REPUBLIC OF THE PHILIPPINES

AKLAN STATE UNIVERSITY

COLLEGE OF TEACHER EDUCATION
BANGA, AKLAN

LET Review
In
Social Studies
(Economics, Taxation, and Land Reform)

Sub-topics:
1. Be exposed to the fundamental precepts of taxation, the laws on the Land Reform and their
applications.
2. Apply these fundamental precepts to the cooperative movement as viewed within the Philippine
context.

ECONOMICS

Economics is a social science that deals with the allocation of scarce resources to satisfy unlimited
human needs and wants.

Economics differs from other of social sciences because of it focus on scarcity.

Macroeconomics deals with the economy in its totality.

Microeconomics is concerned with the analysis of individual economic units and markets.

Positive economics deals with the statements that address the issue of “What is?”.

Normative economics deals with the statements that involve value judgments.

Which of the following is an example of a normative economic statement?

a.) We should not have allowed the exchange rate to depreciate in the late 1990’s.
b.) The exchange rate depreciated in the late 1990’s.
c.) Exchange rate depreciation can be contained using tight monetary policy.
d.) None of the above

Answer: A

Which of the following is an example of a positive economic statement?

a.) Tuition fees in private schools have been rising over time.
b.) The government should allocate a large portion of its budget to education.
c.) The tuition fees should not be raised.
d.) None of the above

Answer: A
The relationship between the price of a good and the quantities that people are willing to buy is called
demand.

Which of the following best illustrates the law of demand?

a.) A decrease in the price of lanzones leads to an increase in purchase of this commodity.
b.) Higher prices of lumber products encourage further deforestation.
c.) Higher incomes encourage people to spend more on cell phones.
d.) None of the above

Answer: A
Which of the following may be considered as factors of production?
a.) Money, bank deposits and loans.
b.) Stocks, bonds and wealth.
c.) Capital, labor and natural resources
d.) None of the above

Answer: C

An example of physical capital is the ________________.

a.) money used for borrowing and lending
b.) money used to start a business
c.) machinery used in factories
d.) none of the above

Answer: C

Disposable income refers to the income that households are free to spend and save.

If a shortage exist in the market, then _____________________________.

a.) the market is in equilibrium
b.) quantity demanded exceeds quantity supplied
c.) quantity demanded equals quantity supplied
d.) none of the above

Answer: B

The existence of a surplus in a free market is likely to __________________.

a.) drive the market price downwards
b.) encourage the entry of a new firm
c.) push the market price upwards
d.) none of the above

Answer: A

If the actual market price is above the equilibrium price, then _________________.
a.) a shortage exists in the market
b.) the market is in equilibrium
c.) a price ceiling must be in effect
d.) a surplus exists in the market

Answer: D

The minimum price at which a commodity may be bought and sold is called a price floor.

Which of the following items is included in the computation of a country’s Gross Domestic Product?
a.) the earnings of foreigners residing in the country
b.) sales of second hand goods
c.) sales in the underground economy
d.) none of the above

Answer: A

Which of the following items is not included in the computation of a country’s Gross National Product?
a.) government expenditures
b.) unemployment benefits
c.) exports
d.) imports

Answer: B
The difference between Gross National Product and Gross Domestic Product is net factor income from
abroad.

Fiscal policy refers to the government’s use of spending and taxation.

Which of the following is consistent with tight fiscal policy?

a.) lower government spending
b.) low money supply growth
c.) lower income taxes
d.) limits on the entry of imports

Answer: A

Assets which can be easily converted to cash are called liquid assets.

Regulation refers to the government’s attempt to control decisions and choices of private firms.

A good for which exclusion is not possible and the marginal use is called public good.

Externalities are defined as the unintended effects of an activity.

TAXATION

Meaning of Taxation

Taxation is the act of laying a tax, the process or means by which the sovereign, through its law-
making body raises income to defray the necessary expenses of government.

As a power, taxation refers to the inherent power of the state to demand enforced contributions
for public purpose or purposes.

Purpose of taxation

The primary purpose of taxation on the part of the government is to provide funds or property
with which to promote the general welfare and protection of its citizens. In its broadest and most general
sense, taxation includes every imposition of charge or burden by the sovereign power upon persons,
property, or property rights for the use and support of the government and to enable it to discharge its
appropriate functions.

Meaning of taxes

Taxes are the enforced proportional contributions from persons and property levied by the law-
making body of the state by virtue of its sovereignty for the support of the government and all public
needs.

Essential characteristics of tax

1.) it is an enforced contribution
2.) it is generally payable in money
3.) it is proportionate in character
4.) it is levied of persons or property
5.) it is levied by the state which has jurisdiction over the person or property
6.) it is levied by the law-making body of the state
7.) it is levied for public purpose or purposes

Theory and basis of taxation.

1.) The power of taxation proceeds upon that the existence of the government is a necessity; that it
cannot continue without means to pay its expenses; and that for these means it has a right to
compel all its citizens and property within its limits to contribute.
2.) The basis of taxation is found in the reciprocal duties or protection and support between the state
and its inhabitants.
Nature of the power of taxation

1.) it is inherent in sovereignty

2.) it is legislative in character
3.) it is subject to constitutional and inherent limitations

Situs of taxation and double taxation

Meaning of situs of taxation

Situs of taxation literally means place of taxation. The basic rule is that the state where the
subject to be taxed has a situs may rightfully levy and collect the tax; and the situs is necessarily in the
state which has jurisdiction or which exercises dominiom over the subject in question.

Situs of subjects of taxation

1.) persons
2.) real property
3.) tangible personal property
4.) intangible personal property
5.) income
6.) business, occupation, and transaction
7.) gratuitous transfer of property

Meaning of double taxation

In its strict sense, double taxation means:

(a) taxing twice,
(b) by the same authority,
(c) within the same jurisdiction or taxing district,
(d) for the same purpose,
(e) in the same year (or taxing period),
(f) some of the property in the territory.

Both taxes must be imposed on the same property or subject matter.

Meaning of tax evasion

Tax evasion is the use by the taxpayer of illegal or fraudulent means to defeat or lessen the
payment of a tax. It is also known as “tax dodging.” It is punishable by law.

Meaning of tax avoidance

Tax avoidance is the exploitation by the taxpayer of legally permissible alternative tax rates or
methods of assessing taxable property or income, in order to avoid or reduce tax liability. Tax avoidance
is more politely called “tax minimization.”

Kinds of taxes under existing laws

1.) National taxes or those imposed by the national government under the National Internal Revenue
Code and other laws, particularly the Tariff and Customs Code
2.) Local taxes or those which local governments may impose for particular needs such as the taxes
imposed under the Local Government Code.

Meaning of Income

Income (for tax purposes) means all wealth which flows into the taxpayer other than as a mere
return on capital
Meaning of income tax

Income tax is a tax on the net income or the entire income realized in one taxable year.

Nature and purpose of income tax

It is generally regarded as an excise tax (privilege tax) and not a tax on persons, property, funds
or profits. It is really a tax on the right to earn income. It is imposed to raise revenue.

Meaning of gross income

Gross income is all income of whatever kind and in whatever form derived from any source but
not including exempt income and items of gross income subject to final income tax.

Meaning of deductions

Deductions are items or amounts which the law allows to be deducted under certain conditions
from gross income in order to arrive at the taxable income.

Meaning of head of the family

A head of a family is an individual who actually supports and maintains in one household one or
more individuals who are closely connected with him by blood relationship, relationship by marriage, or
by adoption and whose right to exercise family control and provide for these dependent individuals is
based upon some moral or legal obligation.

Meaning of tax return

The tax return is the sworn statement executed in accordance with law on a required form
wherein the taxpayer states the facts as to the nature and extent of his tax liability for a taxable year
including the computation of the tax due.

AGRARIAN LAWS

Q: What are some agrarian laws that has been enacted for the benefit of the tenant-farmers?
A:
1.) R.A. 3844, otherwise known as the Agricultural Land Reform Code which took effect on August
8, 1963. The law abolished the Agricultural share tenancy and established agricultural leasehold
relations. It was amended by R.A. 6389, otherwise known as the Code of Agrarian Reforms
which took effect on September 10, 1971. It created the DAR. This law automatically converted
share tenancy into agricultural leasehold.
2.) P.D. No. 27, enacted on October 21, 1972, decreeing the emancipation of tenants from the
bondage of the soil, transferring to them the land they till.
3.) R.A. 6657, otherwise known as the Comprehensive Agrarian Reform Law (CARL) of 1988,
approved on June 10, 1988. (Covers all public and private agricultural lands).

Q: What is Agrarian Reform?

A:
Agrarian Reform means the redistribution of lands, regardless of crops or fruits produced, to
farmers and regular farm workers who are landless, irrespective of tenurial arrangement, to include the
totality of factors and support services designed to lift the economic status of the beneficiaries and all
other arrangements alternative to the physical redistribution of lands, such as production or profit-
sharing, labor administration, and the distribution of shares of stocks, which will allow beneficiaries to
receive a just share of the fruits of the lands they work.

Q: Who are the parties to Agricultural Leasehold relations?

A:
1.) The person who furnishes the landholding, either as owner, civil law lessee, usufructuary, or
legal possessor, and
2.) The person who personally cultivates the same
Q: Is the agricultural lessee entitled to security of tenure?
A:
Yes. He cannot be ejected there from unless authorized by the court for cause.

Q: What are the grounds/causes for extinguishment of Agricultural Leasehold Relations?

A:
1.) Abandonment of the landholding without the knowledge of the Agricultural Lessor;
2.) Voluntary surrender of the landholding by the Agricultural Lessee, written notice of which shall
be served 3 months in advance;
3.) Absence of the person under Section 9 to succeed the Lessee in the event of death or permanent
incapacity of the Lessee.

Q: Who succeeds the agricultural lessee in case of death or permanent incapacity?

A:
The surviving spouse; eldest direct descendant by consanguinity; next eldest descendant in the
order of their age, to be chosen by lessee within one month from such death or incapacity.

Q: What is the lessee’s right of Pre-Emption?

A:
It is the preferential right to buy the landholding under reasonable terms and conditions, in case
the lessor decides to sell the same.

Q: What is the lessee’s right of redemption?

A:
It is the lessee’s right to redeem the landholding at a reasonable price and consideration, in case
it is sold to a third person without his knowledge.

Q: What are the essential requisites of tenancy relations?

A:
1.) The parties are the landowners and tenants;
2.) The subject is agricultural land;
3.) There is consent;
4.) The purpose is agricultural production;
5.) There is personal cultivation; and
6.) There is sharing of harvest

Q: What is the retention area under P.D. 27?

A:
Seven (7) hectares

Q: What is the retention area under R.A. 6657?

A:
Maximum of five (5) hectares per land owner

Q: What is the land-ownership ceiling?

A:
The land ownership ceiling is likewise five hectares. A person who does not own agricultural
land may not buy more than five hectares. A person who already owns two hectares of agricultural land
may buy only up to three hectares. This is in line with the State’s objective of controlling and
democratizing the ownership of land as a natural resource.

Q: What is the so-called 3 hectares award to each child of the landowner?

A:
Aside from the 5 hectare retention area, each child of the landowner may be awarded 3 hectares
each.

Q: Is the 3 hectare award to each child of the landowner automatic?

A:
No. The law only grants preferential rights to the child. Any award to him is a result of the child
being qualified beneficiary.
Q: Who is the right to choose the retention area?
A:
The landowner.

Q: May a person who has been a beneficiary under P.D. 27 but disposed of the landholding be qualified
to be a beneficiary under R.A. 6657?
A:
No.

Q: What options are available to a tenant in the retained area as a lessee, in which case, he or she waives
the right to be awarded land under the CARP, the tenant may alternatively opt to be a beneficiary in
other lands that may be available for distribution. The tenant must decide within one year from the time
the landowner manifest his or her choice of the area for retention. If the tenant chooses the first option,
his or her security of tenure shall be respected and he or she may not be ejected from the land.

PREPARED BY:
SERGIO F. TOLENTINO III
Reviewer
 REPUBLIC OF THE PHILIPPINES
AKLAN STATE UNIVERSITY
COLLEGE OF TEACHER EDUCATION
BANGA, AKLAN

LET Review
In
Social Studies
(Human Rights and The Bill of Rights)

Sub-topics:

1.) Comprehend basic concepts about right to life, human dignity, physical integrity, extent and
limits of state authority, good name and honor of human person, etc.
2.) Manifest knowledge of varied perspectives as a member of society whose rights and duties affect
him/her in the family, in civil, professional and religious society, and international relations.

UNIVERSAL DECLARATION OF HUMAN RIGHTS

PREAMBLE

WHEREAS recognition of the inherent dignity and of the equal inalienable rights of the
members of the human family is the freedom, justice and peace in the world,

WHEREAS disregard and contempt for human rights have resulted in barbarous acts which have
outraged the conscience of mankind, and the advent of the world in which human beings shall enjoy
freedom of speech and belief and freedom from fear and want has been proclaimed as the highest
aspiration of the common people,

WHEREAS it is essential, if man is not to be compelled to have recourse, as a last resort, to

rebellion against tyranny and oppression, that human rights should be protected by the rule of law,

NOW, THEREFORE, The General Assembly, proclaims this Universal Declaration of Human
Rights as a common standard of achievement for all people and all nations, to the end that every
individual and every organ of society, keeping this Declaration constantly in mind, shall strive by
teaching and education to promote respect for these rights and freedoms and by progressive measures,
national and international, to secure their universal and effective recognition and observance, both
among the peoples of Member States themselves and among the peoples of territories under their
jurisdiction.

Article 1

All human beings are born free and equal in dignity and rights. They are endowed with reason
and conscience and should act towards one another in a spirit of brotherhood.

Article 2

1.) Everyone is entitled to all the rights and freedoms set forth in this Declaration, without
distinction of any kind, such as race, color, sex, language, religion, political or other opinion,
national or social origin, property, birth or other status.
2.) Furthermore, no distinction shall be made on the basis of the political, jurisdiction or
international status of the country or territory to which a person belongs, whether it be
independent, trust, non-self governing or any other limitations of sovereignty.

Article 3

Everyone has the right to life, liberty and the security of person.

Article 4

No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all
their forms.
Article 5

No one shall be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

Article 6

Everyone has the right to recognition everywhere as a person before the law.

Article 7

All are equal before the law and are entitled without any discrimination to equal protection of the
law. All are entitled to equal protection against any discrimination in violation of this Declaration and
against any incitement to such discrimination.

Article 8

Everyone has the right to an effective remedy by the competent national tribunals for acts
violating the fundamental rights granted him by the constitution or by law.

Article 9

No one shall be subjected to arbitrary arrest, detention or exile.

Article 10

Everyone is entitled in full quality to a fair and public hearing by an independent and impartial
tribunal, in the determination of his rights and obligations and of any criminal charge against him.

THE BILL OF RIGHTS

Q: What is the basic purpose of the Bill of Rights?

A:
The purpose of the Bill of Rights is to protect the people against arbitrary and discriminatory use
of the political power. This bundle of rights guarantees the preservation of our natural rights which
include personal liberty and security against invasion by the government or any of its branches or
instrumentalities.

Q: State the constitutional provision concerning due process and equal protection of the law.
A:
The 1987 Constitution provides that “no person shall be deprived of life, liberty and property,
without due process of law, nor shall any person be denied equal protection of the law. (Section 1,
Article III).

Q: What is the concept of due process of law?

A:
It is the law that hears before it condemns, which proceeds upon inquiry and renders judgment
only after trial. It is responsiveness to the supremacy of reasons, obedience to the dictates of justice.

Q: Who are protected under the due process clause?

A:
Due process applies and protects all persons, without regard to any difference of race, color, or
nationality. Artificial persons are covered by the protection but only insofar as their property is
concerned.

Q: What is meant by life?

A:
Life includes the right of an individual to his body in the completeness, and extends to the use of
God-given faculties which make it enjoyable.
Q: What is meant by liberty?
A:
Liberty includes the right to exist and the right to be free from arbitrary personal restraint or
servitude. It includes the right of the citizen to be free to use facilities in all lawful ways.

Q: What is meant by property?

A:
Property means anything that can come under the right of ownership and be the subject of
contract. It represents more than the things that a person owns; it includes the right to secure, and
dispose of them.

PREPARED BY:
SERGIO F. TOLENTINO III
Reviewer