Long Quiz Application of Learning

Introduction

The following content link above contains about the real life relationship between
supply and demand in the Philippines. Whereas supply is simply the food, employment and
as for the demand is the quantity demanded of the citizens and the prices. In addition, also
contains on how macro equilibrium shifts to either right or left can be impactful to the
society. All of the links above are also about the economic situation in the Philippines.
Problematic situations such as the inflation when it comes to food, Labor market
insufficiency and cuts in supply chain. Moreover, in this paper will talk about the trade-off
between inflation and unemployment in the Philippines during its time in pandemic. It is also
shows on how National Economic Development Association (NEDA) handles the economic
problems here in the Philippines and the steps they make. In addition, the in this paper would
also show the personal recommendation of the writer for the recovery of the Philippines
while applying the lessons that have been given to the students for the application of leanring
to the economic lessons given.

Application of Learning’s

Title: RECENT TYPHOONS AND TRANSPORT RESTRICTIONS POSE UPWARD

INFLATION PRESSURES – NEDA

Link: https://www.neda.gov.ph/recent-typhoons-and-transport-restrictions-pose-upward-
inflation-pressures-neda/

Summary: From this article states that because of recent typhoons and transportation
restriction of delivery of products such as meat and vegetables. It had become one of the
contributions of exponential increase of inflation here in the Philippines. It had accelerated to
3.3% in November 2020, up until today bringing the 2.6 % increase said by National
Economic Development Authority (NEDA). In addition, tot typhoons such as Ulysses, Pepito
Ofel and Nika had brought the agricultural sector loss income for up to 15.3 billion. And
Chua had suggested to have let at least transportation on products to be ease because if it not,
it would increase the prices of commodities.

The first thing is about the threat of inflation and other external influences such as
typhoons affecting supply chain, COVID and African Swine Fever (ASF) affecting the price
and supply chain. On December 4, 2020 up until today transportation services in agricultural
products such as meat and vegetables have become one of the top contributors to 2021
inflation.

“Our experience with the recent typhoons has highlighted the need for long-term engineering interventions,
reforestation, and coordinated flood management systems across different LGUs and the need to intensify the
distribution of climate-resilient technologies and other production support assistance to mitigate production loss
in the agriculture sector,” said Acting Socioeconomic Planning Secretary Karl Kendrick Chua.

Just as mentioned above it is due to the restrictions to public transport and not enough
investments for the government to use in agricultural sector. In addition, the problem also
hangs on the lack of utilities and damaged tools used by farmers because of recent typhoons.
Because of this the country’s inflation may have accelerated for up to 2.5 % for the first
quarter of the year 2021(JAN – MRH). It is also about the not developed Human capital that
has invested by the government for a long time. But where is the improvement if the
government had already invested in it? One can possible explanation is corruption.
Government have been consistently giving relief goods such as foods. But not the necessary
equipment or knowledge to make agricultural sector to work more than the output scale that
they have currently.

And one of the solutions proposed to either stop or ease the problem, is the idea to
revisit the public transport guidelines and have Land Transportation Franchising and
Regulatory Board (LTFRB) to monitor the actives on unwarranted fare increase. As public
transport were to gradually reopen the economy. Lastly, is to enable technology which can
make the country prosperous by the number of produce product of one person.

Title: TEMPORARY INCREASE IN PORK MAV, LOWER IMPORT TARIFFS TO

ENSURE ADEQUATE AND AFFORDABLE FOOD SUPPLY – NEDA

Link: https://www.neda.gov.ph/temporary-increase-in-pork-mav-lower-import-tariffs-to-ensure-
adequate-and-affordable-food-supply-neda/

Summary: This article is the perfect presentation of how macro equilibrium imbalance can
impact an economy greatly. The decision made here by NEDA is crucial because pork is the
primary source of food of the poor here in the Philippines. And if price of the pork were to be
increase there is a chance of increase hunger rate in the Philippines. Even if there is a
recovery in employment and income were to be made. Food would unaffordable because of
the income made is not enough cause of inflation.

As the economy reopens, in date of April 16, 2021 NEDA suggest to temporarily
increase the price of pork commodity to ensure food supply. The reason for the increase of
pork price it’s because of Swine disease report. According to Philippines Statistics Authority
(PSA) there has been an inventory decrease by 3 million heads of pork’s. And in order to
stabilize the supply chain there has no choice but to import pork in other countries which is
cheaper. For the Filipino citizens this is an important decision to be made because most of the
poor rely on this meat for their food necessity. According to NEDA:

“Every Filipino who eats pork, most especially the poor, cannot afford both an income reduction or loss due to the COVID-
19 pandemic, and higher food prices due to the African Swine Fever (ASF). The government’s priority is to foremost boost
domestic production and use importation only as the last resort. However, after almost two years since ASF started, the data
clearly shows that we cannot meet the total demand for pork only through domestic support,” said Acting Socioeconomic
Secretary Karl Kendrick T. Chua

The only problem in this decision is it may kill the Hog Industry here in the
Philippines. But NEDA chief ensured that the temporary increase of pork imports will not kill
the Hog industry here in the Philippines. The chief would only import for up to 22.8 % of
total consumption imports. The goal here is to only meet balance the macro equilibrium of
pork industry. If it were no balance there are two outcomes, first is the increase of percentage
of hunger and the second outcome would be the drastic increase of inflation percentage
because of pork supply chain had been cut off. As Seen below the picture:

It is also noted that in Fiscal policy when it comes to implementation of taxes such as
tariff rate of pork must also needed to be low enough to help reduce and stabilize the retail
prices. The way it works when the government intervention were low. The tax expense of
transportation will also affect the retail prices because there was low cost in expense
transport. For private firms who delivered the supply of pork when calculating the retail price
it’s included the travel expense when determining the retail price of commodity. The lower
the cost the benefit would be the low price of pork in either farm or super market.

Title: Supply versus demand: Unemployment and inflation in the Covid-19 recession

Link: https://voxeu.org/article/assessing-keynesian-spillovers-covid-19-recession

Summary: This article is about the relation of unemployment and inflation in a COVID-19
recession in an economy. It states here because of the covid-19 economies had put into an
immediate halt where production constricted. Resulting the supply chain to be either cut off
or reduced the deliveries. It had been analyse that because of low production of supply the
prices in retail stores would be increase. Resulting a bad economic phenomenon called
inflation.

And the link above is also about the relationship between inflation and
unemployment. And the way that economist proved that there is a relationship between the
two is through Philips Curve. The way they are related is inverse whereas unemployment
increases the inflation lowers. And if unemployment decreases the inflation increases. To
furthermore understand let us take a look “Supply versus demand: Unemployment and
inflation in the Covid-19 recession”. Covid – 19 is a combination of supply and demand
shocks to an economy. And these shocks dismantle the supply chain and made demand to be
constrained. In a way there is no spending among household. Meaning the economy is just
put into a halt where no sector moves. When this happens it would cause recession meaning
all sectors would make their output is reduced simultaneously. One of the evidence that these
shocks happen is the spike increase of pork prices in the Philippines where supply chains cut
off and the disease of Swine fever were wide spread. To analyse on how unemployment
related to inflation in the Philippines. Let us take a look in the model of Hog production
network in the Philippines.
As you can see in the graph above shows the effect of African Swine Fever (ASF) before the
pandemic there have been a reduction of goods production. Meaning not only unemployment
decrease because of the deaths of Hogs but also the Human Capital is not developed enough
to produced more rooting that unemployment is only addition when it comes to low
production.

With this we can determine how sales were allocated across the market and which sectors
lose supply than demand and become constrained in response to the Covid – 19 shocks which
is the lockdown. For example, in a farmer market there is always a stand that represents their
goods. And in a market there is labor that helps supply chain networks to be working. And if
the commodity were to infected people would stop working because of the fear (incapability
to produce because of ASF), making production put into pause making supply chain to be cut
off. And one of the basics of economics if the supply were low the demand would be high
causing the price increase exponentially.

The baseline here is when across the industry hours work to be lowered or cut the
production produced such as “hog industry” here in the Philippines. These causes supply to
be constraint and output to be lowered. And employment would be reduce in supply-
constrained sectors such as pork here in the Philippines. This bounds the amount of slack in
the economy and naturally demand would increase making spikes in prices. That is how the
inflation and unemployment were to be related in the Philippines. This also proves that there
is a trade-off between inflation and unemployment.

Title: From global pandemic to prosperity to all: Avoiding another lost decade

Link: https://www.youtube.com/watch?v=sJewa-4C0FA&ab_channel=UNCTADOnline

Summary: In this video is about how can we turn or bounce back after all the income lost for
this past year in the Philippines. It is said the only way to bounce back is up to the
government integrity on how can they measure cost and benefit. For economist perspective
we can also manipulate the flow of money and the policy amendments. We can manipulate
the monetary policy on how much we can print money so that the debt would increase and
made people borrow. If we use taxation is about letting the free market go by itself similar to
the belief of Adam Smith, the invisible hand of the economy.
Title: NEDA RECOMMENDS PRIORITY SECTORS FOR A4 GROUP VACCINATION

Link: https://www.neda.gov.ph/neda-recommends-priority-sectors-for-a4-group-vaccination/

Summary: This article states just as said in the title is the prioritization of getting the vaccine
to the group of A4 people. A4 group of people were categorize as a eligible workers needed
for the economy to put in motion again. Eligible workers includes; transport drivers or
operators, market vendors, hotel and restaurants frontline. In addition, Overseas Filipino
Workers (OFW) would also be schedule to the line of vaccination. If this were to be finished
Philippines are ready for the re-opening of the economy.

STEPS TO RECOVERY
(Application of Learning)

To make this crisis turn into prosperity is to have a controlled state on how money
flows in the Philippines. This job would go to our national bank system called Bangko
Sentral ng Pilipinas. And have NEDA and government work together to make economic
policies to benefit all sectors. To conduct this one should have the ability to create a fiscal
policy that specifically enables foreign investors and private sectors in the Philippines
increases the spending of the people.

The first step is to enable again the people to work again and prioritize getting the
vaccine. As we all know in economic growth not only measures in terms of GDP can
measure the growth of an economy it is also about the amount of goods produce in a year.
The fomula of GDP as follows:

The
problem in using GDP as a general measurement of growth is just generalizing the
performance of the economy. It ignores other variable such as productivity, human capital
advancement, technology and household spending. Professionally GDP is use only to
generalize growth but it does not measure the actual performance. It is also about the
productivity of an economy. Just as see above the equation it has spending on it. You can’t
spend if there were no good right? That is why productivity is number one reason on why
countries are rich. Is the capability of an individual to produce goods in a certain period of
time. That is why we Philippines prioritize in getting a vaccine in order to bounce back the
income loss of the country. This is why one of the links above is titled “NEDA
RECOMMENDS PRIORITY SECTORS FOR A4 GROUP VACCINATION”.

The summary of this article is to have the A4 priority group of people to have the
vaccine first. Because people in this group are the workers of the following:

- Accommodation - Transportation including logistics services - Public administration

and defence - Manufacturing of food, beverages, medical and pharmaceutical
products, Religious organizations, Food service, Financial services, except insurance -
and, Basic and higher education.

If this were to be vaccinated first, this would be the eligible workers that can operate
again and make the economy put into motion ever since the pre-covid industry had put into
halt.This is the only way to bounce back after all the debt and loss of income have
accumulated for this past year of COVID.

Second step, to recover of the economy, in the meantime while waiting for the vaccine
the most crucial that needed to be revisit is the law when it comes to Fiscal Policy. Fiscal
Policy is the implementation of tax in a country to control flow of the money. First is lower
both the Corporation tax and foreign commodity trade tax, increase government spending.
The reason for this decision is have the retail price to be lowered. This supports the idea
earlier to the Pork problem here in the Philippines. We need to ease the trade and let foreign
trade to continue and balance out the Equilibrium to avoid uncertainty problem. The second
reason needed to lessen the tax when it comes to the corporation tax. The reason is to have
the employer decide not to laid off a lot of their workers just to cut down the cost. Now that
the tax of the businesses the low, organization can enjoy and have let the employee increase
their wages to encourage household spending.

In conclusion, not only just the Philippines faces such difficult economic problem so does
other Asian counties such as Singapore and Vietnam. And the only way to bounce back
against the recession that Philippines are facing is to have the economy open within its
premise. That is why NEDA suggest prioritizing the A4 people to be vaccinated first so that
the economy would work again. In addition, the only thing that worries me for the Philippine
economy is to not let domestic production of commodities to be died out because of the
decisions when it comes to import of goods.