Estimating the Shadow Exchange Rate, the Shadow Wage Rate and the Social Rate of Discount for the Philippines

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A major task in the economic evaluation of projects is the valuation of goods and resources used and produced. If markets function efficiently and freely, observable market prices should sufficiently indicate this valuation. However, market imperfections do exist arising partly from market failures such as the existence of noncompetitive elements and externalities but more pervasively from government policies such as the protection structure. This paper estimates the shadow prices foreign exchange, shadow prices of saving and the social rate of discount and the shadow prices of labor. The methodology and the data for each shadow prices are discussed.