Tracking the Philippine Economy Using a Macroeconometric Model

Abstract

This paper presents a small macroeconometric model of the Philippine economy. The model consists of eleven equations, six of which are behavioral equations and five are identities. The six behavioral equations of the model are estimated using OLS on annual macroeconomic data from 1999 to 2015. In-sample forecast of the endogenous variables is conducted to determine the tracking ability of the model. The simulation results show satisfactory tracking ability as shown by the simulation statistics and reflected in the graphs of the simulated variables. This shows that the model has adequate forecasting capability and may be used to conduct sensitivity and policy analysis.