PHILIPPINE COCONUT INDUSTRY AND THE INTERNATIONAL TRADE

This study explores effects of Philippines' coconut policies on the performance in the international market. Analysis of the coconut sector found that the Philippine government successfully changed the structure of the coconut industry during the 1970's using a fund collected as coconut levies. Since the Philippines dominated the international trade market of coconut products, it could exercise dominant market power in the world trade, by integrating the domestic sector. However, the industrial policies were not effective. Results of an econometric analysis show that the Philippines did not gain the market power despite the heavy investment in the coconut sector. Due to technological development in the oil processing sector, other oil products became close substitutes for the coconut products. Shift in coconut oil utilization from edible use to inedible use also accelerated the substitutability. Under the competitive market, the Philippines could not gain monopolistic profits from the exports