SHS

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

1
Organization and Management – SHS

Quarter 1 – Module 5: Phases of Economic Development

Republic Act 8293, section 176 states that: No copyright shall subsist in any work of
the Government of the Philippines. However, prior approval of the government agency or office
wherein the work is created shall be necessary for exploitation of such work for profit. Such agency or
office may, among other things, impose as a condition the payment of royalties.

Borrowed materials (i.e., songs, stories, poems, pictures, photos, brand names, trademarks,
etc.) included in this book are owned by their respective copyright holders. Every effort has
been exerted to locate and seek permission to use these materials from their respective copyright
owners. The publisher and authors do not represent nor claim ownership over them.

Regional Director: Gilbert T. Sadsad

Assistant Regional Director: Jessie L. Amin

2
 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

PHASES OF ECONOMIC DEVELOPMENT

Lesson

Today’s module explains the different factors that led to the economi

The following are the things that you will learn as you go throu
identify the different phases of economic development; and
analyze the stages and its implication in the economy.

3
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

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 wit

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

Let’i iee how far you know by iimply aniwerin

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.

4
 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.

fiave you aniwered them all correctlyY If not, it’i ok there are itill oth

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.

5
 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 ii economic developmentY

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

6
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.

7
 Whatare the itageiofEconomic
DevelopmentY

According to Gunter, Economic growth typically refers to an increase in gross

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.

8
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 se

Now let us see what have you learned from the discuss

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
A. What are the indicators of economic development?
Direction: Supply
1. the needed information.

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. Goo

10
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?

11
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
It is a general increase in the country’s products and service output. a. Economic Development

The main factors leading to urbanization.

b. Structural Transformation
This is determined by changes in the fertility rates and changes in life expectancy.

It is a government policy to increase the economy, social welfare and stability of political environment.
c. Economic Growth
It refers to the change in the composition of the gross domestic product.

d. Demographic Transition

e. Migration of People

Practice Task 2

A. Indicators of Economic Development

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

12
 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.

13