The Philippine Economy: How Does an Economy Grow? PDF

CHAPTER 2 THE PHILIPPINE ECONOMY: HOW DOES AN ECONOMY GROW? REPORTERS JULIA MAE BUENAFE THE ENTREPRENEURIAL MIND GERALD CANCINO (GEESSP)...

CHAPTER 2 THE PHILIPPINE ECONOMY: HOW DOES AN ECONOMY GROW? REPORTERS JULIA MAE BUENAFE THE ENTREPRENEURIAL MIND GERALD CANCINO (GEESSP) ROSELYN CLAVERIA  CHAPTER 2 The Philippine Economy How does an economy grow? Learning Objectives orient people on the status of Philippine Economy identify factors that greatly affects the business establishments in our country explain how a specific economy grows discuss how entrepreneurship could help improve the quality of life The 01 03 Philippine The national composed of economy is business In economic knowledge, development, skills, values, Economy enterprises, household, and the government. and the quality of people are the main determinants economic growth. of 02 04 There are economic freedoms, There were inhabitants in the like free competition, free Philippines about 250,000 to choice of investments, and the 300,000 years ago. They prices, which are determined arrived from other countries by the interaction between through the land bridges. They demand and supply. had primitive economic existence. More civilized migrants came in later years.  05 07 The The Philippines was a slave of three colonial masters: the United Under the Martial rule, the friends of the Dictator controlled Philippine States, Japan, and Spain. Philippine business. Democracy was Nevertheless, the Chinese dominated restored finally upon the the retail trade even before the assumption of Corazon Aquino as Economy Spanish time. The Spanish rule president. Under her introduced the tobacco monopoly and administration, the engine of galleon trade for the benefits of economic development has been top-ranking Spanish citizens. assigned to the private business Similarly, the Americans exploited sector. The Ramos government has our agricultural economy. Japan sustained most of the good programs completely ruined our economy. of the Aquino administration. 06 08 The Philippine Government got its The national government, in its political independence in 1946, but effort to alleviate poverty, has been not economic independence from the promoting the growth of US. The import control program of entrepreneurship. It has several President Carlos Garcia gave a financial and technical assistance breathing space for Filipino programs for the poor who are entrepreneurs. However, this did interested in putting up their micro not last because the US had its own businesses. Even some NGOs are way of dominating the Philippine actively involved in entrepreneurial economy. projects for the poor.  The Ro le of Entrepre n eu rship in Economic Development The Role of Entrepreneurship in Economic Development Entrepreneurship offers an economical and faster method of 1 distributing goods and services that accelerates economic development. 2 Entrepreneurship is capable of generating more jobs, income, goods, and services. 3 Entrepreneurship improves the quality of life. 4 Entrepreneurship contributes to more equitable distribution of income, and therefore, eases social unrest. The Role of Entrepreneurship in Economic Development Entrepreneurship utilizes and Entrepreneurship brings social 5 mobilizes resources country productive. to make the 6 benefits through the government. Economic development is a process, while economic growth is a product of Entrepreneurship has several economic development. Both economic definitions. Any person who takes the and non-economic factors constitute risks and invests his resources to 7 8 the determinants of economic make something new or better is development. In less developed engaged in entrepreneurship. This countries, economic development refers applies not only to business, but to the progressive process of also to social services. improving human conditions by reducing or eliminating poverty, disease, injustice, illiteracy, and exploitation. The Role of Entrepreneurship in Economic Development 9 Development of Growth Theories RICARDIAN THEORY LAISSEZ-FAIRE THEORY KEYNESIAN THEORY This is the theory of David explains that the government explains that the government Ricardo focusing on should not Interfere in should play the key role in agriculture playing the major economic activities. economic development. role in economic development. KALDOR THEORY by Nichols Kaldor, maintains HARROD-DOMAR THEORY that the key factor is INNOVATION THEORY conceptualized by Sir Harrod technology. This theory developed by Joseph of England and Prof. Domar of explains that the application Schumpeter, stresses the role the U.S., claims that more of modern technology in the of innovators or entrepreneurs products can be produced production of goods and in economic development. through the use of machines. services has been responsible for the economic success of the highly developed countries. The Role of Entrepreneurship in Economic Development The government can support The contributions of entrepreneurship entrepreneurs from their various are: assistance programs on the following: 1) development of new markets, Peace and Order, Political Stability, 10 2) discovery of new sources of materials, 12 Price Stability, Taxes, 3) mobilization of capital resources, Infrastructures, Education and 4) introduction of new technologies, and Training, Public Administration, 5) creation of employment. Production Technology, Marketing Assistance, and Financial Assistance. There is a need for a Filipino We have seen that entrepreneurship entrepreneurial economy. This means directly affects the social and our productive resources should be in economic development of people. The the hands of Filipinos for their own more society engages in 11 13 benefits. A reasonable economic entrepreneurial undertakings, the more nationalism should dominate our it is likely to develop economically business culture for our own and socially. Our country still has a prosperity as a nation. Schools should long way to go in order to catch up stress the value of entrepreneurship with more developed countries. based on just economic nationalism.  A How does an economy Theories of economic growth may be classified into three broad groups. grow? 1 One group consists of theories viewing economic growth as a natural and inevitable process. The second group of theories explains economic development as a rational process brought about 2 when men environment respond to opportunities in the so as to promote their own self- interest or social welfare. The last group of theories views economic 3 development as a result of seemingly economically irrational yet psychologically and sociologically satisfying activities of enterprising men. We shall label these groups as: general, economic, and socio-psychological theories.  How does an economy grow? B General explanations of economic development: (1) Economic development proceeds according to a master plan or "Law of Nature." (2) Economic development is brought about by an "Invisible Hand." (3) Economic Development is brought about by "Cultural Diffusion. (4) Racial heritage determines the economic development of people. (5) Climatic conditions determine the energy levels of people and in turn its rate of development. (6) The challenge of he natural environment is responsible for the rise of civilization.  How Howdoes doesan aneconomy economygrow? grow? BC General Economicexplanations of economic explanations development: of economic development: 1 2 3 Technology improvements Entrepreneurship is an Population changes and division of labor important factor in affect development. lead to development. development.  How Howdoes doesan aneconomy economygrow? grow? BD Socio-Psychological explanations of economic development: 1 2 According to the work of Talcott Parsons, In contrast, members of traditional individuals in modern societies are: societies tend to: A. unemotional; A. be emotional; B. interested in themselves; B. be more interested in the general welfare of the community; C. able to relate to others in terms of their social roles or their ability to do a job; C. relate to others in terms of their unique qualities; D. known for their accomplishments; and D. be known for who they are; and E. able to relate to others in specific economic terms. E. tie up economic relationships with all sorts of other relationships involving kinship and political, religious, and other social structures.  How does an economy grow? Four Basic Kinds of Resources 1 2 3 4 Gross Gross Domestic National Product (GDP) Product (GNP) GDP (known as Gross Domestic Product) GNP (known as Gross National Product) measures the total value of all goods measures the total value of all goods and services produced within a country's and services produced by the residents borders during a specific time period, of a country, whether the production regardless of who owns the production takes place within the country or assets. It focuses on the location of abroad. It focuses on the ownership of production. production. THANK YOU!