BICOL UNIVERSITY

GRADUATE SCHOOL
LEGAZPI CITY

Name: GRACE R. CAMPOS Year & Course: 2ND YR EDD ELM

Course Code and Description: PhD PA 311 Financial Management in Government
Professor: DR. RAMESIS LORINO

MODULE 2 - 2
ALLOCATION FUNCTION AND NATURE OF PUBLIC GOODS

Our community’s major products are agricultural and livestock products. The
location of our community gives way to agriculture because of the vast plains and
mountains and the availability of water sources. Farmers harvest rice twice a year, and
root crops are steadily available all year – round. Pig farms supply the weekly needs of
meat to the residents too. These products are private goods produced by our community.
A good that can be enjoyed by everyone is referred to as a public good. In
other words, using it can be advantageous for everyone. This could take the shape of a
natural public good like air or a government public good like education. The social or
public goods in our community are lacking, the police and the barangay police are only
visible once riots or barangay problems happen. The healthcare services and facilities
are also not enough to help support the needs of the residents. The education sector
offers daycare center for children below five years old and the Alternative Learning
System (ALS) is offered to out–of–school youths. Public goods are almost always funded
publicly through the government. Perhaps the only public goods that aren’t, are natural
goods such as air, the sun, and such. But evident based on my community, that public
goods should be improved to also elevate the lives of the people. Public goods are the
basic services needed by the people, it serves as a sign of good governance and service.
Merit goods are accessible such as electricity, water, and internet connection
are also available in our community. Most people can afford merit goods and are living
decently in our community. However, basic infrastructures such as dikes and concrete
roads in our community are severely damaged by the previous typhoons. These have not
been fixed by the current and past administrations of the local government and have
caused inconvenience to the residents. The Presence and sales of demerit goods are
also evident in our community, people drink and smoke and consider these as a pastime
after work.
Our community has enough supply of staple foods or the private goods
produced by our community. Given these, the people in our community need more goods
from the government such as basic services for security, education, and recreation. There
is a huge demand for public goods and calls for policy reforms in our government. Filipino
families deserve better services from the government as tax payors and citizens of the
country. The local government unit should put emphasis on improving public goods and
services, especially for communities that are rarely unable to be reached with help from
other sectors.
 The role of fiscal policy is examined when public goods provide both products
and utility services. The government uses fiscal policy as a guide to determine how much
money it should spend to support economic activity and how much money it needs to take
in from the system to keep things operating smoothly. It helps with budgeting for the
purchases of the goods and services it will offer to the public. Nearly everywhere, the
government has a big hand in providing things like infrastructure, education, security, and
fire and environmental protection. And fiscal policy plays a huge role in providing these
services and the needs of the communities. As the government's use of spending and tax
laws, fiscal policy affects macroeconomic factors like inflation, employment, and
aggregate demand.
The allocation and the nature of public goods are dependent on the fiscal policy
of a government. With a proper allocation of funds, public goods will be improved and
would cater to a wider scope of Filipino needs. Law and policymakers should make it a
point to visit and consider far-flung communities to assess the basic needs of the people.
The government should pay close attention to basic goods such as infrastructure, health,
education, and environmental concerns in the community. People should not be deprived
of basic services and should feel secure with the services the government is providing.
As the one in control of the allocation of funding, serving the people should be the top
priority.