/
http://www.researchersworld.com/vol4/vol4_issue1_2/Paper_04.pdf
PHILIPPINE TRADE POLICY
Rehim, K. (2002). Absolute and Comparative Advantage: Ricardian Model.
https://msu.edu/course/ec/340/Kilic/lecture3.pdf
Staff, D. (2018). Not all is well with WTO: Growing protectionism, trade wars
https://www.downtoearth.org.in/news/economy/not-all-is-well-with-wto-growing-
protectionism-trade-wars-threaten-its-existence-61064.
Shen, L. (30 September, 2015). The country that imposes the most restrictions on
is-the-most-protectionist-nation-