This paper analyzes the poverty andinequality implications of removing agricultural andnon-agricultural price distortions in the domestic market ofthe Philippines and abroad. Liberalization in the rest ofthe world is poverty and inequality reducing, whereas fulldomestic liberalization increases national poverty andinequality. Poverty declines while inequality increasesmarginally in the combined scenario of both global anddomestic agriculture reform. Although the reduction in thenational poverty headcount is small in the latter scenario,the poorest of the poor, particularly those living in therural areas, emerge as 'winners', given theirstrong reliance on agricultural production and unskilledlabor wages.