ECONOMIC INSTITUTIONS
Nonmarket Institutions
Reciprocity exists when there is an exchange of goods or labor between
individuals in a community. This would include direct barter or simultaneous exchanges
of goods or labor..
Transfer entails a redistribution of income that is not matched by the actual
exchange of goods or services.
Redistribution can be considered as a combination of transfer and reciprocity.
It involves a centralized collection of goods from members of a group and redistributes
the goods to the same members of the group.
Market Institutions
The market transaction involves parties who sell their goods and services in
exchange for cash from consumers or customers.
Market and state. The state, through the government, plays an important role
in the market. The government regulates the prices especially for the basic commodity
to protect the interest of the consumers. That is why we have this so-called Suggested
Retail Price (SRP) which means that the price of a certain commodity follows a price
ceiling or the maximum price set by the government. The Department of Trade and
Industry (DTI) is tasked with this regulation.
Labor is also considered a commodity and it is an input to the production of
goods and services. The government regulates the prices of labor by determining the
minimum wages through the regional wage board to protect the workers from being
paid below the minimum in exchange for their service rendered. The government
intervenes in the activities of market institutions to primarily protect the interest and
welfare of the consumers and the workers.
ECONOMIC INSTITUTIONS
Nonmarket Institutions
Reciprocity exists when there is an exchange of goods or labor between
individuals in a community. This would include direct barter or simultaneous exchanges
of goods or labor..
Transfer entails a redistribution of income that is not matched by the actual
exchange of goods or services.
Redistribution can be considered as a combination of transfer and reciprocity.
It involves a centralized collection of goods from members of a group and redistributes
the goods to the same members of the group.
Market Institutions
The market transaction involves parties who sell their goods and services in
exchange for cash from consumers or customers.
Market and state. The state, through the government, plays an important role
in the market. The government regulates the prices especially for the basic commodity
to protect the interest of the consumers. That is why we have this so-called Suggested
Retail Price (SRP) which means that the price of a certain commodity follows a price
ceiling or the maximum price set by the government. The Department of Trade and
Industry (DTI) is tasked with this regulation.
Labor is also considered a commodity and it is an input to the production of
goods and services. The government regulates the prices of labor by determining the
minimum wages through the regional wage board to protect the workers from being
paid below the minimum in exchange for their service rendered. The government
intervenes in the activities of market institutions to primarily protect the interest and
welfare of the consumers and the workers.
 Non-state Institutions and Organizations
A bank is a place where people deposit or save their money with interest in a given period. It
lends money both to public and private organizations. The government borrows money from the bank
to finance its projects while private organizations and individuals borrow money to finance their
business and other personal needs.
A corporation is a company or group of people authorized to act as a single entity and
recognized as such in law. Usually, corporations operate as stock corporations where ownership is
through stockholders who own shares in the company.
Cooperative or coop refers to an autonomous association whose membership is voluntary
toward the attainment of shared economic, social and, cultural needs or aspirations. The members are
the owner of a cooperative.
A trade union or labor union is an organization of workers whose main objective is to
protect the welfare of its members. Its purpose is to collectively negotiate with employers for better
compensation benefits, to ensure safety standards in the workplace, and others. In the Philippines,
these national federations are the Trade Union Congress of the Philippines (TUCP) and the Kilusang
Mayo Uno (KMU).
Transnational Advocacy Groups are involved in social advocacy to promote principled
causes, ideas, and values. Their goal is to give the powerless a voice in the domestic and international
law-making body. Common social advocacies include human rights, consumer rights, women’s rights,
environmental issues, and international peace. In the Philippines, Human Rights Watch is very active in
human rights and peace issues.
Development Agencies are committed and dedicated to distributing aid. These agencies are
present in developing countries challenged by security conflict, food shortage, climate change, financial
instability, and others. Some of the prominent development agencies in the Philippines are the
following:
 United States Agency for International Development (USAID)
 Australian Agency for International Development (AusAID)
 Japan International Cooperation Agency (JICA)
The aid can be subdivided into two categories: humanitarian aid (emergency relief efforts in
response to disasters and development aid (foreign aid) aimed at helping countries to achieve
sustainable economic growth.
Global Organizations work in the development of entire countries. They are the funders and
donors. They operate by giving loans or grants to other countries to be used for improvement. In the
onslaught of COVID-19, World Bank granted a loan to the Philippines to be used for financial
assistance to many of the Filipinos who are affected by the pandemic. Below are the most well-known
organizations in the world.
 World Bank (WB)
 International Monetary Fund (IMF)
 Asian Development Bank (ADB)
The International Organizations are organizations with a worldwide membership, scope, or presence.
The two (2) main types are the following:
 International Non-governmental Organizations (INGO) are non-governmental organizations
(NGOs) that operate internationally, for example, the International Committee of the Red
Cross.
 International Governmental Organizations (IGOs) are organizations that are made up
primarily of member states, for example, the United Nations (UN).
Non-state Institutions and Organizations
A bank is a place where people deposit or save their money with interest in a given period. It
lends money both to public and private organizations. The government borrows money from the bank
to finance its projects while private organizations and individuals borrow money to finance their
business and other personal needs.
A corporation is a company or group of people authorized to act as a single entity and
recognized as such in law. Usually, corporations operate as stock corporations where ownership is
through stockholders who own shares in the company.
Cooperative or coop refers to an autonomous association whose membership is voluntary
toward the attainment of shared economic, social and, cultural needs or aspirations. The members are
the owner of a cooperative.
A trade union or labor union is an organization of workers whose main objective is to
protect the welfare of its members. Its purpose is to collectively negotiate with employers for better
compensation benefits, to ensure safety standards in the workplace, and others. In the Philippines,
these national federations are the Trade Union Congress of the Philippines (TUCP) and the Kilusang
Mayo Uno (KMU).
Transnational Advocacy Groups are involved in social advocacy to promote principled
causes, ideas, and values. Their goal is to give the powerless a voice in the domestic and international
law-making body. Common social advocacies include human rights, consumer rights, women’s rights,
environmental issues, and international peace. In the Philippines, Human Rights Watch is very active in
human rights and peace issues.
Development Agencies are committed and dedicated to distributing aid. These agencies are
present in developing countries challenged by security conflict, food shortage, climate change, financial
instability, and others. Some of the prominent development agencies in the Philippines are the
following:
 United States Agency for International Development (USAID)
 Australian Agency for International Development (AusAID)
 Japan International Cooperation Agency (JICA)
The aid can be subdivided into two categories: humanitarian aid (emergency relief efforts in
response to disasters and development aid (foreign aid) aimed at helping countries to achieve
sustainable economic growth.
Global Organizations work in the development of entire countries. They are the funders and
donors. They operate by giving loans or grants to other countries to be used for improvement. In the
onslaught of COVID-19, World Bank granted a loan to the Philippines to be used for financial
assistance to many of the Filipinos who are affected by the pandemic. Below are the most well-known
organizations in the world.
 World Bank (WB)
 International Monetary Fund (IMF)
 Asian Development Bank (ADB)
The International Organizations are organizations with a worldwide membership, scope, or presence.
The two (2) main types are the following:
 International Non-governmental Organizations (INGO) are non-governmental organizations
(NGOs) that operate internationally, for example, the International Committee of the Red
Cross.
 International Governmental Organizations (IGOs) are organizations that are made up
primarily of member states, for example, the United Nations (UN).