The analysis of economic performance and foreign trade development in the Republic of the Philippines

B.Sc. Realine Vicente, BSc

Master's thesis

Abstract:

The Republic of the Philippines is classified as a lower middle-income country in the region East-Asia and Pacific. This diploma thesis analyses the economic performance of the country and its foreign trade development. It is interesting to see the shift of the country’s economy transitioning from an agriculture-based economy to an economy based on services and manufacturing. For the years 1998 to 2018, the different economic policies of the different administrations are taken into consideration and through the construction of a magic quadrangle, the most effective policies are identified. The thesis also delves into the Philippines’ most dominant foreign trade sector – Machine and Electrical Equipment. For the same time period of 1998 to 2018, Balassa and Vollrath indices of all sectors of traded merchandise of the country, based on the HS 1988/92 product nomenclature, are computed. Resulting Balassa and Vollrath indices show that the country has revealed comparative advantage on its dominant sector Machine and Electrical Equipment, and other sectors with promising comparative advantage are also identified. A regression analysis is also performed to establish if there is a relationship among the endogenous variable Philippine GDP with the exogenous variables Exchange rate, Total Exports value, Balassa and Vollrath indices of Machine and Electrical Equipment. Resulting values show that the variable with the strongest effect on the Philippine GDP, in this case, is the Total Exports value.

Keywords

Foreign trade, Economic performance, Revealed comparative advantage, Balassa RCA, Vollrath index, Regression analysis, Magic quadrangle, Philippines, Machine and Electrical Equipment

Language used: English

Date on which the thesis was submitted / produced: 1. 4. 2020

Thesis defence

• Supervisor: Mgr. Elena Kuzmenko, Ph.D.
• Reader: Alena Hatskevich, Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics and Management / Economics and Management