SENIOR HIGH SCHOOL Applied Economics Basic Economic Problems in the Philippines Self-Learning

Module 6 666 Quarter 3 Applied Economics Quarter 3 – Self-Learning Module 6: Basic Economic
Problems in the Philippines First Edition, 2020 Republic Act 8293, Section 176 states that no copyright
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Evalou Concepcion A. Agustin OIC-Schools Division Superintendent Aurelio G. Alfonso EdD OIC-Assistant
Schools Division Superintendent Victor M. Javeña EdD Chief, School Governance and Operations Division
and OIC-Chief, Curriculum Implementation Division Education Program Supervisors Librada L. Agon EdD
(EPP/TLE/TVL/TVE) Liza A. Alvarez (Science/STEM/SSP) Bernard R. Balitao (AP/HUMSS) Joselito E. Calios
(English/SPFL/GAS) Norlyn D. Conde EdD (MAPEH/SPA/SPS/HOPE/A&D/Sports) Wilma Q. Del Rosario
(LRMS/ADM) Ma. Teresita E. Herrera EdD (Filipino/GAS/Piling Larang) Perlita M. Ignacio PhD (EsP) Dulce
O. Santos PhD (Kindergarten/MTB-MLE) Teresita P. Tagulao EdD (Mathematics/ABM) Applied Economics
SENIOR HIGH SCHOOL Basic Economic Problems in the Philippines Quarter 3 Self-Learning Module 6
Introductory Message For the facilitator: Welcome to the Senior High School – Applied Economics Self
Learning Module on Basic Economic Problems in the Philippines! This Self-Learning Module was
collaboratively designed, developed and reviewed by educators from the Schools Division Office of Pasig
City headed by its Officer-in-Charge Schools Division Superintendent, Ma. Evalou Concepcion A. Agustin,
in partnership with the City Government of Pasig through its mayor, Honorable Victor Ma. Regis N.
Sotto. The writers utilized the standards set by the K to 12 Curriculum using the Most Essential Learning
Competencies (MELC) in developing this instructional resource. This learning material hopes to engage
the learners in guided and independent learning activities at their own pace and time. Further, this also
aims to help learners acquire the needed 21st century skills especially the 5 Cs, namely: Communication,
Collaboration, Creativity, Critical Thinking, and Character while taking into consideration their needs and
circumstances. In addition to the material in the main text, you will also see this box in the body of the
module: As a facilitator you are expected to orient the learners on how to use this module. You also
need to keep track of the learners' progress while allowing them to manage their own learning.
Moreover, you are expected to encourage and assist the learners as they do the tasks included in the
module. Notes to the Teacher This contains helpful tips or strategies that will help you in guiding the
learners. For the learner: Welcome to the Applied Economics Self Learning Module on Basic Economic
Problems in the Philippines! This module was designed to provide you with fun and meaningful
opportunities for guided and independent learning at your own pace and time. You will be enabled to
process the contents of the learning material while being an active learner. This module has the
following parts and corresponding icons: Expectations - This points to the set of knowledge and skills
that you will learn after completing the module. Pretest - This measures your prior knowledge about the
lesson at hand. Recap - This part of the module provides a review of concepts and skills that you already
know about a previous lesson. Lesson - This section discusses the topic in the module. Activities - This is
a set of activities that you need to perform. Wrap-Up - This section summarizes the concepts and
application of the lesson. Valuing - This part integrates a desirable moral value in the lesson. Posttest -
This measures how much you have learned from the entire module. After going through this module,
you are expected to: 1. identify the basic economic problems of the country; 2. discuss the causes of
economic problems; and 3. explain how applied economics can be used to solve economic problems.
Directions: Choose the letter of the best answer. Write the letter of your answer on a separate sheet of
paper. 1. Which of the following is an economic problem? a. Poverty b. Unemployment c. Traffic jam in
Metro Manila d. All of the above 2. What is unemployment? a. People who are available for work but do
not find any jobs. b. These are the people who have no work. c. It refers to a person who leave their
current job. d. All of the above 3. Which of the following is NOT TRUE about poverty? a. It is a condition
where people’s basic needs for foods, clothing, and shelter are not being met. b. It occurs when people
do not enjoy a certain minimum level of living standards as determined by a government. c. It is a state
which the income for a family/individual is not enough to sustain the basic food and non-food
requirements. d. None of the above EXPECTATIONS PRETEST 4. Which of the following is a cause of
poverty? a. Exposure to risk such as natural disasters b. High inflation during crisis c. Both A and B are
correct d. None of the above 5. Which of the following is a cause of unemployment? a. Due to people
moving between jobs b. Fewer jobs available in the market c. Both A and B are correct d. None of the
above Directions: Differentiate and give a real-life scenario of trade-off and opportunity cost. Write your
answer in the space provided below. RECAP For the past discussions, we are dealing with scarcity as the
main economic problem. Economics is deeply rooted with this problem. It is the source of what we are
experiencing today. Hence, economists use applied economics to come-up with a policy to lessen the
risk of the problem. For today’s lesson, we will discuss the basic economic problems in the country and
its causes. Economic Problem Economic problem exists because of imbalances of resources and
satisfaction of human needs and wants. Resources are limited to suffice the unlimited desires of the
society. Because of this, all societies are not excused with the economic problem. Philippines is one of
the competitive countries in the world. In the past years, the economy has been increasing and stable.
According to the study of World Bank in 2019, the Philippine economy remains strong and is projected
to grow 5.8% in 2019, before recovering to 6.1% and 6.2% in 2020 and 2021, respectively. Filipinos are
very proactive to attain these figures. However, there are hindrances to meet this goal –and these are
economic problems. It is hard for the Philippines to fully eradicate poverty, unemployment and other
problems because of the resources. Unemployment As per NSCB Resolution No. 15 dated October 20,
2004, unemployed consists of persons in the labor force who are reported as (1) without work; and (2)
currently available for work; and (3) seeking work or not seeking work because of the belief that no
work is available, or awaiting results of previous job application, or because of temporary illness or
disability, bad weather or waiting for rehire or job recall. The latest unemployment report posted by
Philippine Statistics Authority (PSA) was in April 2020. According the report, unemployment rate
increased to 17.7 percent with 7.3 million unemployed Filipinos in the labor force in April 2020. This is a
record high in the unemployment rate reflecting the effects of Corona virus disease 2019 (COVID-19)
economic shutdown to the Philippine labor market. Unemployment rate in January 2020 was 5.3
percent, while in April 2019 it was recorded at 5.1 percent. This global pandemic has a great effect not
only in our country but the rest of world. Let’s us find out what are the causes of high unemployment.
LESSON Major Causes of Unemployment There are reasons why unemployment occurs. These causes
are categorized as structural, cyclical, frictional, and seasonal unemployment. 1. Frictional
Unemployment It is transitional unemployment due to people moving between jobs because of the
many factors. Frictional unemployment can be both voluntarily leaving from their jobs and new entrants
in the labor market. Workers quitting their job to look for better pay adds to frictional unemployment. In
other cases, workers may resign from their job to go back to school or learn a new skill because they
believe they need the skill to earn more income. Others might leave the workforce for personal reasons,
such as to care for a family member, sickness, retirement, or pregnancy. 2. Structural Unemployment
This happens when there is a long-term decline in demand in an industry leading to fewer jobs as
demand for labor falls away. This type of unemployment exists because though jobs are available,
there’s a mismatch between what companies need and what available workers offer. Technology tends
to worsen structural unemployment. Jobs on a production line being replaced by robots e.g. motor
manufacturing, online banking and online retailing. Thus, structural unemployment is long-lasting
unemployment due to shifts in an economy. 3. Cyclical Unemployment Cyclical unemployment is the
impact of economic recession or expansion on the total unemployment rate. This is also known as
Keynesian unemployment or demand-deficient unemployment. During recession, there’s an increase in
unemployment because of business closures and failures that would result to mass lay-offs. Firms are
likely to reduce employment to cut costs and/or maintain profits – this is called “labour shedding" or
“down-sizing" 4. Seasonal Unemployment The concept of seasonal unemployment describes a situation
when workers experience unemployment at certain times of the year when the demand has decreased.
Although unemployment is always problematic, the upside is that seasonal unemployment doesn’t last–
eventually, the peak season of a given industry arrives and many workers become employed once again.
Many workers adapt to seasonal unemployment by working quite a bit when demand is high and saving
up much of their earnings, then living off of those savings during their seasons of unemployment.
Employment opportunities are offered only during holiday seasons, increase in number of tourists, and
agriculture. Poverty Basically, poverty is a condition where people’s basic needs for foods, clothing, and
shelter are not being met. In the final report of Family Income and Expenditure Survey (FIES) in 2018,
the poverty incidence among population, or the proportion of poor Filipinos whose per capita income is
insufficient to meet their basic food and non-food needs, is now estimated at 16.7 percent. This
translates to about 17.7 million Filipinos living in poverty. (PSA, 2020). The poverty incidence has been
decreased throughout the years. This is a good indicator that the economy is really performing. Major
Causes of Poverty 1. Corruption The World Bank recognizes the harmful effects of corruption. Public
sector corruption is defined as the abuse of public power for private benefit. Corruption refers to
preferential access to public goods and services, gratuitous insuring of public procurement and
contracts, illegal hiring in the public sector, bribery or grafting, abuse of official information, inconsistent
application of rules etc. 2. Education Poverty is not only a problem of low incomes but it is a
multidimensional problem that includes low access to opportunities for developing human capital and
education. Poor countries increase their poverty level due to lack of training skills, productive knowledge
and transforms human beings into more valuable human capital and education. Poverty levels are
strongly linked to educational attainment. Two-thirds of poor households are headed by people with
only an elementary school education or below. Access to quality education is identified as a key pathway
out of poverty. Without proper training for the respective skills and knowledge in the work force such as
read, write, communicate and be able to choose different alternative choices in more informed way
would lead to low earnings and therefore increase poverty level. 3. Natural and Geographical
Characteristics Many countries are inherently poor due to their geographic characteristics that
predispose them to weak economic growth. In the Philippines, the majority live in rural areas and work
in the agriculture sector. Asian Development Bank (ADB) suggests that there’s a need of agricultural
development for the farmers and fishermen to generate more income. Also recurrent shocks and
exposure to risks such as economic crisis, conflicts, and natural disasters are the main drivers of the
poverty in the country. 4. Ineffective Governance & Government Policies The ineffective local
governance and government policies seem to prevent the chronically poor from escaping the poverty
trap. In time of high inflation, people can’t afford to buy goods and services that they need. ADB also
highlight that there’s a high level of population growth in the country. Most large families, with six
members or more, are having difficulties to cope with every living. The government needs to put effort
in creating jobs, quality and accessible education, strong macroeconomic policies, and programs to
alleviate poverty. Activity 1: Economic Problem Directions: Enumerate the effects of the above-
mentioned economic problems to individuals and economy. Write your answer in the table below.
Economic Problem Effects to Individuals Effects to the Economy Unemployment Poverty Activity 2: My
Policy! Directions: Below are some of the economic problems in the Philippines. Think of ways or
policies to solve these problems by answering the basic economic questions. Economic Problem What to
Produce? How to Produce? For whom to Produce? Traffic System in Metro Manila ACTIVITIES Housing
Problem/ Informal Settlers To summarize what you have learned in the lesson, answer the following
questions: 1. What are the basic economic problems of the country? 2. What are the causes of poverty?
3. What are the causes of unemployment? Reflect on this! If you were the President of the country,
what economic problem do you want to solve first? Why? Directions: Identify the following terms in
each statement. Write your answer in the space provided. ____________1. It refers to persons in the
labor force who are reported as without work and currently available for work. ____________2. A
condition where people’s basic needs for foods, clothing, and shelter are not being met. WRAP-UP
VALUING POSTTEST ____________3. It is a type of unemployment caused by economic recession or
expansion. ____________4. It is an unemployment due to people moving between jobs because of the
many factors. ____________5. It is a report conducted by Philippine Statistics Authority about the
poverty incidence of the country. References Agarwal, Prateek. "Seasonal Unemployment." Intelligent
Economist. May 21, 2020. Accessed July 8, 2020. https://www.intelligenteconomist.com/seasonal-
unemployment/#seasonalunemployment-definition. "Cyclical Unemployment." Investopedia. April 13,
2020. Accessed July 8, 2020https://www.investopedia.com/terms/c/cyclicalunemployment.asp.
Government of the Philippines. Philippine Statistics Authority. Technical Notes on the Labor Force
Survey. Accessed July 8, 2020. http://www.psa.gov.ph/article/technical-notes-labor-forcesurvey2012-
08-16-1659 Government of the Philippines. Philippine Statistics Authority. Technical Notes on the Labor
Force Survey. Employment Situation in April 2020. Accessed July 8, 2020.
https://psa.gov.ph/content/employment-situation-april-2020 Government of the Philippines. Philippine
Statistics Authority. Updated 2015 and 2018 Full Year Official Poverty Statistics. Released June 4, 2020.
Accessed July 9, 2020. https://psa.gov.ph/poverty-press-releases/nid/162559 Kagan, Julia. "How
Frictional Unemployment Occurs in an Economy." Investopedia. May 20, 2020.
https://www.investopedia.com/terms/f/frictionalunemployment.asp. KEY TO CORRECTION PRETEST D 1.
D 2. D 3. C 4. C 5. POSTTEST: Unemployment 1. Poverty 2. Cyclical Unemployment 3. Frictional
Unemployment 4. Family Income and Expenditure 5. Survey (FIES) Kenton, Will. "Structural
Unemployment." Investopedia. May 27, 2020. Accessed July 8, 2020.
https://www.investopedia.com/terms/s/structuralunemployment.asp. "Philippines Economic Update
October 2019." World Bank. Accessed July 8, 2020.
https://www.worldbank.org/en/country/philippines/publication/philippines-economicupdate-october-
2019-edition#:~:text=Amidst rising global uncertainties, the,in 2020 and 2021, respectively.&text=In the
long-term, promoting,poverty reduction in the Philippines. "The_economic_problem." Economics
Online. January 25, 2020. Accessed July 8, 2020.
https://www.economicsonline.co.uk/Competitive_markets/The_economic_problem.html.
"Unemployment - Main Causes of Unemployment: Economics." Tutor2u. July 01, 2020. Accessed July 8,
2020. https://www.tutor2u.net/economics/reference/unemployment-causes-ofunemployment.