I suspect that this goes a long way toward explaining why efforts to estimate the marginal value of the subsidy have, to date, proved less than successful. Even though rational firms equate marginal benefits and marginal costs, they clearly do not equate total benefits and total costs. Indeed, standard microeconomic theory says that in a competitive equilibrium total benefits should exceed total costs.
Amando M Tetangco, Jr: The Central Bank of the Philippines’ e-Rediscounting System Speech by Mr Amando M Tetangco, Jr, Governor of the Central Bank of the Philippines (Bangko Sentral ng Pilipinas), at the Launching Program for the BSP e-Rediscounting System (ERS), La Union, 14 June 2007.