DEVELOPMENT

STRATEGIES
Alborque, Reinier
Manabat, Blessing Joy
Olalde, Khaizar Moi
Robiso, Christine
Tibar, Maria
Villanueva, Patricia DC.
DEVELOPMENT
STRATEGIES
RIZAMAE TIBAR
Development planning
■is the government’s use of
coordinated policies to
achieve national economic
objectives, such as reduced
poverty or accelerated
economic growth.
Planning involves:
■surveying the existing economic situation.
■ setting economic goals
■devising economic policies and public
expenditures consistent with these goals
■ developing the administrative capability to
implement policies
■ Adjusting approaches and programs in
response to ongoing evaluation.
POLICY MAKING
Stabilization
- A stabilization policy is a
macroeconomic strategy enacted
by governments and central banks
to keep economic growth stable,
along with price levels and
unemployment.
Adjustment
■A set of economic or monetary policies a g
overnment takes in conjunction with the Int
ernational Monetary Fund to
reduce a deficit in a country's balance of
payment.
An adjustment programme often includes m
easures designed to
make the country more fiscally sound, but w
hich are painful to the populace. 
To be eligible for a loan from IMF, developing
countries often have to implement some or
all of the following policies:

■ Cutting government spending.

■ Raising tax revenues and trying to improve tax
collection by clamping down on tax avoidance.
■ Control Inflation.
■ Privatization of state- owned industries.
■ Opening the economy to free trade.
Reform
■A process in which changes are made to the
formal “rules of the game” – including laws,
regulations and institutions – to address a
problem or achieve a goal such as
economic growth, environmental protection
or poverty alleviation.
Privatization
■ is the process of transferring an enterprise
or industry from the public sector to the
private sector.
 THE
IMPORTANCE OF
CAPITAL IN
ECONOMIC
GROWTH, AND
THE CONDITIONS
NECESSARY FOR
CAPITAL TO BE OLALDE, KHAIZAR MOI B
EFFECTIVE
Why is capital is
importance in the
economic growth?
Capital
■Capital is defined as “All those
man-made goods which are used in
further production of wealth.” Thus,
capital is a man-made resource of
production. Machinery, tools and
equipment of all kinds, buildings,
railways and all means of transport
and communication, raw materials,
etc., are included in capital.
 Economist- BOHM BAWERK

According to BOHM BAWERK Capital is the produced

means of production” According to this definition, only those
goods are included in capital, which have been produced by
human efforts.
“Capital goods are the products (tools) of the past
labour (efforts) used for further production.”-
 Capital is the Core of
Economic Development:
Because of its strategic role in raising
productivity, capital occupies a central position
in the process of economic development. The
economic development of any nation is not
possible without a sufficient provision of
machines, tools, irrigation systems, dams,
bridges, factories, roads, railways, etc.
Irrespective of the fact,
 ROLES OF
FINANCIAL
INSTITUTIONS
Manabat, Blessing Joy
TERMS TO REMEMBER

■SAVING
■SAVINGS MOBILIZATION
FINANCIAL INSTITUTIONS

■It is an establishment that

conducts financial transactions
such as investments, loans, and
deposits.
FINANCIAL INSTITUTION AND
THEIR ROLES
■COMMERCIAL BANKS
■INVESTMENT BANK
■BROKERAGE
■INSURANCE COMPANY
■INVESTMENT COMPANY
DIFFICULTIES IN MOBILIZING
SAVINGS
■SAVING IS CRITICAL FOR THE
POOR
■IF THE FINANCIAL SYSTEM IS
NOT STABLE
■CHANGEOVER TO THE
MULTICURRENCY SYSTEM
 CONCEPT OF
FINANCIAL DEEPENING
AND REPRESSION
AND
ROLE OF GOVERNMENT
POLICIES TOWARD
FINANCIAL SECTOR
PATRICIA DC. VILLANUEVA
FINANCIAL DEEPENING
- an increase ratio of money supply to GDP or some price index.
- It refers to liquid money. The more liquid money is available in
an economy, the more opportunities exits for continued
growth.
- the positive role of the financial system on economic growth
by the size of the sector’s activity. That means that an
economy with more intermediary activity is assumed to be
doing more to generate efficient allocation. I
- refers to the increased provision of financial services with a
wider choice of services geared to the development of all
levels of society. 
FINANCIAL REPRESSION

– distortions of the interest rates,

foreign exchange rates, and other
financial prices – reduce the
relative size of the financial system
and the real rate of growth.
ROLE OF GOVERNMENT POLICIES
TOWARD FINANCIAL SECTOR
- to mobilize resources for public expenditure
- to achieve goals for output and employment
growth and price stability
- to protect investors against mismanagement and
fraud
- protect the stability of financial services
companies
- moderator between brokerage firms and
consumers
 COMMON TYPES OF
GOVERNMENT INTERVENTION
&
THE RENT SEEKING AND
CORRUPTION THAT MAY BE
THE CONSEQUENCES OF
EXCESSIVE REGULATION
- CHRISTINE M. ROBISO
Government Intervention
 Regulatory actions taken by a government in order to
affect or interfere with decisions made by individuals,
groups, or organizations regarding social and economic
matters.

The main reasons for policy intervention by the

government are:
 To correct for market failures
 To achieve a more equitable distribution of income and
wealth
 To improve the performance of the economy
Market failure - is the economic situation
defined by an inefficient distribution of goods and
services in the free market.

Markets can ‘fail’ as a result of public goods,

externalities, information problems and
market power.
Common Government Interventions
 Taxes
- Governments use its tax systems to raise funds for its
programs and influence its citizens’ economic actions.
- Taxes are the primary means for governments to raise
funds for its programs and to pay off its debts. It can also
be used to influence its citizens’ financial behavior.

 Subsidies
Subsidy- is a form of financial aid or support extended to
an economic sector (or institution, business, or individual)
generally with the aim of promoting economic and social
policy.
- Governments seek to implement subsidies to
encourage production and consumption in specific
industries. On the supply side, government
subsidies help an industry by allowing the
producers to produce more goods and services. 

 Regulations
- Regulation typically consists of a set of rules
administered by the Government to influence the
behavior of businesses and, consequently,
economic activity.
 Price Control
 Price ceiling- An artificially set maximum price
in a market.
- A price ceiling is a price control that limits the
maximum price that can be charged for a product
or service. By establishing a minimum price, a
government wants to ensure the good is
affordable for as many consumers as possible.
 Price Floor- A mandated minimum price for a
product in a market.
- A price floor is a price control that limits how
low a price can be charged for a product or
RENT-SEEKING
Rent-seeking is an individual's or entity's use of
company, organizational or individual resources to
obtain economic gain without reciprocating any
benefits to society through wealth creation. 

CORRUPTION
Corruption is the misuse of public power (by
elected politician or appointed civil servant) for
private gain.
INTERNATIONAL TRADE
INCLUDING THE
WORLD TRADE
ORGANIZATION
REINIER ALBORQUE
World Trade Organization

■Dealing with rules of trade between nations

■Settle disputes between its members
■Support developing countries
World Trade Organization

Purpose
- Foster an environment conducive to
free trade
- Ease Customs procedures
- Promote Economic growth to its
members
World Trade Organization

■Rules are codified in 3 Agreements

– General Agreement on Tariffs and Trade
– General Agreement on Trade in Services
– Trade-Related Aspects of Intellectual
Property Rights
Trade Development

■Special and Differential Treatment

Provisions
LDC in the WTO
-Aid for trade
- Special events
Market Mobilization
■Considered as a monetary policy
that aims to recover excess
liquidity or money supply by
selling government bonds.