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Abstract
This paper looks at how Philippine trade reform which consists of tariff reduction
and elimination of quantitative restrictions (QR) on rice imports will affect poverty
within two world trade scenarios: Doha and free world trade. The impact of Doha is very
small and generates biased effects against agriculture. The impact of Philippine trade
reform within the Doha agenda magnifies this biased effect, making rural households
worse-off compared to urban households. However, eliminating rice QR generates a set
of effects where consumer price reduction dominates nominal income decline. Thus, real
income improves and poverty declines across household groups, but the net effects are
lower in rural than in urban households. The impact of a free world trade economy is
favorable in terms of higher export prices and export demand for agriculture and
agriculture-related manufacturing industries. This mitigates the biased effects against
agriculture, and is therefore favorable to rural households. However, if Philippine trade
reform is added to the analysis, the result switches back to the previous biased effects on
agriculture and on rural households.