Assessing the Impacts of Flooding in Valenzuela and Pasig Cities Using a City-Level Applied General Equilibrium Model
Ramon Clarete, PhD
University of the Philippines
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Philip Tuaño PhD
Ateneo de Manila University
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Marjorie Muyrong
Ateneo de Manila University
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Czar Joseph Castillo
Labor Education and Research Networt
Most of the economic sector modeling that has been undertaken in terms of flooding and natural disasters examines more the direct impacts of a disaster (Hallegate, Henriet and Corfee-Morlot, 2011). This study utilizes a model that also examines the indirect costs of flooding through a dynamic multi-week model, which it has been able to quantify period by period impacts of disasters on a disaggregated scale as was done in the case of Marikina (Tuaño, Muyrong and Clarete, 2018). As general equilibrium analysis would mostly involve macro-level variables, another innovation in this research is the construction of a city’s economy into tabular format in order to identify the flows of goods and services and factors and incomes throughout an urban area. In order to generate information of the impacts, an innovation undertaken in the research is to examine more specifically the impacts of flooding on the recovery period of capital through the factor recovery matrix, which measures the changes in the available inputs, not only undertaken through a qualitative process, but also by econometrically estimating the impacts from a large database of firms. Estimates of the impact on the income and productivity of Valenzuela and Pasig cities, as an aggregate, and on the various industries comprising the economic output in both areas will be provided.
Capturing Urban Households’ Benefits for Preserving Natural and Cultural Resources in a Neighboring Rural Area: A CVM Approach
Rosalina Palanca-Tan, PhD
Ateneo de Manila University
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Rosalina Palanca-
Tan, Professor in the Department of Economics, Ateneo de Manila University, obtained her PhD in Economics from Sophia University in Tokyo, Japan. She was a post-doctoral fellow at the Environmental Economics Unit of Gothenburg University (Sweden); and a visiting research fellow at the Institute of Environmental Studies 
of Tokyo University
 (Japan), the Institute of Comparative Culture of Kobe University (Japan), and the University of Amsterdam (Netherlands). Her research interests and publications are in the areas of environmental and natural resource economics, behavioral economics, health economics, and Philippines–Japan-China-ASEAN economic relations.
Koronadal households benefit from Lake Sebu’s natural and cultural resources in terms of recreation, tourism income generation, supply of high quality tilapia, agricultural products supply, potential hydroelectric power source, cultural heritage, biodiversity, and climate change mitigation. These benefits encompass both use and non-use values which are integrated in a single estimate using the contingent valuation method. In the study, Koronadal households are asked for their willingness to pay (WTP) or contribute to natural and cultural resources rehabilitation and preservation efforts in the form of a lump-sum monthly amount collected together with their electricity bill payment. Household’s mean WTP is estimated to be between PhP52.42 (US$1.04) and PhP64.39 (US$1.27) per month. Multiplying the annualized WTP by the number of households in Koronadal, total potential annual contributions from Koronadal City would range from PhP29,244,533 (US$577,841) to PhP35,863,170 (US$708,618). Even just a fraction of this potential collection can support essential conservation efforts in Lake Sebu which up to the present have been inadequate due to financial constraints. Moreover, results of the regression analysis reveals that households are more likely to support the preservation program if the amount of required contribution is smaller and household income is higher. Older and more educated respondents are likewise more likely to support the program.
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Fiscal Contracts and Local Public Services: Evidence from Philippine Cities
Jerome Patrick Cruz
Ateneo de Manila University
Since the mid-2000s, the study of taxation and its relationship with the promotion of accountability, state capacity, and more effective service delivery has witnessed a resurgence in interest. Yet while a now-sizeable literature exists on the potential accountability dividends of “fiscal contracting” or “tax bargaining” dynamics, questions remain as to the differential effects of such bargaining on different categories of expenditure and service provision, as well as the role of electoral competition on shaping bargaining dynamics and outcomes. Exploiting a unique dataset of cities in the Philippines from 2011 to 2016, this study provides an empirical analysis of the local revenue-expenditure linkages among all 145 Philippine cities across established revenue and expenditure categories, controlling for the presence of coterminous political dynasties. While the nature of the local public finance data examined does not permit conclusive inference of tax bargaining dynamics, results nonetheless indicate a significant positive relationship of expansions in real property and local business taxes with per capita social expenditures, which could be indicative of tax bargaining-related incentives. By contrast, growth in largely-unconditional transfers are strongly associated with spending on general administrative functions and hard infrastructure outlays— which may be associated with the higher vulnerability of such expenditures to rent-seeking. Beyond providing potential evidence of local tax bargaining, the analysis also suggests that current policy efforts to increase central-local transfers and to shift to certain forms of federalism could aggravate perverse incentives apropos the accountability and responsiveness of local public expenditure patterns.
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