SHS

Organization and
Management
Quarter 1 – Module 5
Phases of Economic Development

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Organization and Management – SHS

Quarter 1 – Module 5: Phases of Economic Development

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Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

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 Development Team of the Module

Writer: Glenda C. Bas

Editors: Elsa B. Regalado
Meriam L. Camila
Jinky A. Villareal
Reviewer: Jinky A. Villareal
Illustrator: Ryan B. Cerillo
Layout Artist: Glenda C. Bas

Lesson PHASES OF ECONOMIC DEVELOPMENT

Today’s module explains the

different factors that led to the economic
growth of our country like remittances
from the Overseas Filipino Workers,
government spending and others.

The following are the things that you will

learn as you go through the lesson:
• identify the different phases of
economic development; and
• analyze the stages and its
implication in the economy.

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Be familiar with the following term, it will help you a lot:

Economic Development – is an increase in living conditions, improvement

of the citizens’ self-esteem needs and presence of a free and just society.

Structural Formation – refers to a change in the composition of the Gross

Domestic Product.

Migration of people – are administrative decisions that are directly related

to all issues and activity within a nation’s borders.

Morbidity – is the incidence of disease, rate of illness.

Let’s see how far you know by

simply answering the questions below.

Direction: Read carefully the statement below. Write TRUE if you agree that the
statement is correct and FALSE if not.

__________1. The remittances of the Overseas Filipino Workers are contributing

factors that led to economic growth of our country.

__________2. An increase in the poverty rate and infant morbidity is an indicator

that there is an economic development.

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__________3. Economic growth is about structural transformation.

__________4. Structural transformation diminishes agricultural sector and increases

the growth of service sector.

__________5. With continuous development, life expectancy continuous to increase,

but sharply declining fertility rates will limit population growth.

Have you answered them all

correctly? If not, it’s ok there are still
other activities as you go through the
lesson. Now, try the next activity.

Do you know?

Activity #1 – Economic Development

Direction: Fill in the thinking bubble with words that can contribute in the economic
development of our country.

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 Read this…
Phases of Economic Development
For the past three decades growth
rate in the economy has been the fastest.
The real gross domestic product has
increased to 70% unfortunately, the growth
slowed down in 2008 due to the financial
crisis all over the world. There are different
factors which led to the growth of the
economy like: government spending,
remittances coming from the Overseas
Filipino Workers.

Philippine economic progress can be

attributed too, to the development in
agricultural products, which includes corn,
sugarcane, pineapples, coconuts, bananas, rice cassavas, mangoes and pork, eggs,
beef and fish. Major industries that contribute to economic development of
Philippines are wood products, electronics assembly, food processing, footwear,
garments, pharmaceuticals, chemicals, petroleum refining and fishing.

What is economic development?

Economic development refers to the sustained, concerted actions of

communities and policymakers that improves the standard of living and economic
health of a specific locality. Michael Todaro define economic development as an
increase in living conditions, improvement of the citizens’ self-esteem needs and
presence of a free and just society. Todaro suggested that the most accurate
method of measuring economic development is Human Development Index which

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includes literacy rates and life expectancy which in turn has impact on productivity
and economic development growth.

Economic development is also

associated with quantitative and qualitative
changes in the economy. Progress in
human capital, increase in literacy rate,
establishment of important establishment
infrastructures, improvement in health and
safety and other areas that aims in
increasing the general welfare of the
citizens are the indicator of development
economically. Participation from the
citizens is the most important ingredient in
nation’s economic development. The term economic development is sometimes
intertwine with economic growth but there is a difference between the two.
Economic growth is the general increase in the country’s products and services
output while economic development is a government policy to increase the
economy, social welfare and stability of political environment.

Also, there is always an association between economic growth and human

development. This is because people consider economic growth as a requirement
for economic development. For example, in the country, the main source of income
is OFW’s. These OFW’s remittances will help bring business opportunities to the
country, thus, the effects will be felt by all areas of the economy. Business will
prosper which will in turn be used to pay for their generation education, improve the
access to health care for that family and will increase the general living standard of
the family. If this effect is replicated in each household, overall economic
development will be achieved.

Economic development leads to improvements in many sectors of a nation.

There are variety of indicators that economist use to measure the level of economic
development in the country.

Indicators of Economic Development

Declining Increasing Declining Increasing

Poverty Literacy Infant Life
Rates Rate Morbidity Expectancy

Economic development has to be supported by the whole nation from

economists, politicians, and also civilians. Thus, it can be concluded that economic
development leads to the creation of more opportunities in the sectors of education,
health sector, research, human development and environmental conservation. It
equally implies an increase in the per capita income of every citizen.

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 What are the stages of Economic
Development?

According to Gunter, Economic growth

typically refers to an increase in gross domestic
product (GDP), while economic development
typically refers to a structural transformation.
Below are the different stages of Economic
Development.

Stages of Economic Development according to Gunter:

1. The Structural Transformation refers to a change in the composition of

GDP. Initially, economic activities and jobs are based in the agricultural sector.
With development, the share of agriculture in GDP decreases due to the increase
and growth of the service sector which slowly overtake the share of industry, while
the share of agriculture continues to decrease. In other words, at the final stage
of development, we typically have an economy in which peopleearn their
livelihood predominantly from the service sector and still important but diminished
industry sector.

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2. The Demographic Transition is determined by changes in the fertlity rates
(example the number of children per women) and changes in life expectancy.
Initially, fertility rates are high, but due to relatively high death rates Iespecially
 3. The main factors leading to the process of urbanization is the migration of
people from rural areas seeking jobs in the emerging urban centers, the
transformation of originally semi-urban suburbs into fully urban centers, and
differences in population dynamics between rural and urban areas.

Now let us see what have you learned

from the discussion. Please perform the
exercises below. Good luck learner!

Practice Task 1

Direction: Pair the statement in Column A with the word/s found in Column
B. Write only the letter of your choice.
Column A Column B
1. It is a general increase in the country’s a. Economic Development
products and service output.

2. The main factors leading to urbanization.

b. Structural Transformation
3. This is determined by changes in the
fertility rates and changes in life expectancy.
c. Economic Growth
4. It is a government policy to increase the
economy, social welfare and stability of 9
political environment.

5. It refers to the change in the composition

of the gross domestic product.
 d. Demographic Transition

e. Migration of People

You’re doing great, let’s try some more!

Practice Task 2

Direction: Supply the needed information.

A. What are the indicators of economic development?

1. _____________________________
2. _____________________________
3. _____________________________
4. _____________________________

B. What are the stages of Economic Development according to Gunter?

1. _____________________________
2. _____________________________
3. _____________________________

Good job! You are now about to

complete the module by answering the
final test prepared for you. Good luck
learner!

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Direction: Encircle the letter from the given options that is best described by each
statement.

1. It is a stage of economic development where it is determined by changes in the

fertility rates and changes in life expectancy.
A. Migration of People C. Demographic Transition
B. Structural Transformation D. Increase Literacy Rates

2. This refers to the living conditions, improvement of citizen’s self-esteem needs

and presence of a free and just society.
A. Economic Development C. Migration of People
B. Economic Growth D. Demographic Transition

3. The following are indicators of economic development except _____

A. Increasing Life Expectancy Rates C. Decreasing Poverty Rates
B. Interest Rates D. Increasing Literacy Rates

4. Urbanization is the main factor of ______________________.

A. Structural Transformation C. Demographic Transition
B. Economic Growth D. Migration of People

5. It typically refers to an increase in gross domestic product (GDP) according to

Gunter.
A. Economic Growth C. Economic Development
B. Demographic Transition D. Structural Transformation

6. These decreases the economic activities in agricultural sector but increase the
growth of the service sector.
A. Demographic Transition C. Migration of People
B. Structural Transformation D. Economic Development

7. According to ________________ the most accurate method of measuring

economic development is the Human Development Index (HDI) which includes
literacy rates and life expectancy which has a direct impact on productivity and
economic growth.
A. Gunter C. Michael Todaro
B. Domestic Policy D. Domestic Facilit

Additional Task:

1. What do you think is the importance of understanding the phases or stages of

economic development?

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Let’s get started (Pretest):

1. True 4. True
2. False 5. True
3. False

Learning Activity 1

Criteria for Rubrics:

5pts - brief and clear ideas
4pts - not so brief and clear ideas
3pts - with ideas but not direct to its main point
2pts - not concise idea

Practice Task 1
1. It is a general increase in the country’s a. Economic Development
products and service output.

2. The main factors leading to urbanization.

b. Structural Transformation
3. This is determined by changes in the
fertility rates and changes in life expectancy.
c. Economic Growth
4. It is a government policy to increase the
economy, social welfare and stability of
political environment. d. Demographic Transition

5. It refers to the change in the composition

e. Migration of People
of the gross domestic product.

Practice Task 2

A. Indicators of Economic Development

1. Declining poverty rates
2. Increasing literacy rates
3. Declining Infant morbidity
4. Increasing life expectancy

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 B. Stages of Economic Development
1. The structural transformation
2. The demographic transition
3. The Migration of people

Post Test
1. C 5. A
2. A 6. C
3. B 7. C
4. D

Reference:

Samar, Gregorio L. et al. (2016) Introduction to Organization and Management. Hunt

Publishing Center. 38-41

Thank you, learner. You did

great! Stay safe.

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