Public Finance Overview

Study Notes

Public Finance Overview

Public finance involves managing resources for essential services like infrastructure, parks, roads, public schools, hospitals, fire departments, and police services.
Public goods are critical for societal well-being and include services from emergency management agencies like NDRRMC.

Effect of Interest Rates

Interest rates significantly influence economic development; a rise in rates can lead to less lending by banks.
High interest rates discourage banks from issuing loans, which can hinder business growth and job creation.
Lower employment leads to decreased income and purchasing power, affecting overall market demand and tax revenue.

Inflation and Its Impact

Inflation is the rate of increase in prices, affecting supply and demand dynamics.
Reduced supply can lead to higher prices, impacting agricultural products and consumer goods.
Philippines has strengths in various sectors: man power (labor), mineral resources (nickel, gold), and tourism (natural attractions, cultural heritage).

Objectives of Public Finance

Management of Public Needs: Focus on healthcare, education, and infrastructure to ensure equal access to public goods like roads, schools, hospitals, libraries, and emergency services.
Economic Development: Emphasis on fostering economic growth through product development and leveraging remittances from overseas Filipino workers (OFWs) to stimulate local economy.
Removing Inequality: Awareness and addressing inequalities in resource distribution and access to services are crucial.
Maintaining Services: Sustaining the quality and availability of public services is essential for overall societal function.

Foreign Direct Investment (FDI)

Increased foreign investment leads to job creation and a diversified economy.
A thriving investment environment enhances opportunities within the local market, improving service availability.

Key Resources of the Philippines

Abundant resources include skilled labor, mineral wealth, and tourism potential.
Example: Foreign companies, like Grace Corporation, investing in the Philippines can provide job opportunities and improved service offerings.

Importance of Public Finance

Understanding public finance is essential for effectively managing public needs and services, promoting equitable economic growth, and ensuring stability in society.
The flow of money within the economy is a critical aspect, as diminished demand for products can disrupt overall financial circulation.

Description

This quiz covers the essentials of public finance, focusing on the funding and maintenance of public goods such as infrastructure, schools, and emergency services. It also discusses how interest rates affect tax deductions and economic development. Test your knowledge on the importance of public finance in community well-being.