Forestry Trade and Population Growth in the Philippines in a General Equilibrium Framework

Abstract

The Philippines has experienced deforestation all throughout the last century. Some scholars attribute it to excessive timber trade others to population growth. The population argument, which is in the centre of most environment-related issue, is valid from 1980s onwards in the case of the Philippines. Population was not an issue in the first half of the 20th century neither in the years before that, however, timber trade was. The Philippines became the single biggest exporter of logs in 1969, while population stood at around 36.7 million. The paper attempts to show using a computable general equilibrium (CGE) framework the relative contribution of population growth and foreign trade policies on deforestation in the case of the Philippines. A static CGE model based on ORANI with an appended sub-forestry model is employed in the analysis. The results show that (domestic) population per se would not significantly increase deforestation. Whilst, export taxes are ineffective tools in reducing deforestation, trade liberalisation policies are beneficial to the economy as a whole.