Tax reform and energy in the Philippines economy: A general equilibrium computation

Journal Article · Sat Dec 31 04:00:00 EST 1994 · Energy Journal

DOI:https://doi.org/10.5547/ISSN0195-6574-EJ-Vol15-No2-8· OSTI ID:244219

Boyd, R G; Doroodian, K; Udomvaech, P ^[1]

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1. Ohio Univ., Athens, OH (United States)

This paper examines how energy tax cuts, offset with income tax increases, affect production, consumption, and total welfare in the Philippines economy. Our results show that energy tax cuts expand the energy and nonmetal mining sectors, but decrease output in the manufacturing, agricultural, and metal mining sectors. Consumption of all goods and services combined increases as the amount of energy tax reduction increases. Our welfare results, however, are mixed. While the welfare of the mid- and high-income levels increases, that of the lowest income level decreases. These results are robust with respect to changes in the elasticity of substitution in energy production as well as the elasticity of substitution in consumer demand. From the standpoint of economic efficiency, a policy such as this would enhance growth and aggregate income. From an equity standpoint, however, this policy is highly regressive in spite of the fact that the richest households pay proportionately more to finance the energy tax reduction. 18 refs., 10 tabs.

• Sponsoring Organization: USDOE
• OSTI ID: 244219
• Journal Information: Energy Journal, Journal Name: Energy Journal Journal Issue: 2 Vol. 15; ISSN ENJODN; ISSN 0195-6574
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
ECONOMIC IMPACT
ENERGY
MATHEMATICAL MODELS
NUMERICAL DATA
PHILIPPINES
TAXES