A small macroeconometric model of the Philippine economy

This paper describes the ADB Philippine model, a quarterly macroeconometric model for forecasting and policy analysis. The model covers private consumption, investment, government, foreign trade, GDP 3-sector labor and production, prices and monetary sectors. The equilibrium-correction form is used, estimated via the general→specific dynamic specification approach, to ensure the best possible blend of a priori long-run theories with short-run dynamics through a posteriori guidance. Country-specific features are incorporated and special attention is given the government block design to enable variables simulations of the fiscal debt problem, one of the most critical problems of the economy at present.