Abstract
IMF Country Report No. 22/370
Copyright Page
IMF Country Report No. 22/370
PHILIPPINES
SELECTED ISSUES
December 2022
This Selected Issues paper on Philippines was prepared by a staff team of the
International Monetary Fund as background documentation for the periodic consultation with the member country. It is based on the information available at the time it was completed on November 8, 2022.
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© 2022 International Monetary Fund
Title page
PHILIPPINES
SELECTED ISSUES
November 8, 2022
Approved By
Asia and Pacific Department
Prepared By Leni Hunter, Sarwat Jahan, Cheng Hoon Lim (All APD), Simon Black, Ian Parry, Artur Swistak, Karlygash Zhunussova (all FAD), and Kaili Chen, Jesper Linde, and Hou Wang (All MCM)
Contents
APPLICATION OF THE INTEGRATED POLICY FRAMEWORK TO THE PHILIPPINES
A. Initial Conditions, Country Characteristics, and Underlying Frictions
B. Scenario-Based Analysis
C. Key Channels
D. Conclusion, Caveats and Future Work
FIGURE
1. Downside Risk and Policy Scenarios
TABLES
1. Sum of Squared Deviations of Output and Core Inflation
2. Specification of Shocks
References
REVENUE MOBILIZATION IN THE PHILIPPINES
A. Overview of Tax Revenue Performance
B. Room for Revenue Mobilization
C. Specific Proposals for Revenue Mobilization
D. Concluding Remarks
BOX
1. VAT on Digital Services: Design Challenges and Country Experiences
References
ADDRESSING CLIMATE CHANGE MITIGATION IN THE PHILIPPINES: ROLE OF CARBON PRICING
A. Introduction
B. Carbon Pricing: Rationale, Instrument Choice, and Design Issues
C. A Quantitative Assessment of Carbon Pricing in the Philippines
D. Conclusion: Moving Reform Forward
BOX
1. Behavioral Responses Promoted by Alternative CO2 Mitigation Policies
FIGURES
1. Global GHG Emissions, Nationally Determined Contributions and Temperature Targets
2. Trends in International Energy Prices
3. National or Regional Carbon Pricing Schemes, 2021
4. Allowance Price Volatility in ETSs
5. GHG Emissions Projections and Targets
6. Contribution of Sectors and Power Generation Fuels to CO2 Reductions Under Carbon Pricing, 2030
7 Projected Fiscal Revenues
8. Cumulative Averted Deaths from Reduced Air Pollution by Age Group
9. Economic Costs and Benefits
10. Percent Change in Output Prices for $50 Carbon Tax in 2030
11. Burden of Carbon Pricing on Households
TABLES
1. Summary Comparison of Carbon Taxes and ETSs
2. Impact of a $50 Carbon Price on Energy Prices in Selected Countries, 2030
ANNEXES
I. Further Details on Carbon Pricing Schemes
II. The Economic Importance of Using Carbon Pricing Revenues Productively
III. Pricing Schemes for Broader Sources of GHGs
IV. Climate Policy Assessment Tool
References