An assessment of trade and industrial policy, 1986-1988

This paper attempts to assess the state of trade and industrial policy and analyze the reforms which have been implemented during the first three years of the Aquino Administration. Specifically, the study covers the period from 1986 to 1988. AS such, _he major policies in the area of Trade and Industry, with focus on the important policy reforms, are identified. These are then evaluated with respect to: (a) how consistent they are to stated objectives and, when relevant, other national objectives, and (b) their impact - qualitative and, when feasible, quantitative - on certain important economic variables. The paper is divided into four sections to cover the four main policy areas in Trade and Industry. The first section reviews and assesses the trade policy situation, presenting and evaluating the reforms undertaken in tariff poli:cy and import liberalization program. It also examines some proposed policy changes, adopted or otherwise, to gauge the: liMely policy direction the government would take. Their COnsistency With stated and other national objectives is discussed. The second section deals with the exchange rate policy and its impact on trade and industry. The third section evaluates the 1987 Omnibus Investment Code (OIC), particularly with respect to its impact on factor prices and incentives to exports. Finally, the fourth section describes and analyzes the major export promotion schemes aside from the export incentives provided in the 1987 01C under the Board of Investment (BOI).