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Effectiveness of Public Spending: The Case of Rice Subsidies in the Philippines

dc.contributor.authorShikha Jha
dc.contributor.authorAashish Mehta
dc.description.abstractIn response to the spike in rice prices in 2008, the rice subsidy program budget for the Philippines’s National Food Authority (NFA) was expanded five-fold to 2.5% of gross domestic product. The NFA is the largest recipient of government subsidy, but also the largest loss-making government corporation. The latest household expenditure data show that the program fares well on some design elements. However, despite all citizens being eligible, only 16% of them avail of the program. Significant exclusion of the poor and leakage to the nonpoor reduce its targeting effectiveness. The gap between the estimated national consumption of NFA rice and the amount of rice officially supplied by the NFA is large. Transferring $1 of subsidy costs the NFA $2.2. The program attracts lower participation from farmers than those with higher incomes or fewer rice-eating members. For those who do not use the program, nonparticipation appears to be involuntary, arising from physical limitations. Households in better-governed regions have a higher propensity to use the program. Those buying NFA rice in cities buy more than their rural counterparts. The program does not act as a safety net against unemployment, as much as for consumption support. It can better reach the poor if its inclusion and exclusion errors are reduced; its access and availability to the poor improved; and the quality of governance bolstered.
dc.publisherAsian Development Bank
dc.titleEffectiveness of Public Spending: The Case of Rice Subsidies in the Philippines
dc.typeWorking Papers
dc.subject.expertSustainable agriculture
dc.subject.expertCommercial agriculture
dc.subject.expertFight Against Poverty
dc.subject.expertPoverty In Developing Countries
dc.subject.expertRural Poverty Alleviation
dc.subject.expertUrban Poverty
dc.subject.expertRural Poverty
dc.subject.adbAgricultural education
dc.subject.adbSustainable development
dc.subject.adbEnvironmental management
dc.subject.adbAgricultural investment
dc.subject.adbDisadvantaged Groups
dc.subject.adbPoverty Elimination
dc.subject.adbEconomic and Social Development
dc.subject.adbSocial Conditions
dc.subject.naturalAgricultural diversification
dc.subject.naturalAgricultural resource
dc.subject.naturalFarm produce
dc.subject.naturalLand capability for agriculture
dc.subject.naturalFood Supply
dc.subject.naturalRural land use
dc.subject.naturalTechnological innovations
dc.subject.naturalAgricultural innovations
dc.subject.naturalFarm supply industry
dc.subject.naturalNatural resource
dc.subject.naturalAdaptive natural resource management
dc.subject.naturalProduce trade
dc.subject.naturalPrice Indexes
dc.subject.naturalIntergrated rural development
dc.subject.naturalCost and standard of living
dc.title.seriesADB economics working paper series
dc.title.volumeNo. 138
dc.contributor.imprintAsian Development Bank
oar.adminregionSoutheast Asia Region
oar.authorJha, Shikha
oar.authorMehta, Aashish

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