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Learning Area: ORGANIZATION AND MANAGEMENT, Quarter 1, Week 5

I. Introductory Concept

This learner’s packet explains the different factors that led to the economic
growth of our country like remittances from the Overseas Filipino Workers, government
spending and others.

II. Learning Competencies

At the end of the learning activities, you are expected to differentiate the phases
of economic development and its impact to business environment (ABM_AOM11-1a-b-
3).

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 include 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.

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 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 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 intertwined 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.

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 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.

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
high infant mortality rates), population growth is limited. In the next stage, both
fertility rates and life expectancy are increasing,causing a sharp increase in the
size of population. With continous development, life expectancy continues to
increase, but sharply declining fertility rates will limit population growth.

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.

III. ACTIVITIES

Activity 1 – PAIR ME!

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
political environment. d. Demographic Transition

_____ 5. It refers to the change in the composition

e. Migration of People
of the gross domestic product.

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Activity 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. _____________________________

Activity 3

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.

__________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.

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IV – ANSWER KEY

Activity 1
1. c 4. a
2. e 5. b
3. d

ACTIVITY 2

A. Indicators of Economic Development

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

B. Stages of Economic Development

1. The structural transformation
2. The demographic transition
3. The Migration of people

ACTIVITY 3

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

Reflection:
I noticed _______________________________________________________

_______________________________________________________________

A question I have is _______________________________________________

_______________________________________________________________

I’m not sure _____________________________________________________

_______________________________________________________________

I realized _______________________________________________________

________________________________________________________

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Reference:

Samar, Gregorio L. et al. (2016) Introduction to Organization and Management. Hunt Publishing
Center. 38-41

Prepared by: Reviewed:

GLENDA C. BAS MERIAM L. CAMILA

Writer Quality Assurer

JINKY A. VILLAREAL, Ed.D

EPS II - Mathematics
Consultant

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