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Competitiveness, Income Distribution, and Growth in the Philippines: What Does the Long-run Evidence Show?

dc.contributor.authorJesus Felipe
dc.contributor.authorGrace C. Sipin
dc.description.abstractThis paper considers unit labor costs (ulcs), i.e., the ratio of the wage rate to labor productivity, as the indicator of competitiveness in the Philippines. It is shown that ulcs have an interpretation from the point of view of the functional distribution of income (i.e., the distribution of output between labor and capital). The paper documents the dynamics of the labor share in national income for 1980-2002, and provides an analysis of the long-run performance of the Philippine economy. The most salient features are: (i) decreasing wage rate (until the mid-1990s) and labor share; (ii) stable profit rate and increasing capital share: (iii) stagnant capital-labor ratio; (iv) decreasing capital productivity; (v) decreasing labor productivity (until the mid-1990s); and (vi) increasing markup, the latter interpreted as an indicator of the firms’ capacity to enforce a certain claim on profits against laborers and competitors, or as an index of the capacity of firms to exert anticompetitive practices. It is argued that these characteristics indicate that the country is submerged in a “low-level equilibrium trap.” This situation has profound implications for long-run growth and for the potential growth rate of the country, and explains the progressive deterioration of the Philippines during the last two decades, although some signs of recovery can be discerned.
dc.publisherAsian Development Bank
dc.rightsCC BY 3.0 IGO
dc.titleCompetitiveness, Income Distribution, and Growth in the Philippines: What Does the Long-run Evidence Show?
dc.typeWorking Papers
dc.subject.expertDevelopment In East Asia
dc.subject.expertDevelopment Planning
dc.subject.expertDevelopment Research
dc.subject.expertTechnology Development
dc.subject.expertAid And Development
dc.subject.expertAsian Development Bank
dc.subject.expertComprehensive Development Framework
dc.subject.expertDevelopment Cooperation
dc.subject.expertDevelopment Management
dc.subject.expertDevelopment Planning
dc.subject.expertDevelopment Strategies
dc.subject.adbDevelopment strategy
dc.subject.adbDevelopment models
dc.subject.adbEconomic development
dc.subject.adbNew technology
dc.subject.adbRural planning
dc.subject.adbAid coordination
dc.subject.adbIndustrial projects
dc.subject.adbInfrastructure projects
dc.subject.adbNatural resources policy
dc.subject.adbEducational development
dc.subject.naturalEconomic development projects
dc.subject.naturalEconomic forecasting
dc.subject.naturalEconomic development projects
dc.subject.naturalMunicipal government
dc.subject.naturalTechnology transfer
dc.subject.naturalExchanges of patents and technical information
dc.subject.naturalTechnical education
dc.subject.naturalTechnology tCommunication in rural development
dc.subject.naturalCommunication in community development
dc.subject.naturalEconomic development projects
dc.subject.naturalDevelopment banks
dc.subject.naturalEconomic forecasting
dc.subject.naturalEnvironmental auditing
dc.subject.naturalCumulative effects assessment
dc.subject.naturalHuman rights and globalization
dc.subject.naturalTransfer Technocracy
dc.title.seriesERD Working Paper Series
dc.title.volumeNo. 53
dc.contributor.imprintAsian Development Bank
oar.themeSmall Medium Business
oar.adminregionSoutheast Asia Region
oar.authorFelipe, Jesus
oar.authorSipin, Grace C.

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