PERFORMANCE TASK

IN
APPLIED ECONOMICS
CASE STUDY
Submitted by:
NADINE AILET B. CORNEL
ABM-12 Student

Submitted to:
Mary Grace Baldoza
Applied Economics Teacher

April 24, 2023

1.HIGH INFLATION RATE

Inflation is defined as an increase in prices
that results in a loss of buying power over time.
However, when we talk about a high inflation
rate,
we mean when the prices of commodities and items
are particularly high and generally deemed bad.
In addition to the overall increase in prices or
the cost of living inside a country, inflation is
frequently a key indication. It might, however,
be computed more precisely for beneficial
expenses such as eating or services such as
obtaining a haircut. In any event, inflation
refers to how much more costly a given set of
goods and/or services has gotten during a
specific time period, which is usually a year.

THE ECONOMIC PROBLEM AND IT’S CAUSES

Inflation is generated by an increase in the
supply of money, which can occur due to a
variety
of economic factors. Inflation is caused by two
fundamental factors. One is an increase in
demand,
which is caused by a variety of factors,
including an increase in the money supply, an
increase in disposable incomes, an increase in
the community's aggregate spending on
consumption
and investment goods, excessive speculation and
 hoarding on the part of producers and traders,
an
increase in foreign demand and thus exports,
an
increase in salaries wages or dearness
allowance,
and an increase in population.
The other component is a lack of a matching
growth in output of goods and services, which
could be owing to a lack of capital equipment
or
a scarcity of other resources.

ANALYSIS OF THE IMPACT OF THE HIGH INFLATION

RATE ON THE PHILIPPINE ECONOMY

In the Philippines, inflation increased to a 14-

year high of 8.7% in January, spurred by rising

utility, housing, and food prices. The headline

rate was the highest since November 2008,

exceeding the central bank's anticipated range of

7.5% to 8.3%. The spike puts the central bank to

the test as it prepares for its next interest

rate review on February 16. Last month, core

inflation reached 7.4%, the highest rate since

April 1999. Price pressure is regarded as a

threat to the Philippines' economic success. Late

last month, National Economic and Development

Authority Secretary Arsenio Balisacan cautioned

that the "lag effect" of inflation could harm

economic growth, which is forecast to slow to 6%

to 7% this year after expanding by 7.6% last

year.

POTENTIAL SOLUTIONS AND THEIR ECONOMIC

FEASIBILITY AND EFFECTIVENESS

There are essentially three forms of

contractionary monetary policies that can be

employed to manage inflation without triggering a

recession. The first is to raise the Federal

Reserve Rate, which is the rate at which banks

borrow money from the government. These banks

must demand higher interest rates on their loans

in order to be profitable. If the Federal Reserve

raises interest rates, banks should follow suit.

When borrowing costs rise, people are less likely

to borrow, resulting in lower spending, lower

prices, and slower inflation. 2023 (Kramer).

Another regulation requires banks to keep a

certain amount of cash in reserve to cover

withdrawals in order to raise reserve

requirements. If a bank has less money to lend,

there will be fewer customers.

2. UNEMPLOYMENT
Those persons in the labor market who are
working but don't have a suitable job are remembered for
this gathering as those who are employable, actively
seeking employment, but are unable to do so. One
measure of unemployment is the unemployment rate,
which is determined by dividing the number of jobless
individuals by the total number of people with jobs.
Unemployment is one of the economic indicators, and the
unemployment rate is a common way to quantify it.

THE ECONOMIC PROBLEM AND ITS CAUSES

In the Philippines, where I was born and raised, unemployment has
been a problem that the government has tried to solve for many
years. According to the survey, there are too many people and
workers who are unable to fill open positions, which leads to
unemployment. In the recent years, the population growth rate in
the Philippines has averaged 1.7%. This is faster than the pace of
population increase in the world, with an average of 1.2%. The high
pace of population increase is the reason for the rising number of
graduates without jobs. The second reasons of unemployment are
the incapacity to accept available work and the structural
unemployment overproduction of labor.

ANALYSIS OF THE IMPACT OF THE HIGH

INFLATION RATE ON THE PHILIPPINE ECONOMY
Joblessness typically results in a lack of compensation, which can have a negative

impact on both the individual level—for example, obligations—and the overall more

urgent difficulties, such as increased costs and having to make do with a lower

standard of living due to fewer purchasing power. When particular facilities or groups

shut down, there may be negative multiplier effects that cause a decline in gross

domestic product and in popularity. Lack of use of labor, a limited resource, can

result in a reduction in national output, which lowers the potential for national output

and impedes economic growth. Fiscal expenditures like welfare spending and tax

revenue increase along with unemployment. Income disparity may increase as a

result of social costs like increased crime rates and lower life spans.

POTENTIAL SOLUTIONS AND THEIR ECONOMIC

FEASIBILITY AND EFFECTIVENESS
There are numerous strategies to deal with the problem of unemployment in the

Philippines. Examples of this include adopting sustained economic growth, job

subsidies, and retraining programs for the unemployed. The reduction of

occupational immobility is another illustration. By offering employment incentives

and enrolling people in retraining programs to pick up new skills in order to lessen

occupational immobility, employers can boost the number of workers they recruit.

Increasing employment opportunities and the size of the labor force are both

components of supported financial development. The Philippines' remedies to

unemployment include lowering occupational immobility, offering retraining

programs for the unemployed, offering employment subsidies, and adopting

sustainable economic growth.

3.INCOME INEQUALITY
Income inequality refers to the income distribution within a population. The
less equitable the distribution, the greater the income inequality. Income
inequality is frequently linked to wealth inequality, also known as the unequal
distribution of wealth. Populaces can be divided in a variety of ways to
display different levels and types of wage inequality, such as pay differences
based on ethnicity or sexual orientation.

THE ECONOMIC PROBLEM AND ITS CAUSES

The Philippines' tax system is centered on consumption taxes, which are assessed

based solely on how much an individual purchases or consumes, regardless of their

level of income. This is one of the elements that fuels income disparity in the

Philippines. In contrast to the high salary classes, who can save money after taking

care of their needs, the low-pay classes must spend more to cover their daily

expenses, therefore they end up paying more in usage fees. Because they harm the

poor more than the wealthy, backhanded accusations—not just against Tank—are

fundamentally wrong. This is because taxpayers, including businesspeople and

property owners, can easily pass these taxes on to the general public,
ANALYSIS OF THE IMPACT OF INCOME INEQUALITY ON
THE PHILIPPINE ECONOMY

After more than a decade of strong macroeconomic progress,

personal consumption is driving GDP growth in the Philippines, and
a rising middle class is anticipated to draw foreign investment in
the years to come. This will place the country at the forefront of
the region's economy. However, despite policies that place a major
emphasis on poverty reduction and income equality, poverty and
income disparity continue even as GDP growth near 7%. Income
disparity has become a particularly urgent issue in light of the
government's initiatives to introduce Tax Reform for Acceleration
and Inclusion (TRAIN), which resulted in inflation exceeding central
bank targets three months after its implementation. Public
subsidies will lessen the impact of the worst short-term shocks,
while greater food production may enhance the long-term
prognosis.

POTENTIAL SOLUTIONS AND THEIR ECONOMIC

FEASIBILITY AND EFFECTIVENESS

Although the Philippines has made great strides in eliminating poverty,

income inequality has only lately started to decline. Government social
assistance, increased citizen ownership of more assets and access to
essential services, secondary education expansion and mobility to better-
paying jobs, and other factors all play a role in the continuance of inequality.
However, gendered societal norms, childcare practices, geographic
inequalities, unequal opportunities, a lack of access to university education, a
lack of skills, and unequal returns on college education all contribute to and
prolong inequality. In sectors that demand on-the-job work, COVID-19 partially
undid decades of progress toward eradicating poverty and inequality,
resulting in a rise in unemployment and poverty of 18.1% in 2021. Policies that
encourage inclusive rural development, increase access to and the quality of
education, and support employment and workers

4. TRADE DEFICIT
We use the word "deficit" to signify lacking or to describe shortages, but it can
also have negative connotations. This frequently results in the idea that trade
deficits are categorically bad for economies when applied to international
commerce. When a nation purchases more than it exports, a trade deficit
results. In other terms, a country has a trade imbalance when it purchases
more than it exports.

THE ECONOMIC PROBLEM AND ITS CAUSES

A trade deficit is the result of a nation importing goods from other nations,
paying import taxes, and not producing everything it requires. The current
action deficit is the name given to this. It can likewise happen when
organizations are engaged in the assembling of items in a far-off country.
Exports are the raw materials needed for manufacturing, while imports are the
finished goods brought into the country.

ANALYSIS OF THE IMPACT OF TRADE DEFICIT ON THE

PHILIPPINE ECONOMY
One result of the Philippines' trade deficit is that it enhances living
standards since people have access to a wider variety of
commodities. If the trade deficit persists, the local currency will
weaken, which will force the government to locate more foreign
currency to make up the difference. Three, a greater import-export
imbalance necessitates finding financial backers of unproven
starts in order to close the import-trade gap. Four, a bigger trade
deficit results in job outsourcing to other countries since more
imports lead to fewer employment options. Finally, when demand
for imported items increases, local production of goods
experiences a fall in demand, leading to the closure of factories
and the loss of jobs.

POTENTIAL SOLUTIONS AND THEIR

ECONOMIC FEASIBILITY AND
EFFECTIVENESS

Spending less and saving more. If American families or the government

reduce consumption (companies save more than they spend), imports would
decline and the need to borrow money from overseas to pay for consumption
will also decline. This suggests that consumption taxes, like those enacted in
almost every other country on Earth, could help cut the deficit by lowering the
government's deficit, promoting savings, and discouraging people from
spending. On the other hand, an unfunded tax cut like the administration will
widen the deficit because the government will spend more than it takes in.

5. AGRICULTURAL PRODUCTIVITY
An important part of the Philippine economy, agriculture employs roughly one-third of

the workforce and contributes about 10% of the country's GDP. However, the sector's

ability to contribute to economic growth and development has been constrained by

relatively poor agricultural production. In this essay, the economic issue will be

identified along with its root causes, the effects of excessive inflation on the

Philippine economy will be examined, and possible solutions will be discussed

together with their economic viability and efficacy, as well as supporting data and

references.

IDENTIFICATION OF THE ECONOMIC PROBLEM AND IT'S

CAUSE
Low productivity in Philippine agriculture is a major economic issue. Poor

infrastructure, outmoded technology, restricted access to financing, and a lack of

education and training are only a few of the causes of low productivity. Low

agricultural yields, poor quality, and low value-added have been the outcomes of

these problems.

Access to inputs and markets is restricted by inadequate infrastructure, which

includes subpar roads, ports, and irrigation systems. This drives up production costs
and restricts the possibility for increased yields. Low productivity is a result of
outdated technology that has prevented the adoption of more productive
farmingtechniques and machinery.

Investment in contemporary technology and inputs has been hampered by low

financing availability, while the adoption of contemporary farming techniques and
management practices has been constrained by a lack of knowledge and training.

ANALYSIS OF THE IMPACT OF LOW AGRICULTURE

PRODUCTIVITY ON THE PHILIPPINE ECONOMY

In recent decades, agriculture in the Philippines has declined. This Policy Note links the

industry's sluggish growth to the gradual increase in production factors and overall

factor productivity. The report points out that low wages, shrinking farm sizes, and

population increase in rural areas have caused workers to leave agriculture. Additionally,

the lack of readily available funding restricts capital formation in the agricultural sector.
Low agricultural output is also a result of inadequate rural infrastructure and severe

climates. This Note advises the government to refocus its public expenditure programs

and encourage research and development to increase long-term productivity in order to

address these major issues. In order to increase agricultural investment and production,

the agri-food system's business environment must be improved.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR ECONOMIC

FEASIBILITY AND EFFECTIVENESS

The issue of the Philippines' low agricultural output can be solved in a number
of ways. These consist of:
Investment in infrastructure can boost access to markets and inputs, lower
production costs, and increase the possibility of higher yields. Infrastructure
investments include those in highways, ports, and irrigation systems.

Adoption of technology: Supporting the adoption of contemporary farming

practices, machinery, and managerial techniques can boost productivity, cut
costs, and enhance efficiency.

loan availability: Increasing loan availability can give farmers the money they
need to invest in cutting-edge equipment and inputs, boosting production.

Education and training: Spreading knowledge of contemporary farming

techniques and management techniques can increase productivity and
efficiency.

SLOW ECONOMIC GROWTH

A sluggish economy is one that is characterized by little to no macroeconomic growth.

The name is not well defined, however it does have a zoological tie to the common slug.

High unemployment or declining GDP growth are two characteristics of economic

slowdowns.

IDENTIFICATION OF THE ECONOMIC PROBLEM

AND IT'S CAUSE
the environment's costs It is common for pollution and other negative externalities to

rise along with increases in output and economic growth. Most of the time, economists

associate rapid economic growth with environmental harm in emerging nations.

ANALYSIS OF THE IMPACT OF SLOW ECONOMIC

GROWTH TO THE PHILIPPINE ECONOMY
Those with lower salaries may become more aware of inequality as the standard of

living continues to improve more slowly.

Tax revenue will be used for public services less frequently than anticipated.

increasing the amount of money the government borrows, for instance, if more
people are requesting pensions and medical care than the economy can support.

unemployment risk if growth is insufficient to replace jobs lost to technology; lower

inflation rates; and less environmental resource stress than anticipated.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR

ECONOMIC FEASIBILITY AND EFFECTIVENESS

In short, Filipino workers require more capital. Growth will become more

inclusive and lead to more high-quality jobs only then. The government must
increase its investments in education and infrastructure, and businesses must

increase their investments; in organizations, both huge and little.

7. POOR INTRASTRUCTURE

An economy's expansion and growth are intimately correlated with its infrastructure.

It acts as a catalyst for the development of strategies to reduce poverty by enabling access

to necessities including health care, education, food resources, transportation, employment

opportunities, and more. Additionally, it elevates living standards across the board and

increases productivity.

Infrastructure refers to the buildings, operations, and procedures that make up a country.

These include structures, roads, bridges, airports, airways, water and sewage systems,

telecommunications networks, and other types of infrastructure. When these infrastructures

are not operating properly, the production chain is disrupted. Due to the intervention,

progress is slowed, which lowers living standards and creates an economic deficit.

IDENTIFICATION OF THE ECONOMIC PROBLEM AND IT'S CAUSE

bad infrastructure is caused by a number of issues, including a lack of funding or funding

shortages, inadequate development resources, ineffective development workforce, and bad

repair and upkeep.

ANALYSIS OF THE IMPACT OF POOR INTRASTRUCTURE ON THE

PHILIPPINE ECONOMY

Since poor infrastructure is a major cause of poverty, it has a significant impact on our
economy. People who are poor typically reside in remote rural settings. This indicates that

these people do not have simple access to roads, reliable transit, electricity, or water.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR ECONOMIC FEASIBILITY AND

EFFECTIVENESS

It solely depends as a potential remedy for inadequate infrastructure. It depends on the specific area and what is

meant by "poor rural infrastructure." The only way a small community could possibly build and utilize additional

stores or a community center, for example, would be to establish some sort of community council. The 'leader'

would then convene a first meeting at his or her residence with all local residents to generate ideas and lay out a

strategy for the construction of this rural infrastructure. There may be scope if a particular rural area has a larger

population.

8. HIGH COST OF ELECTRICITY

There is a growing awareness of high electricity prices across the nation, particularly in the

provinces where rates have historically been high due to greater transmission costs and

costs associated with power generation, primarily from diesel.

IDENTIFICATION OF THE ECONOMIC PROBLEM AND IT'S

CAUSE

There are many potential causes of high prices, including low generation capacity, governance

failures, bureaucratic hurdles, and limited competition.

ANALYSIS OF THE IMPACT OF THE HIGH COST OF ELECTRICITY ON THE PHILIPPINE ECONOMY
ANALYSIS OF THE IMPACT OF HIGH COST OF ELECTRICITY ON

THE PHILIPPINE ECONOMY

Electricity costs fluctuate minute by minute. But the majority of customers pay rates determined by

the fluctuating cost of electricity. Price changes typically take into account changes in the demand for

electricity, the availability of generation sources, the cost of fuel, and the accessibility of power plants.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR ECONOMIC

FEASIBILITY AND EFFECTIVENESS

Since everyone is aware that inflation has a significant impact on our economy. Start saving

energy by connecting devices to power strips and turning the power strips off when you're not

using them as one potential remedy for these high electricity bills. Since you've basically isolated

the device from the power source, that way off will actually mean off.

9. CORRUPTION

Corruption, the abuse of entrusted power for private gain, as defined by Transparency International is systemic in

the health sector

IDENTIFICATION OF THE ECONOMIC PROBLEM AND IT'S

CAUSE

One such issue that has persisted in our nation for a long time is corruption. Corruption is a result of bribery on

many levels and dishonesty on the part of those in positions of authority. People don't comprehend that their

efforts to make minor personal advantages have a significant negative impact on the economic and social

development of the nation.

The following elements have been identified as causes of corruption, according to a 2017 survey study: Greed for

money and desires. higher degrees of governmental and market monopolization. Low levels of democracy, poor

civic engagement, and opaque political processes.

ANALYSIS OF THE IMPACT OF CORRUPTION ON THE PHILIPPINE

ECONOMY

The effects of corruption extend beyond the guilty parties, innocent coworkers implicated, or the standing of the

companies they represent. The competition suffers when positions (or contracts) are awarded to people (or

businesses) who offer bribes or have a personal connection. As a result, more qualified applicants and businesses

are declined. The economy gets more inefficient the more common these practices grow.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR

ECONOMIC FEASIBILITY AND EFFECTIVENESS

On the other hand, when discussing the remedy for this kind of issue. I would suggest that having

appropriate laws is just one of many ways to eradicate corruption. One of the primary causes of the

rising levels of corruption in our nation is the absence of effective legal measures to punish those

found guilty of the crime. The government must establish strong rules and attempt to enforce them

rigorously. A selection of political leaders is an additional option.

How do you expect the populace to maintain their commitment to the nation when the political elites

themselves are embroiled in a litany of scandals and scams? The criteria for choosing the political

leaders must take into

10. BRAIN DRAIN

The slang term "brain drain" refers to a significant exodus or migration of people. A nation's

internal unrest, the existence of lucrative career opportunities abroad, or a desire to move to a

country with a higher standard of living are all factors that can contribute to a brain drain. When

employees believe they may get better salary, benefits, or upward mobility at another company

or industry, brain drain can also happen at the organizational or industrial levels, in addition to

geographically.

IDENTIFICATION OF THE ECONOMIC PROBLEM AND IT'S CAUSE

Brain drain-affected regions suffer from a shortage of human capital. Professionals who leave the company leave

a sizable hole that isn't always simple to fill. Take the example of medical experts from underdeveloped countries

who relocate to developed regions in search of better possibilities. When they depart, there could not be enough

(qualified) replacements, which has an impact on the standard of healthcare for those left behind.

The loss of revenue has an impact on regions that experience brain drain as well. To pay for their social services

and infrastructure improvements, governments rely on income taxes. Tax revenues decrease as a result of a large

departure, which might impede economic progress.

ANALYSIS OF THE IMPACT OF BRAIN DRAIN TO THE PHILIPPINE ECONOMY

Losing human capital, being unable to innovate, experiencing slower economic growth, changing demographics, and incurring

higher public goods costs are just a few of the negative effects that brain drain can have on the sending region.

DISCUSSION OF POTENTIAL SOLUTIONS AND THEIR ECONOMIC FEASIBILITY AND

EFFECTIVENESS

-Expanding interests into a certain economic sector

-Offering competitive pay

-Preparing for legal and social change

-Working on the characteristics of assets, such as housing and healthcare.

Finding ways to make homes more affordable