Butch Montes - Academia.edu (original) (raw)

Papers by Butch Montes

Food and Nutrition Bulletin, 1987

, and the associated drop in the demand for Philippine exports. These developments led to persist... more , and the associated drop in the demand for Philippine exports. These developments led to persistent currentaccount deficits, which were financed through foreign borrowings. The response to external shocks through foreign borrowings brought unpleasant consequences as the country's external debt grew at an annual rate of 25 per cent over the period 1970-1981. The Philippines' own cumulative current-account deficit for the period 1970-1982 was US$12.9 billion, and by 1983 the total external debt reached US$24.6 billion. The foreign financing of the deficit was encouraged by low interest-rate charges during the period 1974-1978. When the international credit market tightened in 1979, however, the country continued to borrow at higher real rates and increasingly shorter terms. In addition, amortization of previous debt became increasingly burdensome as interest rates rose

The globalization of the economy has diluted the full exercise of sovereignty in tax-related issu... more The globalization of the economy has diluted the full exercise of sovereignty in tax-related issues. The proliferation of low tax jurisdictions could facilitate tax evasion and tax avoidance and is a source of pressure for States. Studies prepared by Tax Justice Network and the United Nations University World Institute for Development Economics Research (UNU-Wider) have shown the global distribution of revenue loss from tax avoidance3. Tax Justice Network has calculated, based on a methodology developed by researchers at the International Monetary Fund, that global losses of tax revenue amounts to around $500 billion a year. By 2017, countries which are non-members of the Organisation for Economic Co-operation and Development (OECD) were affected twice as much as OECD countries in terms of gross domestic product (GDP) loss due to profit shifting4.

Realizing the Development Potential of Diasporas, 2013

United Nations University Press is the publishing arm of the United Nations University. UNU Press... more United Nations University Press is the publishing arm of the United Nations University. UNU Press publishes scholarly and policy-oriented books and periodicals on the issues facing the United Nations and its peoples and member states, with particular emphasis upon international, regional and transboundary policies. The United Nations University was established as a subsidiary organ of the United Nations by General Assembly resolution 2951 (XXVII) of 11 December 1972. It functions as an international community of scholars engaged in research, postgraduate training and the dissemination of knowledge to address the pressing global problems of human survival, development and welfare that are the concern of the United Nations and its agencies. Its activities are devoted to advancing knowledge for human security and development and are focused on issues of peace and governance and environment and sustainable development. The University operates through a worldwide network of research and training

Philippine Journal of Development, 1988

P Number Twenty-Seven, Volume XV, No. 2, 1988 ... REVIEW OF STRUCTURAL ADJUSTMENT IN THE PHILIPPI... more P Number Twenty-Seven, Volume XV, No. 2, 1988 ... REVIEW OF STRUCTURAL ADJUSTMENT IN THE PHILIPPINES ... This paper reviews, albeit not comprehensively, the issues of structural adjustment in the Philippines. It focuses on the identificationof those elements in past ...

Governing Globalization, 2002

The Asian crisis and its rapid spread to Russia and Latin America in 1997 and 1998 gave rise to a... more The Asian crisis and its rapid spread to Russia and Latin America in 1997 and 1998 gave rise to a broad consensus on the need to reform the international financial architecture in order to reduce the inherent instability of the current system. This chapter critically reviews the ongoing debate from the developing country perspective and argues the case for a thoroughgoing reform of the current architecture. It looks at the current controversy which is organised in terms of distinguishing the areas in which there is some agreement from those in which there is still a considerable divergence of opinion. This is an expository device, based on the chapter's perception of existing consensus and divergence. The chapter focuses on reforms needed to prevent and manage financial crises — what may be called the ‘narrow’ financial architecture — leaving aside issues relating to development finance, in particular.

Poverty And The Millennium Development Goals: A Critical Look Forward, 2016

In recent years, poverty alleviation, poverty reduction and the eradication of poverty have moved... more In recent years, poverty alleviation, poverty reduction and the eradication of poverty have moved up the international agenda, with poverty eradication now defined as the greatest global challenge facing the world today. In cooperation with its sponsors, the International Social Science Council (ISSC) and the University of Bergen (UiB), CROP works in collaboration with knowledge networks, institutions and scholars to establish independent, alternative and critical poverty research in order to help shape policies for long-term poverty prevention and eradication. The CROP network comprises scholars engaged in poverty-related research across a variety of academic disciplines. Researchers from more than a hundred different countries are represented in the network, which is coordinated by the CROP Secretariat at the University of Bergen, Norway. The CROP series on International Studies in Poverty Research presents expert research and essential analyses of different aspects of poverty worldwide. By promoting a fuller understanding of the nature, extent, depth, distribution, trends, causes and effects of poverty, this series will contribute to knowledge concerning the reduction and eradication of poverty at global, regional, national and local levels.

In 2015, the United Nations community reached agreements on updating the financing for developmen... more In 2015, the United Nations community reached agreements on updating the financing for development mechanisms, Agenda 2030 and an updated climate change regime. The SAMOA pathway is an important resource and an input to these efforts. For Small Island Developing States (SIDS) and their peoples, the right to development will require a genuine global partnership for development that surmounts the exposure and vulnerability of these countries to the vagaries and vicissitudes of international trade and financial markets and the inequities in global macroeconomic policy governance which unduly restrict their policy space. For the SIDS, the right to development will also entail a sea change in present performance trends in mitigation, adaptation, and the transfer of finance and technology. SIDS can take an active role in defining what the right to development means in terms of international economic governance.

Development, 2021

The United Nations' systemic issues agenda concerns the terrain of economic engagement among nati... more The United Nations' systemic issues agenda concerns the terrain of economic engagement among nations and peoples of the world, the terreain which underpins international cooperation and peace. In the twenty-first century, this agenda must contend with inequities in access to decision-making, policy inconsistencies in the rules among different areas such as trade and finance, and curtailing vulnerabilities arising from the excessive dominance of financial logic in economic decision-making.

Journal of the Asia Pacific Economy, 2019

Is foreign direct investment (FDI) more resilient at the onset of an economic crisis and the subs... more Is foreign direct investment (FDI) more resilient at the onset of an economic crisis and the subsequent economic collapse in a given host country compared to other forms of foreign capital inflows? Are affiliates of multinational enterprises in a crisis-hit country better equipped to withstand a crisis and to aid the recovery process by readjusting their investment, production and sales strategies compared to local firms? This paper examines these and related issues in the context of the 1997-98 economic crisis in East Asia. The paper starts with a scene setting surveys of FDI policy and the overall investment climate in the five crisis-hit countries (Thailand, Malaysia, Indonesia, Korea and the Philippines), with emphasis on changes in investment policy introduced as part of the crisis management package. It then looks at the behaviour of FDI compared to other forms of capital flow after the onset of the crisis, followed by an examination of trends in FDI flows in the recovery process and the comparative performance of affiliates of multinational enterprises (MNEs) in economic adjustment. The findings suggest that FDI was indeed a relatively stable source of foreign capital in the crisis context and that MNE affiliates were instrumental in ameliorating the severity of economic collapse and facilitating the recovery process.

United Nations Series on Development, 2014

The U.S. Congress established the East-West Center in 1960 to foster mutual understanding and coo... more The U.S. Congress established the East-West Center in 1960 to foster mutual understanding and cooperation among the governments and peoples of the Asia-Pacific region, including the United States. Principal funding for the Center comes from the U.S. government, with additional support provided by private agencies, individuals, and corporations, and more than 20 Asian and Pacific governments. The Center promotes responsible development, longterm stability, and human dignity for all people in the region and helps prepare the United States for constructive involvement in Asia and the Pacific.

Retooling Global Development and Governance

Occasionally, the Pardee Center convenes groups of experts on specific policy questions to identi... more Occasionally, the Pardee Center convenes groups of experts on specific policy questions to identify viable policy options for the longer-range future. This series of papers, Pardee Center Task Force Reports, presents the findings of these deliberations as a contribution of expert knowledge to discussions about important issues for which decisions made today will influence longer-range human development.

The Journal of Asian Studies, 1993

IDS Bulletin, 1999

Latin American experiences in balance-of-payments crises have been a rich source of insight into ... more Latin American experiences in balance-of-payments crises have been a rich source of insight into the causes and results of such crises. Using the Latin American backdrop, certain features of the Asian crisis suggest that recovery can be more complicated in Asia, though it might not necessarily be more drawn out. In recent memory we can distinguish between two Latin American crises: the 1980s debt crisis and the 1994 Tequila crisis. In fact, Mexico's external payments problems served as the trigger to both. Currently the Thais are trying to avoid a similar reputation; early on, it had been suggested that Asia crisis be called the 'Tom Yum' crisis. The private-lending boom origin of the Latin American Southern Cone crisis of 1981-83 shares many of the features of the Tequila crisis. The 1994 Tequila crisis was characterised by a 'V-shaped' pattern: drastic economic collapse followed by rapid recovery The 1980s debt crisis manifested an 'Lshaped' or 'extended' recovery pattern. In the context of these two types of Latin American crises, three factors create specific complications for Asian economic recovery: (1)Unlike the 1980's debt crisis, the locus of the Asian crisis is not overwhelmingly in the public sector, butin the private sector (2)The Asian crisis is situated in the credit system, with its inherent problems of rehabilitation and recapitalisation plus vulnerability to currency devaluation and instability * This is a heavily excised version of a paper presented at the Forum on Currency and Financial Crises: Latin and Asian Experiences and Lessons, 16 June 1998, ISEAS. I take sole responsibility for all the facts and opinions in this article and my interpretations do not necessarily reflect the views or the policies of the Institute and its supporters

The East-West Center is an internationally recognized education and research organization promoti... more The East-West Center is an internationally recognized education and research organization promoting a stable, peaceful and prosperous Asia Pacific community.

The balance-of-payments difficulties became clearly unmanageable in the first half of 1983. The e... more The balance-of-payments difficulties became clearly unmanageable in the first half of 1983. The erodingconfidence in the economy and the political system further aggravated the problems. The Aquino assassination and the CB disclosureson the international reserveswere two major market surprisesthat resulted in greater dislocation since they were not predicted and properly discounted by the market. Thus, when international lending institutions ceasedfurther lending to the Philippinesand called in their maturing loans in the secondhalf of 1983, the Philippineswas catapulted into its worst balance-of-payments crisis unprecedented in its postwar history. This clearly called for an immediate responsefrom the government. The variousstabilization measuresadopted by governmentin response to the BOP crisis were not introduced at the same time. Rather, they were spread throughout the period 1983-84. It is believed that all the necessarystabilization measureswere already in place by December 1984. This does not, however, mean that the crisisperiod isalready over. This study hasattempted to document and critically evaluatethe various stabilization measuresadopted by government in responseto the 1983-84 BOP crisis. Specifically, it has examined the measures adopted by governmentto improve the balanceof payments, to manage budget deficits and growth of reserve money, as well as the price and wage adjustmentseffected throughout the period 1983-84. Their effects on the overall balance Of payments, inflation, output and employment have also been investigated.The major findings are summarizedbelow. MeasuresAdopted to improve the Balanceof Payments The immediate policy responsesof government were directed at the external sector. To discourageimports and arrest further capital flight, the peso was devaluedthree times between June 1983 and june 1984. Finally, a free float was declaredin October 1984. The adjustments in the exchange rate were accompanied by severeforeign exchangerestrictionsand wide rangingimport controls which include, amongothers, the creation of a foreign exchangepool for priority import payments by requiring banks to sell 100 percent of their foreign exchangereceiptsto the Central Bank and the setting up of priorities in the allocation of foreign exchange. However, towards the last quarter of i 984, the Central Bank abolishedthe foreign exchange priority allocations program for imports and allowed banks to hold 30 percent of their outstanding regular letters of credit. xvi New trade taxes were also imposed, effectively raisingthe prices of importables. Ad valorem duty on all importations was raisedby 10 percent in june 1984. In addition, a special excisetax of 10 percent was imposedon foreign exchangesold by the Central Bank and its agents in June 1984. This was subsequentlyreplaced by the foreign exchangetransaction tax of 1 percent in October 1984. The economic stabilization tax of 30 percent was imposed on all exports in June 1984 but was later suspendedin September 1984. These measureshave immediate effects on the real price of foreign exchange.The seriesof de recto devaluationshave raisedthe real effective exchange rate from an index of 97.74 in 198:2to 112.90 in 1984 (1973=100). Correcting the appreciation of the dollar for the additional import tariff and export taxes and comparingthe resulting net effectiv_ changein the exchangerate with the changesin domestic costs, representedby GDP deflator and wage index show that it was not until June 1984, when the pesowas devaluated toT=18to a dollar, that net advantagefor traditional and non-traditional exports could be discerned.The lifting of the stabilization tax and the floating of the peso could have considerably improved the net effective changein the exchangerate for both traditional and non-traditional exports, had GDP deflator not risen more sharply, eroding some of the benefits from net devaluation. For importabies, the net effective change in the exchange rate has been generally favorable, implying that producers of import substitutes have benefitted from the peso devaluation. Overall, the recent de facto devaluations should have favorable effects on trade balance. Additional tariffs and export taxes have virtually reversedthe trade liberalization processinitiated in 198,T. Interestingly,the commodity groups included in the CB list of priorities are alsothe ones previously enjoying low import tariffs and priority in foreign exchahgeallocations. Since foreign exchangeallocation by government effectively acts as quantitative restrictionson imports, then the measuresadopted by government in responseto the crisis givemore protection to heavily protected import substitutes while penalizing less protected sectors(e.g., exports). Clearly, the emergency measurestaken to managethe BOP are contrary to the long-rungoal of rationalizing the protection structure which would have eliminated the unjustified penaltiesagainstnontraditional exports and efficient import substitutes. Further, the measures,although effective in curing balance-of-paymentsdifficulties, have widened the variation of effective rate of protection that could increasethe cost of bllancing the foreign exchangebudget in the long-run. xvii MeasuresAdopted to Managethe Budget Deficits The efforts to manage budget deficits consistof raisinggovernment revenuesand controlling the growth of expenditUres.Between June 1983 and July 1984, the additional revenues were mainly sourced from the external sector by increasingthe specific tax On petroleum products,tariff duties, export duties and by imposingeconomic stabilization tax on exports. As the need to raisemore revenues was felt, another set of revenue raising measures was put in place between August and Oct(Jber 1984. The new measureshave two distinguishingfeatures. One is that the additional tax burden has been shifted from the external sector to the internal sector. The other is that exemptions previously enjoyed by certain industriesand some individual entities, including government corporations like National Power Corporation_ have been withdrawn. Thus, the efforts to raiserevenuesconsist, of increasingtax ratesand widening the tax base. The estimated revenuesfrom the new tax measuresconstitute 0.5, 1.3 and 2.7 percentof GNP in 1983, 1984 and 1985, respectively. Cash disbursementsof the national governmentfell slightly short of the original cash disbursement program in 1983, but they went beyond by 21.5 percent in 1984. Actual cashdisbursementsin nominal terms increasedby 1 percent in 1983 and 28.9 percent in 1984. Capital outlays, specifically the MPWH/MTC capital outlay and corporate equity, suffered hugecutbacksin.1983 and 1984. Net lending is a problem area in both years in terms of resistanceto cutbacks, mainly because of pressuresfrom the financially-strapped govern: ment corporate sector. The thirteen major non-financialgovernment corporations posted combined deficits of @15.7B and t_12.3B in 1983 and 1984, respectively. Likewise, government financial corporations, particularly DBP, PNB and Philguaranteeincurredhuge deficits, reaching_'l 2.7B in 1984. Taken as a whole, the efforts initiated by the national government to manage its budget deficits produced some favorable results. Total budget deficits as a percent of GNP went down from a high 4.28 in 1982 to 1.69 and 1.58 in 1983 and1984, respectively.While these cuts in budget deficits are impressive by international standards, the accompanying adjustment costs have however produced some perverseredistribution effects asmay be shown later. Responseto the Crisisin the Monetary Sector In contrast to 1982, monetary policy during the period 1983-84