1.

Role of Business in the Economy:

Businesses are vital for economic growth and stability.
 Job Creation: They provide employment opportunities, reducing unemployment
rates.
Example: A tech company hiring software engineers.
 Investment and Innovation: Businesses invest in research, develop new
products, and drive innovation.
Example: Pharmaceutical companies developing new drugs.
 Revenue Generation: Through sales, businesses generate revenue,
contributing to taxes and funding public services.
Example: Retail stores selling goods.
 Trade and Globalization: Businesses facilitate international trade, promoting
economic growth.
Example: Export companies selling products overseas.
 Supplying Goods and Services: They offer products that customers cannot
produce themselves.
Example: Automobile manufacturers producing cars.
 Spreading Good Practices: Businesses promote environmental and workplace
safety standards.
Example: Companies implementing recycling programs.

Social responsibility means that organizations, whether they are governments,

corporations, or individuals, have a duty to society. It's about considering how their
actions affect people, communities, and the environment.
For instance:
 A corporation might reduce its carbon emissions to help combat climate change.
 A government might invest in education and healthcare to improve the well-being
of its citizens.
 An individual might volunteer at a local charity to support their community.
Companies should prioritize ethical, social, and environmental responsibility for several
reasons, including:
 Customer Appreciation: When companies demonstrate ethical behavior and
social responsibility, customers are more likely to trust and support them.
For example, a company that uses sustainable practices in its production
processes may attract environmentally-conscious consumers.

 Brand Reinforcement: Acting responsibly can enhance a company's reputation

and strengthen its brand.
For instance, a company known for fair labor practices may enjoy positive
publicity and increased loyalty from customers.

 Support for New Business: Ethical and socially responsible companies often
receive support from investors and partners who share similar values. This
support can facilitate growth and expansion opportunities.

 Improvement in Productivity: Creating a positive work environment and

treating employees fairly can boost morale and productivity.

For example, offering flexible work arrangements or investing in employee

training can lead to higher job satisfaction and better performance.

 Avoidance of Business Risk: By adhering to ethical standards and social

responsibility practices, companies can mitigate legal, financial, and reputational
risks.
For instance, avoiding unethical business practices can help prevent costly
lawsuits and damage to brand reputation.

 Creation of Goodwill: Engaging in socially responsible initiatives, such as

community outreach programs or charitable donations, can build goodwill among
stakeholders.
For example, a company that sponsors local events or donates to disaster relief
efforts can earn the trust and respect of the community.

 Creation of Competitive Advantage: Companies that differentiate themselves

through ethical practices can gain a competitive edge in the marketplace.
For instance, a company that prioritizes sustainability may attract
environmentally-conscious consumers who are willing to pay premium prices for
eco-friendly products.
  Support of Recruitment: Companies that demonstrate a commitment to ethical
and social responsibility are often more attractive to job seekers.
For example, offering competitive wages, benefits, and opportunities for career
advancement can help attract and retain top talent.

 Increase in Company Spirit: When employees feel proud of their company's

values and contributions to society, it can foster a sense of purpose and
camaraderie.
For example, participating in volunteer activities or corporate social responsibility
initiatives can strengthen team morale and unity.
In summary, integrating ethical, social, and environmental responsibility into business
practices can lead to numerous benefits, including enhanced reputation, improved
employee morale, and increased competitive advantage.

2. Phases of Economic Development:

Economic development progresses through stages.
 Traditional Society: Limited technology, mainly agricultural.
Example: Ancient civilizations relying on farming.
 Pre-Conditions for Take-off: Productivity increases, setting the stage for
growth.
Example: Industrial Revolution in Europe.
 Take-off: Society shifts from agriculture to industry, driven by innovation.
Example: Factories replacing farms as main sources of employment.
 Drive to Maturity: Economy stabilizes, quality of life improves.
Example: Post-World War II economic growth.
 Age of Mass Consumption: Production increases, society reaches its economic
goals.
Example: Consumer culture in modern developed countries.
1. Traditional Society:
 Description: The Philippines historically had an agrarian-based economy
with limited technological advancements.
 Example: During pre-colonial times, indigenous communities relied
heavily on agriculture, fishing, and trade. Rice cultivation, fishing, and
simple crafts formed the backbone of the economy.
2. Pre-Conditions for Take-off:
 Description: Productivity begins to increase, and some technological
advancements may emerge, laying the groundwork for future growth.
 Example: In the late 19th and early 20th centuries, the Philippines saw the
introduction of cash crops like sugar and tobacco by Spanish colonizers.
This period also witnessed the beginnings of infrastructure development,
such as railways and ports, under American rule.
3. Take-off:
4.
 Description: The economy experiences a significant shift from agrarian to
industrialization, driven by technological innovation and increased
investment.
 Example: In the mid-20th century, particularly after World War II, the
Philippines started industrializing, with sectors like manufacturing and
textiles growing. Industrial zones like the Export Processing Zones (EPZs)
were established to attract foreign investment.
5. Drive to Maturity:
 Description: The economy stabilizes, institutions develop, and quality of
life improves as industrialization becomes more entrenched.
 Example: From the 1960s to the 1980s, the Philippines experienced
significant economic growth, fueled by industries such as electronics,
textiles, and agriculture. Institutions like the Central Bank of the Philippines
were strengthened to manage monetary policy.
6. Age of Mass Consumption:
 Description: Production increases significantly, and society reaches a
stage where mass consumption of goods and services becomes the norm.
 Example: In more recent years, the Philippines has seen a rise in consumer
culture, with a growing middle class and increased spending on consumer
goods, electronics, and services. Shopping malls have become prominent
fixtures in urban centers, reflecting the shift towards mass consumption.
These examples highlight the various stages of economic development in the
Philippines, from its agrarian roots to its current status as a developing economy with
growing industrialization and consumerism.
3. Criteria in Classifying Phases of Economic Development:
Different stages are classified based on key factors.

Means of Livelihood: From hunting and fishing to industrial manufacturing.

Example: Transition from agricultural to industrial society.
Extent of Economic Activity: From household-based to national economies.
Example: Growth of global trade networks.
Medium of Exchange: Evolution from barter to money and credit economies.
Example: Adoption of currency for trade and transactions.
Credit: Ability to obtain goods and services with a promise to pay later.
Example: Taking out a loan to purchase a house.

Criteria in classifying phases of economic development can be simplified with

examples as follows:

1. Means of Livelihood:
 Hunting & Fishing: In ancient times, people relied on hunting
animals and fishing for survival. For example, indigenous tribes in
the Philippines hunted wild game and caught fish from rivers and
seas.
 Pastoral Phase: As societies developed, the pastoral phase
emerged, characterized by the domestication and herding of
livestock. In the Philippines, rural communities in mountainous
regions like the Cordilleras raised cattle, pigs, and poultry.
 Handicraft Phase: Skilled artisans crafted various items using
traditional methods. For instance, indigenous communities in the
Philippines produced intricate woven textiles, pottery, and
metalwork.
  Agricultural Phase: With the advent of agriculture, communities
began cultivating crops and practicing farming. In the Philippines,
rice farming became prevalent in lowland areas, while highland
communities grew crops like corn and vegetables.
 Industrial Phase: Industrialization brought the establishment of
manufacturing companies, leading to mass production. In the
Philippines, factories emerged in urban centers like Metro Manila,
producing textiles, electronics, and food products.
2. Extent of Economic Activity:
 Household Economy: Initially, families were self-sufficient,
meeting their needs through subsistence farming and cottage
industries. For example, families in rural areas of the Philippines
grew their own food and produced handicrafts for personal use.
 Village Economy: Economic activities expanded within villages,
with trade and commerce developing among neighboring
communities. In the Philippines, barangays engaged in barter
trade, exchanging goods like rice, fish, and handicrafts.
 National Economy: Villages were eventually integrated into a
larger national economy, with trade networks spanning regions
and provinces. The Philippines developed a national currency and
banking system, facilitating commerce and economic growth.
3. Medium of Exchange:
 Barter Economy: In ancient times, barter systems were prevalent,
with goods and services exchanged directly. For instance, farmers
in the Philippines traded rice for fish with coastal communities.
 Money Economy: The introduction of coins and later paper
currency standardized trade transactions. Filipinos used Spanish
silver coins during the colonial period and later Philippine pesos
for trade.
 Money and Credit Economy: As economic activities expanded,
credit systems emerged, allowing individuals and businesses to
borrow and lend money. In the Philippines, modern banking
institutions provided loans and credit facilities to support
economic growth and development.
These criteria illustrate the historical progression of economic development in
the Philippines, from subsistence livelihoods to a more complex and
integrated economy.

Classifying phases of economic development involves considering various

criteria such as means of livelihood, extent of economic activity, and medium
of exchange. Here's a simplified breakdown:

1. Means of Livelihood:
 Hunting & Fishing: Early humans obtained food by hunting
animals and fishing in rivers or seas.
 Pastoral Phase: Communities relied heavily on raising livestock
for sustenance and trade.
 Handicraft Phase: Skilled craftsmen produced items like
sculptures, jewelry, and furniture through manual labor.
 Agricultural Phase: People began farming land they owned,
transitioning from hunting and gathering.
 Industrial Phase: Manufacturing companies emerged, using
machines for production.
2. Extent of Economic Activity:
 Household Economy: Family members primarily fulfilled each
other's needs.
 Village Economy: Economic and social interactions extended
beyond individual families to the village level.
 National Economy: Villages grouped together forming broader
social and economic networks.
3. Medium of Exchange:
 Barter Economy: Goods and services were exchanged directly
without money, based on mutual agreement.
 Money Economy: Objects like metal bars, buttons, or tools were
used as currency, having stable value and widespread acceptance.
 Money and Credit Economy: Money became the primary
medium of exchange, with credit allowing for future payments,
enabling more complex transactions.
Credit: This is the ability to acquire goods or services with the promise of
paying back later, which facilitates economic transactions. For example,
individuals might purchase goods on credit and settle the payment at a later
date.