Barriers to Economic

Development
 Pre-test
Directions: Arranged the jumbled letters.
1. BALRO USISES
2. STEAX
3. SWAEG
4. SRESECINO
5. FNITOILAN
6. VSENITTNEMS
7. PVOREYT
 01
LABOR
ISSUES
Unemployment and underemployment are one of the most considered
labor problems in the Philippines. These serve as the key indicators of an
economy’s status.
• Underemployment occurs when individuals are employed in less than
full-time hours or regular hours for 40 hours per week such as part-
timer individuals. Those who are underemployed include workers who
are highly skilled but working in low-paying or low-skill jobs and part-
time workers who would prefer to be full-time.
• Unemployment occurs when individuals are actively seeking a job but
are unable to find one
02
TAXES
 Taxes must be paid to the government when a good is sold. It is considered
nflows for the government and outflows for a business and considered a burden
or a business or any small entrepreneurs engaged in a business. Businesses apply
ither a percentage tax on gross receipts of 3% or value - added of 12%.
Businessman pay their business taxes every month and income tax quarterly. For
nstance, if annual gross receipts reached Php500,000.00, this is around 30% of
s gross sales of Php40,000.00-Php50,000.00 monthly. On the other hand, the
uyer possibly shoulders a bigger portion of the tax burden. This happens when a
uyer cannot do away with the consumption of a good and thus considers it
ssential. For example, government levies a 100% sales tax on a bottle of soft
rinks. If the price is Php6.00 per bottle, the consumer must pay Php 12.00 on
ccount of the tax.
 03
WAGES
 On June 9, 1989, the Philippines Congress enacted Republic Act No. 6727
therwise known as the “Wage Rationalization Act”. Each region in the
hilippines has a unique minimum wage set by the Regional Tripartite Wages and
roductivity Boards. Minimum wage refers to a legally mandated minimum
emuneration paid to the workers/employees by the employer for a performed task
uring a given period. The objective of the approved increased minimum wage is
o change the lives of ordinary worker but, the impact of this brings
nemployment due to the increasing cost on the part of businesses. Salary/wage
ncreases also trigger rise in commodity prices.
 04
RECESSION
 Recession is a decline in economic activity for two consecutive quarters that
an lead to a period of negative economic growth and heighten the problems of
nequality and unemployment. When demand falls, firms lay off workers. Higher
nemployment decreased salaries and incomes, and lost opportunities are all
onsequences of recessions. In the current slump, education, private capital
nvestments, and economic opportunities are all likely to suffer, and the
onsequences will be long-lasting.
 05
INFLATION
 In the Philippines and some developed countries, inflation is a normal setup.
It refers to a continuous increase in the price of goods and services for a period.
As price increases, purchasing power decrease (if income remains the same,
the purchase of goods and services must be lesser) and can no longer suffice to
meet their basic needs. Likewise, as lenders increase their interest rates in
reaction to increased prices, the cost of borrowing by businesses and
individuals will also increase. The negative result of a period of high inflation
includes high unemployment and slow economic growth.
 The impacts of inflation on an economy are varied, and they can both good
and detrimental at the same time. Inflation has several negative consequences,
including an increase in the opportunity cost of holding money, uncertainly
about future inflation, which may discourage investment and savings, and, if
inflation is high enough, shortages of goods s consumers stockpile in
anticipation of future price increases.
 06
INVESTMENTS
 Businesses invest to generate future income and to meet future demands.
Investment refers to an item acquired on the purchase of goods to generate
income in the future. It can be either be a long-term or short-term investment.
Long-term investment include the purchase of bonds, stocks, or real estate
property among, several others. Short-term investments include savings and
time deposits. Investment entail risk for a business especially if you expect that
it will generate income in the future, but it does not pan out or it falls short. If
demandf is falling, the firms will cut back on investment. For instance,
investing in a company that ends up going bankrupt or in a project that fails.
Saving is accumulating money for future use that does not entail risk.
 07
POVERTY
 In the Philippines, poverty has proven to be one of the most significant
hallenges facing the filipino people. The United Nations (U.N.) reported that the
Republic of the Philippines is one of the highest poverty rates in Asia despite a
teady decline in recent years. According to the Asian Development Bank report,
here are major factors that cause poverty. These are low economic growth, weak
gricultural sector, increased population rates, and a high volume of inequality
hat make it difficult for Filipino to live and survive.
 Post-test
Directions: Choose the letter of the correct answer.
1. Occurs when individuals are employed in less than full-time hours or regular hours for 40
hours per week such as part-timer individual
a. underemployment
b. unemployment
c. labor issues
d. recession
2. Must be paid to the government when a good is sold
a. taxes
b. labor issues
c. investment
d. inflation
3. Refers to an item acquired on the purchase of goods to generate income in the future
a. investments
b. poverty
c. inflation
d. wages
4. Refers to a legally mandated minimum remuneration paid to the workers/employees by the
employer for a performed task during a given period
a. minimum wage
b. maximum wage
c. wages
d. none of the above
5. Occurs when individuals are actively seeking a job but are unable to find one
a. unemployment
b. underemployment
c. labor issues
d. poverty
6. In the Philippines,_______ has proven to be one of the most significant challenges facing the
filipino people.
a. poverty
b. inflation
c. recession
d. taxes
7. It refers to a continuous increase in the price of goods and services for a period
a. inflation
b. wages
c. taxes
d. investments
8. On June 9, 1989, the Philippines Congress enacted Republic Act No. 6727 otherwise known as
the ___________.
a. Wage Rationalization Act
b. Tax Rationalization Act
c. Inflation Rationalization Act
d. none of the above
9. Is a decline in economic activity for two consecutive quarters that can lead to a period of
negative economic growth and heighten the problems of inequality and unemployment
a. recession
b. inflation
c. labor issues
d. investment
10. include the purchase of bonds, stocks, or real estate property among, several others
a. long-term investment
b. short-term investment
c. unemployment
d. underemployment
True or False: Write TRUE if the statement is correct and FALSE if the statement is incorrect.
1. Wages must be paid to the government when a good is sold.
2. Unemployment occurs when individuals are employed in less than full-time hours or regular
hours for 40 hours per week such as part-timer individual.
3. Underemployment occurs when individuals are actively seeking a job but are unable to find
one.
4. Short-term investments include the purchase of bonds, stocks, or real estate property among,
several others.
5. Long-term investments include savings and time deposits.
Thank
you!