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AE Notes2

Yayah

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4 views

AE Notes2

Yayah

Uploaded by

Christopher Daniel Lim-t
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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AE_Notes #2

Applied Economics in Relation to Philippine Economic Problems


Economic growth or the increase in a nation’s wealth is the goal of many
countries because this means better lives for their citizens. The Philippines has always
been described as one of the fastest growing economies in the East Asia Pacific region.
With expanding urbanization, where cities have been growing motivating more
people to live in cities because of more opportunities of employment and education.
Baguio City, for instance, continues to attract tourists, students and entrepreneurs
from different parts of the country. Also, trade and industry continues to propel the
city’s economy because of the increasing number of business establishments
registered. Because business activities are energized, more workers are being
employed. Our country also has an increasing young population to join the labor force
in our country and abroad. Overseas workers continue to send hard earned money or
remittances to their families back home. These remittances uplift the lives of many
Filipinos, and have been helping our economy. Infrastructure projects are also at its
peak with the construction of roads, bridges, and other physical structures that
facilitate economic activities.

Despite this remarkable growth, people, especially the poor, have been
complaining of non-inclusive growth. Millions of Filipinos say that they experience
hunger in spite of the claims that our country is experiencing economic progress. They
have not felt the comfort that progress should bring.

Unemployment is still a big problem in the Philippines. The National


Statistical Coordination Board Resolution No. 15 dated October 20, 2004 defines the
unemployed as persons who are 15 years old and over and are reported as: (1)
without work and currently available for work and seeking work; OR (2) without
work and currently available for work but not seeking work for the certain reasons.
Unemployment rate in the Cordillera Administrative Region increased from 3.6
percent in January 2018 to 4.9 percent in January 2019. An increase from 32,000 to
39,000 unemployed persons.
Another serious problem in the country is poverty. There are many Filipinos
who have limited or even no means to provide themselves and their families with the
basic needs to survive. In the Cordillera Administrative Region the poverty incidence
among families may have decreased from 17.0 percent in 2015 to 8.7 percent in 2018.
But still, the presence of poverty in the region still affects the nation. According to the
Philippine Statistics Authority, the proportion of poor families in the Philippines in
2018 was estimated at 12.1 percent, which is equivalent to around three million
families.
The increasing population growth in the Philippines is another problem
connected to the issue of scarcity. Resources are not enough to provide for the needs
and wants of a growing population or number of people. According to the
United Nations data, the Philippines population is equivalent to 1.41% of the total
world population. Our county ranks number 13 in the list of countries by population.
In the region alone, the PSA-CAR stated that among the Cordillera provinces, Benguet
had the biggest population with 466,224 followed by Baguio City with 345,366.

Adding more burden to Filipinos is inflation. This is the increase of the overall level of
prices in the economy. This can be caused by challenges in agricultural supply or increase of
international oil prices.

A significant amount of public debt is another problem that affects the growth of the
economy. Public debts are financial obligations or loans made by the government. In 2018,
the national debt of the Philippines amounted to around 133.07 billion U.S. dollars. A big
public debt affects the government’s ability to deliver essential services to its citizens. This
means that the provision of public goods or the needs provided by the government to its
people can be restricted, because money to produce these goods maybe sacrificed to pay for
our growing public debt.

Business establishments are encouraged to open to provide jobs and contribute to the
increase of tax revenues. Tax revenue is the income gained by the government from the taxes
paid by the people. It is used to spend for public goods and other developmental projects.
However, the road to progress is not without consequences. Many business establishments
with factories emit pollution that is harmful to the health of people and the environment. This
harmful consequences of economic activities are called negative externalities.

The government and the people should work hand in hand to solve these problems to
ensure economic welfare where the resources of the country is properly distributed for the
overall well-being of the people.

These are the most pressing economic problems our country is facing, and with applied
economics, you will be able to understand the causes and possible solutions to these
challenges. For example, understanding the existence of scarcity can help you analyze how to
properly use available resources in order to succeed in dealing with scarcity. Knowledge of
economic theories such as the Law of Supply and Demand can help in analyzing why prices are
increasing and what solutions or policies the government can implement to help bring down
prices. Below is a table showing you examples on how some of these problems can be
understood using economic theories to help in strategizing the solutions:
Socio- Economic
Economic Theory/ Explanation Solutions
Problem Concept
Unemployment Law of There is an oversupply of Provide retraining
Supply and workers and a good courses so graduates
Demand amount of graduates may gain new skills that
every year who fall into are necessary to garner
unemployment. Inability them a place in the
to provide enough jobs to workforce.
an increasing number of
graduates who possess
skills that are not high in
demand in
the job market anymore.
Population Law of An increase in population Responsible Parenthood
Growth Supply and would mean more mouths and Family Planning
Demand to feed so demand for Program which promotes
products and services will natural family planning,
increase which will affect birth spacing (three years
the supply of products and birth spacing) and
services that may lead to breastfeeding which are
an increase in prices. good for the health of the
mother, child, family,
and community.
Inflation Law of Increasing oil prices Explore other reliable
Supply and worldwide will increase energy sources to
Demand the prices of goods and achieve energy self-
services because the cost sufficiency.
of producing goods and
service will also
increase.
Pollution Negative An increase in demand Increase and improve
Externalities for products, such as mass public
cars, leads to profit for transportation.
manufacturers. However,
this means an increase of
the number of cars
emitting carbon dioxide
and nitrogen oxide that
are harmful to people and
the environment.

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