(DP 1991-06) Towards a More Open Philippines: Monetary and Exchange Rate Policy

Florian M. Alburo


The Philippines has never had a structural experience in export development. Instead of fully departing from protection and import-substitution, export policies were placed on top of existing biases and the country ended up achieving neither export-orientation nor efficient import-substitution. The paper explores two major forces to export promotion. One is exhange rate. It is argued that it is a policy tool available in active export promotion. The experiences of other countries (to which the Philippines has been historically comparable) show how important exchange rate has been. The other is monetary policy. Access to domestic and foreign credits, cost of money and financing availability for exporters are discussed. It is argued that exports should be allowed access to financing from global financial markets. There is something to be said for an Exim-bank for the Philippines whose special effort is putting to bear its resources-financial, technical - into export development. Some policy actions are suggested.

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