This paper analyzes the poverty and inequality implications of removing agricultural and
non-agricultural price distortions in the domestic market of the Philippines and abroad.
Liberalization in the rest of the world is poverty and inequality reducing, whereas full
domestic liberalization increases national poverty and inequality. Poverty declines while
inequality increases marginally in the combined scenario of both global and domestic
agriculture reform. Although the reduction in the national poverty headcount is small in the
latter scenario, the poorest of the poor – particularly those living in the rural areas – emerge
as “winners”, given their strong reliance on agricultural production and unskilled labor
wages.