ECONOMIC ANALYSIS OF THE EFFECTS OF THE PHILIPPINE CLEAN AIR

ACT ON SECTORAL PRODUCTION USING AN AUGMENTED INPUTOUTPUT MODEL

HERYKA CERBO ASILO

SUBMITTED TO THE FACULTY OF THE DEPARTMENT OF ECONOMICS

COLLEGE OF ECONOMICS AND MANAGEMENT
UNIVERSITY OF THE PHILIPPINES LOS BAOS
IN PARTIAL FULFILLMENT OF THE
REQUIREMENTS FOR
THE DEGREE OF

BACHELOR OF SCIENCE IN ECONOMICS

APRIL 2012

BIOGRAPHICAL SKETCH

Heryka, the youngest of four daughters to Architect Eric and Helen Asilo, was
born on the 1st of December 1992. She took up her secondary education in Los Baos
National High School as part of the pilot section. She graduated in 2008 with the
knowledge that she passed the UPCAT under the Bachelor of Science in Economics.
She was accepted to the University of the Philippines Los Baos in 2008, and
completed her first semester in the University as a College Scholar.
During her sophomore year, she decided to join the prestigious organization
exclusively for BS Economics majors, the UPLB Economics Society. The UPLB
Economics Society or ECONSOC is an active member organization of the Junior
Philippine Economics Society (JPES). During the Academic Year 2011-2012, she was
elected as the Publicity Committee Head of the said Organization.
She is creative and artistic. She is interested in interior design, scrapbooking, and
photography, and hopes to pursue more of her interests after graduation.

iii

ACKNOWLEDGEMENTS
My thesis manuscript, and therefore my graduation, would not be possible if not for these
wonderful people. Thank you so much for everything!
To my adviser Dr. Asa Jose Sajise, thank you for your ideas, patience, and
understanding. Thank you for your guidance throughout this whole process.
To my reader Prof. Agham Cuevas, thank you for all your valuable inputs for this
manuscript.
To the DE Faculty, especially those who have been my professors in the past, thank you
for teaching me everything that I know about Economics. Special thanks to Sir Harvey for all the
help. Also to Tita Lorns and Tita Nel at the department, thank you po!
To my co-advisees Kuya Tiano, Daisy, Mayeen, and Gladz, thanks for everything!
Congratulations to us! Yey!
To my brods and sisses in UPLB Economics Society, thank you for the bonding
moments and successful activities. To my OPEC batchmates Dan, Amara, Ven, Donna,
Rousey, and Gladz, thank you for being the BEST batchmates ever. To my beloved Pubcom
and Execom, for making my life extra busy and extra SPECIAL this year! To my inaanak
Madz, for joining Econsoc (haha), and for your graduation surprise. Thank you all Soc and I love
you!
To all Econsoc SENIORS, thank you for our tambayan moments. Thank you for making
me feel that I am not alone in this endeavor. Special thanks to Gladz and Marco for our NSCBNSO fieldtrip!
To my bestfriends in Econsoc Bis Tricia, Bestfriend April, Amara and Gerald,
thanks for the foodtrips, chismisan, and everything else!
To my high school barkada Wakoko_Czyguyz Bebbin, Gio, Marlon, King, Jessie,
PJ, Pius, Allan, Jordan, Roy, Paolo, Anna, Mariz, especially to Loraine, Jclyn, and Zaren,
thank you for inspiring me not to give up! Thank you for being true friends. I love you and I miss
you!
To the people who I must thank but I am somehow forgetting to mention, SORRY and
THANK YOU SO MUCH for whatever it is. Haha.
To my loving Family Daddy, Ate Toy, Ate Bok, Ate Leng, my nieces Boinky and
Jam, my nephew Yuri, and most especially to my mom, for the constant reminders to drink
water, eat breakfast and drink vitamins; for waking up in the middle of the night to check up on
me; for the simple things you do to cheer me up; and for many other things that remind me that I
am blessed to have you as my family.
And above all else, thank You for blessing my life with these wonderful plans and
people. Thank You for Your guidance because I wouldnt have done all these without You.
Thank You, Lord!

iv

ABSTRACT

ASILO, HERYKA C. 2012. Economic Analysis of the Effects of the Philippine Clean
Air Act on Sectoral Production Using an Augmented Input-Output Model. College
of Economics and Management, University of the Philippines Los Baos
(Undergraduate Thesis).
Thesis Adviser: Dr. Asa Jose U. Sajise
The main objective of the study was to analyze the effects of the Philippine Clean
Air Act on sectoral production with the use of an augmented Input-Output model. The
study proceeded in two stages. First, a regression analysis was conducted to attribute the
changes in fuel consumption to the implementation of the Philippine Clean Air Act. The
results of this regression were then used as basis for simulating changes in the final
demand due to the Philippine Clean Air Act.
The results of the simulations showed that the Household Sector was the sector
with the highest decrease in sectoral gross output while, the sector of Waterworks and
Supply was the one with the lowest decrease in sectoral gross output.
The calculation of the changes in impact variables show that the change in final
demand caused the highest percentage changes in the air pollutants SOx and NOx relative
to the other impact variables, equal to -0.01480689 and -0.00963582, respectively.
The environmental impact variable multipliers were also computed to determine
the effect on the impact variables of a peso increase in each sectors final demand. Again,
the Household Sector exhibited the highest residual multiplier for air pollution related
variables such as particulate matter (PM), VOC, and CO. It also had the highest air
pollution damage multiplier, equal to almost 0.01 which means that a peso increase in the
final demand is associated with 0.01 pesos in air pollution damages. With this, it can be
said that regulations aimed at reducing pollution levels should also focus on the
household sector since it can contribute significantly to pollution.

TABLE OF CONTENTS

TITLE PAGE

APPROVAL PAGE

ii

BIOGRAPHICAL SKETCH

iii

ACKNOWLEDGEMENTS

iv

ABSTRACT

TABLE OF CONTENTS

vi

LIST OF TABLES

viii

LIST OF APPENDICES

ix

CHAPTER 1. INTRODUCTION

1.1 Background of the Study

1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Significance of the Study

1
4
5
5

CHAPTER 2. REVIEW OF LITERATURE

2.1 Environmental Regulations and the Economy

2.2 Environmental Regulations and the Manufacturing Sector
2.3 Environmental Regulations and the Agricultural Sector
2.4 Input-Output Models and Pollution

6
7
8
9

CHAPTER 3. THEORETICAL/ CONCEPTUAL FRAMEWORK

11

3.1 Efficient Level of Pollution

3.2 Environmental Regulations

11
12

CHAPTER 4. METHODOLOGY

16

4.1 The Model

4.2 Modifications and Extensions
4.3 The Household Sector
4.4 Impact Variables
4.5 Economic Policy Simulations

16
18
21
22
24

vi

CHAPTER 5. RESULTS AND DISCUSSION

26

5.1 Regression Analysis

5.2 Input-Output Modeling

26
28

SUMMARY AND CONCLUSION

36

RECOMMENDATION

39

REFERENCES

40

APPENDICES

42

vii

LIST OF TABLES

TABLE NO.

TITLE

PAGE

Results of the Regression Analysis

27

Actual and Simulated Sectoral Petroleum

Consumption, 1990

29

Vector of Changes in Final Demand (Y)

and Sectoral Gross Output (X)

30

Vector of Changes in Impact Variables (v)

33

viii

LIST OF APPENDICES

APPENDIX
TABLE NO.

TITLE

PAGE

A.1

Correlation Matrix

43

A.2

ENRA-Modified IO Table, Philippines, 1990

(In 000 pesos)

44

A.3

Leontief Inverse Matrix, ENRA-Modified IO Table,

Philippines, 1990

46

A.4

Matrix of Impact Coefficients

48

A.5

Environmental Impact Variable Multipliers (v)

Obtained Using the ENRA-Modified A Matrix

50

ix

ECONOMIC ANALYSIS OF THE EFFECTS OF

THE PHILIPPINE CLEAN AIR ACT ON SECTORAL PRODUCTION
USING AN AUGMENTED INPUT-OUTPUT MODEL1
1

A thesis manuscript submitted to the Faculty of the Department of Economics,

College of Economics and Management, in partial fulfilment of the requirements for
graduation for the degree of Bachelor of Science in Economics, under the supervision
of Dr. Asa Jose U. Sajise.

HERYKA CERBO ASILO

CHAPTER I
INTRODUCTION

1.1 Background of the Study

Industrialization and urbanization throughout the world may have brought
positive effects to the economic status of many countries, but another effect of this
phenomenon is often taken for granted, and that is its negative effect on the
environment, pollution. Rapid urbanization and motorization is said to have been
the cause of air pollution problems in Asian countries (Hirota, 2010). Although the
Philippines is still perceived to be an agricultural country, it is not exempted from
the worldwide phenomenon of industrialization, and consequently air pollution.

Sources of air pollution can be classified into stationary, mobile, and area
sources. In the Philippines, among the three classifications, mobile sources
contribute 65% of total emissions based on the 2006 Philippine National Emission
Inventory, with Carbon Monoxide having the biggest pollution load contribution of
50% (Environmental Management Bureau, 2009). According to the Asian
Development Bank (2006), this was relatively due to the threefold increase in
number of road vehicles from 1.6 million to more than 5 million from 1990 to
2005, with gasoline-fuelled vehicles comprising 72% of total fleet.
The national total suspended particulate (TSP), another criteria air pollutant,
was observed to be decreasing from 144 to 97 microgram per normal cubic meter
from years 2003 to 2007. However, TSP geometric mean concentrations are still
above the 90 microgram per normal cubic meter annual mean TSP guideline value
(Environmental Management Bureau, 2009).
The quality of air in the Philippines, especially in urban areas, has been
declining in recent years. The Philippine government, in taking action towards
solving this serious problem, implemented Republic Act 8749 or the Philippine
Clean Air Act of 1999. According to the Act's Declaration of Principles, The State
shall promote and protect the global environment to attain sustainable development
while recognizing the primary responsibility of local government units to deal with
environmental problems.
Under the General Provisions of the Philippine Clean Air Act, the
Department of Environment and Natural Resources (DENR) shall monitor the air

quality in the Philippines and prepare an annual National Air Quality Status Report.
This report would include but will not be limit ed to the following information:
a) Extent of pollution in the country, per type of
pollutant and per type of source, based on reports of
the Departments monitoring stations;
b) Analysis and evaluation of the current state, trends
and projections of air pollution at the various levels
provided herein;
c) Identification of critical areas, activities, or projects
which will need closer monitoring or regulation;
d) Recommendations for
legislative action; and

necessary executive and

e) Other pertinent qualitative and quantitative

information concerning the extent of air pollution and
the air quality performance rating of industries in the
country.

The Act also sets enforceable emission limitations for identified criteria
pollutants, and tasks the Department of Environment and Natural Resources to
designate non-attainment areas. Non-attainment areas, as defined in the Act, are
areas where specific pollutants have already exceeded ambient standards. DENR
will manage these areas and make sure that no new sources of the exceeded air
pollutant will be established without a corresponding elimination of existing
sources. Similar provisions regarding attainment and non-attainment areas can be
found in the Clean Air Act of the US. According to Becker (2001), local regulation
(or the designation of a country as a non-attainment or attainment area) affects the
compliance costs of manufacturing plants in the US.
Provisions of the Philippine Clean Air Act may sometimes be specific to the
different types of pollution source, such as the provision on attainment and non-

attainment areas which mainly apply to stationary sources or factories. Their overall
effect on pollution levels and economic activity, however, are not contained in
specific regions or areas. The emissions from sources, whether they may be mobile
or stationary, naturally spread in the atmosphere. With this, isolating the effect of
the air pollution emissions on polluting firms or sectors only would be difficult and
unnecessary.
Economic relationships between different sectors should also be taken into
account since an output of one sector may be anothers input for production. A
change in demand for goods produced in one sector affects not only the production
of that sector but also the production of all other sectors providing inputs to that
sector (Burkander, 2008). Burkander further discusses that given that pollution is an
externality from production, an increase in demand for goods in one sector will also
cause increased pollution in the related sectors.
1.2 Statement of the Problem
Recognizing that sectors of an economy are interrelated with one another, not
only through their production but also the pollution they generate, this study asks
how an environmental policy such as the Philippine Clean Air Act would affect
sectors involved in significant pollution-generating activities and also those which
are indirect contributors to air pollution. This analysis seeks to answer how the
provisions of the said Act affect the overall economic performance of the different
sectors, and ultimately, the Philippine economy as a whole.

1.3 Objectives of the Study

This study aims to analyze the effects of the Philippine Clean Air Act on
sectoral production and on the economy as a whole with the use of an augmented
Input-Output model. Specifically, this analysis intends to:
1.

Determine the change in production of different sectors brought about

by the provisions of the Clean Air Act;

2.

Identify the relationship between pollution and performance of the

Philippine economy and its different sectors, and;

1.4 Significance of the Study
This study can offer new insights on the effects of the Philippine Clean Air
Act, and probably of similar environmental regulations, on the economy. In
addition, this analysis will explore not only the overall effect of the Clean Air Act
but also its effect on the individual economic sectors and their relationships with
one another.
Furthermore, results of the study can possibly recommend policy
implications for the improvement of the Clean Air Act, considering its impact on the
economic status of the country.

CHAPTER II
REVIEW OF RELATED LITERATURE

2.1 Environmental Regulations and the Economy

The economy and the environment are very much interrelated such that
economic activity may cause certain externalities, such as pollution, that may affect
the environment. Consequently, environmental regulations implemented to address
externalities can also affect the performance of the economy. Having identified this
relationship, studies have been done to analyze the impact on environmental
regulations on different aspects and sectors of the economy.
Millimet, Roy, and Sengupta (2009) did a literature review on the effects of
environmental regulations on economic activity, specifically market structure,
which they defined as the degree of market concentration that depends on the
number of firms in the industry and the distribution of market shares (and the
related size distribution of firms). The firms production cost is the main way
through which environmental regulations can influence market structure, and the
greater these costs are, the lesser the profitability of firms; therefore, influencing the
entry and exit of firms (Millimet, et al., 2009). Katsoulacos and Xepapadeas (1996),
with the assumption that there is a linear demand function and a cost function that is
additively separable in outputs and emissions, found in their study that the
equilibrium number of firms is negatively related to the unit emission tax (as cited

by Millimet, et al., 2009). The same results were obtained by Shaffer and Lee in
1995 and 1999, respectively (as cited by Millimet, et al., 2009).
2.2 Environmental Regulations and the Manufacturing Sector
Environmental regulations generally aim to improve environmental quality or
prevent degradation of natural resources. These regulations often entail economic
costs, but these costs are seldom considered in formulating these regulations and
their provisions. Governments usually focus only on the benefits of environmental
regulations to society, as in the case of the Clean Air Act of the US. Becker, in his
2001 study, analyzed the effect of the US Clean Air Act on air pollution abatement
capital expenditures and operating costs of manufacturing plants. The study used
data from the Pollution Abatement Costs and Expenditures (PACE) Survey from
years 1979-1988. Becker concluded that manufacturing plants that emit high levels
of criteria air pollutants, as defined by the US Clean Air Act, have significantly
higher air pollution abatement costs. Results of the study also showed that local
regulation, or the designation of non-attainment and attainment areas, further affects
air pollution abatement costs, in such a way that manufacturing plants, with high
emissions of an air pollutant, located in designated non-attainment areas for that air
pollutant, had higher air pollution abatement expenditures. Another study conducted
by Greenstone (2002) looks at the impacts of environmental regulations on
industrial activity, specifically on growth of employment, capital stock and
shipments, of polluting sectors. According to the results of the study, environmental
regulations restrict the activity of manufacturing plants. I find that in the first 15
years after the Amendments became law (1972- 1987), nonattainment counties

(relative to attainment ones) lost approximately 590,000 jobs, $37 billion in capital
stock, and $75 billion (1987$) of output in pollution intensive industries
(Greenstone, 2002). This decline in activity of manufacturing pla nts may be
substantial in non-attainment areas; however, this is not very significant compared
to the entire manufacturing sector.

Other studies, however, claim that environmental regulations do not harm the
economy. According to Michael Porter (1991), Strict environmental regulations do
not inevitably hinder competitive advantage against foreign rivals; indeed, they
often enhance it (as cited by Ambec, et al., 2010). This is popularly called the
Porter Hypothesis. Porter and his co-author van der Linde (1995) further state that
more stringent yet properly designed environmental regulations, especially those
using market-based instruments, can trigger innovation that may partially or more
fully offset the costs of complying with them in some cases (as cited by Ambec, et
al., 2010). Jaffe et al. (1995), in examining the effect of environmental regulation on
the competitiveness of the manufacturing sector of the US, found similar results.
Their study concluded that there is relatively little evidence to pro ve that
environmental regulations can weaken the competitiveness of the US manufacturing
industry.

2.3 Environmental Regulations and the Agricultural Sector

The effect of environmental regulations on economic activity is observed not

only in manufacturing sectors but also in commercial agriculture, which is a major

polluting sector in the US. In his 2009 study, Sneeringer analyzed the effects of
environmental regulations on firm location, "the externality costs of legislation
aimed at economic growth, and hog productions effects on air pollution." The
findings of the study show that the legislation in North Carolina caused "an
additional 11% increase per year in hog production in North Carolina relative to the
rest of the US." This also resulted in an annual increase in ambient air pollution of
10% per county. Given that parallel changes in ambient air quality occurred together
with trends in hog production, the study therefore concluded that the hog production
was the cause of air pollution in North Carolina. The observed trend was that a
200% increase in hog production caused a 92% increase in ambient air pollution.
This increase in ambient air pollution can produce significant public health effects,
and if quantified, these effects cost North Carolina at least 20% of revenue from its
hog production sector.

2.4 Input-Output Models and Pollution

The input-output model was created by Wassily Leontief. The input-output
models are used to analyze the mechanism by which inputs in one industry produce
outputs for consumption or for input into another industry (The Concise
Encyclopedia of Economics, 2008). According to Leontief (1970), the input -output
analysis can be used to measure changes in pollution (as cited by Burkander, 2008).
In 2006, Alcantara and Padilla conducted an input-output analysis aimed to
establish which sectors of production were to blame for the CO2 emissions in
Spanish economy. The focus of the study was to identify the effect of an increase in

10

the value-added of the different sectors on total CO2 emissions, and also to
distinguish the sectors which cause an increase in CO2 emissions due to an increase
in income. The following sectors were found to be the key sectors in CO2
emissions: electricity and gas, land transport, manufacture of basic metals,
manufacture of non-metallic

mineral products,

manufacture of chemicals,

manufacture of coke, refined petroleum products and nuclear fuel, wholesale and
retail trade, and agriculture (Alcantara and Padilla, 2006).
Burkander, in his 2008 study, used input-output analysis in finding which
sectors are the highest contributors of lead and sulfuric acid pollution in the US. The
changes in lead and sulfuric acid caused by a 100-million-dollar-change in demand
for each of the 133 sectors were estimated in the study. Results show that the Other
Electrical Equipment and Components sector produced the largest contribution to
lead

pollution,

while the

Electric Power

Generation,

Transmission and

Distribution sector produced the largest contribution to sulfuric acid pollution. The
study concluded that an increase in demand in the sector of electrical equipment and
components causes not only a large amount of lead pollution but also a much greater
indirect pollution from other industries, especially in the sectors which produce
inputs for that sector. However, for the sector of electric power generation, the
resulting indirect pollution was not as much.

CHAPTER III
THEORETICAL/ CONCEPTUAL FRAMEWORK

3.1 Efficient Level of Pollution

Pollution is a negative externality produced during economic activities.
Although it is an unintended damage, the efficient level of pollution is not equal to
zero. This efficient level is the amount of pollution wherein the costs imposed by
pollution is equal to the benefits derived from the economic activity causing the
pollution. The cost of pollution is referred to as environmental damage, and the
benefit foregone when pollution is reduced is the abatement cost. Environmental
damage includes all the costs associated with pollution. Some examples would be
the health costs to individuals and the damage to biodiversity. On the other hand,
abatement cost may include the reduction in the pollution-generating activity, the
use of pollution abatement technologies, or the combination of the two.
The efficient level of emissions e* is that which gives the maximum social
surplus, such that
MAC (e*) = MD (e*)
where MAC is the marginal abatement cost, MD is the marginal damage. The
marginal abatement cost curve is downward sloping due to the fact that foregoing
the pollution-generating activity or using abatement technologies becomes more
difficult and costly. The marginal damage curve is upward sloping because it

12

reflects the presence of threshold tolerances in the environment. The value of MD is

zero at the emission level below the assimilative capacity of the environment,
denoted by e A.

Figure 1. Efficient Level of Pollution

3.2 Environmental Regulations
Environmental

regulations

aimed

at

managing

pollution

uses

two

classifications of instruments: the command-and-control instruments and the

market-based instruments. The command-and-control instruments, the more
traditional approach in regulation, sets standards for how much emissions the firm
can emit and usually, the method or process on how to achieve these standards
(Austin, 1999). According to Stavins and Whitehead (1992), command-and-control
instruments can be classified into two broad types, the technology-based and

13

performance-based (as cited by Austin, 1999). The technology-based instruments

indicates the methods and equipment that firms should use to meet the standards,
while the performance-based instruments set overall target for each firm, or plant,
but gives the firm the discretion on how to achieve the target. Austin (1999) further
discusses that command-and-control instruments are usually based on end-of-pipe
solutions with little consideration on how reduction in emissions can be done
through changes in the production process or product design. These kinds of
regulations give little incentive for firms to pursue these changes, since there is no
reward for achieving the target but there is a risk that standards will be raised to
reflect the change in technology.
The alternative instrument used in environmental regulations is the marketbased instruments or economic instruments. These instruments, according to
economists, can create a system for reduction in pollution that can achieve the same
level of environmental protection for lower overall cost. Also, market -based
instruments of environmental regulation give firms more freedom on compliance.
Austin (1999) enumerated the several different types of economic
instruments. They are as follows:
A short taxonomy of Economic instruments
1. Charges, fees or taxes
These are prices paid for discharges of pollutants to the
environment, based on the quantity and/or quality of the
pollutant(s). To be most effective the charge is levied
directly on the quantity of pollution (emissions tax or
charge), though if this is difficult to measure or monitor, it
may be necessary to levy a charge on a proxy for the

14
emissions, typically on the resource that causes the pollution
(product tax or charge). Product charges occur at different
usage points. They have been levied on products either as
they are manufactured (e.g. fertilizers), consumed (e.g.
pesticides) or disposed of (e.g. batteries) (Barde, 1997).
How effective product charges are depends on how well
linked the input, or product, is to the eventual stream of
pollution. In the case of taxing carbon fuels as a proxy for
carbon dioxide emissions, the linkage is very strong as
virtually all the carbon contained in fuels is released during
combustion. Taxing the fuel is thus little different to taxing
the emissions. On the other hand, taxing pesticides as a
proxy for release of certain chemicals into water systems is
less well linked as the degree of chemical infiltration will
depend on a mixture of variables relating to soil and slope
conditions, the timing of applications etc.

2. Tradable Permits
These are similar to charges and taxes except that they
operate by fixing an aggregate quantity of emissions rather
than charging a price for each unit of emissions. Instead of
being charged for releases, one needs to hold a permit to
emit or discharge. By controlling the total number of
permits, one is effectively controlling the aggregate
pollution quantity.
3. Charge-Permit Hybrids
It is possible to blend the quantity-based permit approach
with a price-based charge or tax approach to try to harness
their different strengths while avoiding their weaknesses. A
good example is RFFs proposal to use a hybrid mechanism
to control CO2 emissions in the U.S. (RFF, 1998). This
would consist primarily of a permit program that would
require domestic energy producers (and importers) to obtain
permits equivalent to the volume of carbon dioxide
eventually released by the fuels they sell. However, by
setting the overall permit quantity, one has no idea what
price permits will sell for this will only be revealed as
businesses and consumers begin to reduce their CO2
emissions. In order to guard against excessively high permit
prices that might arise the very prospect of which may
prevent the program being implemented in the first place
the second aspect of the proposal would be for the
government to release an unlimited number of permits at $25
per ton of carbon should the market price of permits reach
that level. This effectively sets up a charge system of $25 per
ton, capping the possible market price.

15
A system like this attempts to control on the basis of
quantity, which is the most desirable goal, while creating an
escape valve should costs rise too high. Even if the escape
valve is utilised, the program amounts to the institution of a
charge on carbon.
4. Deposit-refund schemes
Under these schemes, a surcharge is levied on a product at
the point of payment. When pollution is avoided by returning
the product, or its polluting components, to a specified
collection stream the surcharge is refunded. These economic
instruments have been used most often for drinks containers,
batteries and packaging (OECD, 1997).
5. Subsidies
Where taxes or charges can be used as a penalty on
discharges, subsidies can be used to reward the reduction of
discharges in a similar manner. The financial incentive is
effectively the same, though the flow of funds is in a
different direction. A subsidy program will involve a transfer
of funds from the government to the industry, while a charge
program would be a revenue source for the government.
Subsidies may be relatively explicit in the form of grants and
soft loans, or be somewhat indirect, such as in adjusted
depreciation schedules. (Barde, 1997).

CHAPTER IV
METHODOLOGY

The study used an augmented 41-sector input-output model that incorporates

environmental coefficients developed by Orbeta (1999) in the study entitled
Development of Environmental Impact Multipliers in the Philippines. The study
conducted by Orbeta in 1999 followed the modifications and extensions done by
Mendoza (1996) for ENRAP III and expanded the coverage of sectors and
transactions table used. The following discussion of the details of the I-O model was
taken from Orbeta (1999).
4.1 The Model
Consider an economy with n sectors of production, let
X

[Xi] where Xi is the gross output of sector i,

n x 1 vector of gross output;

[aij] where a ij is the Leontief IO technical coefficient and

aij zij/X j where zij is the monetary value of the input flow
from sector i to sector j,

n x n Leontief IO coefficient matrix; and

17

[Yi] where Yi is the total final demand for sector i,

n x 1 vector of final demands.

The gross output vector X can then be expressed as

X = AX + Y,

(1)

that is, each sectors gross output should equal the sum of the intermediate demand
and final demand for its products. By matrix manipulation, the gross output vector
X can be rewritten as
X = (I A) -1 Y

(2)

where (I - A) -1 is often referred to as the Leontief inverse. The multiplicative effect s

in the economy of an exogenous change in one or more components of final demand
can be obtained using
X = (I - A)-1 Y

(3)

where Y denotes the changes in final demands and X denotes the changes in the
sectoral gross output.
The change in sectoral gross output may not be the only measure of the
economic effects of changes in exogenous final demands. Suppose there are other
impact variables of interest, such as labor income and employment, which can be
measured either in monetary or physical flow units. Furthermore, environmental and
natural resources can be included as impact variables as well. Let

18

[vkj] where vkj is the impact coefficient defined as the amount

of impact variable k associated with a peso worth of sector js
output,

impact coefficient matrix; and

vector of impact effects.

Then, the changes in the impact variables due to changes in final demands are given
by
v = V (I - A)-1 Y, or
v=VX

(4)
(5)

4.2 Modifications and Extensions

The following are the adjustments for household production, environmental
inputs and outputs, and natural resource depreciation:
a.

Incorporating income from

nonmarketed,

nature based household

production in upland agriculture and fuelwood gathering

The conventional IO table will be adjusted to incorporate the nonmarketed
household production by accounting the value of production as pure labor income in
the input side. On the output side, it would become a positive adjustment in gross
output through an increase in personal consumption expenditure (PCE).

19

b.

Incorporating natural resource and environmental variables

The following are the adjustments done outside the conventional IO table:
i.

Natural resource depletion for forests, fisheries, minerals and soil

Natural resource depletion is taken into account as another input similar to

physical capital depreciation. The natural resource depletion value for the
agriculture sector is based on the estimated quantity of upland soils eroded. For the
forestry sector, it is based on the change in stock of forest resources dipterocarps,
plantation products, mangrove resources, pine and rattan and the quantity of
upland soils eroded both from grassland and woodland. For the mining sector, it is
based on the quantity of copper and gold extracted. For the fishery sector, it is based
on the change in quantity of small pelagic catch.
The estimates of natural resource depletion corresponding to physical can be
recorded positively or negatively. Because resource depreciation is assume d to be a
nonmarketed good, recording it positively yields a value of output if the natural
resource is priced. Recording it negatively, on the other hand, yields a value
reflecting the net value of production to the economy. To be consistent with the
ENRAP aggregate national income and product accounts, the natural resource
depreciation is entered negatively. On the output side, negative adjustments are
made on the relevant sectors values of total output corrected for household
production. The highest resource depreciation estimates were found in the forestry
and fisheries sectors, both renewable resource sectors.
ii.

Environmental (air and water) waste disposal services

20

The air and water waste disposal services are entered negatively as
environmental inputs. ENRAP computed these values based on the pollution
abatement cost that would be incurred if pollution were to be reduced 90%. These
are the attributed economic values of the residuals or pollutants as inputs to or
negative outputs of the production process. Since pollutants are being generated
and firms are not incurring pollution abatement cost, the environment acts as an
unpriced input to production. The values of environmental services for air are based
on the cost of reducing particulate matter (PM) and lead (Pb). For water, on the
other hand, environmental services are valued based on pollution abatement costs
for biochemical oxygen demand 5 (BOD 5 ) and suspended solids (SS).
iii.

Environmental (air and water) damages

ENRAP based the value for environmental damages on the health effects and
productivity losses due to pollution. The values are attributed to the various
production sectors as generators of pollution. These being undesirable outputs or
economic bads, the values are entered as negative adjustments in the value of the
sectors total output.
iv.

Net environmental benefits

The net environmental benefit (NEB), which is introduced as an accounting

balancing entry like the operating surplus concept for produced assets, is defined as
the difference between the absolute values of environmental services (ES) and
environmental damages (ED). Hence, it can be expressed as
NEB = ES- ED

21

that is, the savings in pollution abatement cost of the firm by polluting minus the
resulting pollution damages. A positive NEB suggests that the net social benefit of
polluting is positive for the sector, or that the value of damages prevented by the
pollution reduction is less than the pollution abatement cost.
A positive value for the NEB is not unexpected because zero or near zero
pollution levels, assumed in the calculation of the environmental waste disposal
services, is not socially optimal. The socially efficient level of pollution is that
which equates the marginal abatement cost and the marginal damages prevented.
Conversely, a negative value for NEB implies that the net social benefit of some
incremental pollution abatement for the given sector is positive.
v.

Direct nature services

The value of direct nature services, as estimated by ENRAP, consists of

those for diving activities, forest recreation and coastal beach services. On the input
side, the NEB would now be given by
NEB = ES- ED + direct nature services
On the output side, the value of gross output for the other services sector,
which includes the direct nature sectors, is adjusted positively given that direct
nature services are desirable outputs.
4.3 The Household Sector
The IO model can be closed with respect to the household. To endogenize the
sector, it must be moved from the final demand column to the technically

22

interrelated table. This also accounts for the dependence of the household
consumption on labor income which in turn depends on the gross output of each of
the sectors. Correspondingly, the labor services row (compensation of employees) is
moved up inside the technically interrelated table. The household consumption
expenditure (labor PCE), assumed to be financed by labor income, is considered to
be a constant proportion of total PCE. The possibility that the demand for a good
can be sensitive to income is overlooked. This arises due to the fact that, implicitly,
the analysis assumes a single representative consumer and equity considerations are
ignored.
In environmental accounting, endogenizing the household sector is
acceptable if it emits significant levels of pollution. The 41 x 41 technology matrix,
which has been adjusted for the endogenized household sector, has an extra row for
labor income and an extra column for household consumption expenditure, which is
financed by labor income.
4.4 Impact Variables
The impact effects of the policy were calculated for the following variables:
a.

gross sectoral outputs;

b.

labor income;

c.

natural resource depreciation

d.

environmental waste disposal services: air and water;

e.

environmental damages;

23

f.

natural resource depletion:

upland soils (metric tons [mt]):

agriculture, grassland, woodland

fisheries (mt):

small pelagic

forestry (cubic meters [cu m]):

dipterocarp, plantation, mangrove,

pine, rattan (lineal meters)

minerals:
g.

copper (mt), gold (ounces)

pollutants or residuals:
air:

PM

particulate matter

SOx

sulfur oxides

NOx

nitrogen oxides

VOC -

volatile organic compounds

CO

carbon monoxide

water: BOD5 -

biochemical oxygen demand 5

SS

suspended solids

TDS

total dissolved solids

Oil

oil

nitrates

phosphates

The first five sets of variables are determined in monetary units while the last
two sets in physical terms. The assumption in this study is that each sector generates

24

pollutants (residuals) in fixed proportions to its output and that the environmental
waste disposal service and damage values are linearly related to the amount of
pollutants generated, and ultimately to output. The study does not consider the
accumulation of residuals and the assimilative capacity of the environment. Also,
the study ignores the possibility that there could be nonlinear relationships between
pollution abatement costs and damages on one hand, and the levels of pollutants on
the other. The impact coefficients may then be used to study changes in pollution
levels, abatement costs or environmental services, and damages, under alternative
output assumptions.
4.5 Economic Policy Simulations
The study was done in two phases. First, the relevant resource and
environmental effects of the provisions of the Philippine Clean Air Act was
examined. Simulations were conducted using equation (4), i.e.
v = V (I - A)-1 Y

(4)

where the effect of the provisions of the Philippine Clean Air Act was modeled as
exogenous changes in finals demands, Y, using the augmented 41 x 41 matrix A.
Next, the calculation of gross output, labor income and environmental impact
multipliers was done. The multipliers give the change in the impact variables per
one peso increase in final demand from sector, and are computed using equation (4)
but with the matrix of final demand changes equal to an identity matrix.
According to the Environmental Management Bureau (2009), mobile sources
contribute 65% of total emissions based on the 2006 Philippine National Emission

25

Inventory. Hence, a change in fuel consumption due to the provisions of t he

Philippine Clean Air Act was considered because one of the main mechanisms
through which the provisions of the Act will have an effect on ambient air qualit y
standards is through fuel prices.
An ordinary least squares regression analysis was conducted to attribute the
change in fuel consumption to the implementation of the Clean Air Act. The
regression equation is given by
DFCPC = + 1 TRP + 2 RPI + 3 GDPPC + 4 PCAA +
where DFCPC is the Road Sector Diesel Fuel Consumption Per Capita (kt of oil
equivalent), TRP is the Total Refinery Production (in thousand barrels), RPI is the
Retail Price Index for Mineral Fuels, Lubricants and Related Materials (1978=100),
GDPPC is the Gross Domestic Product Per Capita (in current Philippine pesos),
PCAA is the intercept dummy variable for the implementation of the Philippine
Clean Air Act, with the value of PCAA=1 if data is from 1999, the year of the
implementation of the Act, to present and PCAA=0 if otherwise.

CHAPTER V
RESULTS AND DISCUSSION

5.1 Regression Analysis

An ordinary least squares regression analysis was conducted to attribute the
change in fuel consumption of the different sector due to the Philippine Clean Air
Act. Given that mobile sources are the leading source of total emissions in the
Philippines, one mechanism through which the Clean Air Act may affect the
economy is through fuel consumption. Refinery production, price of fuel, per capita
income, and regulatory factors (i.e., the provisions of the Clean Air Act) were
considered to be the other variables affecting fuel consumption. The regression
equation is given by
DFCPC = + 1 TRP + 2 RPI + 3 GDPPC + 4 PCAA +
where DFCPC is the Road Sector Diesel Fuel Consumption Per Capita (kt of oil
equivalent), TRP is the Total Refinery Production (in thousand barrels), RPI is the
Retail Price Index for Mineral Fuels, Lubricants and Related Materials (1978=100),
GDPPC is the Gross Domestic Product Per Capita (in current Philippine pesos),
PCAA is the intercept dummy variable for the implementation of the Philippine
Clean Air Act, with the value of PCAA=1 if data is from 1999, t he year of the
implementation of the Act, to present and PCAA=0 if otherwise.

27

Time-series data from 1979 to 2008 were gathered from the World Bank
Databank and the National Statistical Coordination Board.
The data was tested for the problems of heteroscedasticity, autocorrelation,
and multicollinearity. Using the Cook-Weisberg test, it was detected to have no
heteroscedasticity with the Prob > chi2 = 0.9898. Testing for autocorrelation, the
Durbin-Watson d-statistic equal to 1.541069 was compared to the critical values of
dL and d U for = 5, k = 3, and N = 30 which are equal to 1.214 and 1.650,
respectively. The value of the d-statistic falls in the inconclusive region.
The problem of multicollinearity was also detected by generating the
pairwise correlation matrix (See Appendix A.1.). The variable RPI was discovered
to cause the problem, and one way to treat this problem is by dropping the variable
causing the multicollinearity; however, the variable for the price of fuel is an
economically relevant variable affecting fuel consumption. Therefore, it was
chosen not to be dropped from the regression analysis.
Table 1. Results of the Regression Analysis

DFCPC Coefficient Std. Err. t

P > |t| [95% Conf. Interval]
1.32 e-07 3.37 e-08 3.93
0.001
6.29 e-08 2.02 e-07
TRP
-0.000016 5.70 e-06 -2.80
0.010 -0.0000277 -4.23 e-06
RPI
5.00 e-07 1.50 e-07 3.32
0.003
1.90 e-07 8.10 e-07
GDPPC
-0.0005953 0.0026019 -0.23
0.821 -0.0059541 0.0047634
PCAA
0.298428 0.0029579 10.09
0.000
0.23751 0.0359347
_cons
2
2
R = 0.8701; Adj. R = 0.8493
Results of the regression analysis show that among the four explanatory
variables, all, except the dummy variable PCAA, were found to be significant. The

28

variables TRP and GDPPC were significant at 1%, while the variable RPI was
significant at 5%. The RPI and the intercept dummy PCAA have negative
regression coefficients, while the TRP and the GDPPC have positive coefficients.
The value of the R2 is high, which is expected since the data used were time-series.
The R2 of the model was equal to 0.8701, while the Adj. R 2 was 0.8493. This value
implies that 87% of the variation in the Road Sector Diesel Fuel Consumption Per
Capita can be explained by the explanatory variables of Total Refinery Production,
Retail Price Index, Gross Domestic Product Per Capita, and the Philippine Clean
Air Act.
However statistically insignificant, the coefficient of the dummy variable
PCAA equal to -0.0005953 will be used to simulate the change in fuel consumption
of the 41 sectors in the input-output table.
5.2 Input-Output Modelling
Using the data from the 1990 ENRA-Modified Input-Output Table of the
Philippines and the coefficient of the variable PCAA from the regression analysis,
the petroleum consumption of the 41 sectors was simulated to illustrate the change
in fuel consumption due to the implementation of the Philippine Clean Air Act.
Table 2 shows the actual and simulated petroleum consumption of the different
sectors, and the difference between the two which gives the change in final demand
for petroleum products (Y).

29

Table 2. 1990 Actual and Simulated Petroleum Consumption (In 000 pesos)

Sector
1 Palay and corn production
2 Veg. , fruits & nuts (exc. coconut) prod.
3 Coconut
4 Sugarcane
5 Other agri. crops
6 Livestock, poultry & other animal prod.
7 Agricultural services
8 Fishery
9 Forestry
10 Metallic ore mining
11 Non-metallic mining & quarrying
12 Food manufacturing
13 Beverage manufacturing
14 Tobacco manufacturing
15 Textile manufacturing
16 Wearing apparel, leather & leather products
17 Mfr. of wood & wood products incl. fur & fixtures
18 Mfr. of paper & paper prod.
19 Printing, publishing & allied products
20 Mfr. of chemicals & plastic products
21 Petroleum refineries & misc. prod of petrol & coal
22 Mfr. of rubber products
23 Mfr. of glass & glass products
24 Mfr. of cement
25 Mfr. of other non-metallic mineral products
26 Basic metal industries
27 Mfr. of fab. metal prod., mach. & eqpt. (exc. electrical)
28 Manufacture of electrical machinery, etc.
29 Other manufacturing industries
30 Electricity and gas
31 Waterworks and supply
32 Construction
33 Wholesale and retail trade
34 Transportation and storage services
35 Communication
36 Financing, insurance, real estate and bus. services
37 Public admin. & defense
38 Education services
39 Med., dental, other health & veterinary services
40 Other community, social & personal services
HH Household Sector

Actual Petroleum
Consumption
79,775
178,301
102,246
157,787
60,989
240,689
170,439
4,701,329
909,789
1,006,046
130,329
6,413,554
450,349
68,447
574,424
487,370
1,060,297
295,584
50,853
1,257,851
574,353
160,473
296,839
2,147,063
285,350
837,807
201,142
124,512
205,606
9,070,447
42,371
3,145,428
18,133,126
1,725,482
64,506
1,044,326
1,714,032
409,193
244,766
1,254,971
2,637,105

Simulated Petroleum
Consumption
79727.50994
178194.8574
102185.133
157693.0694
60952.69325
240545.7178
170337.5377
4698530.299
909247.4026
1005447.101
130251.4151
6409736.011
450080.9072
68406.2535
574082.0454
487079.8686
1059665.805
295408.0388
50822.72721
1257102.201
574011.0877
160377.4704
296662.2917
2145784.853
285180.1311
837308.2535
201022.2602
124437.878
205483.6027
9065047.363
42345.77654
3143555.527
18122331.35
1724454.821
64467.59958
1043704.313
1713011.637
408949.4074
244620.2908
1254223.916
2635535.131

Y
-47.49006
-106.14259
-60.86704
-93.93060
-36.30675
-143.28216
-101.46234
-2798.70115
-541.59739
-598.89918
-77.58485
-3817.98870
-268.09276
-40.74650
-341.95461
-290.13136
-631.19480
-175.96116
-30.27279
-748.79870
-341.91234
-95.52958
-176.70826
-1278.14660
-169.86886
-498.74651
-119.73983
-74.12199
-122.39725
-5399.63710
-25.22346
-1872.47329
-10794.64991
-1027.17943
-38.40042
-621.68727
-1020.36325
-243.59259
-145.70920
-747.08424
-1569.86861

30

The resulting vector of changes in final demand for petroleum products (Y) was
then multiplied to the Leontief Inverse Matrix of the ENRA-Modified 41 x 41 IO Table
(See Appendix A.3.) in order to calculate the X, following the equation,
X = (I - A)-1 Y
where (I - A) -1 is the Leontief inverse, Y denotes the changes in final demand,
and X denotes the changes in the sectoral gross output.

Table 3. Vector of Changes in Final Demand (Y) and Sectoral Gross Output (X)
Sector
1 Palay and corn production
2 Veg. , fruits & nuts (exc. coconut) prod.
3 Coconut
4 Sugarcane
5 Other agri. crops
6 Livestock, poultry & other animal prod.
7 Agricultural services
8 Fishery
9 Forestry
10 Metallic ore mining
11 Non-metallic mining & quarrying
12 Food manufacturing
13 Beverage manufacturing
14 Tobacco manufacturing
15 Textile manufacturing
16 Wearing apparel, leather & leather products
17 Mfr. of wood & wood products incl. fur & fixtures
18 Mfr. of paper & paper prod.
19 Printing, publishing & allied products
20 Mfr. of chemicals & plastic products
21 Petroleum refineries & misc. prod of petrol & coal
22 Mfr. of rubber products
23 Mfr. of glass & glass products
24 Mfr. of cement
25 Mfr. of other non-metallic mineral products
26 Basic metal industries

Y
-47.49006
-106.14259
-60.86704
-93.93060
-36.30675
-143.28216
-101.46234
-2798.70115
-541.59739
-598.89918
-77.58485
-3817.98870
-268.09276
-40.74650
-341.95461
-290.13136
-631.19480
-175.96116
-30.27279
-748.79870
-341.91234
-95.52958
-176.70826
-1278.14660
-169.86886
-498.74651

X
-2516.7067
-1189.8827
-554.5475
-369.5231
-989.7860
-2561.5617
-446.5745
-4481.2900
-1199.5414
-1650.2331
-5288.9082
-12060.8601
-1029.4307
-425.7064
-2553.2346
-835.7086
-1209.7328
-1400.6790
-292.4028
-6511.4753
-6967.0432
-1331.7163
-454.6617
-1501.6499
-393.3161
-2854.4887

31
27 Mfr. of fab. metal prod., mach. & eqpt. (exc.
electrical)
28 Manufacture of electrical machinery, etc.
29 Other manufacturing industries
30 Electricity and gas
31 Waterworks and supply
32 Construction
33 Wholesale and retail trade
34 Transportation and storage services
35 Communication
36 Financing, insurance, real estate and bus. services
37 Public admin. & defense
38 Education services
39 Med., dental, other health & veterinary services
40 Other community, social & personal services
HH Household Sector

-119.73983

-1853.8497

-74.12199
-122.39725
-5399.63710
-25.22346
-1872.47329
-10794.64991
-1027.17943
-38.40042
-621.68727
-1020.36325
-243.59259
-145.70920
-747.08424
-1569.86861

-1617.8959
-2778.9282
-6827.1854
-159.3837
-2178.7730
-14166.3664
-6101.9440
-311.2127
-5198.9741
-1032.5785
-516.0922
-484.9800
-3085.2105
-14361.6461

Table 3 shows the vector of changes in final demand Y and the resulting
vector of changes in sectoral gross output X. The Household Sector, followed by
the sectors of Wholesale and Retail Trade, Food Manufacturing, Petroleum
Refineries and Miscellaneous Production of Petrol and Coal, and Electricity and
Gas, was the sector with the highest negative change in sectoral gross output due to
the simulated decrease in final demand for fuel. On the other hand, the sectors of
Waterworks and Supply, Printing, Publishing and Allied Products, Communication,
Sugarcane Production, and Manufacturing of Other Non-metallic Mineral Products
were those with the lowest negative changes in sectoral gross output due to the
simulated decrease in final demand for petroleum products.

The Household sector consumes fuel for most of its daily activities. The
sectors fuel consumption is mainly for cooking, lighting, heating water for bathing
and washing garments, and air conditioning of rooms (Shukla, 2009). This goes to

32

show that the household is very dependent on fuel, thus explaining the high sectoral
output change due to the simulated change in fuel consumption; however, the
dependency of this sector on petroleum products does not manifest in the IO table
(See Appendix A.2.). The IO table shows that the largest amounts of input needed
for the production of the household sector are from the sector of Food
Manufacturing, Financing, Insurance, Real Estate and Business Services, and
Transportation; therefore, it can be said that it is through these indirect channels
that the effect of changes in the market for petroleum products is transmitted.
For the wholesale and retail trade sector, the distribution and transportation
of the goods is the main cause for the consumption of fuel. The IO table shows that
the highest amount of input needed by this sector is from the Petroleum, Refineries
& Miscellaneous Production of Petrol and Coal. The same goes for the Electricity
and Gas sector which uses petroleum products as its main input, as shown in the IO
table.
The change in final demand affects not only sectoral gross o utput but also
other impact variables such as labor income, environment and natural resources.
Given
V

[vkj ] where vkj is the impact coefficient defined as the amount

of impact variable k associated with a peso worth of sector js
output,

impact coefficient matrix (See Appendix A.4); and

vector of impact effects.

33

Then, the changes in the impact variables due to changes in final demands are
given by
v = V (I - A) -1 Y, or
v=VX

Table 4. Vector of Changes in Impact Variables (v)

Impact Variable
NR (Physical)
Agriculture
Grassland
Woodland
Small Pelagics
Dipterocarps
Plantation
Mangroves
Pine
Rattan
Copper
Gold
Residuals
PM
SOx
NOx
VOC
CO
BOD5
SS
TDS
OIL
N
P
Labor Income (CE)
Environmental Variables
NR Depn
EWDS (Air)
EWDS (Water)
Air Damages
Water Damages

Base year
values

% changes

17356.51987
101.4812024
1754.809114
1.792516
131.5896916
-479.4566976
5.87775286
7.67706496
13543.78204
15.67721445
38.94550116

-457000000
-1562000
-27000000
-20322
-2025400
7376800
-91300
-117710
-208383160
-180460
-445900

-0.0037979
-0.0064969
-0.0064993
-0.0088206
-0.006497
-0.0064995
-0.0064378
-0.006522
-0.0064995
-0.0086874
-0.0087341

-117.3442683
-58.44233439
-31.28722643
-165.6812181
-546.1878439
-369.7289672
-30202.15784
-63.24080054
-0.74321694
-121.9423193
-7.103119872
-12799.81397

2047255
394697
324697
3406047
10711421
8177958
515195570
1501230
63500
2357059
153101
309,895,416

-0.0057318
-0.0148069
-0.0096358
-0.0048643
-0.0050991
-0.004521
-0.0058623
-0.0042126
-0.0011704
-0.0051735
-0.0046395
-0.0041304

432.2871402
531.3945406
1625.673564
102.0834138
84.63666197

-5945463
-6611402
-30547134
-1762158
-1476354

-0.0072709
-0.0080375
-0.0053219
-0.0057931
-0.0057328

34

Table 4 shows the changes in the impact variables (v), computed by

multiplying the V matrix and the vector of changes in sectoral gross output (X).
Also shown in the table are the percentage changes in the impact variables relative
to the base year values.
The change in final demand for fuel was found to cause the highest
percentage changes in the air pollutants SO x and NO x relative to the other impact
variables. SO x and NO x had percentage changes equal to -0.01480689 and 0.00963582, respectively. Also, the waste disposal services for air had a higher
percentage change compared to that of the waste disposal services for water, but
the percentage changes of air and water damages are almost the same.
The environmental impact variable multipliers were also computed, and are
presented in Appendix A.5. The Fishery sector has the highest natural resource
depreciation multiplier equal to 0.0928. This means that a peso increase in the final
demand for products of the fishery sector leads to a depreciation of about 0.09
pesos. The sectors of Forestry, Manufacturing of Wood and Wood Products, and
Metallic Ore Mining also exhibited high natural resource depreciation multipliers.
For the air pollutant PM, the Household Sector, Basic Metal Industries,
Non-metallic Mining and Quarrying, and Public Administration and Defense show
the highest residual multipliers. On the other hand, the sectors of Electricity and
Gas, Manufacturing of Cement, and Manufacturing of Paper and Paper Products
were the sectors with the highest multipliers for the pollutant SO x . Manufacturing
of Cement and Non-metallic Mining and Quarrying had the highest multipliers for

35

NO x. For both the pollutants VOC and CO, the Household Sector and the Public
Administration and Defense exhibited the highest residual multipliers.
The sector of Non-metallic Mining and Quarrying had the highest waste
disposal service multiplier for air equal to 0.05. This multiplier means that the
sector produces air pollutants but utilizes disposal services to reduce the harmful
effects of the pollutants before it is released into the environment. For the water
waste disposal services, Forestry exhibited the highest impact multiplier of 0.48.
The activities of the forestry sector, such as refinishing and restoring wood, and
wood preservation, generate hazardous wastes like waste solvents, paints... waste
chemicals, sludge and wastewater (British Columbia, 2008). Hence, more costs
incurred to dispose of and treat the sectors waste water. Among the sectors, the
household has the highest air pollution damage multiplier, equal to almost 0.01;
meaning a peso increase in the final demand is associated with 0.01 pesos in air
pollution damages. This may be brought about by the households dependency on
fuel for many of its activities, and combustion of fuel is the main source o f air
pollutants. While for water damages, the sector of Other Agricultural Crops had the
highest multiplier with 0.02. This multiplier suggests that a large amount of
wastewater is generated in the production of agricultural crops and this affects the
supply of potable water. This in turn causes damages on the health and productivity
losses.

CHAPTER VI
SUMMARY AND CONCLUSION

The main objective of the study is to analyze the effects of the Philippine
Clean Air Act on sectoral production with the use of an augmented Input-Output
model. Specifically, this analysis intends to determine the change in the production
of different sectors brought about by the provisions of the Clean Air Act, identify
the relationship between pollution and performance of the eco nomy and its
different sectors, and provide policy implications based on the results of this study.
Regression analysis was performed to attribute changes in fuel consumption
to the implementation of the Philippine Clean Air Act. The Clean Air Act was
introduced into the regression model as an intercept dummy. Refinery production,
price of fuel, and per capita income were the other explanatory variables tested in
the regression.
The dummy variable for the Philippine Clean Air Act has a negative
coefficient of -0.0005953, and was found to be insignificant. Despite this, the
regression coefficient of the dummy variable PCAA was used to simulate the
change in petroleum consumption of the 41 sectors in the 1990 IO table used by
Orbeta (1999). This obtains the vector of changes in final demand (Y). The vector
of changes in final demand was multiplied with the Leontief Inverse Matrix of the
41 x 41 IO table for the Philippines to determine the vector of changes in sectoral
gross output (X).

37

The Household Sector, Wholesale and Retail Trade, Food Manufacturing,

Petroleum Refineries and Miscellaneous Production of Petrol and Coal, and
Electricity and Gas were the five sectors with the highest decreases in sectoral
gross output due to the simulated change in final demand. While the sectors of
Waterworks and Supply, Printing, Publishing and Allied Products, Communication,
Sugarcane Production, and Manufacturing of Other Non-metallic Mineral Products
were those with the lowest decreases in sectoral gross output.
Other than the changes in sectoral output due to changes in final demand,
the changes in impact variables were also computed using the impact coefficient
matrix used by Orbeta (1999). The change in final demand for fuel was found to
cause the highest percentage changes in the air pollutants SO x and NO x relative to
the other impact variables. The pollutants SO x and NO x had percentage changes
equal to -0.01480689 and -0.00963582, respectively. Also, the waste disposal
services for air had a higher percentage change compared to that of the waste
disposal services for water, but the percentage changes of air and water damages
are almost the same.
The environmental impact variable multipliers were calculated to determine
the effect on the impact variables of a peso increase in each sectors final demand.
The Fishery sector has the highest depreciation multiplier equal to 0.0928. This
means that a peso increase in the final demand for products of the fishery sector
leads to a natural resource depreciation of about 0.09 pesos.

38

For the air pollutant PM, the Household Sector exhibits the highest residual
multiplier, while the sector of Electricity and Gas had the highest multiplier for the
pollutant SO x. On the other hand, Manufacturing of Cement and Non-metallic
Mining had the highest multiplier for NO x. For both the pollutants VOC and CO,
the Household Sector and the Public Administration and Defense generated the
highest residual multipliers. While for water damages, the sector of Other
Agricultural Crops had the highest multiplier with 0.02.
Among the sectors, the household has the highest air pollution damage
multiplier, equal to almost 0.01 which means that a peso increase in the final
demand is associated with 0.01 pesos in air pollution damages. With this, it ca n be
said that regulations aimed at reducing pollution levels should also focus on the
household sector since it can contribute significantly to pollution.

CHAPTER VII
RECOMMENDATION

Future studies on the effects of the Philippine Clean Air Act ar e

recommended to focus on possible mechanisms, other than fuel consumption,
through which the policy can affect the economy. Such mechanisms, whether
directly or indirectly, can cause changes in the output of the different sectors of the
economy, and can therefore be the basis for future research.

REFERENCES
Alcantara, V. and Padilla, E. (2006). An input-output analysis of the key sectors
in CO2 emissions from a production perspective: An application to the
Spanish
economy.
Retrieved
from
http://dep-economiaaplicada.uab.cat/repec/doc/wpdea0601.pdf.
Ambec, S., Cohen, M.A., Elgie, S., and Lanoie, P. (2010). The Porter Hypothesis at
20: Can environmental regulation enhance innovation and competitiveness?
(Chairs
Paper).
Retrieved
from
http://www.isc.hbs.edu/pdf/PorterHypothesis_at20_Montreal .pdf.
Asian Development Bank. (2006). Country synthesis report on urban air quality
management: Philippines (Discussion Draft). Manila, Philippines.
Austin, D. (1999). Economic instruments fir pollution control and prevention: A
brief overview. Retrieved from http://pdf.wri.org/incentives_austin.pdf.
Becker, R.A. (2001). Air pollution abatement costs under the Clean Air Act:
Evidence from the PACE survey. Center for Economic Studies, US Bureau of
the Census.
British Columbia Environment Industry Association (2008). Forestry & Forest-Based
Product
Manufacturers
Fact
Sheet.
Retrieved
from
http://www.hazwastebc.com/documents/bceia_009.pdf.
Burkander, P. (2008). Modeling pollution using input-output analysis. Retrieved
from
http://people.emich.edu/aross15/projectguides/sample_project_leontief_pollution.pdf.
Environmental Economics and
Policy. (n.d.). Economic efficiency and the
environment.
Retrieved
from
http://web.uvic.ca/~ehutchin/531/reading/ch4.PDF.
Environmental Management Bureau. (2009). National air quality status report.
Quezon City, Philippines: Department of Environment and Natural
Resources.
Greenstone, M. (2002). The impacts of environmental regulations on industrial
activity: evidence from the 1970 and 1977 Clean Air Act Amendments and
the Census of Manufactures. J. Polit. Econ. 110:1175219
Hirota, K. (2010). Comparative studies on vehicle related policies for air pollution
reduction in ten Asian countries. Sustainability, 2, 145-162.

41

Jaffe A.B., Peterson S.R., Portney P.R., and Stavins R.N. (1995). Environmental
regulation and the competitiveness of U.S. manufacturing: What does the
evidence tell us? J. Econ. Lit. 33:13263.
Mendoza, M.N.F. (1996). Input-output modeling. In the Philippine Environmental
and Natural Resources Accounting Project (ENRAP Phase III): Technical
Appendices. DENR and USAID, Philippines.
Millimet, D.L., Santanu, R., and Sengupta, A. (2009). Environmental regulations
and economic activity: Influence on market structure. Retrieved from
http://people.smu.edu/asengupt/arre.pdf.
National Statistical Coordination Board (NSCB). (2010). Philippine Statistical Yearbook.
Makati City, Philippines.
National Statistics Office (NSO). (2009). Philippine Yearbook. Sta. Mesa, Manila,
Philippines.
Orbeta, E.M. (1999). Development of environmental impact multipliers in the
Philippines.
Retrieved
from
http://web.idrc.ca/en/ev-64656-201-1DO_TOPIC.html.
Shukla, R. (2009). Pattern of domestic fuel consumption. Retrieved from
http://economictimes.indiatimes.com/opinion/view-point/pattern-of-domesticfuel-consumption/articleshow/5161846.cms.
Sneeringer, S. (2009). Effects of environmental regulation on economic activity and
pollution
in
commercial
agriculture.
Retrieved
from
http://ageconsearch.umn.edu/bitstream/46591/2/SAEAPaperSneeringer.pdf.
Thaiprasert, N., and Hicks, M.J. (2011). The effect of higher fuel prices on Indianas
economy (Policy Brief). Center for Business and Economic Research. Ball
State University.
The Concise Encyclopedia of Economics. (2008). Wassily Leontief. Retrieved from
http://www.econlib.org/library/Enc/bios/Leontief.html.
The

World
Bank
Group.
(2012).
Philippines.
http://data.worldbank.org/country/philippines.

Retrieved

from

APPENDICES

43

APPENDIX A.1
Correlation Matrix

DFCPC
TRP
DFCPC
1.0000

RPI

GDPPC

TRP

0.7995*
0.0000

1.0000

RPI

0.4503*
0.0125

0.1056
0.5785

1.0000

GDPPC

0.6612*
0.0001

0.3187
0.0861

0.9512*
0.0000

PCAA

0.5863*
0.0007

0.2338
0.2137

0.7908* 0.8719*
0.0000 0.0000

PCAA

1.0000

1.0000

APPENDIX A.2
ENRA-Modified IO Table, Philippines, 1990
(In 000 pesos)

44

(APPENDIX A.2 contd.)

45

APPENDIX A.3
Leontief Inverse Matrix, ENRA-Modified IO Table, Philippines, 1990
Sector
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
HH

1
1.1627
0.0296
0.0092
0.0050
0.0163
0.0482
0.0535
0.0312
0.0065
0.0073
0.0346
0.2158
0.0176
0.0119
0.0339
0.0155
0.0075
0.0120
0.0040
0.1505
0.0407
0.0144
0.0049
0.0008
0.0015
0.0191
0.0179
0.0153
0.0238
0.0214
0.0027
0.0047
0.0589
0.0892
0.0047
0.0822
0.0001
0.0085
0.0083
0.0448
0.4582

2
0.0453
1.1369
0.0093
0.0050
0.0165
0.0487
0.0627
0.0315
0.0072
0.0074
0.0380
0.2187
0.0176
0.0119
0.0346
0.0155
0.0087
0.0208
0.0055
0.1610
0.0453
0.0124
0.0052
0.0009
0.0015
0.0193
0.0166
0.0163
0.0255
0.0227
0.0029
0.0046
0.0641
0.1035
0.0053
0.0833
0.0001
0.0085
0.0085
0.0517
0.4581

3
0.0300
0.0205
1.0060
0.0033
0.0110
0.0328
0.0642
0.0217
0.0049
0.0048
0.0268
0.1452
0.0123
0.0083
0.0231
0.0109
0.0069
0.0083
0.0028
0.0709
0.0346
0.0083
0.0027
0.0006
0.0010
0.0123
0.0106
0.0109
0.0167
0.0158
0.0025
0.0031
0.0409
0.0608
0.0035
0.0564
0.0000
0.0060
0.0068
0.0338
0.3211

4
0.0481
0.0304
0.0101
1.0053
0.0173
0.0510
0.0794
0.0324
0.0071
0.0087
0.0552
0.2315
0.0179
0.0121
0.0356
0.0160
0.0087
0.0143
0.0051
0.2128
0.0684
0.0140
0.0063
0.0009
0.0017
0.0227
0.0199
0.0174
0.0287
0.0248
0.0057
0.0050
0.0781
0.1098
0.0054
0.0917
0.0001
0.0086
0.0179
0.0512
0.4639

5
0.0394
0.0249
0.0083
0.0044
1.1260
0.0416
0.0250
0.0265
0.0060
0.0087
0.0372
0.1894
0.0145
0.0098
0.0331
0.0131
0.0082
0.0116
0.0036
0.1794
0.0432
0.0131
0.0054
0.0008
0.0014
0.0220
0.0191
0.0162
0.0364
0.0208
0.0024
0.0042
0.0623
0.0884
0.0049
0.0744
0.0000
0.0070
0.0124
0.0449
0.3767

6
0.1105
0.0318
0.0134
0.0078
0.0217
1.2988
0.0579
0.0329
0.0068
0.0070
0.0382
0.3405
0.0146
0.0099
0.0301
0.0130
0.0105
0.0119
0.0037
0.1433
0.0466
0.0119
0.0048
0.0008
0.0014
0.0184
0.0154
0.0165
0.0232
0.0278
0.0027
0.0043
0.0587
0.1153
0.0049
0.0765
0.0000
0.0071
0.0073
0.0444
0.3798

7
0.0394
0.0268
0.0080
0.0044
0.0177
0.0430
1.0102
0.0286
0.0072
0.0088
0.0447
0.1910
0.0160
0.0108
0.0306
0.0143
0.0108
0.0113
0.0038
0.0999
0.0589
0.0104
0.0037
0.0008
0.0015
0.0233
0.0179
0.0204
0.0267
0.0438
0.0203
0.0047
0.0585
0.0831
0.0048
0.0853
0.0001
0.0078
0.0076
0.0523
0.4171

8
0.0332
0.0196
0.0066
0.0037
0.0126
0.0348
0.0046
1.1684
0.0054
0.0189
0.0932
0.1617
0.0113
0.0077
0.0431
0.0104
0.0073
0.0101
0.0031
0.0773
0.1335
0.0096
0.0030
0.0008
0.0014
0.0512
0.0710
0.0173
0.0467
0.0396
0.0017
0.0045
0.0519
0.0853
0.0037
0.0673
0.0000
0.0055
0.0056
0.0317
0.2957

9
0.0520
0.0363
0.0105
0.0058
0.0189
0.0573
0.0100
0.0381
1.1058
0.0119
0.0751
0.2525
0.0219
0.0148
0.0414
0.0194
0.0111
0.0153
0.0053
0.0986
0.1045
0.0145
0.0042
0.0011
0.0018
0.0317
0.0340
0.0249
0.0340
0.0315
0.0024
0.0057
0.0831
0.1245
0.0060
0.1027
0.0001
0.0106
0.0107
0.0541
0.5713

10
0.0431
0.0228
0.0099
0.0047
0.0158
0.0426
0.0058
0.0248
0.0094
1.0244
0.0906
0.2046
0.0127
0.0085
0.0334
0.0120
0.0169
0.0159
0.0043
0.3720
0.1109
0.0193
0.0098
0.0029
0.0028
0.0671
0.0558
0.0523
0.0556
0.0453
0.0017
0.0090
0.0754
0.1364
0.0047
0.0921
0.0001
0.0065
0.0071
0.0416
0.3257

11
0.0368
0.0208
0.0081
0.0040
0.0158
0.0374
0.0051
0.0234
0.0094
0.0271
1.0587
0.1757
0.0117
0.0078
0.0387
0.0109
0.0137
0.0228
0.0038
0.2524
0.0673
0.0196
0.0069
0.0025
0.0044
0.0770
0.0767
0.0317
0.0366
0.0274
0.0022
0.0092
0.0781
0.1082
0.0054
0.0954
0.0001
0.0059
0.0068
0.0715
0.2996

12
0.2629
0.0503
0.0472
0.0299
0.0660
0.2247
0.0284
0.0728
0.0080
0.0093
0.0530
1.3211
0.0135
0.0090
0.0346
0.0120
0.0074
0.0141
0.0039
0.1209
0.0688
0.0154
0.0059
0.0010
0.0019
0.0249
0.0242
0.0158
0.0248
0.0353
0.0022
0.0045
0.0599
0.1151
0.0045
0.0777
0.0000
0.0065
0.0073
0.0429
0.3472

13
0.0943
0.0250
0.0176
0.0133
0.0261
0.0843
0.0110
0.0324
0.0058
0.0189
0.0562
0.4707
1.1098
0.0063
0.0236
0.0087
0.0057
0.0212
0.0051
0.1057
0.0658
0.0121
0.0433
0.0009
0.0018
0.0528
0.0635
0.0158
0.0283
0.0353
0.0044
0.0042
0.0540
0.1113
0.0044
0.0703
0.0000
0.0052
0.0084
0.0443
0.2441

14
0.0283
0.0170
0.0059
0.0031
0.1438
0.0295
0.0063
0.0186
0.0213
0.0122
0.0428
0.1366
0.0098
1.2944
0.0307
0.0093
0.0065
0.3860
0.0219
0.1166
0.0549
0.0399
0.0052
0.0011
0.0021
0.0323
0.0216
0.0173
0.0385
0.0345
0.0018
0.0057
0.0635
0.1666
0.0052
0.1014
0.0000
0.0048
0.0060
0.0399
0.2533

15
0.0531
0.0271
0.0122
0.0058
0.1054
0.0519
0.0086
0.0295
0.0085
0.0122
0.0885
0.2515
0.0150
0.0100
1.7821
0.0169
0.0087
0.0306
0.0100
0.4950
0.1019
0.0182
0.0127
0.0012
0.0023
0.0308
0.0242
0.0259
0.0535
0.0812
0.0020
0.0061
0.0745
0.1557
0.0058
0.1065
0.0001
0.0073
0.0082
0.0473
0.3832

16
0.0448
0.0247
0.0100
0.0049
0.0638
0.0460
0.0070
0.0267
0.0074
0.0128
0.0720
0.2131
0.0140
0.0094
0.9769
1.0204
0.0079
0.0254
0.0085
0.3425
0.0860
0.0161
0.0093
0.0011
0.0020
0.0296
0.0218
0.0223
0.0809
0.0631
0.0018
0.0055
0.0697
0.1382
0.0056
0.0983
0.0001
0.0068
0.0074
0.0426
0.3598

17
0.0378
0.0240
0.0218
0.0042
0.0237
0.0402
0.0069
0.0259
0.2386
0.0228
0.0845
0.1825
0.0141
0.0095
0.0863
0.0188
1.1634
0.0207
0.0058
0.1540
0.1145
0.0178
0.0057
0.0016
0.0039
0.0594
0.0592
0.0377
0.0813
0.0419
0.0021
0.0068
0.1102
0.1775
0.0068
0.1159
0.0001
0.0069
0.0078
0.0472
0.3665

18
0.0353
0.0205
0.0076
0.0039
0.0227
0.0363
0.0053
0.0225
0.0897
0.0323
0.0870
0.1697
0.0118
0.0079
0.0336
0.0114
0.0102
1.8970
0.0041
0.1981
0.1144
0.0165
0.0062
0.0019
0.0056
0.0862
0.0529
0.0247
0.1037
0.0826
0.0018
0.0066
0.0750
0.2049
0.0056
0.1015
0.0000
0.0058
0.0066
0.0410
0.3041

19
0.0431
0.0240
0.0095
0.0047
0.0206
0.0436
0.0061
0.0262
0.0404
0.0201
0.0715
0.2060
0.0136
0.0091
0.0421
0.0128
0.0090
0.7796
1.0235
0.3073
0.0861
0.0242
0.0084
0.0015
0.0035
0.0536
0.0342
0.0256
0.0640
0.0579
0.0020
0.0066
0.0783
0.1997
0.0067
0.1046
0.0001
0.0067
0.0079
0.0478
0.3508

20
0.0917
0.0289
0.0239
0.0098
0.0281
0.0776
0.0110
0.0331
0.0070
0.0135
0.1220
0.4229
0.0130
0.0079
0.0432
0.0111
0.0078
0.0254
0.0046
1.5933
0.0891
0.0265
0.0366
0.0015
0.0038
0.0368
0.0309
0.0234
0.0299
0.0406
0.0019
0.0056
0.0692
0.1470
0.0051
0.0942
0.0000
0.0060
0.0071
0.0439
0.3040

21
0.0271
0.0154
0.0060
0.0030
0.0114
0.0276
0.0038
0.0173
0.0066
0.0184
0.7001
0.1296
0.0087
0.0058
0.0275
0.0081
0.0094
0.0165
0.0028
0.1835
1.0559
0.0138
0.0050
0.0017
0.0030
0.0521
0.0516
0.0219
0.0258
0.0201
0.0015
0.0064
0.0567
0.0786
0.0039
0.0682
0.0000
0.0044
0.0050
0.0498
0.2234

22
0.0544
0.0241
0.0131
0.0059
0.1548
0.0507
0.0094
0.0267
0.0072
0.0141
0.0817
0.2554
0.0127
0.0083
0.3131
0.0154
0.0082
0.0283
0.0053
0.6586
0.0820
1.1059
0.0161
0.0014
0.0024
0.0379
0.0234
0.0247
0.0383
0.0633
0.0019
0.0053
0.0668
0.1499
0.0053
0.0911
0.0000
0.0061
0.0076
0.0430
0.3189

46

(APPENDIX A.3 contd.)

Sector
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
HH

23
0.0319
0.0182
0.0070
0.0035
0.0126
0.0325
0.0044
0.0200
0.0070
0.0570
0.2691
0.1526
0.0104
0.0070
0.0318
0.0102
0.0086
0.0296
0.0037
0.2182
0.1405
0.0148
1.1194
0.0025
0.0078
0.1512
0.0379
0.0355
0.1046
0.0551
0.0015
0.0056
0.0563
0.1148
0.0045
0.0770
0.0000
0.0052
0.0057
0.0386
0.2679

24
0.0315
0.0183
0.0068
0.0035
0.0137
0.0324
0.0044
0.0208
0.0169
0.0221
0.3143
0.1508
0.1508
0.0069
0.0317
0.0100
0.0088
0.2383
0.0182
0.1879
0.3240
0.0161
0.0056
1.0061
0.0099
0.0617
0.0493
0.0421
0.0415
0.0923
0.0019
0.0081
0.0750
0.1626
0.0051
0.1200
0.0001
0.0051
0.0060
0.0675
0.2660

25
0.0328
0.0201
0.0070
0.0036
0.0142
0.0344
0.0047
0.0223
0.0161
0.0415
0.2270
0.1576
0.0116
0.0078
0.0388
0.0117
0.0091
0.0743
0.0084
0.1613
0.1468
0.0215
0.0186
0.2207
1.0384
0.1128
0.0426
0.0398
0.0870
0.0515
0.0019
0.0072
0.0857
0.1561
0.0061
0.1129
0.0001
0.0061
0.0087
0.0570
0.2994

26
0.0348
0.0198
0.0077
0.0038
0.0132
0.0354
0.0048
0.0215
0.0076
0.4918
0.1207
0.1663
0.0113
0.0075
0.0300
0.0108
0.0126
0.0150
0.0040
0.2410
0.1108
0.0167
0.0068
0.0026
0.0037
1.4932
0.0422
0.0379
0.0586
0.0516
0.0018
0.0075
0.0760
0.1939
0.0052
0.0941
0.0001
0.0057
0.0064
0.0394
0.2900

27
0.0343
0.0204
0.0075
0.0038
0.0139
0.0355
0.0048
0.0224
0.0074
0.2209
0.0848
0.1646
0.0118
0.0079
0.0373
0.0126
0.0120
0.0217
0.0057
0.1979
0.0855
0.0195
0.0067
0.0022
0.0039
0.6401
1.0867
0.0743
0.1449
0.0451
0.0018
0.0067
0.0791
0.1957
0.0059
0.0989
0.0000
0.0059
0.0066
0.0432
0.3045

28
0.0326
0.0179
0.0073
0.0036
0.0164
0.0328
0.0045
0.0200
0.0069
0.0806
0.0625
0.1556
0.0101
0.0067
0.0515
0.0274
0.0103
0.0310
0.0099
0.2486
0.0672
0.0414
0.0105
0.0029
0.0098
0.2367
0.0865
1.7121
0.0589
0.0453
0.0018
0.0061
0.0817
0.1996
0.0063
0.1031
0.0000
0.0052
0.0079
0.0405
0.2581

29
0.0356
0.0214
0.0079
0.0039
0.0188
0.0370
0.0051
0.0257
0.0083
0.1012
0.0626
0.1707
0.0124
0.0084
0.1163
0.0206
0.0154
0.0268
0.0049
0.1956
0.0729
0.0251
0.0109
0.0017
0.0028
0.1556
0.0615
0.0584
1.4103
0.0425
0.0018
0.0062
0.0797
0.1813
0.0060
0.1046
0.0001
0.0061
0.0068
0.0407
0.3215

30
0.0263
0.0172
0.0055
0.0029
0.0103
0.0282
0.0038
0.0185
0.0196
0.0142
0.2177
0.1271
0.0101
0.0068
0.0254
0.0098
0.0102
0.0137
0.0050
0.0925
0.3140
0.0108
0.0045
0.0012
0.0020
0.0373
0.0331
0.0545
0.0475
1.0284
0.0014
0.0067
0.0466
0.1145
0.0039
0.0855
0.0000
0.0050
0.0057
0.0368
0.2634

31
0.0280
0.0169
0.0060
0.0031
0.0100
0.0291
0.0039
0.0181
0.0087
0.0748
0.0532
0.1343
0.0098
0.0066
0.0215
0.0091
0.0062
0.0117
0.0040
0.1575
0.0607
0.0090
0.0046
0.0020
0.0053
0.2249
0.0199
0.0185
0.0245
0.0565
1.0013
0.0073
0.0419
0.0766
0.0036
0.1377
0.0000
0.0050
0.0062
0.0062
0.2540

32
0.0374
0.0239
0.0085
0.0041
0.0173
0.0398
0.0055
0.0257
0.0448
0.0690
0.1088
0.1804
0.0140
0.0095
0.0407
0.0139
0.0682
0.0344
0.0056
0.1458
0.1058
0.0355
0.0135
0.0679
0.0642
0.2026
0.1166
0.0721
0.0494
0.0348
0.0023
1.0064
0.0989
0.1567
0.0064
0.1099
0.0031
0.0069
0.0080
0.0463
0.3646

33
0.0380
0.0229
0.0079
0.0042
0.0216
0.0401
0.0055
0.0264
0.0068
0.0231
0.1726
0.1835
0.0131
0.0088
0.0529
0.0136
0.0089
0.0195
0.0068
0.1476
0.2501
0.0703
0.0055
0.0015
0.0024
0.0561
0.0522
0.0485
0.1215
0.0310
0.0058
0.0091
1.1325
0.1496
0.0105
0.1610
0.0001
0.0064
0.0082
0.0843
0.3381

34
0.0315
0.0205
0.0064
0.0035
0.0141
0.0340
0.0046
0.0227
0.0072
0.0162
0.0429
0.1530
0.0121
0.0082
0.0332
0.0121
0.0129
0.0232
0.0053
0.0795
0.0567
0.0287
0.0035
0.0016
0.0020
0.0447
0.0233
0.0196
0.0377
0.0377
0.0039
0.0085
0.1089
1.0760
0.0126
0.1545
0.0001
0.0059
0.0090
0.0461
0.3149

35
0.0192
0.0125
0.0040
0.0021
0.0087
0.0206
0.0028
0.0137
0.0041
0.0157
0.0286
0.0928
0.0073
0.0050
0.0219
0.0087
0.0047
0.0209
0.0102
0.0669
0.0363
0.0178
0.0027
0.0010
0.0020
0.0422
0.0280
0.1736
0.0457
0.0225
0.0039
0.0062
0.0620
0.0783
1.0291
0.1018
0.0000
0.0036
0.0043
0.0312
0.1905

36
0.0212
0.0137
0.0044
0.0024
0.0087
0.0227
0.0031
0.0155
0.0067
0.0112
0.0326
0.1024
0.0079
0.0054
0.0233
0.0106
0.0107
0.0220
0.0094
0.0714
0.0401
0.0110
0.0030
0.0055
0.0064
0.0284
0.0192
0.0181
0.0462
0.0232
0.0035
0.0523
0.0538
0.0590
0.0081
1.1111
0.0002
0.0040
0.0061
0.0526
0.2061

37
0.0864
0.0590
0.0173
0.0096
0.0323
0.0947
0.0126
0.0646
0.0146
0.0207
0.0815
0.4192
0.0349
0.0237
0.0765
0.0334
0.0162
0.0476
0.0308
0.1834
0.1061
0.0280
0.0075
0.0028
0.0035
0.0512
0.0436
0.0527
0.0953
0.0507
0.0072
0.0136
0.1266
0.1985
0.0118
0.2522
1.0041
0.0184
0.0442
0.1649
0.9107

38
0.0835
0.0578
0.0167
0.0093
0.0308
0.0918
0.0122
0.0610
0.0148
0.0176
0.0703
0.4052
0.0347
0.0236
0.0733
0.0357
0.0150
0.0593
0.0223
0.1737
0.0902
0.0240
0.0071
0.0018
0.0031
0.0435
0.0381
0.0334
0.0828
0.0590
0.0085
0.0112
0.1194
0.1737
0.0113
0.1873
0.0001
1.0174
0.0223
0.0933
0.9068

39
0.0771
0.0395
0.0160
0.0085
0.0265
0.0806
0.0104
0.0515
0.0089
0.0158
0.0689
0.3726
0.0205
0.0137
0.0645
0.0366
0.0102
0.0215
0.0067
0.3823
0.0778
0.0196
0.0108
0.0013
0.0024
0.0369
0.0295
0.0251
0.0970
0.0497
0.0048
0.0072
0.0815
0.1647
0.0078
0.1221
0.0001
0.0099
1.0120
0.0621
0.5275

40
0.0649
0.0360
0.0130
0.0072
0.0243
0.0674
0.0089
0.0683
0.0087
0.0206
0.0604
0.3152
0.0144
0.0094
0.0401
0.0142
0.0109
0.0193
0.0068
0.2079
0.0738
0.0187
0.0070
0.0012
0.0021
0.0469
0.0332
0.0395
0.0848
0.0548
0.0075
0.0076
0.0744
0.1185
0.0084
0.1195
0.0001
0.0068
0.0073
1.0918
0.3606

HH
0.1187
0.0845
0.0234
0.0132
0.0422
0.1319
0.0175
0.0882
0.0180
0.0150
0.0716
0.5769
0.0512
0.0348
0.0910
0.0449
0.0201
0.0305
0.0110
0.1650
0.0913
0.0264
0.0080
0.0020
0.0035
0.0383
0.0312
0.0385
0.0584
0.0495
0.0048
0.0111
0.1369
0.2108
0.0122
0.2079
0.0002
0.0248
0.0236
0.1163
1.3387

47

APPENDIX A.4
Matrix of Impact Coefficients
Impact Variable
1
NR (Physical)
(5.2285)
Agriculture
0.0000
Grassland
0.0000
Woodland
0.0000
Small Pelagics
0.0000
Dipterocarps
0.0000
Plantation
0.0000
Mangroves
0.0000
Pine
0.0000
Rattan
0.0000
Copper
0.0000
Gold
Residuals
0.0000
PM
0.0000
SOx
0.0000
NOx
0.0000
VOC
0.0000
CO
0.0088
BOD5
1.7488
SS
0.0000
TDS
0.0000
OIL
0.0068
N
0.0001
P
Labor Income
0.2751
CE
Environmental Variables
(0.0061)
NR Depn
0.0000
EWDS (Air)
(0.0429)
EWDS (Water)
0.0000
Air Damages
(0.0016)
Water Damages

10

11

12

13

14

15

16

17

18

19

20

21

(0.1189)
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

(5.9500)
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

(0.9273)
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

(0.4185)
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
(0.0004)
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
(0.0846)
(1.4629)
0.0000
(0.1097)
0.3997
(0.0049)
(0.0064)
(11.2908)
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
(0.0095)
(0.0236)

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0002
0.0398
0.0000
0.0000
0.0002
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0100
1.9902
0.0000
0.0000
0.0077
0.0001

0.0000
0.0000
0.0000
0.0000
0.0002
0.0016
0.3102
0.0000
0.0000
0.0012
0.0000

0.0000
0.0000
0.0000
0.0000
0.0001
0.0007
0.1400
0.0000
0.0000
0.0005
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0084
0.0603
0.0000
0.0000
0.0027
0.0000

0.0000
0.0000
0.0000
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0001
0.0001
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0001
0.0001
0.0001
0.0001
0.0008
0.0847
16.8156
0.0000
0.0000
0.0652
0.0010

0.0025
0.0009
0.0003
0.0002
0.0011
0.0000
2.2985
0.0000
0.0000
0.0000
0.0000

0.0037
0.0007
0.0017
0.0015
0.0091
0.0000
0.0266
0.0000
0.0000
0.0000
0.0000

0.0004
0.0001
0.0001
0.0001
0.0004
0.0002
0.0002
0.0039
0.0000
0.0000
0.0000

0.0001
0.0003
0.0002
0.0001
0.0007
0.0020
0.0021
0.0027
0.0000
0.0000
0.0000

0.0000
0.0001
0.0001
0.0000
0.0003
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0001
0.0003
0.0001
0.0001
0.0005
0.0007
0.0003
0.0008
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0002
0.0000
0.0001
0.0002
0.0000
0.0000
0.0000

0.0005
0.0002
0.0005
0.0005
0.0028
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0026
0.0010
0.0003
0.0002
0.0017
0.0010
0.0014
0.0049
0.0000
0.0000
0.0000

0.0001
0.0001
0.0001
0.0001
0.0008
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0003
0.0002
0.0001
0.0001
0.0005
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0001
0.0000
0.0007
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.2685

0.2109

0.2817

0.2143

0.1560

0.2806

0.1452

0.3620

0.1439

0.1388

0.0655

0.0498

0.0515

0.0911

0.0859

0.0810

0.0480

0.1114

0.0649

0.0160

(0.0001)
(0.0001)
(0.0010)
0.0000
0.0000

(0.0069)
(0.0002)
(0.0489)
0.0000
(0.0018)

(0.0011)
(0.0011)
(0.0076)
0.0000
(0.0003)

(0.0005)
(0.0003)
(0.0034)
(0.0001)
(0.0188)

0.0000
(0.0001)
(0.0039)
0.0000
(0.0015)

0.0000
(0.0003)
0.0000
0.0000
0.0000

(0.0789)
(0.0013)
0.0000
0.0000
0.0000

(0.0375)
(0.0037)
(0.4133)
(0.0001)
(0.0153)

(0.0082)
(0.0049)
(0.2367)
(0.0022)
0.0000

0.0000
(0.0429)
(0.0030)
(0.0032)
0.0000

0.0000
(0.0026)
(0.0003)
(0.0004)
0.0000

0.0000
(0.0032)
(0.0022)
(0.0001)
(0.0004)

0.0000
(0.0014)
0.0000
0.0000
0.0000

0.0000
(0.0026)
(0.0011)
(0.0001)
(0.0001)

0.0000
(0.0010)
(0.0002)
0.0000
0.0000

0.0000
(0.0150)
(0.0001)
(0.0004)
0.0000

0.0000
(0.0052)
(0.0022)
(0.0022)
(0.0002)

0.0000
(0.0041)
0.0000
(0.0001)
0.0000

0.0000
(0.0026)
(0.0003)
(0.0003)
0.0000

0.0000
(0.0003)
(0.0001)
0.0000
0.0000

48

(APPENDIX A.4 contd.)

22
Impact Variable
NR (Physical)
0.0000
Agriculture
0.0000
Grassland
0.0000
Woodland
0.0000
Small Pelagics
0.0000
Dipterocarps
0.0000
Plantation
0.0000
Mangroves
0.0000
Pine
0.0000
Rattan
0.0000
Copper
0.0000
Gold
Residuals
0.0001
PM
0.0001
SOx
0.0001
NOx
0.0000
VOC
0.0003
CO
0.0000
BOD5
0.0000
SS
0.0000
TDS
0.0000
OIL
0.0000
N
0.0000
P
Labor Income
0.0547
CE
Environmental Variables
0.0000
NR Depn
(0.0013)
EWDS (Air)
0.0000
EWDS (Water)
0.0000
Air Damages
0.0000
Water Damages

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

HH

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0004
0.0003
0.0007
0.0003
0.0014
0.0000
0.0001
0.0007
0.0000
0.0000
0.0000

0.0008
0.0022
0.0014
0.0002
0.0012
0.0000
0.0003
0.0022
0.0000
0.0000
0.0000

0.0003
0.0002
0.0003
0.0002
0.0014
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0021
0.0003
0.0001
0.0001
0.0005
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000

0.0001
0.0001
0.0001
0.0004
0.0007
0.0003
0.0001
0.0003
0.0001
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0002
0.0000
0.0003
0.0001
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0004
0.0060
0.0010
0.0000
0.0001
0.0000
0.0050
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0007
0.0000
0.0001
0.0001
0.0004
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0001
0.0001
0.0001
0.0004
0.0000
0.0000
0.0000
0.0000

0.0002
0.0001
0.0002
0.0003
0.0007
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0029
0.0000
0.0000
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0001
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0001
0.0000
0.0001
0.0001
0.0004
0.0000
0.0127
0.0000
0.0006
0.0001
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0005
0.0000
0.0004
0.0002
0.0000
0.0000
0.0000
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000
0.0134
0.0006
0.0000
0.0000
0.0003
0.0001

0.0047
0.0001
0.0004
0.0104
0.0319
0.0116
0.0052
0.0000
0.0000
0.0009
0.0004

0.0747

0.0469

0.0865

0.0330

0.0741

0.0402

0.0954

0.1129

0.1194

0.1442

0.1284

0.1785

0.0851

0.0980

0.5928

0.6303

0.2875

0.1543

0.0000

0.0000
(0.0065)
(0.0010)
(0.0003)
0.0000

0.0000
(0.0057)
(0.0009)
(0.0007)
0.0000

0.0000
(0.0072)
0.0000
(0.0003)
0.0000

0.0000
(0.0028)
(0.0003)
(0.0018)
0.0000

0.0000
(0.0036)
0.0000
(0.0001)
(0.0001)

0.0000
(0.0012)
(0.0002)
(0.0000)
0.0000

0.0000
(0.0006)
0.0000
(0.0000)
0.0000

0.0000
(0.0007)
0.0000
(0.0004)
0.0000

0.0000
0.0000
0.0000
0.0000
0.0000

0.0000
(0.0021)
0.0000
(0.0006)
0.0000

0.0000
(0.0006)
0.0000
(0.0000)
(0.0000)

0.0000
(0.0029)
0.0000
(0.0002)
0.0000

0.0000
(0.0003)
0.0000
(0.0025)
0.0000

0.0000
(0.0002)
0.0000
(0.0000)
0.0000

0.0000
(0.0022)
(0.0393)
(0.0001)
0.0000

0.0000
(0.0001)
0.0000
0.0000
0.0000

0.0000
(0.0002)
0.0000
(0.0000)
(0.0001)

0.0000
(0.0003)
0.0000
0.0000
(0.0024)

0.0000
(0.0085)
(0.0357)
(0.0040)
(0.0021)

49

APPENDIX A.5
Environmental Impact Variable Multipliers (v) Obtained Using the ENRA-Modified A Matrix
Impact
Variable
1
NR (Physical)
(6.1489)
Agriculture
(0.0005)
Grassland
(0.0095)
Woodland
(0.0000)
Small Pelagics
(0.0007)
Dipterocarps
0.0026
Plantation
(0.0000)
Mangroves
(0.0000)
Pine
(0.0734)
Rattan
Copper (0.0001)
(0.0002)
Gold
Residuals
0.0026
PM
0.0003
SOx
0.0003
NOx
0.0049
VOC
0.0153
CO
0.0173
BOD5
2.1892
SS
0.0010
TDS
0.0000
OIL
0.0090
N
0.0003
P
Environmental Variables
(0.0099)
NR Depn
(0.0074)
EWDS (Air)
(0.0718)
EWDS (Water)
(0.0022)
Air Damages
(0.0034)
Water Damages

One Peso Increase in Final Demand from Sector

9
10
11
12
13

14

15

16

17

18

19

20

21

(0.4389)
(0.0006)
(0.0105)
(0.0000)
(0.0008)
0.0029
(0.0000)
(0.0000)
(0.0813)
(0.0001)
(0.0002)

(6.1527)
(0.0004)
(0.0072)
(0.0000)
(0.0005)
0.0020
(0.0000)
(0.0000)
(0.0553)
(0.0000)
(0.0001)

(1.2547)
(0.0006)
(0.0104)
(0.0000)
(0.0008)
0.0028
(0.0000)
(0.0000)
(0.0802)
(0.0001)
(0.0002)

(0.7337)
(0.0005)
(0.0088)
(0.0000)
(0.0007)
0.0024
(0.0000)
(0.0000)
(0.0677)
(0.0001)
(0.0002)

(0.6776)
(0.0006)
(0.0099)
(0.0000)
(0.0007)
0.0027
(0.0000)
(0.0000)
(0.0768)
(0.0001)
(0.0002)

(0.2683)
(0.0006)
(0.0105)
(0.0000)
(0.0008)
0.0029
(0.0000)
(0.0000)
(0.0813)
(0.0001)
(0.0002)

(0.2239)
(0.0005)
(0.0079)
(0.0005)
(0.0006)
0.0022
(0.0000)
(0.0000)
(0.0610)
(0.0002)
(0.0004)

(0.3520)
(0.0936)
(1.6177)
(0.0000)
(0.1213)
0.4420
(0.0054)
(0.0071)
(12.4854)
(0.0001)
(0.0003)

(0.2979)
(0.0008)
(0.0138)
(0.0000)
(0.0010)
0.0038
(0.0000)
(0.0001)
(0.1061)
(0.0097)
(0.0242)

(0.2534)
(0.0008)
(0.0138)
(0.0000)
(0.0010)
0.0038
(0.0000)
(0.0001)
(0.1061)
(0.0003)
(0.0006)

(1.7167)
(0.0007)
(0.0117)
(0.0000)
(0.0009)
0.0032
(0.0000)
(0.0001)
(0.0903)
(0.0001)
(0.0002)

(0.6240)
(0.0005)
(0.0085)
(0.0000)
(0.0006)
0.0023
(0.0000)
(0.0000)
(0.0655)
(0.0002)
(0.0004)

(0.2481)
(0.0018)
(0.0312)
(0.0000)
(0.0023)
0.0085
(0.0001)
(0.0001)
(0.2405)
(0.0001)
(0.0003)

(0.4029)
(0.0007)
(0.0124)
(0.0000)
(0.0009)
0.0034
(0.0000)
(0.0001)
(0.0960)
(0.0001)
(0.0003)

(0.3279)
(0.0006)
(0.0108)
(0.0000)
(0.0008)
0.0030
(0.0000)
(0.0000)
(0.0836)
(0.0001)
(0.0003)

(0.3440)
(0.0202)
(0.3490)
(0.0000)
(0.0262)
0.0954
(0.0012)
(0.0015)
(2.6940)
(0.0002)
(0.0005)

(0.2453)
(0.0076)
(0.1312)
(0.0000)
(0.0098)
0.0359
(0.0004)
(0.0006)
(1.0128)
(0.0003)
(0.0008)

(0.2977)
(0.0034)
(0.0591)
(0.0000)
(0.0044)
0.0161
(0.0002)
(0.0003)
(0.4561)
(0.0002)
(0.0005)

(0.6459)
(0.0006)
(0.0102)
(0.0000)
(0.0008)
0.0028
(0.0000)
(0.0000)
(0.0790)
(0.0001)
(0.0003)

(0.1868)
(0.0006)
(0.0097)
(0.0000)
(0.0007)
0.0026
(0.0000)
(0.0000)
(0.0745)
(0.0002)
(0.0004)

0.0026
0.0003
0.0004
0.0049
0.0154
0.0079
0.2916
0.0010
0.0000
0.0017
0.0002

0.0018
0.0002
0.0002
0.0034
0.0108
0.0153
2.1560
0.0007
0.0000
0.0087
0.0002

0.0027
0.0003
0.0004
0.0050
0.0160
0.0094
0.5664
0.0011
0.0000
0.0027
0.0002

0.0022
0.0003
0.0003
0.0041
0.0129
0.0072
0.3720
0.0009
0.0000
0.0018
0.0002

0.0023
0.0003
0.0003
0.0041
0.0130
0.0178
0.4387
0.0015
0.0000
0.0052
0.0002

0.0024
0.0004
0.0004
0.0045
0.0142
0.0071
0.2374
0.0009
0.0000
0.0013
0.0002

0.0021
0.0005
0.0005
0.0033
0.0109
0.0051
0.2156
0.0008
0.0000
0.0010
0.0001

0.0034
0.0005
0.0006
0.0063
0.0203
0.1022
18.7486
0.0012
0.0000
0.0733
0.0013

0.0049
0.0015
0.0008
0.0039
0.0130
0.0061
2.6194
0.0010
0.0000
0.0014
0.0001

0.0058
0.0011
0.0021
0.0048
0.0198
0.0061
0.3374
0.0009
0.0000
0.0013
0.0001

0.0026
0.0005
0.0005
0.0039
0.0125
0.0104
0.7474
0.0053
0.0000
0.0037
0.0002

0.0020
0.0008
0.0006
0.0029
0.0097
0.0081
0.3602
0.0050
0.0000
0.0017
0.0001

0.0026
0.0009
0.0005
0.0029
0.0100
0.0064
0.4743
0.0025
0.0000
0.0020
0.0001

0.0028
0.0013
0.0007
0.0045
0.0147
0.0083
0.3144
0.0026
0.0000
0.0016
0.0002

0.0025
0.0009
0.0005
0.0041
0.0134
0.0071
0.2710
0.0020
0.0000
0.0014
0.0001

0.0031
0.0008
0.0011
0.0047
0.0165
0.0262
4.1867
0.0010
0.0000
0.0165
0.0004

0.0072
0.0026
0.0011
0.0038
0.0144
0.0144
1.6740
0.0100
0.0000
0.0066
0.0002

0.0045
0.0015
0.0008
0.0042
0.0147
0.0099
0.8330
0.0047
0.0000
0.0035
0.0002

0.0028
0.0008
0.0007
0.0036
0.0122
0.0068
0.3747
0.0019
0.0000
0.0018
0.0001

0.0040
0.0008
0.0015
0.0035
0.0146
0.0045
0.2374
0.0007
0.0000
0.0010
0.0001

(0.0033)
(0.0078)
(0.0253)
(0.0023)
(0.0017)

(0.0091)
(0.0054)
(0.0655)
(0.0016)
(0.0030)

(0.0044)
(0.0098)
(0.0325)
(0.0024)
(0.0020)

(0.0033)
(0.0072)
(0.0245)
(0.0020)
(0.0223)

(0.0037)
(0.0074)
(0.0290)
(0.0020)
(0.0036)

(0.0029)
(0.0076)
(0.0227)
(0.0021)
(0.0016)

(0.0928)
(0.0100)
(0.0197)
(0.0018)
(0.0011)

(0.0450)
(0.0145)
(0.4838)
(0.0030)
(0.0188)

(0.0111)
(0.0149)
(0.2612)
(0.0043)
(0.0014)

(0.0027)
(0.0509)
(0.0267)
(0.0051)
(0.0014)

(0.0081)
(0.0103)
(0.0336)
(0.0023)
(0.0031)

(0.0037)
(0.0112)
(0.0240)
(0.0018)
(0.0020)

(0.0027)
(0.0099)
(0.0240)
(0.0023)
(0.0038)

(0.0032)
(0.0152)
(0.0262)
(0.0025)
(0.0034)

(0.0029)
(0.0126)
(0.0236)
(0.0022)
(0.0024)

(0.0116)
(0.0278)
(0.1208)
(0.0027)
(0.0052)

(0.0057)
(0.0194)
(0.0624)
(0.0061)
(0.0031)

(0.0041)
(0.0175)
(0.0388)
(0.0039)
(0.0022)

(0.0037)
(0.0148)
(0.0237)
(0.0025)
(0.0017)

(0.0020)
(0.0343)
(0.0191)
(0.0035)
(0.0010)

50

(APPENDIX A.5 contd.)

Impact
Variable
22
NR (Physical)
(0.4355)
Agriculture
(0.0006)
Grassland
(0.0105)
Woodland
(0.0000)
Small Pelagics
(0.0008)
Dipterocarps
0.0029
Plantation
(0.0000)
Mangroves
(0.0000)
Pine
(0.0813)
Rattan
Copper (0.0001)
(0.0003)
Gold
Residuals
0.0025
PM
0.0009
SOx
0.0006
NOx
0.0036
VOC
0.0122
CO
0.0064
BOD5
0.3066
SS
0.0014
TDS
0.0000
OIL
0.0015
N
0.0001
P
Environmental Variables
(0.0030)
NR Depn
(0.0124)
EWDS (Air)
(0.0225)
EWDS (Water)
(0.0021)
Air Damages
(0.0040)
Water Damages

One Peso Increase in Final Demand from Sector

29
30
31
32
33

23

24

25

26

27

28

34

35

36

37

38

39

40

HH

(0.2191)
(0.0006)
(0.0102)
(0.0000)
(0.0008)
0.0028
(0.0000)
(0.0000)
(0.0790)
(0.0005)
(0.0013)

(0.2163)
(0.0014)
(0.0247)
(0.0000)
(0.0019)
0.0068
(0.0001)
(0.0001)
(0.1908)
(0.0002)
(0.0005)

(0.2248)
(0.0014)
(0.0236)
(0.0000)
(0.0018)
0.0064
(0.0001)
(0.0001)
(0.1818)
(0.0004)
(0.0010)

(0.2392)
(0.0006)
(0.0111)
(0.0000)
(0.0008)
0.0030
(0.0000)
(0.0000)
(0.0858)
(0.0047)
(0.0116)

(0.2357)
(0.0006)
(0.0108)
(0.0000)
(0.0008)
0.0030
(0.0000)
(0.0000)
(0.0836)
(0.0021)
(0.0052)

(0.2262)
(0.0006)
(0.0101)
(0.0000)
(0.0008)
0.0028
(0.0000)
(0.0000)
(0.0779)
(0.0008)
(0.0019)

(0.2472)
(0.0007)
(0.0121)
(0.0000)
(0.0009)
0.0033
(0.0000)
(0.0001)
(0.0937)
(0.0010)
(0.0024)

(0.1793)
(0.0017)
(0.0287)
(0.0000)
(0.0022)
0.0078
(0.0001)
(0.0001)
(0.2213)
(0.0001)
(0.0003)

(0.1912)
(0.0007)
(0.0127)
(0.0000)
(0.0010)
0.0035
(0.0000)
(0.0001)
(0.0982)
(0.0007)
(0.0018)

(0.2600)
(0.0038)
(0.0655)
(0.0000)
(0.0049)
0.0179
(0.0002)
(0.0003)
(0.5058)
(0.0007)
(0.0016)

(0.2613)
(0.0006)
(0.0099)
(0.0000)
(0.0007)
0.0027
(0.0000)
(0.0000)
(0.0768)
(0.0002)
(0.0005)

(0.2144)
(0.0006)
(0.0105)
(0.0000)
(0.0008)
0.0029
(0.0000)
(0.0000)
(0.0813)
(0.0002)
(0.0004)

(0.1313)
(0.0003)
(0.0060)
(0.0000)
(0.0004)
0.0016
(0.0000)
(0.0000)
(0.0463)
(0.0001)
(0.0004)

(0.1445)
(0.0006)
(0.0098)
(0.0000)
(0.0007)
0.0027
(0.0000)
(0.0000)
(0.0756)
(0.0001)
(0.0003)

(0.5841)
(0.0012)
(0.0214)
(0.0000)
(0.0016)
0.0058
(0.0001)
(0.0001)
(0.1648)
(0.0002)
(0.0005)

(0.5643)
(0.0013)
(0.0217)
(0.0000)
(0.0016)
0.0059
(0.0001)
(0.0001)
(0.1671)
(0.0002)
(0.0004)

(0.5220)
(0.0008)
(0.0130)
(0.0000)
(0.0010)
0.0036
(0.0000)
(0.0001)
(0.1005)
(0.0002)
(0.0004)

(0.4378)
(0.0007)
(0.0127)
(0.0000)
(0.0010)
0.0035
(0.0000)
(0.0001)
(0.0982)
(0.0002)
(0.0005)

(0.7998)
(0.0015)
(0.0263)
(0.0000)
(0.0020)
0.0072
(0.0001)
(0.0001)
(0.2032)
(0.0001)
(0.0004)

0.0034
0.0011
0.0015
0.0036
0.0133
0.0050
0.3330
0.0015
0.0000
0.0011
0.0001

0.0042
0.0034
0.0023
0.0036
0.0138
0.0067
0.4206
0.0044
0.0000
0.0017
0.0001

0.0035
0.0014
0.0013
0.0039
0.0142
0.0065
0.4516
0.0015
0.0000
0.0017
0.0001

0.0065
0.0014
0.0008
0.0036
0.0123
0.0054
1.3455
0.0008
0.0000
0.0012
0.0001

0.0041
0.0009
0.0007
0.0039
0.0124
0.0059
0.7176
0.0012
0.0001
0.0012
0.0001

0.0025
0.0007
0.0005
0.0030
0.0100
0.0049
0.3828
0.0010
0.0000
0.0011
0.0001

0.0027
0.0006
0.0005
0.0036
0.0118
0.0059
0.4609
0.0010
0.0000
0.0013
0.0001

0.0028
0.0065
0.0016
0.0032
0.0111
0.0058
0.4363
0.0007
0.0000
0.0018
0.0001

0.0023
0.0006
0.0004
0.0028
0.0091
0.0044
0.3871
0.0006
0.0000
0.0011
0.0001

0.0038
0.0008
0.0007
0.0043
0.0142
0.0096
1.0066
0.0011
0.0000
0.0037
0.0002

0.0027
0.0005
0.0006
0.0040
0.0132
0.0066
0.2644
0.0009
0.0000
0.0012
0.0001

0.0022
0.0005
0.0005
0.0037
0.0116
0.0056
0.2352
0.0008
0.0000
0.0011
0.0001

0.0043
0.0003
0.0002
0.0021
0.0068
0.0035
0.1522
0.0005
0.0000
0.0007
0.0001

0.0014
0.0003
0.0002
0.0023
0.0073
0.0042
0.1903
0.0006
0.0000
0.0009
0.0001

0.0053
0.0007
0.0008
0.0099
0.0311
0.0161
0.5145
0.0021
0.0006
0.0030
0.0004

0.0052
0.0007
0.0007
0.0097
0.0304
0.0150
0.4909
0.0021
0.0000
0.0028
0.0004

0.0033
0.0006
0.0005
0.0062
0.0183
0.0099
0.3707
0.0017
0.0000
0.0020
0.0002

0.0024
0.0006
0.0004
0.0040
0.0127
0.0210
0.3487
0.0014
0.0000
0.0020
0.0002

0.0072
0.0007
0.0009
0.0142
0.0443
0.0214
0.6222
0.0026
0.0000
0.0038
0.0005

(0.0026)
(0.0241)
(0.0301)
(0.0030)
(0.0011)

(0.0027)
(0.0259)
(0.0265)
(0.0037)
(0.0015)

(0.0030)
(0.0242)
(0.0304)
(0.0030)
(0.0014)

(0.0063)
(0.0169)
(0.1331)
(0.0056)
(0.0012)

(0.0041)
(0.0155)
(0.0690)
(0.0035)
(0.0013)

(0.0028)
(0.0110)
(0.0340)
(0.0022)
(0.0012)

(0.0035)
(0.0101)
(0.0416)
(0.0023)
(0.0014)

(0.0025)
(0.0143)
(0.0233)
(0.0024)
(0.0012)

(0.0026)
(0.0071)
(0.0325)
(0.0020)
(0.0010)

(0.0046)
(0.0154)
(0.0510)
(0.0033)
(0.0020)

(0.0028)
(0.0137)
(0.0235)
(0.0023)
(0.0016)

(0.0024)
(0.0094)
(0.0203)
(0.0019)
(0.0013)

(0.0015)
(0.0049)
(0.0136)
(0.0037)
(0.0008)

(0.0017)
(0.0050)
(0.0143)
(0.0012)
(0.0009)

(0.0065)
(0.0177)
(0.0888)
(0.0046)
(0.0035)

(0.0062)
(0.0148)
(0.0484)
(0.0045)
(0.0033)

(0.0051)
(0.0115)
(0.0315)
(0.0029)
(0.0023)

(0.0064)
(0.0090)
(0.0257)
(0.0021)
(0.0042)

(0.0087)
(0.0190)
(0.0666)
(0.0062)
(0.0046)

51