The System-wide Consumer Demand Analysis is one of the most neglected areas of applied research i... more The System-wide Consumer Demand Analysis is one of the most neglected areas of applied research in the local context. This is rather surprising considering the relative importance of Personal Consumption Expenditure to the national economy (PCE traditionally accounts for about 75 percent of the country\u27s Gross Domestic Product).This paper is one of the very few studies about the pattern of behavior of representative Filipino consumer in a multi-commodity set-up. With the objective of determining the ideal model to describe this behavior pattern, the study compared empirically the merits of two of the most theoretically sound, but mathematically rigorous complete systems of demand equations -- The Rotterdam model and the Linear Expenditure System. One unique feature of the study is its use of a quarterly data series (PCE: Q1 1981 -- Q2 1994). Most demand researchers are wary of using consumption data base of lesser frequency than a year because of their belief that demand adjustment to income and price changes requires at least a year to be manifested. This study hoped to shed some light on this issue as well as on other equally important concerns which might have wide ranging practical implications
One of the most anticipated data releases of the Philippine statistical system is the quarterly r... more One of the most anticipated data releases of the Philippine statistical system is the quarterly real gross domestic product.<br> This all-important variable provides the basis of establishing the economic performance of the country on a year-on-year<br> basis. Official publication of this statistic, however, comes at a significant delay of up to two months, upsetting the planning<br> function of various economic stakeholders. Under this backdrop, data scientists coined the term "nowcasting" which refers<br> to the prediction of the present, the very near future, and the very recent past based on information provided by available<br> data that are sampled at higher frequencies (monthly, weekly, daily, etc.). This study aims to demonstrate the viability of<br> using a state-of-the-art technique called MIDAS (Mixed Data Sampling) regression to solve the mixed frequency problem<br> in implementing the nowcasting of the country's ec...
Despite the economic and commercial importance of food consumption away from home, very limited a... more Despite the economic and commercial importance of food consumption away from home, very limited attempt has been made to investigate the evolution and economics of this type of food consumption among Filipinos over time. This study hopes to set the pace among local researchers in taking advantage of the availability of high quality primary data of nationwide household surveys to generate useful insights on the “eating out” behavior of modern Filipinos. The study will endeavour to establish the linkage between food demand behaviours and socioeconomic and demographic characteristics of households, highlighting on the difference between wealthy/not wealthy consumers and the increasing role of time constraint on the part of household members in their decision to “eat out”. To supply the dynamic content of the analysis, public use raw data files of several rounds of the Family Income and Expenditure Survey (FIES) are used. Relevant microeconometric models which address censoring, truncat...
This study utilized the recently available public use raw data file of the 2011 round of the Annu... more This study utilized the recently available public use raw data file of the 2011 round of the Annual Poverty Indicator Survey (APIS) to establish the latest stylized facts on the Philippine child labor situation. Public use file of the 2008 APIS was also used to generate comparative descriptives. It is also an attempt to jointly estimate the schooling and employment choices of Filipino children via the multinomial logit model that used the four different permutations of schooling and employment as the mutually exclusive and exhaustive categories of choice. A value added feature of the study is the use of survey design consistent procedures in establishing the descriptives as well as the estimates of the main empirical model. Tabulated summaries of the results reveal some alarming developments in the child labor situation of the country. The outcome of the econometric modeling confirms the empirical relevance of certain covariates discussed in the literature concerning schooling/work ...
Over the past several years, considerable interest for equity investment has been generated by th... more Over the past several years, considerable interest for equity investment has been generated by the so-called "emerging markets"-capital markets of developing countries mainly in Asia, Latin America and Africa. These emerging market economies include Argentina, Brazil, Chile, Colombia, Greece, India, Indonesia, Jordan, Republic of Korea, Malaysia, Mexico, Nigeria, Pakistan, Philippines, Portugal, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The importance of this group to the global market has been recognized as early as 1981 when the first emerging market country funds were formed to attract investors to purchase stocks in developing economies (Buckberg 1995). At present, a good number of Wall Street brokerage firms trade issues from the stock markets of these countries and the Financial Times tracks securities of 14 emerging markets on a daily basis (Gooptu 1993).
Food has traditionally been the top priority item in any household’s consumption basket. Whether ... more Food has traditionally been the top priority item in any household’s consumption basket. Whether consumed at home or outside the home, households usually apportion about half of their total budget on food. In the modern times however, because of the shifting consumer preferences and dramatic growth in income, especially in the cities, there has been a remarkable change in household’s food consumption patterns. In the Philippines, the proliferation of vast arrays of food service facilities such as conventional full-service and fast-food restaurants, coffee shops, food courts, roadside stalls, canteens, delicatessens, etc., together with improved purchasing power, growing time constraints among household members and incessant bombardment of promotional ads across various media collectively create a strong impetus among Filipinos to “eat out.” The result may be a steady convergence of the proportion of food eaten at home (FAH) and the proportion of food eaten away from home (FAFH). The...
In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng... more In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng Pilipinas (BSP) utilizes mon etary aggregates as intermediate targets in meeting desired macroeconomic goals. Through the "money multiplier approach," levels of various monetary aggregates (MI, M2, and M3) consistent with the pre-planned levels of the ultimate target variables such as output (GNP), price level, employment and BOP deficit are set hoping that upon achieving such money targets the final goals will also be met. This procedure has proven to be quite effective in the past and has helped the BSP a lot in influencing the direction of the country's economic activity. The popularity of the approach is mainly due, not only to its relative simplicity, but also to the immense intuitive appeal it generates. Everybody understands the fact that as the BSP releases reserve money into the banking system, the banks use this money to lend to the private sector. The money lent...
In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng... more In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng Pilipinas (BSP) utilizes mon etary aggregates as intermediate targets in meeting desired macroeconomic goals. Through the "money multiplier approach," levels of various monetary aggregates (MI, M2, and M3) consistent with the pre-planned levels of the ultimate target variables such as output (GNP), price level, employment and BOP deficit are set hoping that upon achieving such money targets the final goals will also be met. This procedure has proven to be quite effective in the past and has helped the BSP a lot in influencing the direction of the country's economic activity. The popularity of the approach is mainly due, not only to its relative simplicity, but also to the immense intuitive appeal it generates. Everybody understands the fact that as the BSP releases reserve money into the banking system, the banks use this money to lend to the private sector. The money lent out eventually goes back to the banks as deposits and are used again by these banks in the course of their lending. The process is repeated a number of times until the amount initially injected into the system increased k-folds (hence multiplied k times, with "k" being a factor known as the "money multiplier") in the form of bank deposits which everybody knows form part of the country's money supply. This process is the rationale behind the multiplier approach mentioned above. At any rate, as the liquidity of the system expands, the economy heats up fueling the much needed growth.
Over the past several years, considerable interest for equity investment has been generated by th... more Over the past several years, considerable interest for equity investment has been generated by the so-called "emerging markets"-capital markets of developing countries mainly in Asia, Latin America and Africa. These emerging market economies include Argentina, Brazil, Chile, Colombia, Greece, India, Indonesia, Jordan, Republic of Korea, Malaysia, Mexico, Nigeria, Pakistan, Philippines, Portugal, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The importance of this group to the global market has been recognized as early as 1981 when the first emerging market country funds were formed to attract investors to purchase stocks in developing economies (Buckberg 1995). At present, a good number of Wall Street brokerage firms trade issues from the stock markets of these countries and the Financial Times tracks securities of 14 emerging markets on a daily basis (Gooptu 1993).
The martingale properties of the floating exchange rates of the ASEAN+3 region are analyzed in th... more The martingale properties of the floating exchange rates of the ASEAN+3 region are analyzed in this study using contemporary (2000 to 2012) weekly data of inter-bank call rates. The main goal of the analysis is to see if informational efficiency is a feature floating (managed or independently floating) currencies in this coalition of countries still possess despite the current credit crisis and other economic shocks during the period. Employing relevant state-of-the-art econometric techniques, the study sets to empirically determine the presence of two important ingredients of informationally efficient market-the existence of the unit root component and the presence of uncorrelated increments within each exchange rate series. To address the unit root problem, a battery of tests catering to heterogeneous panel data is used while variance ratio tests robust to the occurrence of conditional volatilities are implemented. While the stylized facts and simple correlation analysis of the currencies and their one week holding period returns give initial evidence of market efficiencies, the various analytical tests and procedures implemented in the study provide compelling evidence on the existence of martingale properties of the FX series. Both the panel unit root and variance ratio tests uphold the validity of the efficient market hypothesis (EMH) in the participating currencies. The implication of this result is that despite the occurrence of perturbations due to economic shocks (e.g. the current credit crisis) the currencies of the region, which are currently pursuing unification, are riding the crises and exhibit informational efficiency. This may be considered a testament to the success of the ongoing interregional monetary coordination and other multilateral initiatives of countries within the region aimed at crisis prevention and monetary policy synchronization.
The state of the art in signal extraction gradually evolved from the use of a mechanical form of ... more The state of the art in signal extraction gradually evolved from the use of a mechanical form of moving average filters to the present sophisticated model-based techniques capable of performing automatic modeling and signal extraction involving hundreds or even thousands of time series in one production run. The leading edge of technology is being shared by two ARIMA model-based systems: ARIMA X12 of the US Bureau of Census and the twin programs TRAMO-SEATS developed at the Bank of Spain. These specialized expert systems have been adopted by most statistical agencies of advanced OECD countries and the European community. The Philippines on the other hand is using the ARIMA X11 system modified by the Bank of Canada in its routine seasonal adjustment and time series decomposition tasks. This study is an attempt to implement the ARIMA model-based (AMB) approach of extracting unobserved signals from 194 quarterly national accounts statistics of the Philippines using the TRAMO-SEATS syst...
Calendar seasonality in returns of financial markets represents interesting departure from their ... more Calendar seasonality in returns of financial markets represents interesting departure from their informational efficiency. This is especially true for the popular "day-of-the-week" effect often seen in the stock markets of even the most developed economies, when in certain days of the week, particularly Mondays, returns are significantly negative. As this anomaly presents a distinct challenge to the Efficient Market Hypothesis (EMH) which has been demonstrated in the Philippine Stock Exchange during its still ongoing modernization period, the present study attempts to determine if this challenge exists in the PSE through this period. Employing cutting-edge non-parametric statistical procedures, including a level of significance correction to preclude the possibility of "false positive" outcomes in the pair-wise multiple comparison tests of trading day effects, the study is able to reach a conclusion that the Philippine Stock Exchange, including its six sectoral s...
International Research Journal of Finance and Economics
This study examines the existence of the spatial market integration of the different pairs of reg... more This study examines the existence of the spatial market integration of the different pairs of regional rice markets in the Philippines. By employing modern time series econometric techniques, it uncovered compelling pieces of evidence of strong steady state linkages of the various pair wise combinations of regional markets, with only an insignificant few segregated routes. The main conclusion that was drawn from various inference procedures undertaken in the study is that, despite the geographic segregation of the regional rice markets, and the presence of fragmented and often inefficient distribution system, price signals and other market information are being transmitted efficiently across the markets, thus negating the potential occurrences of unexploited arbitrage opportunities.
Time series forecasting models for tourist arrivals to the Philippines from the top 12 source cou... more Time series forecasting models for tourist arrivals to the Philippines from the top 12 source countries are empirically developed in this paper. Together with a reliable procedure of modeling background noise, this study employed a modeling framework which took into account influential events that impact on the level and direction of arrival series. From this framework, the study was able to establish twelve time series models for the monthly incoming tourism traffic from the top tourists sending countries to the Philippines for use in predicting future visitor arrivals scenarios.
The System-wide Consumer Demand Analysis is one of the most neglected areas of applied research i... more The System-wide Consumer Demand Analysis is one of the most neglected areas of applied research in the local context. This is rather surprising considering the relative importance of Personal Consumption Expenditure to the national economy (PCE traditionally accounts for about 75 percent of the country\u27s Gross Domestic Product).This paper is one of the very few studies about the pattern of behavior of representative Filipino consumer in a multi-commodity set-up. With the objective of determining the ideal model to describe this behavior pattern, the study compared empirically the merits of two of the most theoretically sound, but mathematically rigorous complete systems of demand equations -- The Rotterdam model and the Linear Expenditure System. One unique feature of the study is its use of a quarterly data series (PCE: Q1 1981 -- Q2 1994). Most demand researchers are wary of using consumption data base of lesser frequency than a year because of their belief that demand adjustment to income and price changes requires at least a year to be manifested. This study hoped to shed some light on this issue as well as on other equally important concerns which might have wide ranging practical implications
One of the most anticipated data releases of the Philippine statistical system is the quarterly r... more One of the most anticipated data releases of the Philippine statistical system is the quarterly real gross domestic product.<br> This all-important variable provides the basis of establishing the economic performance of the country on a year-on-year<br> basis. Official publication of this statistic, however, comes at a significant delay of up to two months, upsetting the planning<br> function of various economic stakeholders. Under this backdrop, data scientists coined the term "nowcasting" which refers<br> to the prediction of the present, the very near future, and the very recent past based on information provided by available<br> data that are sampled at higher frequencies (monthly, weekly, daily, etc.). This study aims to demonstrate the viability of<br> using a state-of-the-art technique called MIDAS (Mixed Data Sampling) regression to solve the mixed frequency problem<br> in implementing the nowcasting of the country's ec...
Despite the economic and commercial importance of food consumption away from home, very limited a... more Despite the economic and commercial importance of food consumption away from home, very limited attempt has been made to investigate the evolution and economics of this type of food consumption among Filipinos over time. This study hopes to set the pace among local researchers in taking advantage of the availability of high quality primary data of nationwide household surveys to generate useful insights on the “eating out” behavior of modern Filipinos. The study will endeavour to establish the linkage between food demand behaviours and socioeconomic and demographic characteristics of households, highlighting on the difference between wealthy/not wealthy consumers and the increasing role of time constraint on the part of household members in their decision to “eat out”. To supply the dynamic content of the analysis, public use raw data files of several rounds of the Family Income and Expenditure Survey (FIES) are used. Relevant microeconometric models which address censoring, truncat...
This study utilized the recently available public use raw data file of the 2011 round of the Annu... more This study utilized the recently available public use raw data file of the 2011 round of the Annual Poverty Indicator Survey (APIS) to establish the latest stylized facts on the Philippine child labor situation. Public use file of the 2008 APIS was also used to generate comparative descriptives. It is also an attempt to jointly estimate the schooling and employment choices of Filipino children via the multinomial logit model that used the four different permutations of schooling and employment as the mutually exclusive and exhaustive categories of choice. A value added feature of the study is the use of survey design consistent procedures in establishing the descriptives as well as the estimates of the main empirical model. Tabulated summaries of the results reveal some alarming developments in the child labor situation of the country. The outcome of the econometric modeling confirms the empirical relevance of certain covariates discussed in the literature concerning schooling/work ...
Over the past several years, considerable interest for equity investment has been generated by th... more Over the past several years, considerable interest for equity investment has been generated by the so-called "emerging markets"-capital markets of developing countries mainly in Asia, Latin America and Africa. These emerging market economies include Argentina, Brazil, Chile, Colombia, Greece, India, Indonesia, Jordan, Republic of Korea, Malaysia, Mexico, Nigeria, Pakistan, Philippines, Portugal, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The importance of this group to the global market has been recognized as early as 1981 when the first emerging market country funds were formed to attract investors to purchase stocks in developing economies (Buckberg 1995). At present, a good number of Wall Street brokerage firms trade issues from the stock markets of these countries and the Financial Times tracks securities of 14 emerging markets on a daily basis (Gooptu 1993).
Food has traditionally been the top priority item in any household’s consumption basket. Whether ... more Food has traditionally been the top priority item in any household’s consumption basket. Whether consumed at home or outside the home, households usually apportion about half of their total budget on food. In the modern times however, because of the shifting consumer preferences and dramatic growth in income, especially in the cities, there has been a remarkable change in household’s food consumption patterns. In the Philippines, the proliferation of vast arrays of food service facilities such as conventional full-service and fast-food restaurants, coffee shops, food courts, roadside stalls, canteens, delicatessens, etc., together with improved purchasing power, growing time constraints among household members and incessant bombardment of promotional ads across various media collectively create a strong impetus among Filipinos to “eat out.” The result may be a steady convergence of the proportion of food eaten at home (FAH) and the proportion of food eaten away from home (FAFH). The...
In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng... more In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng Pilipinas (BSP) utilizes mon etary aggregates as intermediate targets in meeting desired macroeconomic goals. Through the "money multiplier approach," levels of various monetary aggregates (MI, M2, and M3) consistent with the pre-planned levels of the ultimate target variables such as output (GNP), price level, employment and BOP deficit are set hoping that upon achieving such money targets the final goals will also be met. This procedure has proven to be quite effective in the past and has helped the BSP a lot in influencing the direction of the country's economic activity. The popularity of the approach is mainly due, not only to its relative simplicity, but also to the immense intuitive appeal it generates. Everybody understands the fact that as the BSP releases reserve money into the banking system, the banks use this money to lend to the private sector. The money lent...
In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng... more In order to operationalize the transmission mechanism of monetary policies, the Bangko Sentral ng Pilipinas (BSP) utilizes mon etary aggregates as intermediate targets in meeting desired macroeconomic goals. Through the "money multiplier approach," levels of various monetary aggregates (MI, M2, and M3) consistent with the pre-planned levels of the ultimate target variables such as output (GNP), price level, employment and BOP deficit are set hoping that upon achieving such money targets the final goals will also be met. This procedure has proven to be quite effective in the past and has helped the BSP a lot in influencing the direction of the country's economic activity. The popularity of the approach is mainly due, not only to its relative simplicity, but also to the immense intuitive appeal it generates. Everybody understands the fact that as the BSP releases reserve money into the banking system, the banks use this money to lend to the private sector. The money lent out eventually goes back to the banks as deposits and are used again by these banks in the course of their lending. The process is repeated a number of times until the amount initially injected into the system increased k-folds (hence multiplied k times, with "k" being a factor known as the "money multiplier") in the form of bank deposits which everybody knows form part of the country's money supply. This process is the rationale behind the multiplier approach mentioned above. At any rate, as the liquidity of the system expands, the economy heats up fueling the much needed growth.
Over the past several years, considerable interest for equity investment has been generated by th... more Over the past several years, considerable interest for equity investment has been generated by the so-called "emerging markets"-capital markets of developing countries mainly in Asia, Latin America and Africa. These emerging market economies include Argentina, Brazil, Chile, Colombia, Greece, India, Indonesia, Jordan, Republic of Korea, Malaysia, Mexico, Nigeria, Pakistan, Philippines, Portugal, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. The importance of this group to the global market has been recognized as early as 1981 when the first emerging market country funds were formed to attract investors to purchase stocks in developing economies (Buckberg 1995). At present, a good number of Wall Street brokerage firms trade issues from the stock markets of these countries and the Financial Times tracks securities of 14 emerging markets on a daily basis (Gooptu 1993).
The martingale properties of the floating exchange rates of the ASEAN+3 region are analyzed in th... more The martingale properties of the floating exchange rates of the ASEAN+3 region are analyzed in this study using contemporary (2000 to 2012) weekly data of inter-bank call rates. The main goal of the analysis is to see if informational efficiency is a feature floating (managed or independently floating) currencies in this coalition of countries still possess despite the current credit crisis and other economic shocks during the period. Employing relevant state-of-the-art econometric techniques, the study sets to empirically determine the presence of two important ingredients of informationally efficient market-the existence of the unit root component and the presence of uncorrelated increments within each exchange rate series. To address the unit root problem, a battery of tests catering to heterogeneous panel data is used while variance ratio tests robust to the occurrence of conditional volatilities are implemented. While the stylized facts and simple correlation analysis of the currencies and their one week holding period returns give initial evidence of market efficiencies, the various analytical tests and procedures implemented in the study provide compelling evidence on the existence of martingale properties of the FX series. Both the panel unit root and variance ratio tests uphold the validity of the efficient market hypothesis (EMH) in the participating currencies. The implication of this result is that despite the occurrence of perturbations due to economic shocks (e.g. the current credit crisis) the currencies of the region, which are currently pursuing unification, are riding the crises and exhibit informational efficiency. This may be considered a testament to the success of the ongoing interregional monetary coordination and other multilateral initiatives of countries within the region aimed at crisis prevention and monetary policy synchronization.
The state of the art in signal extraction gradually evolved from the use of a mechanical form of ... more The state of the art in signal extraction gradually evolved from the use of a mechanical form of moving average filters to the present sophisticated model-based techniques capable of performing automatic modeling and signal extraction involving hundreds or even thousands of time series in one production run. The leading edge of technology is being shared by two ARIMA model-based systems: ARIMA X12 of the US Bureau of Census and the twin programs TRAMO-SEATS developed at the Bank of Spain. These specialized expert systems have been adopted by most statistical agencies of advanced OECD countries and the European community. The Philippines on the other hand is using the ARIMA X11 system modified by the Bank of Canada in its routine seasonal adjustment and time series decomposition tasks. This study is an attempt to implement the ARIMA model-based (AMB) approach of extracting unobserved signals from 194 quarterly national accounts statistics of the Philippines using the TRAMO-SEATS syst...
Calendar seasonality in returns of financial markets represents interesting departure from their ... more Calendar seasonality in returns of financial markets represents interesting departure from their informational efficiency. This is especially true for the popular "day-of-the-week" effect often seen in the stock markets of even the most developed economies, when in certain days of the week, particularly Mondays, returns are significantly negative. As this anomaly presents a distinct challenge to the Efficient Market Hypothesis (EMH) which has been demonstrated in the Philippine Stock Exchange during its still ongoing modernization period, the present study attempts to determine if this challenge exists in the PSE through this period. Employing cutting-edge non-parametric statistical procedures, including a level of significance correction to preclude the possibility of "false positive" outcomes in the pair-wise multiple comparison tests of trading day effects, the study is able to reach a conclusion that the Philippine Stock Exchange, including its six sectoral s...
International Research Journal of Finance and Economics
This study examines the existence of the spatial market integration of the different pairs of reg... more This study examines the existence of the spatial market integration of the different pairs of regional rice markets in the Philippines. By employing modern time series econometric techniques, it uncovered compelling pieces of evidence of strong steady state linkages of the various pair wise combinations of regional markets, with only an insignificant few segregated routes. The main conclusion that was drawn from various inference procedures undertaken in the study is that, despite the geographic segregation of the regional rice markets, and the presence of fragmented and often inefficient distribution system, price signals and other market information are being transmitted efficiently across the markets, thus negating the potential occurrences of unexploited arbitrage opportunities.
Time series forecasting models for tourist arrivals to the Philippines from the top 12 source cou... more Time series forecasting models for tourist arrivals to the Philippines from the top 12 source countries are empirically developed in this paper. Together with a reliable procedure of modeling background noise, this study employed a modeling framework which took into account influential events that impact on the level and direction of arrival series. From this framework, the study was able to establish twelve time series models for the monthly incoming tourism traffic from the top tourists sending countries to the Philippines for use in predicting future visitor arrivals scenarios.
Accurate prediction of the number of international tourists that will visit the country in the fu... more Accurate prediction of the number of international tourists that will visit the country in the future from its major country sources is an absolute requisite for effective tourism planning. For a well-endowed country as the Philippines, which has all the potentials to become a force to reckon with in international tourism, particularly in the Southeast Asian region, effective planning is sorely needed. The government on its part is not remiss in formulating tourism plans and strategies over the years, yet the country has been lagging in this area over lesser endowed neighbors in the region – one of the world's fastest growing tourism destinations. The Philippine international tourism market is currently dominated by four countries – Korea (South Korea), United States, Japan and China. Collectively these countries capture close to 60% of the Philippine international tourism market, with Korea occupying the top with market share of more than 25%, followed by the U.S., Japan and China, in that order. Developing reliable short to medium-term arrival scenarios for these countries may prove to be enormously beneficial to a wide-range of local tourism and hospitality businesses in crafting their operational, tactical and strategic business plans. This study attempts to develop and operationalize empirical forecasting models for the monthly number of tourists coming from these countries. The models, developed through a framework that considers possible influential events plus an ARIMA background noise are used to formulate two-years-ahead arrival scenarios. The models passed all conventional econometric model selection criteria and turned-in outstanding in-sample and out-of-sample forecasting performances.
Accurate prediction of the number of international tourists that will visit the country in the fu... more Accurate prediction of the number of international tourists that will visit the country in the future from its major country sources is an absolute requisite for effective tourism planning. For a well-endowed country as the Philippines, which has all the potentials to become a force to reckon with in international tourism, particularly in the Southeast Asian region, effective planning is sorely needed. The government on its part is not remiss in formulating tourism plans and strategies over the years, yet the country has been lagging in this area over lesser endowed neighbors in the region – one of the world’s fastest growing tourism destinations. The Philippine international tourism market is currently dominated by four countries – Korea (South Korea), United States, Japan and China. Collectively these countries capture more than 60% of the Philippine international tourism market, with Korea occupying the top with market share of more than 25%, followed by the U.S., Japan and China, in that order. Developing reliable short to medium-term arrival scenarios for these countries may prove to be enormously beneficial to a wide-range of local tourism and hospitality businesses in crafting their operational, tactical and strategic business plans. This study attempts to develop and operationalize empirical forecasting models for the monthly number of tourists coming from these countries. The models, developed through a framework that considers possible influential events plus an ARIMA background noise are used to formulate two-years-ahead arrival scenarios. The models passed all conventional econometric model selection criteria and turned-in outstanding in-sample and out-of-sample forecasting performances.
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Papers by Cesar C Rufino