Assignment

Example of the four fiscal policy under Philippines setting.

The first major function of fiscal policy is to determine exactly how much funds will be
allocated. This is closely to the issue of taxation and spending, because the allocation of
funds depends upon the collection of taxes and the government using the revenue for
specific purposes.
In any democratic country as in the Philippines, the allocative function in budgeting
determines on how government revenue will be spent for example; road constructions,
schools, hospitals etc. This may call for more generous transfer payments and, will always
exceed the amount that can reasonable be raised in taxation or by borrowing.
The distribution function of fiscal policy is to determine more specifically how the funds will
be distributed throughout each segment of the economy. In this, the money is distributed
accordingly by the Philippines government to specific needed services as listed above like
road constructions, schools, hospital etc.
Funds allocated on specific projects and services like road constructions, schools, hospitals,
must be budgeted effectively to prevent economical restrains and instability. This is to
ensure that projects and services are delivered with a stable economic growth at hand.
Development is one of the fundamentals in any country. Development reflects economic
growth true economic growth occurs when various projects are financed using borrowed
money. By allocating funds accordingly in each of the examples given and distributing the
funds efficiently while having a stable growth will not only develop the country but grow the
economy as a whole. Therefore, all functions of the fiscal policy are essential for the
development and growth of the economy.

Rami, Fiona N