The Philippine Economy

and Its 21 Century

st

Socioeconomic Challenges
 ECONOMY
- is a system of organizations and institutions that
either facilitate or play a role in the production and
distribution of goods and services in a society.

- it deals with the three Economic Problems:

a. What goods and services should be produced?
b. How should these goods and services be produced?
c. For whom should these goods and services be
produced?
 ECONOMIC SYSTEM
- refers to a set of economic institutions that
dominate a given economy with the main
objective of solving the basic economic
problems.

Four Economic System/ Categories

1. Free Market Economy
2. Centralized Economy
3. Mixed Economy
4. Traditional Economy
 ECONOMIC SYSTEMS
Project analysis slide 3
Free Market Centralized Mixed Traditional

A system Also called as Combination of free A system

characterized by command market and characterized by
competition and economy. This centralized customs and
high level of system is economy. There is a habits. Barter is
private characterized by balance between a mechanism
ownership. the heavy private and where goods are
Entities have involvement of government exchanged for
economic government in accountability in another good.
freedom. managing the achieving economic
economy. goals.
MACROECONOMIC GOALS OF A COUNTRY
- There are countless of economic problems due to market
failures, which are the economic situations defined by an
inefficient distribution of goods and services in the free market.

MACROECONOMIC
GOALS
1. Economic Growth
2. Full employment
3. Price stability
TOP SOCIOECONOMIC
PROBLEMS
1. Poverty
2. Unemployment
3. Social Inequality
ECONOMIC
GROWTH
- Economic growth is typically
measure through GDP (Gross trend
Domestic Product), which is the
value of all final goods and
services that are consumed at a
given period. We can say that
GDP is the economy’s output.
Expansion – low/decreased unemployment, increased
production, leads to rise in consumer spending patterns.

Depression – prolonged period of Recession – economic downturn, high/increased

recession. Like the Great unemployment, slow business, and a decline in consumer
Depression in 1930s. purchases.
EMPLOYMENT
- The upward and downward movements in the business cycle lead to unemployment.
The economy slows down during a recession and is characterized by generally low
PRICE
business and consumer activity.

STABILITY - The absence of prolonged inflation and

deflation.

Inflation - the decline of purchasing power of a given currency over time. One
reason of high inflation is the continued price increase of goods and services
which has negative consequences.
Deflation – is the continuous decline of prices that contracts the money supply
and limits liquidity. People tends to hold on to their money and liquidate assets.
It will lower the demand that leads to economic instability.
 THE STATE OF THE
PHILIPPINE ECONOMY
ECONOMIC PERFORMANCE
- The Philippine economy has been experiencing growth since 1999 as evidenced by
higher year-on-year GDP.
- According to Finance Secretary Cesar Purisima, the GDP growth of 2 nd quarter of
2016 is 7% which is the 70th consecutive quarter growth.
2015 2016
Type of Expenditure
Q1 Q2 Q3 Q4 Q1 Q2
1. Household Final Consumption Expenditure 1 231 928 1 291 318 1 241 881 1 499 010 1 3188 432 1 386 006
2. Government Final Consumption Expenditure 185 519 224 704 195 352 179 771 207 461 254 930
3. Capital Formation 416 596 401 895 438 731 548 058 527 612 512 845
4. Exports 898 070 941 672 1 034 252 807 172 963 737 1 004 125
5. Less: Imports 963 339 909 069 1 090 388 979 368 1 146 194 1 099 305
6. Statistical Discrepancy -2,417.00 - 7,293.00 3 269 6 501 16 092 20 020
Gross Domestic Product 1 766 358 1 943 228 1 823 097 2 061 146 1 887 141 2 078 621
Year-on-Year Growth in GDP 5.0% 5.9% 6.2% 6.5% 6.8% 7.0%
Net Primary Income 372 543 372 131 380 082 416 155 409 451 395 163
Gross National Income 2 138 900 2 315 359 2 203 179 2 477 300 2 296 592 2 473 783
ECONOMIC PERFORMANCE
- Aside from the table earlier. Here are the following indicators of economic
performance.

1. Consumer Price Stability – measures prices of goods and purchasing

power of consumers
2. Average Monthly Inflation Rate – another way to measure purchasing
power.
3. GNI and GDP by Sector – measures economic growth by sector such as
agriculture, hunting, forestry, and fishing sector, industry sector, and
service sector.
4. Philippine Employment Data – labor force data
5. Average Monthly Exchange Rate – measures the strength of domestic
currency
 THE PHILIPPINES’ 21ST
CENTURY SOCIOECONOMIC
CHALLENGES
GLOBALIZATI - Globalization gives opportunity to every
ON country but it also brings some challenges as
well.
Global Challenges
1. War and Terrorism in the Middle East – Islamic State in Iraq and Syria (ISIS).
Paris is attacked by ISIS in 2015, suicide bombing in Belgium in 2016. Which
heightened the threat to security.
2. Political Instability in Europe – Great Britain leaving the European Union (EU).
“Brexit” Britain’s move to leave the EU shocked the global market. One reason of
this is that Europe accepts refugees from Syria who escapes war.
Domestic Issues
3. Territorial Dispute with China – dispute over the West Philippine Sea, banning
Filipino fishermen around Scarborough Shoal or Panatag Shoal.
4. The Ongoing War in Mindanao – MILF or Moro Islamic Liberation Front are the
rebels of the Southern Philippines. The war started in 1970 that has been ongoing
for over 40 years.
Thank You