St. Augustine’s Academy of Patnongon, Inc.

Real St.,Poblacion, Patnongon, 5702 Antique, Philippines

APPLIED Grade 12
ECONOMICS
Quarter 1
MODULE 2
Week 3 & 4

The Philippine Economy and Its

21st Century Socioeconomic
Challenges
Norielle S. Oberio
norzoveru@gmail.com
Subject Teacher

NOTE: PLEASE USE PAD PAPERS WHEN ANSWERING THE ACTIVITIES.DO NOT WRITE ANYTHING ON THIS MODULE
 This module was prepared and reviewed by the teachers of St. Augustine’s
Academy of Patnongon, Inc. We are encouraging the parents to cooperate with us to
successfully deliver learning to their children. We encourage the parents to help us by
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following for individual concerns:
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This Module belongs to: _________________________________

Section: _______________________________________

Introduction
Scope/ overview
This module will focus on the Philippine Economy. To better appreciate the
current state of the economy, three primary macroeconomic goals of a nation will be
discussed. Knowing the goals of the government will help you understand the
different government initiatives and economic policies. Moreover, you will have an
idea of the role of applied economics in helping the government take advantage of
opportunities and solve economic challenges.
Before assessing the state of the economy at this time, it is worthwhile to
know the different economic systems in the world and to what category the
Philippines’ economy belongs.

Lesson 1: Economic System

No of weeks/days: Week 3

Objectives (of the lesson)

1. Identify the different economic system

2. Explain the three primary macroeconomic goals of a country.
Discussion of the topic what is it

Economies across the world are managed differently, but aim toward
answering the three fundamental economic questions: what to produce, how to
produce and for whom to produce. Nations decide on the best way to allocate their
scarce resources. Economic systems refer to the different ways of managing a
nation’s available resources to answer the three economic questions.

Based on varying degrees of private ownership and government control,

economic systems may be classified into four main types:

1. Free Market System is a system characterized by competition and a high

level of private ownership. Prices are set by market mechanism or by the
interaction of buyers and sellers in the market. Resources are allocated freely
based on the interaction of market forces (buyers and sellers).
The Laissez faire system is an example of free market economy. It is used
to define an economic system void of government intervention. This economic
system rest upon assumption of the economy is a self-regulating system and
that any form of regulation disrupts the natural interaction of market forces.
2. Centralized economy is also sometimes referred to as command economy.
This system is characterized by the heavy involvement of the government in
managing the economy. The method of central planning is employed where
the government plans, direct, and decides on how resources will be allocated.
Individuals have no plan or limited economic freedom and private ownership
is very limited.
3. Mixed economy is an economic system that combine features of free market
and centralized system. Free market forces and central planning together
determine what to produce, how to produce and for whom to produce. There
is balance between private and government accountability in achieving
economic goals.
4. Traditional economy is characterized by customs and habits. Barter is a
mechanism where goods are exchange for another good.

Activities/ Tasks

What I have learned

How will you describe the economic system of the Philippines? Is it effective in
achieving the country’s economic goals? Discuss your thoughts about it.
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What’s more
The Philippines is now at the dark side of its economic aspect. This because of the
issues that we are experiencing such as COVID-19 pandemic, ABS-CBN closure,
extra-judicial killing, corruption in the government, calamites such as typhoons,
volcanic eruption and earthquakes, etc. How this kind of situations affect in the
economic system of the government?

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Macroeconomic Goals of a Country

The government plays an important role in a mixed economy. As a central

decision maker, it has the responsibility of overseeing and ensuring that efficiency in
the pursuit of economic goals. There are countless problems in the economy born
out of market failures. These are problems arising from inefficiencies in the
allocation of resources. Among the top socioeconomic problems that most
developing countries face are poverty, unemployment, social inequality, among
others.

Economic growth is typically measured through GDP. The business cycle

is characterized by the upward and downward trend of GDP observed over a period
of time, usually years. An increase in GDP signifies growth or expansion, while a
decline signifies contraction.

Recession means a period of economic downturn characterized by high or

increased unemployment, slow business, and a decline in consumer purchases,
among others. A prolonged period of recession is known as depression.
Expansion, on the other hand, features low or decreased unemployment, increased
production, and a rise in consumer spending driven by higher income.
Activities/ Tasks

What I can do

Cite an example of a government reform or regulation policy, then identify and relate
the reform to the likely macroeconomic goal behind it.

Government Reform/Regulation Macroeconomic Goal

Policy
Example Rapidly ensure that all people have the
Philippine Health Insurance Corporation opportunity to gain access to the health
(PhilHealth) services they need at every stages of
life without the risk of financial ruin; and
make the program sustainable in the
long run through effective revenue
collection and efficient purchasing
ability.
Lesson 2: Economic System
No of weeks/days: Week 4

Objectives

1. Explain how applied economics can be used to solve the country’s

economic problems
2. Understand the opportunities and challenges given the country’s current
economic state.

Discussion of the topic what is it

The table below indicate the economic performance of the country for 2019 and
2020.

Gross National Income (Gni) and Gross Domestic Product (Gdp) by Expenditure
Shares (in millions)

Type of Expenditure 2019 2020 (1st Semester)

Household Final
Consumption 21, 130, 206 6, 465, 331
Expenditures
Government Final 3, 600, 452 1, 366, 484
Consumption Expenditure
Capital Formation 7, 544, 285 1, 513, 819
Exports 8, 310, 598 2, 154, 444
Less: Imports 11, 785, 098 2, 835, 201
GDP 28, 796, 631 8, 599, 817
Net Primary Income 2, 900, 810 846, 309
Gross National Income 31, 697, 441 9, 446, 126
Source: http://www.bsp.gov.ph/statistics/spei_new/tab30_geu.htm

Gross National Income and Gross National Product by Sector (in millions)

Industry 2019 2020

Agriculture, Forestry and 2, 539, 333 866, 569
Fishing
Industry Sector 8, 688, 643 2, 433, 008
Services Sector 17, 568, 656 5, 300, 240
GDP 28, 796, 631 8, 599, 817
Net Primary Income 2, 900, 810 846, 309
Gross National Income 31, 697, 441 9, 446, 126
Source: http://www.bsp.gov.ph/statistics/spei_new/tab29_giu.htm
Activities/ Tasks

What I have learned

Based on the Tables above, give your opinion on the economic performance of the
country.
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What’s more

Read the article and answer the questions below

EU Parliament's threat to revoke Manila's tariff incentives alarming, may

worsen poverty
Aleta Nieva Nishimori, ABS-CBN News

MANILA - The threat of the European Union to revoke tariff incentives on Manila’s
exports over human rights concerns is alarming particularly in this time of a
pandemic, the head of a think tank said Saturday.

Dindo Manhit, president of Stratbase ADR Institute, said losing a market would lead
to unemployment, thus aggravating poverty. This, while the Philippine economy has
been dragged into recession by the lingering COVID-19 pandemic.

“Sa panahon ngayon wala tayong dapat mawalang market. 'Pag nawala ang
binebentahan mo ng produkto, kahit hindi sila malaki, tatamaan ang kita ng bansa.
Ang mawawala ay trabaho at ang mawawala 'pag nawalan ng trabaho dadagdag
ang kahirapan ng taongbayan,” Manhit said.

(We cannot afford to lose an export market at this time. If you lose a market, even if
its not that big, it would still hit the income of the country. There could be job loss and
this could worsen poverty.)

The European Parliament called for a review of the tariff incentives extended to
Manila citing human rights abuses and the deteriorating level of press freedom in the
Philippines.
“'Pag tinanggal ito dahil sa isyu ng violation of human rights, dahil sa atake sa media
at journalists nakakalungkot na pangyayari,” Manhit said in an interview on
TeleRadyo on Saturday.

(It’s going to be sad if they remove it because of issues of human rights violations
and attacks against media and journalists.)

The loss of an export market would mean less opportunity to sell Philippine products
and could also impact jobs and push medium enterprises in the country to closure.

“Sana 'wag mangyari, sana pakinggan din ng gobyerno ang mga ganitong
resolusyon,” he said.

(Let’s hope this won’t happen and that the government listens to this kind of
resolution.)

He said it would be better if the government responds and not simply dismiss it as
there are already fears that some export firms might lose their business.

Malacañang on Friday dared EU’s lawmaking body to push through with the threat.

Presidential Spokesperson Harry Roque said the Philippines cannot be threatened

even as the country continues to grapple with the impact of the pandemic.

“Dapat sana wag lang awayin, magandang mapag-usapan, meron naman tayong
ambassador doon, ano ba talagang dapat gawin kung talagang misinformation ito,
ipaliwanag ng gobyerno,” he said.

(Let’s not quarrel, it would be better to discuss the best moves since we have an
ambassador there, and if this is really misinformation then the government should
explain.) (news.abs-cbn.com)

1. How this threat can affect the Philippine economy?

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2. The government said that they are unfazed of the EU decision if ever. Does
the government made the right decision? Why and why not?
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What I can do
 As an ordinary citizen of this country, make your own statement regarding the
status of our economy. How can you address the present challenges that we
are facing that affect our economic growth? Give also your recommendation
for the positive outlook of our economy.

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References:

Boado, Applied Economics, DIWA Senior High School Series, copyright 2017, ppg
33-51.

http://www.bsp.gov.ph

https://news.abs-cbn.com/news/09/19/20/eu-threat-revoke-philippines-tariff-
incentives-may-worsen-poverty