DEVELOPMENT ECONOMICS

Group 1

1. Discuss the impact of the following items vs development: Provide 4 examples for
each item.

a. Poverty
b. Health
c. Inequality
d. Education
e. Population Growth
f. Labor
g. Urbanization
h. Agriculture
i. Rural-Urban Migration
j. Environment

2. According to reports, Philippines is no. 7 based on GDP per capita, is it true?

Provide 4 examples.

Group 2

1. Explain the impacts of the following on development:

 International Trade
 Conflict
 Balance of Payments
 Aide
 Debs
 Foreign Investments

2. Discuss TRAIN Law. Did the TRAIN law help lessen or eradicate poverty?

3. Give 4 priority projects/programs (existing or new) that will help LGUs alleviate poverty

These are some of the priority projects/programs that will help our LGUs alleviate poverty
first we have the
1. Pantawid Pamilyang Pilipino Program (4Ps) - Pantawid Pamilya is a conditional
cash transfer (CCT) program that provides cash grants to poor households with
children 0‐14 years old and/or pregnant mothers, provided that they comply with
the conditions set by the program. Also, this CCT program is a social assistance
program that provides conditional cash assistance to the poor families to alleviate
their immediate needs (short-term poverty alleviation); and a social development
 program that aims to break the intergenerational poverty cycle through
investments in human capital.
The 4Ps has dual objectives as the flagship poverty alleviation program of the Aquino
administration:

 social assistance, giving monetary support to extremely poor families to respond to

their immediate needs; and
 social development, breaking the intergenerational poverty cycle by investing in the
health and education of poor children through programs such as:
1.1 health check-ups for pregnant women and children aged 0 to 5;
1.2 deworming of schoolchildren aged 6 to 14;
1.3 enrollment of children in daycare, elementary, and secondary schools;
and
1.4 family development sessions.

2. Listahanan (National Household Targeting System for Poverty Reduction)

NHTS-PR was being implemented by the DSWD since 2008 and also has been
supported by the world bank and the Australian Government Department of Trade
and Industry. It is an information management system that identifies who and where
the indigent households are in the region and in the whole Philippines. It generates
and establishes a socio-economic database of indigent households. It can provide
national up to household- level data including the household roster. Listahanan
makes available the database of households AT NO COST. The more programs use the
Listahanan, the higher is the value- for-money for this government investment.

We need this to ensure that the limited resources of the different social protection
agencies reach the poorest individuals. Also, the strategy aims to improve
coordination among social protection agencies and it unifies the criteria for the
selection of the poorest population.

3. Sustainable Livelihood Program

The DSWD believes that the indigents can't rely on conditional cash transfers alone
to prevent them from under‐investing in wellness and education. They also need to
be productive, whether as entrepreneurs or employees/workers, which is the
ultimate and ideal way out of poverty.

It's is a community‐based program that provides capacity building to improve the

program participants’ socio‐economic status. First, it supports micro-enterprises to
become organizationally and economically viable. Second, it links participants to
employment opportunities.

4. Unconditional Cash Transfer

The Unconditional Cash Transfer (UCT) initiative is the biggest tax reform mitigation
program under the TRAIN Law. This program seeks to provide cash allocations to
poor households and individuals who may not benefit from the lower income tax
rates but may be adversely affected by rising prices. It also provides qualified
beneficiaries cash grants computed at Two Hundred Pesos (Php 200.00) per month
 for the first year of implementation, and at Three Hundred Pesos (Php 300.00) per
month for each succeeding year of implementation.

Group 3

1. What are the classical theories of economic growth and development, provide 5
examples each.

The classical theory of economic growth was a combination of economic work done
by Adam Smith, David Ricardo, and Robert Malthus in the eighteenth and nineteenth
centuries. The theory states that every economy has a steady state GDP and any
deviation off that steady state is temporary and will eventually return. There are four
approaches in classical theories and those are Linear stages of growth model,
Theories and Patterns of structural change, International‐dependence revolution and
Neoclassical, free market counterrevolution. First is the Linear stages of growth
model. The linear stages of growth model is an economic model which is heavily
inspired by the Marshall Plan which was used to revitalize Europe's economy after
World War II. It assumes that economic growth can only be achieved by
industrialization. The linear stages of growth models are the oldest and most
traditional of all development plans.

2. Discuss the implementation of Fiscal Policy to help the Philippine government to

regain its momentum after the pandemic. Based on data class, pang ilan ang
Philippines in terms of government spending of ASEAN. Why is the Philippines on
such ranking?

Group 4

1. All contemporary model development and underdevelopment. Provide 4 examples

each.

2. Explain/Discuss Economic Development.

-Economic Development is programs, policies or activities that seek to improve the

economic well-being and quality of life for a community. Economic development can
also be defined as an increase in a country's wealth and standard of living. For
 example, Improved productivity, higher literacy rates, and better public education are
all consequences of economic development in a country. Economic development is a
critical component that drives economic growth in an economy, creating new job
opportunities and facilitating an improved quality of life that includes increased
access to opportunities created by economic growth for existing and future
generations. Some examples of economic development include Increased
industrialization Development of manufacturing and production industries, leading to
job creation and increased income. Improved infrastructure: Investment in
transportation, communication, and energy systems, which can increase efficiency
and productivity.

 Why do we need to study Economic Development?

There are a lot of reasons why we need to study economic development. The study
of economics helps people understand the world around them. It enables people to
understand people, businesses, markets and governments, and therefore better
respond to the threats and opportunities that emerge when things change. By
studying development economics, you will have the opportunity to apply the tools of
economic analysis to the problems and challenges facing less-developed countries,
and to begin to understand why some countries have been able to go through a
process of economic and human development whilst others have languished.
Studying economic development would be a big help to a developing country like our
country. We will be able to analyze the problems that our country is currently
experiencing we will also be able to find solutions with those problems. It can also
create jobs that will help our country with poverty. Economic developers provide
critical assistance and information to companies that create jobs in our economy. We
help to connect new-to-market and existing companies with the resources and
partners needed to expand, such as industry partners and government partners.

3. Discuss the three (3) core values of Development and provide 4 examples each.

 Sustenance
 Self-Esteem
 Freedom

There are 3 core values of Development. First is the sustenance. Sustenance refers to
the basic needs of a human being without which survival would not be possible.
These needs include food, shelter, clothing, security, and good health. No food
means hunger and hunger also affect social and economic development. It can
decrease productivity because we need food to have energy to work and to make our
body function well. Hunger can also increase healthcare cost. If a person does not get
the proper nutrition their body needs, they are more likely to have an illness. Next is
shelter. Not having walls protecting us or a shelter can cause serious healthcare
issues of course if people live in the streets they can catch colds, bacteria and viruses
since a shelter is also our protection from the weather and harmful viruses living
around us and living in the streets can develop mental health problems knowing that
you are in danger and might get harm anytime since there are no walls protecting
you. Next is clothing. Just like a shelter clothes protects our body from colds and
harmful bacteria and viruses living around us. Shortage of any of these necessities
shows a situation of severe underdevelopment of the country’s economy.
Development must lead to reduction of these shortages and fulfilling the basic needs
of the people. The benefits of growth must be accompanied by a reduction in the
absolute poverty situation. As a result, improvement in the quality of life in and
economy is bound to occur. Self-esteem is the measure of your own self-worth, self-
love, and self-acceptance. It evolves during the formative years of childhood and
adolescence when individuals compare their authentic selves to an aspirational ideal
self and to the standards set by those around them. There are different types of self-
esteem. Low self-esteem, high self-esteem, worthiness-based self-esteem, and
competence-based self-esteem. Low self-esteem is when someone lacks confidence
about who they are and what they can do. They often feel incompetent, unloved, or
inadequate. People who struggle with low self-esteem are consistently afraid about
making mistakes or letting other people down. High self-esteem is believing in
yourself and knowing that you are a great addition to this world. You recognize that
you might have a few weaknesses, but you also have a lot of strengths which really
shape up who you are. Next is worthiness-based self-esteem or self-worth. Self-
worth is the internal sense of being good enough and worthy of love and belonging
from others. Self-worth is often confused with self-esteem, which relies on external
factors such as successes and achievements to define worth and can often be
inconsistent leading to someone struggling with feeling worthy. Last is the
Competence-based self-esteem. It is a reversal of the same dynamics. These
individuals have a high degree of competence but also experience a low sense of
worthiness. They compensate for this imbalance by relying on their competence to
make them feel good about themselves, which makes success very important to
them. People with high self-esteem generally have more success at school and work,
better social relationships, improved mental and physical health, and less anti-social
behavior. People with high self-esteem are more motivated to go to work and to
succeed in life and this can increase the productivity of our economy. All people have
the right to a life of dignity and honor. We should all promote self-worth and
development must be spread across the whole economy and not just in certain
sections within it. Last core values of development is the Freedom. Freedom refers
not just freedom from servitude, but also from discrimination, oppressive beliefs,
and practices. Also, equal opportunities and freedom in every aspect of the social,
legal, cultural and political situation are necessary for every individual. Everyone
must be free to choose and have control over their own lives, choices, and actions.
Growth without freedom defeats the purpose of development.
FISCAL MANAGEMENT

Group 1

1. Discuss the budget cycle in the Philippines – 4 phases. Identify 2 problems and 2
solutions.

The Philippine Budget Cycle has four phases first the Budget Preparation second the
Budget Legislation third the Budget Execution and last is the Budget Accountability.
Each phase is obviously separate from the others, but they overlap in the
implementation of the budget during the budget year. First the Budget Preparation
The budget preparation phase commenced through the issuance of a Budget Call by
the Department of Budget and Management (DBM). The Budget Call contains budget
parameters earlier set by the Development Budget Coordination Committee (DBCC)
as well as policy guidelines and procedures to aid government agencies in the
preparation and submission of their budget proposals. Following the issuance of the
Budget Call, the various departments and agencies submit their respective Agency
Budget Proposals to the DBM. The DBM next consolidates the recommended agency
budgets into the National Expenditure Program (NEP) and a Budget of Expenditures
and Sources of Financing (BESF). The NEP provides the details of spending for each
department and agency by program, activity or project (PAP), and is submitted in the
form of a proposed GAA. The NEP and BESF are thereafter presented by the DBM and
the DBCC to the President and the Cabinet for further refinements or reprioritization.
Once the NEP and the BESF are approved by the President and the Cabinet, the DBM
prepares the budget documents for submission to Congress. Next is the Budget
Legislation process. The Budget Legislation Phase covers the period commencing
from the time Congress receives the President’s Budget, which is inclusive of the NEP
and the BESF, up to the President’s approval of the GAA. This phase is also known as
the Budget Authorization Phase and involves the significant participation of the
Legislative through its deliberations. Initially, the President’s Budget is assigned to
the House of Representatives’ Appropriations Committee on First Reading. The
Appropriations Committee and its various Sub-Committees schedule and conduct
budget hearings to examine the PAPs of the departments and agencies. Thereafter,
the House of Representatives drafts the General Appropriations Bill (GAB). The GAB is
sponsored, presented, and defended by the House of Representatives’
Appropriations Committee and Sub-Committees in plenary session. As with other
laws, the GAB is approved on Third Reading before the House of Representatives’
version is transmitted to the Senate. After transmission, the Senate conducts its own
committee hearings on the GAB. To expedite proceedings, the Senate may conduct
its committee hearings simultaneously with the House of Representatives’
deliberations. The Senate’s Finance Committee and its Sub-Committees may submit
the proposed amendments to the GAB to the plenary of the Senate only after the
House of Representatives has formally transmitted its version to the Senate. The
Senate version of the GAB is likewise approved on Third Reading. The House of
Representatives and the Senate then constitute a panel each to sit in the Bicameral
Conference Committee for the purpose of discussing and harmonizing the conflicting
provisions of their versions of the GAB. The “harmonized” version of the GAB is next
presented to the President for approval. The President reviews the GAB and prepares
the Veto Message where budget items are subjected to direct veto or are identified
for conditional implementation. Third is the Budget Execution. With the GAA now in
full force and effect, the next step is the implementation of the budget. The Budget
Execution Phase is primarily the function of the DBM, which is tasked to perform the
following procedures, first is to issue the programs and guidelines for the release of
funds. Second is to prepare an Allotment and Cash Release Program. Third is to
release allotments and last is to issue disbursement authorities. The implementation
of the GAA is directed by the guidelines issued by the DBM. Prior to this, the various
departments and agencies are required to submit Budget Execution Documents
(BED) to outline their plans and performance targets by laying down the physical and
financial plan, the monthly cash program, the estimate of monthly income, and the
list of obligations that are not yet due and demandable. Thereafter, the DBM
prepares an Allotment Release Program (ARP) and a Cash Release Program (CRP).
The ARP sets a limit for allotments issued in general and to a specific agency. The CRP
fixes the monthly, quarterly, and annual disbursement levels. Allotments, which
authorize an agency to enter obligations, are issued by the DBM. Allotments are
lesser in scope than appropriations, in that the latter embrace the general legislative
authority to spend. Allotments may be released in two forms through a
comprehensive Agency Budget Matrix (ABM), or, individually, by SARO. Armed with
 either the ABM or the SARO, agencies become authorized to incur obligations on
behalf of the Government in order to implement their PAPs. Obligations may be
incurred in various ways, like hiring of personnel, entering contracts for the supply of
goods and services, and using utilities. To settle the obligations incurred by the
agencies, the DBM issues a disbursement authority so that cash may be allocated in
payment of the obligations. A cash or disbursement authority that is periodically
issued is referred to as a Notice of Cash Allocation (NCA),[97] which issuance is based
upon an agency�s submission of its Monthly Cash Program and other required
documents. The NCA specifies the maximum amount of cash that can be withdrawn
from a government servicing bank for the period indicated. Apart from the NCA, the
DBM may issue a Non-Cash Availment Authority (NCAA) to authorize non-cash
disbursements, or a Cash Disbursement Ceiling (CDC) for departments with overseas
operations to allow the use of income collected by their foreign posts for their
operating requirements. Actual disbursement or spending of government funds
terminates the Budget Execution Phase and is usually accomplished through the
Modified Disbursement Scheme under which disbursements chargeable against the
National Treasury are coursed through the government servicing banks. Last is the
Accountability. The accountability is a significant phase of the budget cycle because it
ensures that the government funds have been effectively and efficiently utilized to
achieve the State socio-economic goals. It also allows the DBM to assess the
performance of agencies during the fiscal year for the purpose of implementing
reforms and establishing new policies. An agency’s accountability may be examined
and evaluated through performance targets and outcomes, budget accountability
reports, review of agency performance and audit conducted by the Commission on
Audit (COA). One of the problems during budget cycle is during the budget
accountability process is the interpretation of Commission on Audit (COA) with the
guidelines they’re issuing because there are different interpretations with their
guidelines. For example, COA might have a different interpretation when it comes to
unnecessary expenditure with regards to COA Circular 2012-003 it might be
unnecessary to COA but necessary to the agency. The solution for this is to make sure
that the agency will only use their money or budget according to their mandate. Next
problem is during the budget preparation process. Most of the documentary
requirements are in other agencies. I think the better solution for this is the budget
preparation process should ne done at the last quarter of the previous year and the
planning should be more than a year to have ample time. For example, in
preparation for your 2025 budget all the documentary requirements should already
been requested from other agencies last 2023 then proposed the budget by 2024.

2. Discuss Government Revenues Provide 4 programs or projects that would help the
government realize its revenue targets

- Revenues refer to all cash inflows of the National Government Treasury which are
collected to support government expenditures but do not increase the liabilities
of the National Government. Revenues consist of tax and non-tax collections. The
non-tax revenue is government revenue that is not generated from taxes. It refers
to all other collections of the government in exchange for services rendered,
penalties imposed, and assets conveyed. For example, bond issues and profits of
 state-owned companies, collection of fines & fees, licenses, and registration
charges. One of the primary purposes of taxation is to generate revenue for the
government. Taxes provide funding for essential public services and
infrastructure, including education, healthcare, transportation, defense, law
enforcement, and social welfare programs. Without tax revenue, governments
would struggle to finance these functions that is necessary for societal well-being
and economic development. There are a lot of National Taxes but the most
common tax that we are all familiar with is the VAT or the Value Added Tax. Of
course, we are all familiar with VAT because it is a consumption tax levied on the
sale of goods and services. Whenever you eat on fast food or buy your groceries
there it is the 12% additional tax on your receipt that’s VAT. Another sample of
National Taxes that we are all familiar with is the income tax. This is the type of
tax governments impose on income generated by businesses and individuals
within their jurisdictions. To help the government realize its revenue targets the
following are the programs that should be implemented First is to Implement Tax
Reform. Tax reform is the process of changing the way taxes are collected or
managed by the government and is usually undertaken to improve tax
administration or to provide economic or social benefits. It can include reducing
the level of taxation of all people by the government, making the tax system
more progressive or less progressive, or simplifying the tax system and making
the system more understandable or more accountable. Second is to Invest in
Infrastructure Projects. Investing in infrastructure has a positive and multiplier
effect on economic growth and employment and can also reduce income
inequality and poverty levels by giving low-income households access to internet
service, better urban transport, and other basic services. Infrastructure
development not only creates jobs and stimulates economic growth but also
generates revenue through tolls, fees, and taxes associated with the use of
infrastructure assets. Next is to leveraging Public-Private Partnership (PPPs). It is
a partnership between the public sector and the private sector for the purpose of
delivering a project or a service traditionally provided by the public sector.
Collaborating with private companies on infrastructure projects or leasing
government-owned assets can generate revenue streams while sharing risks and
costs with the private sector. Last is to reduce trade barriers. Reducing trade
barriers promotes increased international trade because it allows for more
competition. This can provide lower prices for consumers as well as increase in
productivity and it may also attract new partners and investors which will be a
benefit for nation’s economy.

3. Most of the big item projects in the Philippines are sourced from borrowings by the
National Government, should the Local Government do the same? What’s the
implication to LGUs in the long run? Provide 4 examples.

Group 2

1. Discuss GAA and its impact on PH Economy

Provide 4 programs/project considered most important under BBM admin
2. How would the PH govt be able to generate revenues w/o taxing the poor, indirectly
or directly?

3. BORROWINGS

 If the govt borrows funds, where should it borrow? Local or foreign?

 Impact on future generations

4. Provide 4 examples of what the govt would do to implement programs/projects

without borrowing funds

Private public partnership

Group 3

1. Where should the government allocate budget? Economic or social services? What is
the impact of your choice? Provide 4 examples.

2. Discuss balanced budgeting. Explain the implication of budget surplus or budget

deficit in the government. Provide 4 examples.

Group 4

1. Discuss Fiscal Policy. What are the two types of Fiscal Policy?

Fiscal Policy has a very important role in managing the economy. The Fiscal Policy is
influenced by the government by adjusting the nature and extent of the taxes,
government spending and borrowing to achieve sustainable growth. A healthy fiscal
policy is important to control inflation, increase employment and maintain the value
of money. A Fiscal Policy aims to motivate private sectors increase their operations
that will influence the economy of our country. It also aims to promote income
equality by imposing direct taxes on individuals with higher income while subsidizing
the consumption items of low-income households. Necessary items like fuels, food
items and all the basic needs are subsidized for the masses while luxury items like
imported cars, bags, shoes, and vanity products are indirectly taxed to maintain
equality among citizens. This is one of the ways by which the government maintains
a balance of receipts and payments. With the recent pandemic we experienced it
shows us that Fiscal policy is important to implement corrections and sustain the
population while guiding the economy. There are two primary types of Fiscal Policy.
First is the Expansionary Fiscal Policy. This type of Fiscal Policy involves increasing
government spending and decreasing taxes stimulate economic growth, increase
employment, and increase mass demand. This type of Fiscal policy is typically used or
 implemented during economic downturn to restore economic activity. During
expansionary periods, governments can increase spending on infrastructure projects,
social programs, and other initiatives to boost demand and stimulate economic
growth. They may also enact tax cuts to reduce taxes, which puts more money in
consumers' pockets and stimulates spending. Governments can also increase transfer
payments such as welfare, unemployment, or other benefits to increase household
income. Expansionary Fiscal Policy also has its pros and cons one of its pros is it can
have a rapid impact to the economy if and only if implemented correctly. Cons for
this is all the new spending can be exceedingly harmful to the economy if it flames
inflation. Another pros is government spending can also create jobs and lessen our
country's unemployment rate and tax cuts can put money directly into taxpayers’
pockets but one of the cons of this is the tax cuts used to improve economic
conditions must be reversed later to restore revenue and to pay down the debt. Next
type of Fiscal Policy is the Contractionary Fiscal Policy. This type of Fiscal Policy
involves decreasing government spending and/or increasing taxes to slow down
economic growth, reduce inflationary pressures, and cool down aggregate demand.
It is usually enacted during periods of high inflation or economic overheating to
prevent the economy from growing too quickly and to maintain price stability.
Contractionary policy aims to delay potential distortions to the capital markets.
Distortions include high inflation from an expanding money supply, unreasonable
asset prices, or crowding-out effects, where a spike in interest rates can lead to a
reduction in private investment spending such that it lessens the initial increase of
total investment spending. The contractionary policy often results in the tightening of
credit through increasing the interest rates, increased unemployment, reduced
business investment, and reduced consumer spending. Contractionary policy is
typically issued during times of extreme inflation or when there has been a period of
increased speculation and capital investment fueled by prior expansionary policies.

2. Which Fiscal Policy to adapt by the government to regain confidence after Covid 19
crisis or pandemic?

Covid 19 pandemic caused economic and financial

3. Discuss and explain the differences between local and national budgeting. Impact of
local budgeting to local and regional development? Provide 4 examples.