South East Asian Studies, Vol. 15, No.1, June 1977

Growth Accounting or the Philippines:
The DelDand-ror-Output Side
Mitsuo EZAKI*I Introduction
The first and main account in national income statistics (NIS) is the gross national
product and expenditure account which gives GNP estimates from both factor income andexpenditures.

It is a framework for the national economy to account for level of output (i.e.,value added) from both sides of inputs (i.e., factor income) and demands (i.e., expenditures).
This means that growth of output(s) also can be accounted for from both sides: growth of
inputs and growth of demands.

In other words, there can be, for the national economy, an

accounting framework in terms of growth rates which may be called growth accounting(in the broad sense).
The growth accounting from the input side based on national income statistics (i.e.,
NIS basis) is well-established in relation to the concept of production function and identicalwith the measurement of total factor productivity.

In the previous paper (Ezaki [1976]),

the author has presented a framework for growth accounting from the input side based on
the input-output (10) tables (i.e., 10 basis) and provided a measurement on the Philippine
economy comparing the 1965 and 1969 input-output tables (i.e., measurement of the 10
basis) as well as using the NIS data (i.e., measurement of the NIS basis).

In this paper,

we will discuss the growth accounting from the demand side under the 10 framework andprovide a corresponding measurement on the Philippine economy using mainly the 1965
and 1969 input-output tables.!)

A measurement of the NIS basis will also be provided forcomparative purposes.
Section II deals with methodology.

Section III provides measurement on the Philippine

economy.

II Growth Accounting from the Demand Side - Methodology
There may exist several alternative approaches to the growth accounting from thedemand side, because we have no dominant theoretical basis for the demand side such as* iIJ1ffij:Jlt~, The Center for Southeast Asian Studies, Kyoto University.
1) The 1961 input-output table will not be used in principle, because it is said that the table contains a misleading data compilation for the capital formation. (In other words, it is said that the data on investmentsin each industry are compiled there instead of the data on output of each industry delivered to capitalformation.)3

production function for the input side.

Here we try to combine the analysis of importsubstitution (Chenery [1960]) and the constant-market-shares (eMS) analysis of exports(e.g., Richardson [1971]) consistently from the point of view of the latter. 2 ) We divide total
market for domestic outputs into two parts: domestic market and world market, and decompose growth of domestic outputs into two effects: (i) proportional growth effect (P.G.E.)
which corresponds to growth of total demands in both markets and (ii) competitive effect(C.E.) which corresponds to increase in shares in both markets, providing thus an accounting
framework for the sources of growth from the demand side.
Let us begin with the CMS analysis applied to world market, which is the ordinary andwell-known case.

First, let us define Philippine share in world market of commodity i as

where Ei=Philippine exports of commodity i, and Wi=worlcl imports of commodity t.
Then, differentiating with respect to time (denoted by dot (.) ), we getfrom which we can see that increase in (or growth of) exports is caused by the two effects:
increase in (or growth of) world imports with no change in market share, and increase in(or growth of) market share with no change in world imports.

The former is, of course,

proportional growth effect (P.G.E.) while the latter is competitive effect (C.E.) which may
also be called share effect.
There have been not a few criticisms on this CMS analysis for exports. 3)
raise an important criticism which has been hitherto overlooked.

Yet, we canThat is to say, the world

imports (Wi) may not be an appropriate measure to indicate the size of world market so thatthe increase in market share (fJi) may not reflect competitive power in the proper manner.
Take the U.S. market as an example.

In the case of light industry products, the Philippines

must compete in the U.S. market not only with other developing countries but also with the
U.S. itself.

In the case of automobiles, Toyota (Japanese automobile industry) must increase

its share in the U.S. market competing not only with Folkswagen (German automobile
industry) but also with Ford (U.S. domestic industry).

In many cases, therefore, total

domestic demands in each country may be better than imports only to be used as a measurefor the size of world market. 4 )2) For the analysis of import substitution, see Shionoya [1968, Section IVJ (Japan), Liang and Lee [1974,
Section VJ (Taiwan), N arongchai Akrasanee [1975J (Thailand), etc. For the CMS analysis of exports,
see Balassa [1971, Chapter 2J (seven developing countries), Naya and Udom Kerdpibule [1973J (Southeast
Asia), Liang and Lee [1974, Section VIJ (Taiwan), Naya and Akrasanee [1976J (Thailand), etc.
3) See Richardson [1971J, for example.
4) Total domestic demands include intermediate demands as well as final demands so that, in order to allow
for this criticism in the actual measurement, several input-output tables are needed for each importing
country in the world. In this paper, we will follow the ordinary eMS analysis of exports due to thelimited availability of appropriate 10 tables in the importing countries.

4M. EZAKI: Growth Accounting of the Philippines, The Demand-far-Output Side

This criticism suggests that the CMS analysis is applicable also to the domestic market,
because Philippine industries are competing with foreign ones in the Philippine domestic
market also.

In fact, we can derive the Chenery measure of import substitution from thepoint of view of the CMS analysis.

First, note that total domestic demands of the Philippines

are matched by both domestic and foreign supplies:

where di=total domestic demands of commodity £, zi=domestic outputs of commodity £delivered to domestic use, and Mi=Philippine imports of commodity £.

Then, we candefine Philippine share of commodity £ in Philippine domestic market as

Differentiating with respect to time, we get(5)

zi=aj"(ii+di·~i

orZi!Zi=di!di+(zi/ai.

It is needless to say that P .G.E. and C.E. in the domestic market are identified with thefirst and the second terms respectively in the righthand side of each equation above.

The

C.E. here is identical with the measure of import substitution proposed by Chenery [1961,
pp. 639-644].
As to the Chenery's measure of import substitution, Morley and Smith [1970J raised
a criticism, and proposed a modified measure which explicitly allows for the interdependency
between industries in the analysis of import substitution.

It seems, however, to the authorthat their modified measure is not superior to the original one (see Appendix of this paper),so that we do not employ their analytical method and framework here.
Our next task, then, is to combine consistently both of the foreign and the domestic
markets discussed above.

It is clear for this purpose that the 10 framework is better thanthe NIS framework since the latter describes the relationship between value added andfinal expenditures only, neglecting in a sense the intermediate demands and supplies. 5 )Under the 10 framework, we get the following basic identities for each industry:(6))'i+Mi=di+Ei(7)Zi=)'i-Ei=di-Mi(8))'i=Zi+Ei

where }'i=total output of industry £ (or commodity £).6)

Equation (6) shows the ex post

identity between supply and demand in each industry, i.e., total supply from both domestic
and foreign sources must be equal to total demand of both domestic and foreign origins.
Equation (7) is the definitional identity for the domestically used domestic output (Zi).
5) The same was true for the input side of growth accounting. See Ezaki [1976].
6) Capital letters Y, D and Z will be used for the corresponding variables under the NIS framework.

5Here it is assumed that imported commodities are not used directly for exports.

From thisdefinition of Zi are derived the two identities: equations (3) and (8).7)
N ow we can derive an identity for the growth of output from equations (8), (2) and (5) :Zi
Zi +-- Ei
Ei-----.
-------.----

(9)

Yi

Zi

Yi

Ei

which shows that growth of output is decomposed into P.G.E. and c.E. in the weighted
average sense.

This is the basic formula for the growth accounting from the demand side.

The formula, however, is expressed in terms of continuous time so that we need a corresponding discrete approximation in the actual measurement.

The discrete expressions forequations (5) and (2) are:(10) LJZi/Z i =LJd ifd i+LJaifai+(LJdifd i)'(LJaifai)(11)

LJEifEi=LJ Wif Wi+LJfJiffJi+(LJ W ifWi)'(LJfJiffJi)

where LJ means increase between two (i.e., base and succeeding) periods.

Note that thethird terms appear in addition to P.G.E.'s and C.E.'s in the above identities.

They arecaused by the changes in both total demands and market shares and called z'nteractz'on effect(I.E.).

The discrete expression for the basic formula (9), therefore, consists of three effects

in the weighted average sense:(12)

LJ..Jl.i = Zi . LJz i + Ei LJEi
Yi
Yi
Zi
Yi
Ei

4t

;ii (LJt+ LJa~i_+~i .-~~~~) +i/-(LJ;i+4t+4~i.
=P.G.E.+C.E.+I.E.

i)(in the weighted average sense).

This formula will be applied, in the next section, not only to the seven aggregate sectors(industries) used in the previous paper but also to the disaggregated components industries(though the disaggregation will be made for the manufacturing sector only).

It seems,

therefore, worthwhile to develop here in general form the relationships between aggregate
and disaggregate measures.
Let us consider the world market first.

There seems no need of explanation on thefollowing identities for the k-th component industry in the z'-th aggregate sector (industry):7) In the measurement of Section 3, we estimate first Zi by (Yi-Ei) and then di by (zi+il1"j). Note thatall variables (except for market shares) are measured either at current prices or at constant prices or both,
depending on the data availability.

6M. EZAKI: Growth Accounting of the Philippines, The Demand-for-Output Side

where ,8ik=Philippine share of commodity k in world market, Eik=Philippine exports ofcommodity k, and Wik=world imports of commodity k.

Ei= ~ Eik

(15)

k

and

Then, using

Wi= ~ Wik,kwe get an identity for the growth of exports in the aggregate industry i:(16)which is essentially identical with equation (11).

All of the three terms in the right-hand side

above are the weighted averages of components P .G.E.'s, C.E.'s and I.E.'s with the export
composition as common weights, so that we can interprete them as the measures of pure
P.G.E. (denoted by P.G.E. *), pure C.E. (denoted by C.E. *) and pure I.E. (denoted by I.E. *)respectively for the i-th industry. The difference between P.G.E.*, which is based on the
disaggregate data, and P.G.E., which is based on the aggregate data, is called commodity

compositional effect (C.C.E), because its sign and magnitude are dependent on the differencein composition between Philippine exports and world imports as well as on the growth ofthe latter :8)(17)

C.C.E.=:P.G.E.*-P.G.E.= ~ (~; -~~:) .L1l:~kwhere P.G.E.*= ~(Eik/Ei)'(L1Wik/Wik) and P.G.E.==L1Wi/Wi. In other words, thestronger is the export concentration on the specific commodities growing fast in world market,
the greater will be the magnitude of C.C.E. (and vice versa).

Using this concept of C.C.E.

and comparing equation (16) with equation (11), we get(18)

C.E. =C.E. *+C.C.E. +(I.E. *-I.E.)

which shows that the competitive effect based on the aggregate data (i.e., C.E.) includes
C.C.E. in addition to the pure competitive effect based on the disaggregate data (i.e.. C.E. *). 9)
So far was concerned about the world market.

As to the domestic market also, we candefine commodity compositional effect in the same way as equation (17):
(19)

Zik
dik) L1dik
C.C.E.=:P.G.E.*-P.G.E.= ~~--:( z, -d·~k, . ··d·.,k

where Zi= ~ Zik and di== ~ dik.

The relationship between C.E. and C.E.* for industry

8) See Richardson [1971], footnote 3, p. 209.
9) (I.E.
I.E.) is the residual under discrete approximation.

*-

It vanishes under continuous time.

7

i can be derived by comparing equation (10) with the counterpart of equation (16), and is thesame as equation (18).

III

Growth Accounting from the Demand Side - Measurement

In this section, we will provide a growth accounting from the demand side for thePhilippine national economy comparing mainly two input-output tables: the 1965 table of
National Economic Council (NEC) and the 1969 table of National Economic and Development Authority (NEDA).

For the demand side, we will again aggregate more than fifty

industries in the original 10 tables into seven sectors in the same way as for the input side
(Ezaki [1976]): (1) Agriculture (Agriculture, Fisheries and Forestry), (2) Mining (Mining
and Quarrying), (3) Manufacturing, (4) Construction, (5) Transportation, etc. (Transportation, Communication, Warehousing and Storage, and Utilities), (6) Commerce (Trade,
Banking, Insurance and Real Estate), and (7) Services (Private and Government Services)'!O)
For the manufacturing sector, however, we will show the disaggregate results also based on
twenty components industries in order to derive more definite implications on the Philippine
industrialization.

Furthermore, we will provide here a measurement of the NIS basis using

the national income statistics data, though the linkage between NIS and 10 bases for thedemand side is neither direct nor clear-cut compared to the case of input side.
Let us begin with the aggregate seven industries, first.

Table 1 shows the final results

obtained by applying formula (12) to the 10 data (except for T17 i) at both current and constant prices,!l)As is explained in detail in the Data Appendix of this paper, W j (world

imports of commodity i) is estimated (or approximated) by the sum of total imports of commodity i in twenty top trading partners of the Philippines from the point of view of thePhilippine exports such as U.S., Japan, Netherlands, Korea, West Germany, and so on.
The share of these twenty countries in total Philippine exports (all commodities) is 98.0%
in 1965 and 97.3% in 1969, so that our estimate or approximation of Wi here does not seemto give misleading results.

The data source for W j is UN Yearbook of International Trade

Statistics, in which exports of the Philippine industries are identified, one by one, with
commodities in the world market on the basis of the Standard International Trade Classification (SITC).

However, for the last three sectors of transportation, commerce and services,

the corresponding data in world market are not available so that the world imports are
assumed to grow at the same rates as the Philippine exports.

In Table 1, the results atconstant 1967 prices are shown in the second line of each row corresponding to each industry.
The basic data for them are obtained by deflation.

The deflators for Yj and Ej are the NIS

10) For the 1969 input-output table, an aggregate 12 X 12 table is available in the N EDA Stat£stical Yearbook
1976. However, we must be very careful in using it, because this aggregate table contains an erroneousclassification of industries for the sectors of transportation, communication and warehousing (9th) andother services (12th).
11) See footnote 7 of this paper.

8

Table 1 Decomposition of Growth of Outputs (at current and constant prices): 1969/1965---_.'---

1

2

Industries

LJYi/Yi----

2. Mining

64.8%
17.5
135.8
72.0

....

LJzi/Zi

.836
.174

76.0%
25.5
225. 7137. 7--~---~---------

8_._----_._-----

9

---',

LJai/ai

P.G.E.

CE.

Ei/Yi
-

72.0%
24.0
119.3
103.0

2.3%
1.2
48.5
17.1

LJE;fEi

2x5+
6x9

P.G.E.

CE.

P.G.E.

LJfh/fh
C.E.

29.6%
28.4

-16.5%-39.8%

65.0%
24.7

LJW;fTVi- - - - - - - - - _ _-_._----

.164
. 826

12

11

2x4
+
6x8

... _ - - - - _ .. _ - - - - - - - , . , - - - - - - - -LJd;fdi10---------

8+9+8x9,.,---------- - - - - ...-_._.._----_._------ .. - - - , - - .. _ - - - -1. Agriculture__----,--_.. ",- - - - - - - - - - , - - - - - - _..

Z;fYi_-------

7

6

4+5+4X5or-~---._---..

._------~

5- ' ,. .

2x3+6x7-------~-

10+11+12

----

4

3

----

2x4x5
+
6x8x9
I.E.

116.8
58.2

44.4
44.4

50.2
9.6

N

;..
~

..

Q
..,

....

8.3%
-22.8

~
F.l

57.4
54.6

-0.8%
-5.5
49.9
10.9

0.6%
-1.6

0
~

5-

>
(")
(")

28.5

0

6.6

g

~

S"

3. Manufacturing

70.9
50.1

4. Construction

50.5
10.4

.897

74.4
53.3

65.8
47.6

5.2
3.8

1. 000

50.5
10.4

50.5
10.4

0.0
0.0

.103

40.1
23. 1

0.000

-

54.4
42.5

-9.2
-13.6

64.6
47.1

3.7
2.0

2.6
1.0

Illl

50.5
10.4

0.0
0.0

0.0
0.0

"tl

-

-

0
...,

5CP

g;

-6"
S"

'0

5. Transp., etc.

67.5
43.3

.891

70. 1
45.5

74.0
48.8

-2.3
(-2.3)

.109

46.3
25.2

(46.3)(25.2)

(0.0)
(0.0)

71. 0
46.2

-2.0
-2.0

-1.5
-1.0

6. Commerce

48.1
30.5

.909

55.5
37.0

55.0
36.6

0.3
(0.3)

.091

-25.4
-34.3

(-25.4)(-34.3)

(0.0)
(0.0)

47. 7
30.1

0.3
0.3

0.1
0.1

7. Services

36.4
8.3

.869

50.1
19.2

LJy
y

Z
y

:EZi. LJZi
Z Zj

.880
.879

aNotation for total economy: y= :EYi,
cc

2.6
(2.6)

.131

-54.2
-63.6

E
Y

:EEj.LJEj
E Ej

65.4%
36.0

Z

di

P.G.E.*

61.1%
33.4

Z

ai

CE.*

2.6%
1.9

Z= :E Zi, and E= :E Ei.

(-54.2)(-62.6)

(0.0)
(0.0)

33.2
5. 7

2.3
2.3

1.0
0.4

. J20
.121

11. 7%
-10.6

...,

::r
CP
tj
CP

S
III
:;l

9..,0-

6:E Ei LJWi :E Ej LJfJj:EZi. LJdi_ :EZi. LJai

Total Economya

58.9%
30.3

46.4
16.2

CP

~rn

----iF Wi

7f'7i PGE*...

P.G.E.*

C.E.*

15.1%
7.6

-3.0%
-13.9

~

CE.*

I.E.*

.g

g

Ui

0:
CP

55.6%
30.3

1.9%
-0.0

1.3%
+0.0

deflators which were used in the previous paper,12) while those for Wi and M i are the priceor unit value indexes of world exports of market economies. 13)

Again for the last three sectorsof transportation, commerce and services, the NIS deflators are used to deflate Wi and M ialso due to the lack of appropriate data.
Though the table contains some unreliable portions caused by the insufficient data, we
can say that, between 1965 and 1969, output in each industry grew almost in proportion tototal demands of both domestic and foreign markets, because P.G.E. (column 10) is dominant
while C.E. (column 11) is quite small.

The exception is the mining industry.

Its output

growth, which is very large compared to the other industries, receives significant contributions from both P.G.E. and C.E.

This is mainly due to the rapid increases in productionand export of copper during this period (i.e., 255% and 185% respectively in value).14)
In the agricultural sector, on the other hand, the competitive effect in the world market(column 9) is not only significant but also negative.

The result is also due to a specific reason.

In other words, the exports of coconut and copra, whose share in total agricultural exports
was almost 50% in 1965, decreased considerably between 1965 and 1969 (i.e., -35.6% in value
based on the 10 data), causing a low growth of total agricultural exports and a negative
share-increase in world agricultural market. 15 ) A similar result is obtained for the manufacturing sector where the import substitution effect (column 5) is moderate and the competitive effect in world market (column 9) is even negative.

Let us investigate in moredetail below the case of manufacturing industry whose performance is closely related to theprocess of Philippine industrialization.
Table 2 shows the disaggregate results for twenty components industries in the
manufacturing sector, which are obtained by applying the same formula (12) and expressed
only at current prices due to the lack of price data.

From the table we can see that, in almost

every component industry, P.G.E. (column 10) is dominant while C.E. (column 11) is positive
but small.

The results on total or average effects (columns 10 and 11) correspond to thoseon components effects in the domestic market (columns 4 and 5), because the ratio of domestic
use to domestic production (column 2) is close to one in many industries (.897 on the average),making the domestic market dominant over the export market.

For the domestic market

12) See Table 4 of Ezaki [1976] and the related discussions on the NIS deflators there. The export price indexes should be used to deflate E i if such data are available.
13) See Data Appendix of this paper. The import price indexes of the Philippines should be used to deflate
Mj if such data are available.
14) The value shares of copper production in total metallic production and total mining production are,respectively, 49% and 32% in 1965 while 74% and 54% in 1969. See Philz'ppine Yearbook 1975, Tables
XV. 1 and XV. 4 and NEDA Statistical Yearbook 1975, Table 12.6.
15) Precisely speaking, we must allow also for the commodity compositional effect as in the case of manufacturing sector discussed below. Balassa [1971, Table 2.6, p. 43] provides the results of eMS analysis forseveral commodities of the Philippine exports comparing 1950-53 with 1963-66. Judging from ourresults above, it seems that there occurred in the early 1960's a structural change in the Philippine agricultural exports in relation to copra and logs.

10the disaggregate results of Table 2 are quite similar to the aggregate results of Table 1 (which
are shown also in the last row of Table 2).

That is to say, during the period in question,

the effect of import substitution is moderate in most industries except for some of the heavy
industries (i.e., basic metals and machineries other than electrical ones),l6) and there exists
no big discrepancy between P.G.E.* (63.4%) and P.G.E. (65.8%) or between e.E.* (6.4%)
and C.E. (5.2%).

For the world market, however, the disaggregate results are conspicuousin that C.E. (column 9) is not only significantly positive but also more important than P.G.E.
(column 8) in many cases. l7 ) As a result, the pure competitive effect of total manufacturingsector (C.E. *) is significantly positive (6.0%), explaining 15% of its export growth (40.1 0/ 0),
and there arises a considerable discrepancy between C.E. * (6.0%) and C.E. (-9.2%). As
can be seen from equation (18), this discrepancy is caused mainly by the commodity compositional effect (e.c.E.) for which a large negative value (-22.10/0) is obtained here according to equation (17).
Then, what is the reason why such a large negative value is observed for the c.e.E. ofworld market?

The answer can be found in Table 3 which shows the breakdown of C.C.E.'s

in the manufacturing sector for the world market as well as for the domestic market.

A

notable fact on the world market is that the Philippine exports concentrate heavily on the
products of food manufacturing industry (column (7) to be compared with column (8»,while the growth of world demand for the manufactured food is lowest among the productsof nineteen industries under consideration (column (11».

Therefore, the positive con-tribution to e.C.E. of food manufacturing industry (7.3%' column (12»is small relative

to its large compositional gaps between Philippine exports and world imports (.37327,
column (9».

The same may be true, though to a lesser extent, for the exports of chemicalindustry whose major component is coconut oil. lS ) As a result of this heavy concentrationof exports on food manufacturing (and probably on chemicals), the commodity compositional
gaps in other industries become negative and large (column (9) ), causing significant negative
contributions to e.e.E. (column (12».

This is true especially in the case of heavy industries

where the world demands for their products are growing quite rapidly (column (11».

For16) It is needless to say that the effect of import substitution is, more or less, negatively correlated with thelevel of a. The data on a in twenty components industries in 1965 are as follows: (1). 890, (2). 951,
(3) .978, (4) .643, (5) .968, (6).988, (7). 620, (8) .911, (9) .840, (10) .838, (11) .611, (12) .841, (13) .813,(14) .338, (15) .660, (16) .106, (17) .450, (18) .448, (19) .365, (20) 1.000. Total manufacturing = .764 (theweighted average of components a/s in 1965).
17) The extraordinarily big figures in columns 7 and 9 correspond to the case where exports and market sharesare very small in the base year 1965. The data on {3 in 1965 are as follows: (1) .0140194, (2) .0006131,(3) .0143846, (4) .0023201, (5) .0122571, (6) .0012752, (7) .0000002, (8) .0001238, (9) .0000271, (10) .0000618(11) .0075037, (12) .0014261, (13) .0000002, (14) .0001135, (15) .0001248, (16) .0000212, (17) .0000267,(18) .0000043, (19) .0003438, Total manufacturing = .0032752 (the weighted average of components(3's in 1965).
18) The share of coconut and other oils and fats in total chemical exports is 90.7% in 1969 (based on the
10 data).

12

Table 3

Breakdown of C.C.E.'s in the Manufacturing Industry (at current prices): 1969/1965-'~'---~-------

World Market

Domestic Market- ----

Industries

(1)

(2)

-_ __
...

.---

(4)
(3)
- _ _ . _ - - - . - _...
(3) in(1)-(2)
1969
1965
..

Zik/Zidik/di1965

1965--_ __..

- - - ~ . _ - - - _ . -._---_.~------_._-----------

(5)

(6)

(7)

(8)

(9)

(10)

(11)

(12)

LJdik

C.C.E.a(3) X (5)Eik/Ei

Wik/Wi(7)-(8)1965(9) in1969

LJWik?Vik -

C.C.E.b(9) X (11)19.696
32.3

7.3%
-0.3

25.0

0.9
-1.5

-

.00087~__ ...
50.5%
84.8
79.9
124.3
70. 7
162. 7
47.2
30.8
127.0

.0020650.1

O. 1.0004.0-.01124.01014

64.1
62.7

-0.9

.04722-.01363.007400.5.22389.01797.02312.00274.0035581. 4

O.?

. 00000. 04196-.04196-.03616

48.8

-2.0

.03758

97.2

-2. ]

.0040355.0-0.2.00084-.11218-.0205656.3-.00362.11621.02140-.09146.03940.05170-.01800-.00209-.01997-.04536

83.7

-3.7

.00079. 12156-.12077-.12459

17. Electric mach.

.01836.02964-.04413-.01128

61. 5
61. 2

-6.3
-1.3

16. Machinery.01746.03578.00757-.02012-.01174.05126-.05084-.0581991. 3.03407.05533.01893.00162-.02126-.02352

-0.8
-1.'3

.00042

18. Transp. equip.
19. Miscel. manuf.

71. 4
59.7

.07878.04894-.10956-.03060

128.4
66.5

-

-.07868-.04380
-

-

-

1.0

0.0

0.0

--_

1. Food manuf.

. 46136.37702.08434.07898

2. Beverages.04177.03192.00985

3. Tobacco prod.

.06050.04498

4. Textiles etc.

.06213.07025.01552-.00812.00985.00970

5. Wood prods.

.02153.01618.00535

6. Furniture etc.

.00597.00439.00158

7. Paper8. Printing.02232-.00386.02563.02618.02045

9. Leather.00294.00255

10. Rubber prod.

.01894

11. Chemicals
12. Petroleums.07147.01643.08510.05462.02586

13. Non-metallic
minerals
14. Basic metals
15. Metal prod.

20. Scrap.00518.00039-.00617.00477.00198-.00339.00202

...

1965

1965

----------

_----

4.3%
0.8
1.2
-1.0

.....-_.-.... _----_._--.48706.11379.37327.37807.00225.Ot657.01200-.00975-.00448.01060.03597.13511.02762-.03940.02788-.01654.09571

0.4.103380.3-0.2.00120.003070.2.00000.00021

0.0

38. 7

aSee equation (19).
~

~

N

>

C
..
Q

....

0

:;:

5-

>-

("')
("')

0

142.2
37.5
79.6

3.4
-0.3

aq

-1.6

0
....

-0.4

5<'I>

63.2

-0.3

'"t:J

-.01485

27.2

-0.6

.;:;'

.04957.01230

50.1
27.8

6.6
-0.6

!!'

U

.07576.0818844.8.04259-.00187-.04259-.00088.00564-.00543.00004.00498-.00494-.00284-.00525.02111.10209-.02071.04128.13180-.02331-.03433

~

a

S'

[

'1j

S'
<'I>

...,

::r
<'I>
<'I>

.00950.00223-.00943.00061-.00319.00080

27.8

-0.3

164.3

0.1

.00010.00514-1.0

1.0

bSee equation (17).

0.0

0.0

-2.3

1.0

cColumn sums.

S
I\'

::J
0-

~
0

....

-7.4

6

-4.6
-10.1

-d

-2.9

0.:
<'I>

- - - - _ .... _------

Total Manufact. c

a;:
M

-22.0

~

~

Ul

the C.C.E. in the succeeding period, say 1969-1973 (though the required 10 data are notavailable yet), we can expect that a large negative value will be observed again, since thecommodity compositional gaps in 1969 (column (10) ) are not so much different from thosein 1965 (column (9)).

For the domestic market, on the other hand, we can say based on thesimilar analyses that a strong concentration of domestic supplies on food manufacturingindustry is the main reason for the negative C.C.E. (-2.3%).

However, the C.C.E. hereis small in absolute value because domestic supplies are generally dominant over foreign
supplies (i.e., imports) in the domestic market,19) resulting in small compositional gaps
between domestic supplies and total domestic demands (column (3) ).
These observations on the performance of the manufacturing sector and its components
industries lead us to a somewhat definite conclusion about the Philippine industrialization
during the period between 1965 and 1969.

That is to say, the Philippine industrialization

was successful during this period in the sense that most of the components industries of the
manufacturing sector strengthened their competitive powers in both of the domestic andworld markets.

At the same time, however, the competitive power of the manufacturingsector as a whole was weakened, to a small extent in the domestic market while considerably
in the world market, due to the unfavorable effects of commodity composition caused by
the heavy concentration on the food manufacturing industry in both markets.

As to thePhilippine economic growth in the postwar period, it is often argued that the easy phase or
exuberant stage in import-substituting industrialization was over by the end of the 1950's.20)
Our observations and conclusion above seem to indicate that the second stage of import substitution in the backward linkage industries and the export expansion proceeded smoothly
in the second half of the 1960's.

The second stage, actually, was more explicit in this period

than in the first half of the 1960's since, as is shown in Table 4,21) the effect of import substitution (column 5) was negative in general and negatively large in some of the heavy industries
during the period between 1961 and 1965. 22 )So far was concerned about the individual sectors and industries.

For the total economy,

Table 1 (the last two rows) gives a measurement of the 10 basis derived by aggregating sevencomponents sectors. 23 ) The result is given, of course, in terms of gross (total) output, so that
19) See the data on a in footnote 16.
20) See, for example, Power and Sicat [1971], Chapter 2.
21) Note that Table 4 is based on the 1961 input-output table which contains an erroneous data compilationon the capital formation (footnote 1). However, its effect on the final results seems to be small judging
from the comparison of capital formation between 1961 and 1965 tables.
22) The unfavorable performance of manufacturing industries in the domestic market during 1961-1965,
contrasted with the favorable performance during 1965-1969, may reflect the exchange control policies
in the 1960's, because the former period can be characterized as the phase of continued decontrol anddevaluation while the latter as the phase of return to moderate exchange control after the phase of complete
liberalization. See Robert E. Baldwin [1975], Table 1-6, p. 12. The favorable performance in the world
market, on the other hand, seems due mainly to the continued devaluation during this period.
23) Note that this is only an approximate result due to the insufficient data (especially for the world market).

14

Table 4

Decomposition of Growth of Manufacturing Outputs (at current prices): 1965/1961
--

I

2

3

4

5

6

7

8

9

10

1]

12

iJYk/Yk

Zk/Yk

iJzk/ Zk

iJdk!dkiJak/ak

Ek!Yk

iJEk/Ek

iJWk!WkiJ{3k/{3kP.G.E.

C.E.

I.E.

73.8% .891
12.7 .998
81. 8 .955
36.5 .989
27.5 .870
36.8 .991
72.0 .99999
86.8 .99962
39.0 .99995
25.4 .99992
92.3 .928
42.5 . 99997

74.1%
12.3
74.8
17.3
-5.5
34.9
72.0
86.7
38. 7
25.1
50.5
37.3

75.9%
16.0
65.8
16.4
-3.4
34.6
41. 5
84.4
22.2
32.9
60.2
24.0

-1.0%
-3.2
5.5
0.8
-2.2
0.3
21. 6
1.3
13.5
-5.8
-6.0
10.7

.109
71.9%
.002
249.3
.045
232. 1.011
1686.6
248.3
.130
.009
241. 3200.0 a.00001.00038369.8.000054700.0a.000082875.0632.4.072· 00003 174658.3

50.496
41.1
36.0
50.1
48.8
175.4
57.5
92. 7
62.8
42.9
79.8
51.1

14.496
147.5
144.1
1089.8
133.9
23.8
90.1
143. 72852. 12610.5307.8115561. 0

82.3.99982

82.4

78.5

2.2

.00018

-88.5

114.4

-94.6

78.5

14. Basic metals
8.9
15. Metal prod.
125.0
16. Machinery-38.4
17. Electric mach. 81. 4
18. Transp. equip. 133. 7
19. Miscel. manuf. 44.7
20. Scrapb-.99993.998. 99953.99999.99999
.978

6. 1
124.9
-39.1
80.9
133.6
39.2

43.9
113.7
40.1
97.7
100.0
105.6

-26.3
5.2
-56.5
-8.5
16.9
-32.3

.00007.002· 00047· 00001.00001.022

39041. 7215.81459.348700.0a5950.0
289.9

76.4
82.3
107.4
111.2
120.6
141. 222111. 4
73.2
650.4
22917.2
2646.561. 7

43.9 -24.7 -10.4
113.6
6.0
5.3
40. 1 -56.2 -22.3
97.7 -8.3 -8.0
100.0
16.9
16.9
106.4 -30.2 -31.4

-

-

-

-

-

~~. iJdk~~. iJak

Industries

1. Food manuf.
2. Beverages
3. Tobacco prod.
4. Textiles etc.
5. Wood prods.
6. Furniture etc.
7. Paper8. Printing
9. Leather
10. Rubber prod.
11. Chemicals
12. Petroleums
13. Non-metallic
minerals-~....0.

~

Total
Manufacturing.. _--_ .. _--_._. __ .. --~~. iJz k

iJYM_
YM

ZM
YM

63.4

.938

56.2

(11)(11)( II )---------_.~------"

ZM

Zk

ZM

dk

ZM

ak

(P.G.E.)(C.E.)

58.4(58.2)-1.4.( -1. 3)

EMYM~ E k . iJE k
EM

Ek

.062

172.5

( II )( II-)

73.1% O. 7% O. 1%
16.1 -2.9 -0.4
5.8
64.5
11. 8
6.1
16.8
12.8
3.4
15.5
8.6
0.5
35.9
0.5
41. 5
9.0
21. 6
84.4
1.1
1.4
3. 1
22.2
13.6
32.9 -5.6 -1.8
61. 6
16.6
14.3
24.0
14.2
4.3

-

2.2

-

~ E k . iJWk ~_~. iJ{3k P.G.E.* C.E.*
EM

Wk

EM

13k

1.7

-

(C.E.)(P.G.E.) (C.E.)(I.E.)

52.7(75.6)

74.8(55.2)

58.0(59.3)

1.7(1. 9)--_."._~------aO (zero) in the 1961 10 table so that 1 (one thousand pesos) is used in computation. bNot available in 1961.

N

;.-

:5
Q

....
0

:s

&

>-

()
()

0

c

g
S'

Il'q

0
.....

&

'"

"tI

g;

ii'
'1:l
S'

'"

!f'

o-:J

::r

'"
U
'"I"
S
::l

9.....
0
....

6
c

-0

~

I.E.*

(P.G.E.)

3.3
(2.2)

~
~

---,.._~.-_._._--~------

IJ}

0.:

'"

~

~

Table 5 Decomposition of Growth of GNP (at constant 1967 prices): 1956-1974
1

3

2

5

4

--~--~-_.

JYjY

JZ/Z

Z/Y

JD/D

Ja/a

6
__

._._.~----

ElY

7

8

9

10

11

P.G.E.

C.E.

JEIE

JWIW

Jf31 f3----------------~

.844

60/59

5.1%
3.9
6.6
2.0

.871
.887

8.6
-0.1

1957/56
58/57
59/58

7.2%
5.3

.860

-1.5%
4. 1

8.996
1.2
4.0
1.4

4.4
-1.5

.156
.140
.129

-6.1%
-4.4
-6.6

3.9% -9.6%
-0.7
-3.7
11. 3
-16.1

4.9

1.8
-0.3

/.792
.780
.812

0.1

.848

.869

6.9

6.0

0.8

5. 7

5.6

0.5

.127

15.9

8.0

7.3

4.2

7.0
2.5

4. 1
5. 1

3.6

63/62
64/63

.873
.861

.139
.155

8.6
9.4

9. 7
-3.1

65/64

5.2

1.9
3.6

1.4
-2.5

19.1

.845
.840

3.6
4.5
4.0

-0.4

.160

8.5

66/65

4.8
5.8

. 827
.825
.829

4.6
6.4

4.6

-0.0
-2.5

4. 7
-3.5

69/68

8. 2
7.8

.852

.148

2. 7

1.8
2.2

6.1
3.3
-9.9
-5.1

.133

9.8

1.4
0.3
-0.4

.138
.144

-1.0

70/69

5. 7

.867

71/70

6.2

72/71
73/72

4.2
9.8

.862
.856
.837

9.9

4.0
1.5
10.3

74/73

5. 7

.837

12.2

13.3

----,.--_._--

1961/57
65/61
69/65

23.6
28.3

.163
.163

"._-----

20.0%
21. 9

73/69

5.0
5.4
1.8

O. 1

.175
.171

22. 1%
15.4
29.6

.873
.827

23.9

.867

------~-----------_.-

--

--_

.. ~-

13.1%
16.6
30.5

7.9%
-1.0
-0.7

.140

19.6

3.6

--_._~._--

.. _.

5.8
14.2
11. 6

0.0

.836

.00782

O. 1.842.00763

4.3
5.3

O. 2
-0.1

.846
.859

.00819.00898

4. 7

0.4

0.1

.837

-0.6

-2.3

5.5
8.5

-2.5

-0.1
-0.2

.00870. 00911

-20.3
-15.0

9.1
6. 7

-3.4
-0.7

3.4

2.1

4.3
2.6
10.6
11. 7

1.8
1.4
-0.7

11. 0
18. 1
9.4

9.3
11. 9
3.2

-30.0

-

-5.7

. 834

.173

22. 996 -11. 2%
39.2
19.3
48.2
-36.1

.133

57.4

40.6

12.0

3m
'-..j
,-:"
'-..j

~

~

.00879.00859-0.2.00685

~

O. 1

.828

.00582

<Jju

O. 1

.846

.00590

0.1
-0.1
-0.3

.858
.861
.858

.00617.00667.00652

-0.5

33.6

5.2%
1.6
-6.8

0.596
0.8
-3.2

/.780
.842
.834

/.00859.00763.00911

22.4

4. 7

1.3

.828

.00582

14.5%
19.5

;.mt

.833
.812
.813

-------_._---~---

~--

9.2%
66. 1
-5.3

.127

.00853.00716

1.4
2.6
-2.6

1.4
4.6
8.1
-2.3

-27.8

/.00950.00859

0.4

8.3
6. 1

---------'---_ .. -

.860

9.9

2.2
6.0

f3

--_._-----

0.0
-0.1

6.4

6.0
13.6

-

-0.2%

61/60

5.2
5.9

8.5

---~-_.-.

3.4

62/61

.173

18.5
3.3

a

I.E.
--

-2.8%

9.2
-2.3

9. 1
8.1
5.8

13

8. 1%
0.5

.113
.131

67/66
68/67

12

- -----".,-----------_._._--'-----

Basic identities: Y+M=D+E, Z= Y-E=D-Jll, Y=Z+E, a=Z/D and f3=EIW.
Data sources: National Income Series (NEDA), Statistz'cal Yearbook (NEDA), Yearbook of International Trade Statz'stics (UN), etc.

~

01

~

M. EZAKI: Growth Accounting of the Philippines, The Demand-for-Output Side

it seems worthwhile for comparative purposes to provide here a corresponding result interms of GNP (i.e., measurement of the N1S basis).

There exists no meaningful linkage

between 10 and N1S bases unlike the case of growth accounting from the input side, mainly
because it is not reasonable to compare GNP (total final expenditures) directly with imports
in the domestic market.

Therefore, our measurement of the N1S basis here is derived only

by analogy without any theoretical rationale for the domestic market, replacing y (total
output) by Y (GNP or total value added), z (total domestic supply to domestic market) byZ (total domestic supply to domestic final market), and d (total domestic demand) by D
(total domestic final demand). The results at constant 1967 prices are presented in Table 5
for the period 1957-1974 annually.24) We must be careful in reading the table that P.G.E.'s
and C.E.'s are measured on the basis of the highly aggregated national income data which
probably generate high levels of C.C.E.'s in both markets.

Though the results shown in

Table 5 not only lack their theoretical background for the domestic market but also miss thedetailed informations on the components sectors and industries, they are useful to get a roughidea on the sources of GNP growth from the demand side and to supplement the measurementof the 10 basis constrained by the limited availability of input-output tables.

IV Concluding Remarks
We have presented, in this paper, a methodological framework for the growth accounting
from demand side on the basis of the input-output tables by applying the constant-marketshares (CMS) analysis of exports consistently to both of the domestic and world markets.
U sing this framework, we have provided a measurement on the Philippine economy in theform of comparing mainly the 1965 and 1969 input-output tables of NEC and NEDA, andinvestigated in some details the process of Philippine industrialization in the 1960's.
Our measurement and analysis, however, are limited in many respects mainly due to thescarcity of available data.

For example, first, various components demands in the domestic

market are not distingushed explicitly here so that such demand factors as consumption,
investment and intermediate expenditures are treated completely in the same manner.
Second, similarly in the world market, differences between components individual markets(countries) are not explicitly allowed for, neglecting the so called market compositional
effect of the ordinary CMS analysis.

Third, also in the world market, the role of domestic

industry as the competitor in each importing country is neglected by regarding only imports
as the measure for the market size.

Fourth, the measurement and analysis here are madeonly for the period between 1965 and 1969, or at most for the 1960's (though the 1957-1974
period is covered in a rough way by the measurement of the N1S basis).

Finally, the com-

24) The national income data for 1956-1960 are obtained from Canlas, Encarnacion and Ho [1975], Table l.
The world imports (TV) are again estimated by the sum of total imports (all commodities) of the sametwenty countries. The deflator for W is the price or unit value index (all commodities) of world exportsof market economies.

17

parison between growth accounting of the demand side and that of the input side is possible
only for the aggregate seven sectors but not for the detailed components industries. 25 )These limitations, of course, must be lessened and eliminated one by one in accordancewith the improved data availability.

At the same time, similar analyses must be made on theother developing countries in East and Southeast Asia (Korea, Taiwan, other ASEAN
countries, etc.) as well as on Japan, because the international comparison may possibly shedsome light on the process of Philippine economic development.

The analysis by international

comparison on both input and demand sides will be the major topic of the author's future
researches.

Appendix. Note on the Morley-Smith Measure of Import Substitution
Morley and Smith [1970] criticized the Chenery's measure of import substitution as employing a narrow definition of imports, and proposed a new measure by expanding the conceptof imports to include the intermediate demands generated by import susbtitution.

In this ap-

pendix, we will raise several criticisms against their proposal, from which it may be concluded
that their measure of import substitution is somewhat misleading or at least not superior to theordinary one.
Their analytical framework can be summarized as follows using their own notation andequation numbers:(2)

Xi+mi fi+ ~ aijXj(£=1. . . n)

where mi=imports, Xi=gross production, /i=final demand, both domestic
and foreign, and aij=observed imput-output coefficientf(3)[I- A]x+m(4)x+ [I-A] -1m = [I- A]-V

(5)

m*=[I-A]-1 m =the vector of redefined imports(6)

z*=x+m*=the new vector of total supply.

(in matrix notation)

According to their explanations, m* in equation (5) is the correct concept of imports to be usedin the analysis of import substitution, since it values imports on a comparable basis withdomestic production by allowing for implicit imports due to the intermediate demands generated by import substitution.

In fact, m* seems to be a measure for the equivalent of imports

in domestic production, but it is so only in a limited and unrealistic situtaion.
To clarify this, we consider, first, the case of two industries (i.e., n=2) without losing any
generalities, and rewrite equation (5) as:(AI)25) This is due to the insufiicient availability of capital stock data in each industry.

18

M. EZA KI: Growth Accounting of the Philippines, The Demand-far-Output Side

Note that m*l,l and m*2,1 represent the reqiured increases in outputs of both industries tosubstitute ml completely by domestic production.

m*l,l consists not only of direct substitu-

tion (i.e., ml) but also of indirect substitution (i.e., implicit imports), while m*2,1 consisits onlyof indirect one.

The same is true for m*1,2 and m*2,2 except the fact that they correspond tothe case of substituting m2 domestically.

Now we can see from equation (AI) that ml*(=m*l,l +m*1,2) or m2*(=m*2,1 +m*2,2) consists of these direct and indirect effects insubstituting both ml and m2 simultaneously by domestic production.

Therefore, ml * is not

the equivalent of ml in domestic production since (m*l,l m*2,1) is a reasonable one (though
under the present context only).

Similarly, m2* is not the equivalent of m2 in domestic

production since (m*2,1 m*2,2) is a resonable one.

Only as the set, m* (the redefined import

vector) may be considered as a resonable equivalent of m (the original import vector) indomestic production, so that the meaning of m* is vague or at least not direct.

Actually,

their illustrative explanations to justify m* (given in second, third and fourth paragraphs
at p. 729) are all related to either (m*l,l m*2,1) or (m*1,2 m*2,2) but not both.
Even if m* as the vector is not meaningless, it is the concept derived under the unrealistic
assumption of constant.f (i.e., unchanged final demand).
following way.
(A2)

This can be understood in the

Equation (2), which isx+m f+Ax

in matrix notation, shows the actual or onserved situation.

Suppose that imports are com-pletely substituted by increasing domestic outputs with no change in final demand:(A3)

x* f+Ax*

This is a hypothetical situation.
(A4)Then, we get

x*-x=[I-AJ-1m=m*

which sows that m* is the required increase in output to replace m domestically with no changein.f.

However, it is not possible to increase domestic outputs without using more capitals or

without the increase in captial formation which means the change in f

On the other hand,greater domestic outputs reuire greater labor inputs which may lead to the increase in consumption.

Therefore, m* is the concept derived by comparing the actual situation (equation(A2» with an impossible or unrealistic hypothetical situation (equation (A3».

Furthermore,equation (4) corresponds to the supply-demand equilibrium relations in this hypothetical situation, since its left-hand side is the new vector of total supply with the import component
redefined by domestic equivalent while its right-hand side is the vector of total demand requreid to sustain the observed.f domestically (See equation (A3».

There is no reason why the

hypothetical supply-demand relations shown by equation (4) are better than the ordinary andnatural ones shown by equation (2) or (A2) which values imports on a comparable basis withdomestic outputs as far as the former is competitive with the latter.
19

Data Appendix: World Imports (Wi)(i) Definition of world market. In this paper, the world market is defined as the group of twenty top
trading partners in 1969 which are listed in Table A-I. Note that Indonesia and Malaysia do not belong tothis group of top twenties but they are included in our world market in place of South Africa (19th) andBelgium (20th) only by reason of ASEAN countries.
(ii) Identification of commodities between Philippine 10 tables and UN trade statistics. The data for
Philippine exports are those of the input-output tables, while the data on world imports are based on the
UN Yearbook of International Trade Statistics which classifies commodity transactions according to theStandard International Trade Classification (SITC). Here, the Philippine exports of the 10 basis are identified one by one with the commodities of the SITC basis by using Foreign Trade Statistics of the Philippines(1969 issue, Bureau of the Census and Statistics) which provides detailed data on Philippine exports based on
the SITC. Table A-2 shows this identification in terms of the SITC code numbers. For the sectors oftransportation, commerce and services, however, the corresponding SITC data are not available or not identifiable so that all of the data in the UN trade yearbook are regarded as concerning the agricultural, mining andmanufacturing industries, except for the data carrying the SITC code number 9 which are neglected here
completely. The world imports are, of course, obtained by summing imports in the twenty countries listed
in Table A-l. For some commodities in some countries, the commodity classification in the UN yearbook
is not detailed enough to be compared with Table A-2, so that our data on world imports (Wj) contain someminor approximations which hardly influence the analyses of this paper.

Table A.I

Philippine Exports by Destination (All Commodities).
(thousand U.S. dollars and % in total)Countries

1965

Total (all countries)

768,448

1. U.S.A.
2. Japan
3. Netherlands
4. Korea

348,745
217,565

5. West Germany
6. Taiwan
7. Hong Kong1969
854,601(100.0)( 45.8)360,327( 42. 2)

328,811( 38.5)59,490( 28.3)( 7.7)

30,325

(

3.5)

9,078

(

1. 2)

26, 134(

3. 1)

46,865(

6.1)

19,993(

2.3)

12,111

(

(

1. 7)

(

1. 6)
0.3)

14,446

2,610

7,629

(

0.9)

8. Spain

4,185

(

0.5)

7,005

(

0.8)

9. U nited Kingdom

8,521

(

1.1)

6,048

(

0.7)

10. Singapore

1, 348

(

0.2)

4,738

(

0.6)

3,068

(

0.4)

4,465

(

0.5)

12. Thailand

493

(

0.0)

3,999

(

0.5)

13. Denmark
14. Italy

9,479

(

3, 281(

0.4)

8, 148(15. Canada

2, 107(

16. Sweden

10,644(

17. France

6, 048

(

1. 2)
1. 1)
0.3)
1. 4)
0.8)

18. Norway

1, 977(

19. Indonesia

376

20. Malaysia

89

11. Australia

Subtotal(1-20)

753, 277(100.0)3, 134

(

0.4)

3,018

(

0.4)

2, 579

(

0.3)

2,264

(

0.3)

1, 741

(

0.2)

(

0.3)
0.0)

864

(

0.1)

(

0.0)

563

(

0.1)

( 98.0)831,364( 97.3)

Source: Central Bank of the Philippines, Statistical Bulletin, Vol. XXVI, December 1974, Table 76(pp. 159-196).

20

M. EZAKI: Growth Accounting of the Philippines, The Demand-far-Output Side

Table A-2

Commodity Identification Based on the Standard International
Trade Classification (SITC).*

Industries

SITC Code Numbers

00,031,041,042-01,043,044,045,051,052,
054,055,071,22,241,242
28,311,312 (or 28,321,331)

Agriculture, Fisheries and Forestry
Mining and Quarrying
Manufacturing

1. Food manufactures

01,02,032,042-02,046,047,048,053,06,072,
073,074,075,08,09

2. Beverages
3. Tobacco products
4. Textile manufactures, wearing appareland made-up textile goods
5. Wood, cane and cork products, except
furniture
6. Furniture and fixtures

7. Paper and paper products
8. Printing, publishing and allied industries
9. Leather and leather products, except
footwear
10. Rubber products
11. Chemicals and chemical products
12. Petroleum refineries and other petroleum
products
13. Non-metallic mineral products
14. Basic metals

15. Metal products, except machinery and1112
21,26,65,83,84,85
243,244,63
82
25,64
892
61
23,62
271,29,4,5
313,314 (or 332,334)
272,6667,68
69transport equipment

16. Machinery, except electrical
17. Electrical machinery, apparatus and71

72

appliances

18. Transport equipment
19. Miscellaneous manufactures
20. Scrap

73
81,86,891,899* Derived by comparing the 1969 input-output table with the Foreign Trade Statistics of the PhiHppines1969 (Bureau of the Census and Statistics).
(iii) Deflators for the world imports. For the aggregate three sectors of agriculture, mining and manufactur!ng, world imports are deflated by the aggregate price indexes which are weighted averages of theprice or unit value indexes for world exports of market economies in the UN Yearbook of International Trade
Statistics. The weights are derived from our estimates of nominal IV;'s in 1965 and 1969.

References
Narongchai Akrasanee, "Import Substitution, Export Expansion and Sources of Industrial Growth inThailand, 1960-1972." in P. Sondysuvan (ed.), Finance, Tra& and Economic Development in Thailand,
Bangkok, Sompong Press, 1975, pp. 257-277.
B. Balassa et al., The Structure of Protection in Developing Countries, Baltimore, The Johns Hopkins Press,

1971.
21

R. E. Baldwin, Foreign Trade Regimes and Economic Development: The Phil£ppines, New York, National

Bureau of Economic Research, 1975.
D. B. Canlas, J. Encarnacion and T. J. Ho, "Sectoral Employment, Income Distribution and Consumption:
A Macromodel with an Input-Output Structure," IEDR- UPSE Discussion Paper No. 75-16, October
1975.
H. B. Chenery, "Patterns of Industrial Growth," The American Economic Review, Vol. 50, September 1960,
pp. 624-654.
M. Ezaki, "Growth Accounting of the Philippines: A Comparative Study of the 1965 and 1969 Input-Output
Tables," IEDR-UPSE Discussion Paper No. 76-2, January 1976 (forthcoming in The Philipp£ne Economic Journal).
K. Liang and T. Lee, "Taiwan," in S. Ichimura (ed.), The Economic Development of East and Southeast
Asia, Honolulu, The University Press of Hawaii, 1975, pp. 269-346.
S. M. Morley and G. W. Smith, "On the Measurement of Import Substitution," The American Economic
Review, Vol. 60, September 1970, pp. 728-735.
S. N aya and N arongchai Akrasanee, "Thailand's International Economic Relations with Japan and theUnited States: A Study of Trade and Investment Interactions," in L. V. Castle and F. Holmes (eds.),
Co-operation and Development in the AsiafPaczfic Region--Relations between Large and Small Countries,
Tokyo, The Japan Economic Research Center, 1976, pp. 94-141.
S. Naya and Udom Kerdpibule, "Trade Policy and Problems of Export Expansion-The Case of Southeast
Asia," in K. Kojima (ed.), Structural Adjustments in Asian-Paczjic Trade, Tokyo, The Japan Economic
Research Center, 1973, pp. 151-186.
J. Power and G. P. Sicat, The Philippines: Industrialz'zation and Trade Pol£cz'es, (OECD Report), Oxford
University Press, 1971, pp. 1-134.
J. D. Richardson, "Constant-Market-Shares Analysis of Export Growth,"Journal of International Economics,
Vol. 1, 1971, pp. 227-239.
Y. Shionoya, "Patterns of Industrial Development," in L. R. Klein and K. Ohkawa (eds.), Economic Growth:
The Japanese Experiance since the j/;feziz' Era, Homewood, Irwin, 1968, pp. 69-109.
Bureau of the Census and Statistics, Foreign Trade Statistics of the Phillipines-1969, Manila.
Central Bank of the Philippines, Statistical Bulletin: Statistical Appendix to the Twenty-Sixth Annual
Report, 1973, (Department of Economic Research), Vol. XXVI, December, 1974.
National Census and Statistics Office, Philippine Yearbook 1975, Manila, 1975.
National Economic and Development Authority, NEDA National Income Series, Number 1-3, Manila,
1973-1975.
, NEDA Statistical Yearbook of the Philippines, 1975 and 1976 issues, Manila, 1975 and1976.
1969 Input-Output Tables of the Phihppines, Manila, 1975.
National Economic Council, The 1961 Interindustry (Input-Output) Accounts oj the Philippines, (Office of
Statistical Coordination and Standard), Manila.
, "The 1965 Interindustry (Input-Output) Accounts of the Philippines," The Statistical Reporter,Vol. XV, No.3, July-September 1971.
United Nations, Yearbook of International Trade Statistics (various issues), New York.

22