nep-sea New Economics Papers
on South East Asia
Issue of 2024‒04‒15
twenty-six papers chosen by
Kavita Iyengar, Asian Development Bank

  1. Status of the JETP in Vietnam By Minh Ha-Duong
  2. Kompilasi Sistem Pendidikan Antar Benua By Gunawan, Hendri; Hastuti, Pebri; , Januardi; Pramika, Depi; Kurniawan, Chandra; Sihaloho, Fahmi Ashari S.; arifin, syamsul; Maram, Ahmad Nabilul
  3. Financing Primary Care in the Philippines By Valerie Gilbert Ulep; Miharu Kimwell; Romelei Camiling-Alfonso; Denese de Guzman; Arianna Amit; Ida Marie Pantig; Alex Herrin
  4. Defending The West Philippine Sea: Achieving Genuine National Security Against A Backdrop Of Global Shifts In Power And Persistent Domestic Security Challenge By Herman Joseph Kraft; Robin Michael Garcia; Ronna Shane Belaro; Paula Patrice Hamoy; Rodel Cabrido; Senen Bacani
  5. Regulating Manufacturing FDI: Local Labor Market Responses to a Protectionist Policy in Indonesia By Gehrke, Esther; Genthner, Robert; Kis-Katos, Krisztina
  6. Do foreign bank investors promote acquiring banks' value in Asia-Pacific Countries? By Yoko Shirasu; Yukihiro Yasuda
  7. Outlook and Policy Options for Philippine Employment towards 2040 By Philip Arnold P. Tuano; Joselito T. Sescon; Rolly Czar Joseph T. Castillo; Cymon Kayle Lubangco; Biran Jason H. Ponce; Prezatia Moseska Maria H. Vicario; Christopher P. Monterola
  8. Compellingness in Nash Implementation By Chatterji, Shurojit; Kunimoto, Takashi; Salles Ramos, Paulo Daniel
  9. Drug policy history, design and practice: introduction By Tinasti, Khalid; Zhang, Yong-An
  10. 아세안 경제통합의 진행상황 평가와 한국의 대응 방향: TBT와 SPS를 중심으로(Assessing ASEAN Economic Integration Progress and South Korea’s Approach: Focus on TBT and SPS) By Kwak, Sungil; Shin, Mingeum; Kim, Jegook; Jang, Yong Joon; Choi, Bo-Young
  11. Scorecards for Livable and Sustainable Communities By Jeferson Arapoc; Charina Lyn Amedo-Repollo; Asa Jose Sajise; Allyssa Mari Mercado; Senen Bacani
  12. Ai sẽ trả tiền cho chuyển đổi điện năng của Việt Nam? By Minh Ha-Duong
  13. Study on Standardizing Working Time: A Case of XYZ Retail Store in Bandung, Indonesia By Aprodhita Anindya Putri; Akhmad Yunani
  14. Learning Among 15-Year-Olds in the Philippines and the Covid-19 Pandemic: Insights from the 2022 Pisa By Leonardo A. Lanzona; Geoffrey M. Ducanes; Loriel O. Eleazar; Katheryn Hidalgo; Ancieto Orbeta
  15. Stochastic expansion for the pricing of Asian options By Fabien Le Floc'h
  16. Digitalization, Decentralization and a Culture of Learning: Sowing the Seeds for Effective and Sustained Public Sector Rightsizing By Ronald Mendoza; Alex Brillantes; Miguel Paje; Ainna Comia; Karl Emmanuel Ruiz; Edilberto C. de Jesus
  17. Productivity-Enhancing Research & Development: Public Spending and Institutions By Karl Robert Jandoc; Benjamin Radoc, Jr.; Ludigil Garces; Mae Hyacinth Kiocho; John Faust Turla; Christopher P. Monterola
  18. Examining the Impact of the PIFITA Bill By Renato E. Reside, Jr.; Ma. Lourdes Lacson; Fernando T. Aldaba
  19. Development of a Fiscal-Centric DSGE Model in Aid of Policy Evaluation By Lawrence B. Dacuycuy; Fernando T. Aldaba
  20. Nature-based solutions for flood management in Asia and the Pacific By Kensuke Molnar-Tanaka; Swenja Surminski
  21. Malaysia: 2024 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Malaysia By International Monetary Fund
  22. Spikes in Power Prices: Unravelling Grid Congestion By Majah-Leah Ravago; Michael R. M. Abrigo; Patrizia Benedicto; Nastasha Brigitte Kuan; J. Kathleen Magadia; Charlotte Marjorie Relos; James Roumasset
  23. Improved Inter-Island Transport Connectivity, Local Employment and Job Quality By Kris Francisco; Neil Irwin Moreno; Aniceto Orbeta, Jr.
  24. Accounting for Climate Risks in Costing the Sustainable Development Goals By Rimjhim Aggarwal; Piergiorgio M Carapella; Ms. Tewodaj Mogues; Julieth C Pico-Mejia
  25. The Tiger and the Elephant: Fifty Years of Korea-India Diplomatic Ties and Directions for Long Term Cooperation By Park, Byungyul
  26. Monetary and Financial Agenda Towards Inclusion, Consumer Protection, and Innovation By Luis F. Dumlao; Alvin P. Ang; Ser Percival K. Pena-Reyes; Genesis Kelly S. Lontoc; Satyabhama Andrea C. Gulapa; Fernando T. Aldaba

  1. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The presentation details the progress and commitments of Vietnam's Just Energy Transition Partnership (JETP), which began negotiations at COP26 and culminated in a Political Declaration in Brussels on December 14, 2022. The JETP involves a mobilization of $15.5 billion, split equally between public and private funding, to align Vietnam's power sector with its net-zero pledge. Under the JETP, Vietnam aims to peak its power sector CO2 emissions at 170 Mt in 2030, restrict coal power capacity to 30.2 GW by 2030, and ensure that renewable sources account for at least 47% of electricity production by the same year. Notable achievements include exceeding the renewable energy target by 2022 and drafting the Power Development Plan 8 to restart the renewable energy sector. The slides conclude with an emphasis on strong cooperation momentum and the effectiveness of a known recipe for power sector investment that includes direct purchase agreements, auctions, grid code, tariffs, and support through training and technology transfer.
    Date: 2023–04–18
  2. By: Gunawan, Hendri; Hastuti, Pebri; , Januardi; Pramika, Depi; Kurniawan, Chandra; Sihaloho, Fahmi Ashari S.; arifin, syamsul; Maram, Ahmad Nabilul
    Abstract: Buku ini kami dedikasikan teruntuk salah satu penulis yaitu Almarhum Bapak Chandra Kurniawan yang wafat 14 Februari 2023 lalu. Terima kasih telah memberikan contoh dan tauladan yang baik kepada kita semua. Kami semua berharap melalui buku ini akan menjadi salah satu ladang amal yang tidak pernah putus untuk beliau sekaligus sebagai media kami untuk mengenang bagaimana kegigihan beliau dalam menuntut ilmu. “Tuntutlah ilmu hingga ke negeri Cina”, merupakan kata bijak yang sering kita dengar tentang pentingnya pendidikan. Ungkapan ini memberikan gambaran pada kita tentang tidak adanya batasan dalam mencari ilmu bahkan hingga ke negeri jauh sekalipun. Karena itulah, berbagai sistem pendidikan dirancang untuk memberikan pengalaman belajar yang berkesan bagi peserta didiknya. Berbagai sistem pendidikan terbaik terdapat di berbagai negara yang berada di penjuru dunia. Buku ini memberikan para pembaca gambaran bagaimana sistem pendidikan di beberapa negara di berbagai belahan benua. Melalui buku ini pembaca akan mendapatkan tambahasan wawasan yang luas mengenai berbagai sistem pendidikan di negara-negara yang ada di Benua Asia, Eropa, Afrika, Amerika dan Australia. Informasi mengenai sistem pendidikan di setiap negara yang telah dibahas diperoleh dari laman resmi Kementerian Pendidikan masing-masing dan juga melalui wawancara langsung dari para pelaku di dunia pendidikan. Buku ini juga dapat dijadikan sebagai sarana dalam membuat kebijakan terkait sistem pendidikan di Indonesia, sehingga akan lebih maju di masa mendatang
    Date: 2024–03–14
  3. By: Valerie Gilbert Ulep (Philippine Institute for Development Studies); Miharu Kimwell (University of the Philippines Diliman); Romelei Camiling-Alfonso (Philippine Society of Public Health Physicians); Denese de Guzman (Philippine Society of Public Health Physicians); Arianna Amit (ACERD); Ida Marie Pantig (ACERD); Alex Herrin (HREP-ADMU Senior Adviser)
    Abstract: The study assesses the state of primary care (PC) in the Philippines, considering outcomes and various sectoral inputs like financing, service delivery, and governance. Based on this assessment and adhering to established health financing principles, we made recommendations to address challenges. PC plays a leading role in the ongoing Universal Health Care reform in the Philippines, highlighting the importance of such assessments to inform policy and legislative agenda. Analyzing data from various sources and examining existing policies, we assessed the performance of PC in the country, benchmarking progress with regional and aspirational peers. Our findings suggest that health outcomes of Filipinos have improved over the years, but progress has been modest and marked with inequities and fast-changing disease patterns. These challenges result from various issues, including chronic underinvestment, challenges in financing arrangements, supply-side constraints such as limited capital investments and health human resources, and governance and organizational problems. We argue that addressing these challenges can be achieved by leveraging health financing strategies and reforms. Our recommendations revolve around refining the health financing system to better align incentives, allocate resources efficiently, and enhance governance and organizational structures.
    Keywords: primary care, financing, health systems
    JEL: I10 I14 I18
    Date: 2024–03
  4. By: Herman Joseph Kraft (University of the Philippines, Diliman UP CIDS – Strategic Studies Program); Robin Michael Garcia (University of the Asia and the Pacific WR Advisory Group); Ronna Shane Belaro (ACERD); Paula Patrice Hamoy (ACERD); Rodel Cabrido (ACERD); Senen Bacani (Former Secretary, Department of Agriculture)
    Abstract: The proposed research centers on the fundamental question of how to safeguard the Philippines' claims in the West Philippine Sea amidst escalating strategic competition. It aims to investigate several key areas: first, the spectrum of available options for the Philippines in addressing China's activities in the West Philippine Sea; second, the expectations of the Philippines regarding its alliance with the United States; third, potential cooperative initiatives with strategic partners to navigate the shifting regional power balance; and finally, the role of ASEAN and other multilateral institutions in actively addressing the West Philippine Sea issue. Additionally, this research scrutinizes how these policy options interact with various variables, which may influence both the policy issue and the envisioned policy outcomes. The primary research methodology employed for achieving these research objectives involves data collection methods that emphasize the perspectives of elite and mass respondents. An analysis of opinion research using recent surveys, Focus Group Discussions (FGDs), and Key Informant Interviews (KIIs) were conducted by the research team to delve deeper into the policy issue and develop comprehensive insights from experts and policy intellectuals with a stake in national security concerns.
    Keywords: West Philippine Sea, Philippine security, regional security, US-China competition
    JEL: F50 F51 F52 F53
    Date: 2024–03
  5. By: Gehrke, Esther (University of Wageningen); Genthner, Robert (University of Göttingen); Kis-Katos, Krisztina (University of Goettingen)
    Abstract: We analyze the effect of rising protectionism towards foreign direct investment (FDI) on domestic employment, exploiting revisions in Indonesia’s highly-granular negative investment list, and spatial variation in the exposure of the manufacturing sector to these investment restrictions. Rising FDI restrictions caused employment gains at the local level, explaining about one-tenth of the aggregate employment increases observed between 2006 and 2016 in Indonesia. These employment gains went along with a reorganization of the local production structure, and new firm entries in the manufacturing sector that are concentrated among micro and small enterprises. While our results are consistent with an increase in the labor-to-capital ratio and reduced productivity among regulated firms (which allowed smaller and less productive firms to enter the market), we also document that at least half of the employment gains are driven by spillover-effects along the local value chain and into the service sector.
    Keywords: FDI regulation, Indonesia, local labor markets
    JEL: F16 F21 F23 J23 J31 L51
    Date: 2024–02
  6. By: Yoko Shirasu; Yukihiro Yasuda
    Abstract: Using comprehensive data on banks' M&A arrangements in Asia-Pacific countries from 2000 to 2014, we investigate differing performance effects based on the types of foreign institutional investors from the perspective of the acquirer bank's M&A strategies. Measured by the simple Q ratio, our results indicate that acquirer bank's future prospects in Asia-Pacific countries increase three years following the completion of M&A deals when the foreign institutional investors' is a bank type and has high equity stakes in the acquirer. In addition, acquirer banks' loan ratios are found to significantly increase without an accompanying increase in nonperforming loans when held by a bank type foreign investor. Moreover, banks' incomes from other fee-based businesses increase. By contrast, when an investment advisor or fund type of foreign institutional investors have high equity stakes, acquirer banks failed to expand core businesses in the long run, although some success is made in cost reduction in the short run. These results indicate that bank type foreign investors contribute to acquirer banks' future performance through influential advisory functions in the opaque banking industry of Asia.
    Date: 2024–03
  7. By: Philip Arnold P. Tuano (Ateneo de Manila University); Joselito T. Sescon (Ateneo de Manila University); Rolly Czar Joseph T. Castillo (Labor, Education and Research Network, Ateneo de Manila University); Cymon Kayle Lubangco (Ateneo de Manila University); Biran Jason H. Ponce (Ateneo de Manila University); Prezatia Moseska Maria H. Vicario (Ateneo de Manila University); Christopher P. Monterola (Asian Institute of Management)
    Abstract: We reviewed the context and trends of Philippine labor and employment along with its challenges. The labor market in the Philippines is characterized by a large and growing workforce with varied skills, but there are also significant labor and employment issues together with the importance to address the effects of continuing global technological changes in production. These issues must be addressed by current and future Philippine government administrations in crafting policies that target vital strategic industries for sustainable transformation and quality job creation to fulfill its ambitions for the Filipino people in 2040. We then simulate the economic structure of the Philippines from 2024 to 2040 through a computable general equilibrium (CGE) model, assuming growth targets are achieved with modest capital and technological (TFP) changes. Then we link with a microsimulation model at the bottom to simulate changes in the labor market. Analyzing the trends in terms of labor market outcomes it appears that the economy stimulated an increase in employment shares and presumably the share of value added overall. Both skilled and unskilled labor need to increase. On this note, along with the PDP 2023-2028, our pointed recommendation is to conduct multi sectoral employment planning summits from national to regional levels as mandated by the Trabaho Act or RA 11961 to formulate the national employment plan with short-term and long-term targets sector by sector.
    Keywords: Labor, employment, skills, wages, computable general equilibrium, microsimulation, skills
    JEL: C68 J18 J21 L52
    Date: 2024–03
  8. By: Chatterji, Shurojit (School of Economics, Singapore Management University); Kunimoto, Takashi (School of Economics, Singapore Management University); Salles Ramos, Paulo Daniel (School of Economics, Singapore Management University)
    Abstract: A social choice function (SCF) is said to be Nash implementable if there exists a mechanism in which every Nash equilibrium outcome coincides with that specified by the SCF. The main objective of this paper is to assess the impact of considering mixed strategy equilibria in Nash implementation. To do this, we focus on environments with two agents and restrict attention to finite mechanisms. We call a mixed strategy equilibrium “compelling” if its outcome Pareto dominates any pure strategy equilibrium outcome. We show that if the finite environment and the SCF to be implemented jointly satisfy what we call Condition P+M, we construct a finite mechanism which Nash implements the SCF in pure strategies and possesses no compelling mixed strategy equilibria. This means that the mechanism might possess mixed strategy equilibria which are “not” compelling. Our mechanism has several desirable features: transfers can be completely dispensable; only fi-nite mechanisms are considered; integer games are not invoked; and players’ attitudes toward risk do not matter.
    Keywords: Implementation; compelling equilibria; ordinality; mixed strate-gies; Nash equilibrium
    JEL: C72 D78 D82
    Date: 2024–02–01
  9. By: Tinasti, Khalid; Zhang, Yong-An
    Abstract: The history, policies and practice of drug control in Asia have been historically multifaceted, particularly concerning substances like opium, cannabis, and various indigenous psychoactive plants. The opium trade, notably in the 19th and early 20th centuries, significantly impacted Asian societies, triggering conflicts, influencing international relations, and altering the socio-economic fabric. Yet, the history of drug control across different parts of Asia reflects a complex interplay of factors and a stark regional diversity. This special issue serves as a platform for interdisciplinary studies that link Asian drug trafficking with collaborative legal responses across the region. The primary objective is to compile an overview of the history, current practices, and policies addressing drug production, trafficking, and usage in a continent that houses 60% of the global population. This is done by sampling articles that encompass the large geographical scope of Asia, from Northeast Asia to the Middle East. The special issue focuses on three key dimensions of drug control that affect Asian countries: Historical landmarks, including milestones of drug control policy developments at the national level, which shaped the international regime over the last two centuries; public health and history of local responses with the analysis of the burden of infectious diseases, and the state of access to controlled essential medicines; and, criminal justice and historical landmarks of its development through legal responses and punishments.
    Keywords: history; Asia; drug control; China; Lebanon; Azerbaijan; Phillipines
    JEL: N0
    Date: 2024–02–27
    Abstract: 본 연구는 한국과 아세안 간 경제협력에 기여하고 이들 국가에 대한 교역 확대를 목적으로 TBT와 SPS의 제도적 조화를 모색하기 위해 기획된 연구이다. RCEP 발효에 따른 역내 연계성 개선 노력이 필요한 시점에서 본 연구 주제는 시의성이 높다. 또한 본 연구는 아세안의 TBT/SPS 제도 및 정책 현황 검토, 역내 규제거리 측정, TBT/SPS가 수출국의 대아세안 수출에 미친 영향에 대한 실증적 분석, 중소ㆍ중견 기업 대상 설문조사 등 TBT와 SPS 조치에 대한 종합적인 접근을 통해 한국의 대응 방향에 대한 논의를 전개하고, 아세안과의 협력을 위한 구체적인 방향을 제시했다는 점에서 의미가 있다.TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary Measures) have two attributes. They act as barriers to trade expansion by protecting producers, but their importance has grown in terms of consumer protection measures after the COVID-19 pandemic. Rather than eliminating related regulations, achieving harmonization within the ASEAN region can simultaneously serve two objectives: expanding trade between South Korea and ASEAN and improving consumer protection. We assess the level of regional economic integration by measuring regulatory distances among ASEAN member states. We also measure regulatory distances between South Korea and ASEAN, and between Japan and ASEAN. We estimate the impact of ASEAN’s TBT and SPS on the export performance of countries exporting goods to the ASEAN region. In addition, a survey of South Korean firms exporting goods to the ASEAN region is conducted to assess their difficulties and to evaluate South Korea’s support policies. Chapter 2 evaluates the economic integration efforts within the ASEAN region, focusing on TBT and SPS. In 2020, ASEAN conducted a mid-term assessment of economic integration and produced the “Mid-Term Review: ASEAN Economic Blueprint 2025” in 2021. According to the results, ASEAN has achieved 54.1% of the sectoral work plans, with the remaining 34.2% currently underway and expected to be achieved without major problems. The ASEAN recognizes the need for regional integration to overcome the poly-crises facing the global economy. ASEAN Comprehensive Recovery Framework (ACRF) views economic integration as a means of recovery from the COVID-19 pandemic and the associated poly-crises. As a result, intra-ASEAN trade and investment have increased steadily since 2021. (the rest omitted)
    Keywords: Trade barriers; economic integration; TBT; SPS; ASEAN economic integration
    Date: 2023–12–29
  11. By: Jeferson Arapoc (University of the Philippines Los Banos); Charina Lyn Amedo-Repollo (University of the Philippines Diliman); Asa Jose Sajise (University of the Philippines Los Banos); Allyssa Mari Mercado (ACERD); Senen Bacani (Former DA Secretary)
    Abstract: This research addresses the pressing need for comprehensive sustainability metrics in the Philippines, focusing on its blue and green economy sectors. Despite abundant coastlines and biodiversity crucial to the nation's economic health, a gap in systematic monitoring impedes Local Government Units (LGUs) from assessing environmental and sustainability performance. This study proposes "Blue and Green Economy Scorecards" as innovative tools for LGUs, fostering transparency and accountability. Drawing inspiration from established indices and emphasizing a "Ridge to Reef" approach, these scorecards consider the intrinsic value of ecosystem services. Initial categories and indicators are derived from international models like the Human Development Index, with a methodology involving literature reviews, expert consultations, and data collection. Weighting and aggregation steps produce composite scores, empowering LGUs to monitor and advance sustainability. This initiative aligns with socio-economic objectives and underscores the Philippines' commitment to international agreements. The scorecards represent a pivotal step toward a sustainable blue and green economy, bridging the gap in monitoring tools and facilitating informed governance decisions for the nation's ecological well-being.
    Keywords: blue and green economy, scorecards, livable cities
    JEL: Q01 Q21 Q56 R58
    Date: 2024–03
  12. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - Université Paris-Saclay - CNRS - Centre National de la Recherche Scientifique)
    Abstract: How to finance the development of the Vietnam power system in the coming years? For the new solar and wind projects, market mechanisms such as auctions, direct power purchase agreements and self consumption will attract private investors. Options to finance thermal power projects are not so clear-cut, now that high fossil fuels prices question their profitability. Can State owned enterprises self finance without increasing the energy prices to the average citizen?
    Abstract: Làm thế nào để chi trả cho sự phát triển của hệ thống điện Việt Nam trong những năm tới? Đối với những dự án điện mặt trời và gió, các công cụ thị trường như đấu giá, thỏa thuận mua bán điện trực tiếp và tự tiêu thụ sẽ thu hút các nhà đầu tư tư nhân. Nhưng những phương án tài chính cho các dự án nhiệt điện lại không rõ ràng như vậy, vì hiện giá năng lượng hóa thạch đang đặt ra câu hỏi về khả năng sinh lợi của các dự án này. Liệu các doanh nghiệp quốc doanh có thể tự chủ tài chính mà không cần tăng giá điện?
    Keywords: Energy transition Policy Finance LNG Markets, Energy transition, Policy, Finance, LNG, Markets
    Date: 2022–07–05
  13. By: Aprodhita Anindya Putri; Akhmad Yunani
    Abstract: Work time standardization helps to find and reduce wasteful movements and time in the workplace, such as chatting, mobile phone use, insufficient rest, or unproductive tasks. This study aims to map the process of displaying products from the warehouse to the shelves and calculate and determine the standard working time of employees of the Operations Division of PT XYZ Branch who oversee displaying X Milk and Y Bread. The data was collected six times in three weeks, including interviews and observations, and took a sample of 20 pieces on each product to carry out data analysis such as data sufficiency tests and control charts. Several time deviations were found in the display process of X Milk products on all observation days in different activities. Whereas in the process of displaying Y Bread, only the deviation of working time was found on the 4th observation day, which proves that the process needs to have a standard working time so that the activity work time is more controlled. Therefore, the analysis is carried out with the calculation of performance rating, time allowance, normal time, and standard time. The result of the standard time calculation for the display process of X Milk products is 15.83 minutes and Y Bread is 9.18 minutes for each product of 20 units.
    Date: 2024–03
  14. By: Leonardo A. Lanzona (Ateneo de Manila University); Geoffrey M. Ducanes (Ateneo de Manila University); Loriel O. Eleazar (ACERD); Katheryn Hidalgo (ACERD); Ancieto Orbeta (Philippine Institute of Development Studies)
    Abstract: Using the recently released 2022 PISA dataset in combination with the 2018 PISA dataset, this study examines how the COVID-19 pandemic could have impacted the learnings of school-attending 15-year-olds in the country, whether in terms of actual learning losses or the opportunity cost of learning more. Using both cross-tabulations and regression analysis, the study finds heterogenous changes in learning outcomes before and after the pandemic, with the negative changes higher for some subgroups (males, public school students, those without access to their own digital device) compared with others. The results of the study points to potential priority groups for remedial intervention to make up for pandemic learning losses – public school males, for example – already behind before the pandemic and left further behind after the pandemic, those with little access to real-time lessons by a school teacher through video conferencing and those without access to digital devices during the school closures, and those at the bottom of the socioeconomic strata. The study discusses some policy interventions to facilitate remedial catch-up to make up for pandemic learning losses as well as the general deficiency in the proficiency of Filipino students even before the pandemic.
    Keywords: learning loss, learning gain, equity, PISA, pandemic education
    JEL: L40 L51 L52 K21 O57 O53
    Date: 2024–03
  15. By: Fabien Le Floc'h
    Abstract: We present closed analytical approximations for the pricing of Asian options with discrete averaging under the Black-Scholes model with time-dependent parameters. The formulae are obtained by using a stochastic Taylor expansion around a log-normal proxy model and are found to be highly accurate in practice.
    Date: 2024–02
  16. By: Ronald Mendoza (IDinsight); Alex Brillantes (University of the Philippines Diliman); Miguel Paje (ACERD); Ainna Comia (ACERD); Karl Emmanuel Ruiz (ACERD); Edilberto C. de Jesus (Asian Institute of Management)
    Abstract: In the Philippines, the strengths and weaknesses of both the central and local bureaucracies have been revealed by the recent pandemic, encompassing coordination hurdles, limited capacities, complex partnerships, data deficiencies, and the imperative of digitalization. With the nation striving to build back better after the pandemic, calls for public sector reform— and the need to rightsize the government—reflect the increased urgency for more effective and improved provision of public services. Government rightsizing can be understood to reach the end goal of better provision of public services—guided by answering the inter-related questions of What to produce, How to produce and For whom to produce these public services. Hence, rightsizing may entail expanded public sector investments and activities in some key areas, and rationalization and streamlining in others. Rather than produce yet another rightsizing study recommending specific spending cuts and rationalization, and investments, this paper takes a different approach by focusing on the bigger picture of government rightsizing in the Philippines. It reviews the literature and policy experience on rightsizing, as well as the emerging enabling conditions for this. It supplements this broad review with key informant interviews in order to develop a proposed policy framework (along with an operational guide) for organizing more effective and sustained rightsizing in the Philippine public sector, offering guidance and insights to legislators for finalizing (and implementing) the House Bill No. 7240 which shall be known upon enactment as the National Government Rightsizing Act. The goal here is to see beyond the immediate details of individual agencies, projects and programs that require rightsizing analysis—rather to look at the broader canvass of the role of the State and way reformists have approached the rightsizing agenda. With a focus on the national government, this paper argues that in order to set the stage for more effective and sustained rightsizing, reformists need to take a step back and support some key enablers and possible game-changers, such as digitalization, the present impetus of decentralization, and a culture of learning with strong monitoring, evaluation, and data-enabled decisionmaking. There are key legislative reforms under the Marcos administration (with attendant budgetary implications) along these lines, which this paper supports with evidence and specific policy recommendations.
    Keywords: government rightsizing, digitalization, decentralization
    JEL: H11 H77 O1 P0
    Date: 2024–03
  17. By: Karl Robert Jandoc (UP School of Economics); Benjamin Radoc, Jr. (Ateneo de Manila University); Ludigil Garces (ACERD); Mae Hyacinth Kiocho (ACERD); John Faust Turla (ACERD); Christopher P. Monterola (Asian Institute of Management)
    Abstract: The intensity of research and development (R&D) that is necessary to accelerate innovation leading to economic growth is nuanced by industry needs and the interplay of variables during pre-R&D, conduct of R&D, technology transfer and commercialization, and the readiness of end-users. The Philippines is behind comparator countries in terms of both public and private investments in R&D. In the public R&D sphere, there are myriad wicked problems that need to be solved to spur R&D investments: low budgets, complex procurement rules, missing markets that hamper technology transfer, lack of human resource complement, and lack of clear and coherent vision on how to harness innovation to improve productivity. We recommend focusing on the low-hanging fruits. There should be an articulated vision on what type of innovation to focus on, complemented by policies to reform or relax bottlenecks regarding budgetary and procurement processes. Government should promote an R&D culture that prioritizes efficient and responsible data sharing, provide clear rationale on the roles, scope, and limitations of existing and proposed research centers, and harness digitalization to streamline processes and to enhance synergies among the government, firms, individuals, and research institutions.
    Keywords: institutions, public spending, R&D, technology transfer
    JEL: H50 O32
    Date: 2024–03
  18. By: Renato E. Reside, Jr. (University of the Philippines School of Economics); Ma. Lourdes Lacson (ACERD); Fernando T. Aldaba (Ateneo de Manila University)
    Abstract: The Passive Income and Financial Intermediary Taxation Act (PIFITA) has been passed by the Philippine Congress to the Senate and is currently awaiting ratification. However, there currently are no estimates of the impact of passage of the bill into law on the Philippine economy. This paper attempts to do this by gauging its impact on investment through the changes in the user cost of capital. The results of regression analysis confirms that a reduction of various taxes on passive income lowers the user cost of capital, which stimulates investment.
    Keywords: Philippines, taxation, investment, financial intermediation, user cost of capital
    JEL: H20 K34 O16 G2 E22
    Date: 2024–03
  19. By: Lawrence B. Dacuycuy (De La Salle University); Fernando T. Aldaba (Ateneo de Manila University)
    Abstract: This paper presents an estimable dynamic stochastic general equilibrium (DSGE) model whose major purpose is to deal with the empirics of fiscal policy in the Philippines. We estimated structural parameters using Bayesian methods, some of which have not been estimated for the Philippines. Based on macroeconomic data, which span the period from the second quarter of 2002 to the third quarter of 2021, explicit characterizations of model dynamics due to unanticipated shocks were achieved. The model also showed how informative smoothed shocks are in describing outcomes during the three previous administrations. Finally, the model generated a select number of fiscal multipliers under different scenarios involving monetary accommodation and fiscal stabilization.
    Keywords: DSGE, Fiscal policy, Philippines, fiscal rules
    JEL: C11 E32 E62 H54
    Date: 2024–03
  20. By: Kensuke Molnar-Tanaka; Swenja Surminski
    Abstract: Countries in Asia and the Pacific face a heightened risk of flooding as disasters increase worldwide due to climate change. Yet these countries often lack the infrastructure necessary to prepare for and respond to floods effectively. When flood protection measures exist, they generally rely only on grey, hard-engineered infrastructure, which has been increasingly challenged in recent years. Nature-based solutions (NbS) offer a new approach for flood management, with several co-benefits beyond the reduction of risks. This approach has gained recognition from policy makers in the region, but they are confronted with a number of challenges, including the lack of a clear, common definition and guidelines, as well as financing issues. The growing imperatives of climate adaptation call for complementary, innovative and forward-looking solutions, such as a combined approach incorporating both NbS and grey infrastructure. Alors que les catastrophes augmentent dans le monde entier en raison du changement climatique, les pays d’Asie et du Pacifique font face à un risque accru d’inondations. Or ces pays manquent souvent des infrastructures nécessaires pour s’y préparer et y répondre efficacement. Là où des mesures de protection contre les inondations existent, elles reposent le plus souvent uniquement sur des infrastructures grises ou lourdes qui sont de plus en plus contestées. Les solutions fondées sur la nature (SFN) proposent une nouvelle approche de la gestion des inondations, dont les co-bénéfices vont au-delà de la réduction des risques. Les décideurs de la région l’ont bien compris, mais ils font face à plusieurs défis, notamment l’absence d’une définition claire et commune et de lignes directrices, ainsi que des problèmes de financement. L’impératif croissant de l’adaptation climatique exige une combinaison de solutions complémentaires, innovantes et tournées vers l’avenir, telles qu’une approche intégrant à la fois les SFN et les infrastructures grises.
    JEL: O20 O53 Q54 Q57
    Date: 2024–03–22
  21. By: International Monetary Fund
    Abstract: Malaysia’s growth momentum has slowed but remains resilient to external headwinds. While monetary policy has paused its tightening cycle, fiscal policy is consolidating, and the ringgit had been under pressure through most of 2023. The government’s commitment to the reform priorities outlined in its national strategic plans is yet to fully materialize, with the economy’s path to high-income status hanging in the balance.
    Date: 2024–03–10
  22. By: Majah-Leah Ravago (Department of Economics, Ateneo de Manila University); Michael R. M. Abrigo (Philippine Institute of Development Studies); Patrizia Benedicto (ACERD); Nastasha Brigitte Kuan (ACERD); J. Kathleen Magadia (ACERD); Charlotte Marjorie Relos (ACERD); James Roumasset (University of Hawaii)
    Abstract: How do congestion and disruptions in transmission impact electricity prices? We investigate the impact of congestion on the wholesale spot market prices and the impact of disruption on residential electricity prices. We utilize time-series transmission node-level data on congestion market prices and combine it with other information on the market network data from the independent electricity market operator for our congestion analysis. Treating congestion as an aberration in the system, we apply impulse response analysis to examine the dynamic and cumulative impact of congestion on wholesale electricity spot prices. To examine the impact of disruption on prices, we use distribution unit data submitted to the industry regulator of the Philippines. We exploit an incident in the Visayas that cuts transmission capacity in half causing a disruption in the system as a natural experiment. We employ a synthetic difference-in-differences methodology and examine the effect of this disruption on consumer electricity prices and market concentration. We find that congestions greatly impact market nodal prices, and the effect persists beyond the time of congestion. The impact of the disruption varies by region at the distribution level, possibly explained by the region’s resources and endowment.
    Keywords: Congestion, transmission, electricity prices, Philippines, impulse response function, difference-in-difference
    JEL: C99 C13 L14 L94 Q40 Q41
    Date: 2024–03
  23. By: Kris Francisco (Philippine Insttute of Development Studies); Neil Irwin Moreno (ACERD); Aniceto Orbeta, Jr. (Philippine Insttute of Development Studies)
    Abstract: This paper exploits the timing of the implementation of the Roll-on/Roll-off policy to assess the impact of improved inter-island transport connectivity on local employment and job quality. While not a direct goal of the policy, this paper seeks to demonstrate the mechanism by which improvement in the transport system affects local economies in the Philippines. Using the difference-in-differences strategy, we compared the employment outcomes in municipalities hosting the ports included in the RORO network against those municipalities with ports that are excluded from the network. Our results show that female workers with middle and high skill level largely benefitted from access to the RORO network. We also found that the increase in employment was driven by the services sector, particularly the finance and insurance industries.
    Keywords: Roll-on/Roll-off transport, Local employment, Job quality, Philippines
    JEL: O18 L91 J40
    Date: 2024–03
  24. By: Rimjhim Aggarwal; Piergiorgio M Carapella; Ms. Tewodaj Mogues; Julieth C Pico-Mejia
    Abstract: This paper evaluates the additional spending needed to meet core targets of selected Sustainable Development Goals (SDGs) while accounting for the associated cost to address climate risks. The SDGs under study are those related to human and physical capital development. An additional 3.8 percent of global GDP, or US$3.4 trillion, of public and private spending will be required by 2030 to achieve a strong performance in the selected SDGs while addressing associated climate risks. This includes an increase of 0.4 percent of global GDP (US$358 billion) compared to estimates that do not account for mitigation and adaptation needs within these sectors. LIDCs and SSA experience the highest climate-related cost augmentation relative to GDP, while EMEs (driven by large Asian emerging economies) bear the largest cost in absolute terms.
    Keywords: Sustainable Development Goals; Climate change; Spending; Expenditure; Health; Education; Water and sanitation; Electricity; Roads.; expenditure Needs; sanitation infrastructure Improvement; wash infrastructure improvement; road infrastructure; water infrastructure Improvement; Sustainable Development Goals (SDG); Infrastructure; Natural disasters; Global
    Date: 2024–03–08
  25. By: Park, Byungyul (Korea Institute for Industrial Economics and Trade)
    Abstract: In 2023, Korea and India celebrated a historic milestone, commemorating the 50th anniversary of their formal diplomatic relationship. The two nations officially established diplomatic ties on November 21, 1973, but it was much later that bilateral trade and investment began to thrive. In the late 1990s, India shifted its focus to Korea’s automobile and IT industries, and several Korean industrial giants, including Hyundai Motor, LG, and Samsung Electronics, entered India. In 2009, the two countries signed the Comprehensive Economic Partnership Agreement (CEPA), which marked the beginning of what would become a robust trade relationship. Six years later, both countries agreed to deepen ties, and formed a Special Strategic Partnership, using the CEPA as a foundation for enhanced cooperation. India liberalized its economy in 1991, which paved the way for rapid economic growth to follow. Throughout the 2000s, Indian GDP expanded by an average of seven percent annually. In 2021, it emerged as the world’s sixth-largest economy, with a nominal GDP of approximately USD 3.14 trillion. This growth is set to continue unabated; ratings agency S&P Global projects that the Indian economy will expand by an annual average of 6.3 percent throughout the 2020s, eventually eclipsing Japan and Germany and propelling it to third place globally. Against a backdrop of declining Korean exports to China and the ASEAN member states, Korea is faced with the challenging of diversifying its export markets. This paper explores pathways for cooperation with India with a view toward establishing India as a major export partner.
    Keywords: India; Korea; India-Korea trade; exports; trade; Samsung; LG; Hyundai; LG; Comprehensive Economic Partnership Agreement; CEPA; Special Strategic Partnership; export diversification; Korea; KIET
    JEL: F12 F13 F23 F43 F53
    Date: 2024–02–29
  26. By: Luis F. Dumlao (Ateneo de Manila University); Alvin P. Ang (Ateneo de Manila University); Ser Percival K. Pena-Reyes (Ateneo de Manila University); Genesis Kelly S. Lontoc (Ateneo de Manila University); Satyabhama Andrea C. Gulapa (ACERD); Fernando T. Aldaba (Ateneo de Manila University)
    Abstract: Starting off from Chapter 11 (Ensure Macroeconomic Stability and Expand Inclusive and Innovative Finance) Subsection 1 (Ensure Macroeconomic Stability and Expand Inclusive and Innovative Finance) of the Philippine Development Plan 2023-2028 (PDP), we focus our research on Monetary and Financial Agenda Towards Inclusion, Consumer Protection, and Innovation. In Section IV, we revisit Republic Act 3765 or the Truth in Lending Act of 1963. In the spirit of consumer protection, we recommend regulations that are expected to improve transparency and empower consumers to make better informed decisions. In Section V, we use literature from behavioral finance on how regulators can nudge consumers to make better financial actions providing opportunities for inclusion and innovation. In Section VI, we discuss starting points for legislative discussion on how to protect retirees from financial and monetary matters as a complement and/or alternative to providing financial literacy programs. One in which our laws are relatively silent is on the treatment of whistleblowers. In Section VII, we discuss conventional practices on the treatment of whistleblowers in other jurisdictions to deter and/or catch nefarious agents and/or practices in the financial industry. In the last two sections, we acknowledge that prohibitively high interest rates on loans is a major hurdle towards inclusion. Part of the reason is that there are laws and/or regulations that charge financial institutions forcing them to pass on thecost to consumers.
    Keywords: financial inclusion, financial innovation, consumer protection, monetary policy
    JEL: G18 G21 G41
    Date: 2024–03

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