Comparative advantage of almaciga resin production in Palawan and Davao Oriental, Philippines

Canesio Predo; Kharmina Paola Evangelista; Rogelio Andrada; Analyn Codilan; Vanessa Palma-Torres; Lawrence Adolph Amada; Margaret Calderon

Canesio D. Predo Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Kharmina Paola A. Evangelista Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Rogelio T. Andrada II Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Analyn L. Codilan Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Vanessa M. Palma-Torres Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Lawrence Adolph M. Amada Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines
Margaret M. Calderon Institute of Renewable Natural Resources, College of Forestry and Natural Resources, University of the Philippines Los Baños, College, Laguna, Philippines

Keywords: Agathis philippinensis, domestic resource cost ratio, Manila copal, non-timber forest product, policy analysis matrix, profitability

Abstract

The paper investigates the profitability and comparative advantage of resin tapping in San Vicente and Brooke’s Point in Palawan and Governor Generoso, Davao Oriental, from the tappers’ viewpoint and the industry’s competitiveness in the international market. Cost-return and comparative advantage analyses were undertaken, and the Domestic Resource Cost Ratio (DRCR) was derived through the policy analysis matrix (PAM). Results show that almaciga resin production among tappers is highly profitable from financial and economic perspectives due to relatively low input resource costs. Based on shadow prices, the DRCR values for all sites are less than unity, showing that almaciga resin production at current prices has a comparative advantage and is competitive in the international market. The PAM results show that almaciga resin production using a fair price that accounts for the tappers’ opportunity cost of time is highly profitable from the private and social viewpoints. With the increased fair private price and economic price, DRCR estimates are higher than the values obtained at the current price situation for all sites. Nevertheless, all DRCR estimates are still less than unity, implying that imposing a fair price policy at the farm gate level will still make almaciga resin production competitive in the international market. Adjusting further the world prices being higher under the shadow exchange rate (SER), domestic almaciga resin still exhibits a comparative advantage, as seen in the DRC/SER ratio of less than one for all sites. The results can provide more evidence-based guidance for policy measures toward fair pricing for almaciga resin in the Philippines.