A look on the developing country trade model: The Philippines case

• Main Author: Reyes, Rachel C.
• Format: text
• Published: Animo Repository 2004
• Subjects: Philippines—Commerce; Economics
• Online Access: https://animorepository.dlsu.edu.ph/faculty_research/8727
• Institution: De La Salle University

Studies have been performed investigating the trade performance of developing countries and this paper follows the track by applying the Philippine macroeconomic data on the modified developing country trade structural model developed by Kinal and Lahiri (1993). 2SLS and 3SLS estimations of the simultaneous equations model show that Philippine import demand is determined by its own and cross prices, its lagged value, and the ratio of international reserves to imports. Export demand is sensitive to Philippine export prices and the export demand's past values. Export supply responds to the country's productive capacity and export's previous year values. This paper disproves the simultaneity of exports and imports in the Philippines based on the 1981-2002 annual observations, despite its applicability to developing countries in general.