By ARTURO BOQUIREN
On 14-16 November 2007, I attended the 45th Annual Meeting of the Philippine Economic Society. Some of the papers presented were as follows:
• University of the Philippines School of Economics Professor Dr. Dante Canlas said that most of the growth in real per capita gross domestic product (GDP) in the Philippines is due to an increase in the capital-labor ratio and hardly any from technical progress, and that this growth pattern is not sustainable.
• Asian Development Bank’s Dr. Jong-Wha Lee said that East Asian countries grew faster than the rest of the world in the last four decades, and the growth performance can be attributed to strong fundamental growth factors like investment rate, human resources, fertility, institutional quality, macroeconomic stability, and the degree of trade openness.
• Ateneo’s Dr. Edsel Beja Jr. asserted that export-led growth remains an important strategy in the realization of the long-desired robust economic growth in the Philippines
• Philex consultant Rolando Pena articulated that the mineral industry needs a more rational strategic approach. The rational approach should cover industrialization promotion through value-adding, cleansing of idle tenements, and addition of a new category of medium-scale mining that would allow the use of explosives and equipment.
• Bangko Sentral economist Teresa Duenas emphasized that foreign affiliation has been the most prominent influence on Philippine firms’ propensity to export
• University of the Philippines-Baguio Professor Dr. Santos Dacanay revealed that foreign banks are more cost inefficient due to higher personnel cost and that acquired banks in mergers are not necessarily inefficient
• Dr. Niceto Poblador stressed that competing for market dominance no longer makes sense and that a better strategy for firms is to position themselves in markets that are yet evolving. This requires continuous innovation and ability to adapt to continuously evolving markets.
• Bangko Sentral’s Agnes Yap and and Cristeta Bagsic asserts there is no one-size-fits-all foreign exchange policy and firm or a sector can be negatively affected by foreign exchange development. For them, this implies that initiatives from policy makers that encourage the development of risk management mechanisms would be very helpful
• Dr. Mario Lamberte and Karen Tecson analyzed the feasibility of establishing a single supervisory body for the Philippine financial system and pointed out the need to establish an organization aimed at safeguarding the interests of consumers of financial services and helping form a financial sector reform agenda.
• University of the Philippines School of Economics Professor Dr. Joy Abrenica argued that predatory pricing might not be happening even if a firm significantly lowers its price way below costs. She argued that what might be happening may be merely promotional rather than predatory.
Commenting on the papers mentioned would take some time. For the meantime, it is sufficient to say that many of the papers reflect conservative thinking in economics. To these papers I contributed my own with the title “Validating benefit-cost analysis of mining through comparative analysis and test of hypotheses.”
The paper is a sequel to a paper I made a year ago. In the earlier paper I observed that socio-economic data appear to suggest that mining communities are laggards in development.
The paper I presented before the Philippine Economic Society analyzed whether my 2006 findings are consistent over time. In particular, I examined whether my earlier findings are upheld by the most recent data available. The most recent data covers a period when gold prices are at their historical highs.
Factoring in the latest available data this 2007, what is suggested by the data available is that non-mining communities perform just as good as mining communities. However, in terms of eliminating poverty, non-mining communities perform better. I offer my paper as a reference for communities and local government units considering proposals for large-scale mining in their localities.
Peter Wallace, an well-known economic analyst who attended my paper presentation, conceded that my work suggests the need to improve the sharing of benefits between mining companies and communities. Against this, I suggested to Peter Wallace that a better interpretation of data is that we need not welcome mining companies to be on a higher growth path. In summary, my paper points out the need to pursue an environment-friendly development. #