Good

morning
everyone!
Lesson 2.6 :

Supply – Demand
and Philippine
Economic Problems
THE PHILIPPINE PESO AND
FOREIGN CURRENCIES
Trading with other countries is also an
important economic activity that
impacts on the economy. Selling locally
made products, called exports, means
we earn dollars as payment for these
goods bought by foreign buyers.
 We need foreign currencies to trade
with other country.
Currency – a system of money in general
use in a particular country.
Example 1 :
When we buy imported brands like Nestlё
chocolates or Nike shops, the importers pay for
these in the currency of the country from which
we buy these goods.
Example 2 :
When we visit England to see the famous
London Bridge, to catch a glimpse of Prince
William or Prince Harry, and then go shopping at
their popular department store Harrods.
HOUSING SHORTAGE AND THE REAL
ESTATE BOOM IN THE PHILIPPINES

 Philippines real estate boom is weakening.

 Demand and supply also play an important
role in the Philippine real estate situation.
In the late 1990’s, during the Asian
financial crisis, constructions hit low levels
in the Philippines. Some high profile
construction projects were abandoned and
demand for housing was at a low level.
Some real estate companies even had to
close.
Table 2.10 Total Number of Occupied Units in
the Phil. By Census Year 1960 - 2010

Decennial Census Total Population

( in thousand )

1960 4, 435.2
1970 5, 668.8
1980 7, 9 19.9
1990 11, 161.7
2000 14, 891.1
2010 19, 715.7
 Saving and Investment
• are necessary to build the future. Saving is
to investment as food as to the body
nourishment process. Saving and
Investment are not only the concern of
business but also of households and
government.
Investment is defined as building up the
capital stock for more future production and
consumption.
Savings is defined as postponed
consumption at present.
 Rent And Price
Structure
It is the compensation made to the owner
of such land or building.
• From the point of view of economics,

RENT refers to a payment made for a

factor of production (such as land, labor,
or capital) to its owner and the payment
level expected by the owner, due to its
exclusivity or scarcity.
Economic rent exists due to
market imperfections. Without
market imperfections, there
would be no need for payment
of rent.
In short economic rent is any
unearned income.
Effect of Economic Progress on
Rent
 The progress of society can be in different
directions. Effects of this progress on rent are,
therefore, bound to vary with the directions
in which the society progresses.

 The effect in its various aspects:

1. Increase of Population
2. Improving of Transportation
3. Improving Methods of Agricultural
Production
 TYPES OF RENT
1. ECONOMIC RENT
► refers to the payment made for the use of
land alone.

2. GROSS RENT
► is the rent which is paid for the services
of land and the capital invested on it.
3. DIFFERENTIAL RENT
► refers to the rent which arises due to the
differences in the fertility of land.

4. CONTRACT RENT
► refers to that rent which is agreed upon
between the landowner and the user of the
land. On the basis of some contract, which
may be verbal or written, contract rent may be
more or less than the economic rent.
Family Expenditure Distribution 2009

Sales
Housing
9%

Others
31%

Food
60%
 MINIMUN WAGE
The problem of inadequate wage is
intertwined with the problem of
unemployment. Both problems stem
from the lack of jobs for our large labor
force. It is legally mandated price floor
on hourly wages, below which non-
exempt workers may not be offered or
accept. As of 2019, the federal minimum
wage rate in the US is $7.25 per hour.
 TAXES
■ We pay taxes for government to provide public
goods and services that empower and enable
individuals and institutions like * school, business
corporation* to pursue their dreams.

■ It is required payments from citizens to

government. The payments fund projects and
expenditures that serve the public interest.

“Taxes are the price we pay for a civilized society.“

- Wendell Holmes
There are different kinds of
taxes, most of which fall
into a few basic categories:

Taxes on Income
And
Taxes on Goods and Services
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 Taxes on Goods and
Services
1.Sales Tax
 Is the most often used as a methods for states and
local governments to raise revenue.
2. Excise Tax
 Are based on the quantity of an item and not on its
value
3. User Fees
- Are taxes that are assessed on a wide variety of
services, including airlines tickets, rental cars,
utilities, licenses and many others.
4. Sin Taxes
 Are imposed on items like cigarettes and
alcohol.

5. Luxury Taxes
- Are imposed on certain items, such as expensive
cars or jewelry.
 Source : Data Bank, World Bank

Tax Revenue as % of GDP

18

16

14

12

10

0
 ECONOMIC ICON

ALFRED MARSHALL
- ( 26 July 1842 – 13 July 1924) was one of the
most influential economists of his time. He
was the dominant figure in British economics
(also a world economics) from about 1890
until his death in 1924. He demonstrated an
aptitude in mathematics but experienced a
mental crisis that led him to abandon
physics and switch to philosophy.
 His specialty was
microeconomics – the study of
individual markets and
industries, as opposed to the
study of the whole economy. In
his most important book,
Principle of Economics, Marshall
emphasized that the price and
output of a good are determined
by both supply and demand.
THANK
YOU☻