Chapter 2 National Income Accounting PDF

I. NATIONAL INCOME ACCOUNTING Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING Measuring the performance of the economy is one of the main concerns of macroeconomics Licensure Exam...

I. NATIONAL INCOME ACCOUNTING Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING Measuring the performance of the economy is one of the main concerns of macroeconomics Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING GROSS NATIONAL PRODUCT (GNP) Is the market value or money value of all final goods and services produced by all nationals in the economy during a given period of time. Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING GROSS DOMESTIC PRODUCT (GDP) Measures the market value of all final goods and services produced within the boundaries of the Philippines, whether by Filipinos or foreign-supplied resources. Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING Characteristics of GNP/GDP: 1)It is a flow concept, measured as the quantity of final goods and services produced by the economy per period of time. 2) It is measured in monetary terms Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING 3).It includes goods and services bought for final use, not unfinished goods in their intermediate stages of production that are purchased for further processing & resale. Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING 4) It includes only final goods and services produced during the accounting year. 5) It is a measure of productive activities only Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  GROSS NATIONAL PRODUCT Nominal GNP/GDP measures the value of output in a given period in the prices of that period, or, as it is sometimes put, in current pesos. Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  GROSS NATIONAL PRODUCT Real GNP/GDP or GNP/GDP at constant prices measures changes in physical output in the economy between different time periods by valuing all goods produced in the two periods at the same prices, or in constant pesos. Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA PER CAPITA INCOME GDP POPULATION Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING NET NATIONAL PRODUCT (NNP) GNP – DEPRECIATION Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  NATIONAL INCOME ACCOUNTING NATIONAL INCOME (NI) NNP – INDIRECT TAXES Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA Approaches to GDP Measurement A. EXPENDITURE APPROACH In this approach, the GNP/GDP is computed by getting the sum of the final expenditures of the four major sectors of the economy. These major sectors include the following: Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA Approaches to GDP Measurement A. EXPENDITURE APPROACH Household – personal consumption expenditure (C) Businesses – private domestic investment (I) Government – government consumption expenditures (G) Foreign Sector – net exports (X – M) GDP = C + I + G + (X - M) Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA Approaches to GDP Measurement B. INCOME APPROACH GDP = W + R + i + P + IBT + D W = Wages, Salaries, and Supplements / Compensation of Employees R = Rental Income of Persons i = Net interest P = Corporate profits before taxes + Income of unincorporated enterprises IBT = Indirect Business Taxes, adjustments, stat discrepancy D = Depreciation (Overall) Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA Approaches to GDP Measurement C. INDUSTRIAL ORIGIN APPROACH GDP = AS + IS + SS AS = Agrifishery IS = Industry Sector SS = Services Sector Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA  Gross National Income and Gross Domestic Product, by Industry At Current Prices (in Million Pesos) At Constant 2018 Prices (in Million Pesos) 2020 2021 2022 2020 2021 2022 1. Agriculture, forestry, and fishing 1,828,424 1,954,487 2,103,198 1,780,391 1,775,210 1,783,499 2. Industry 5,098,232 5,607,689 6,436,937 5,115,316 5,551,622 5,914,703......Mining and quarrying 137,060 185,371 280,250 137,493 144,498 152,185......Manufacturing 3,169,921 3,424,049 3,796,904 3,266,302 3,556,426 3,730,403......Electricity, steam, water and waste management 611,051 650,961 746,142 589,213 615,591 647,257......Construction 1,180,199 1,347,309 1,613,641 1,122,308 1,235,106 1,384,859 3. Services 11,024,918 11,848,438 13,484,380 10,642,137 11,213,252 12,245,428......Wholesale and retail trade; repair of motor vehicles and motorcycles 3,317,371 3,502,794 3,987,519 3,275,537 3,413,864 3,710,868......Transportation and storage 551,045 605,204 806,522 515,149 547,807 678,561......Accommodation and food service activities 253,013 285,187 395,073 231,811 248,404 328,180......Information and communication 593,039 640,034 695,675 585,185 638,971 689,868......Financial and insurance activities 1,823,979 1,963,148 2,224,346 1,769,952 1,854,248 1,986,719......Real estate and ownership of dwellings 1,081,612 1,139,221 1,249,334 1,031,275 1,054,235 1,110,216......Professional and business services 1,137,558 1,222,489 1,350,601 1,068,769 1,136,507 1,240,113......Public administration and defense; compulsory social activities 950,590 1,027,079 1,114,045 911,188 959,685 998,321......Education 719,494 796,472 883,972 687,610 744,159 799,264......Human health and social work activities 325,260 385,750 411,713 306,903 351,472 364,343......Other services 271,957 281,061 365,579 258,758 263,899 338,975 Gross Domestic Product 17,951,574 19,410,614 22,024,515 17,537,843 18,540,084 19,943,630 Net primary income from the rest of the world 1,360,427 690,388 1,298,327 1,320,173 639,322 1,133,701 Gross National Income 19,312,001 20,101,002 23,322,842 18,858,016 19,179,406 21,077,331 Source: Philippine Statistics Authority (PSA) Gross Domestic Product (At Constant 2018 Prices) Year-on-Year Growth Rates (in percent) Q1 2018-2019 to Q2 2022-2023 PHILIPPINE GROSS DOMESTIC PRODUCT (CONSTANT 2015 US$) 2022: P24.28 TRILLION AGRICULTURE, FORESTRY, AND FISHING, VALUE ADDED (% OF GDP) 2023: 9.40% Kringle Marie P. Mercado, L.Agri, MSc, MBA | Licensure Exam for Agriculturist Kringle Marie P. Mercado, L.Agri, MSc, MBA | Licensure Exam for Agriculturist Kringle Marie P. Mercado, L.Agri, MSc, MBA | Licensure Exam for Agriculturist AVERAGE DECADAL GROWTH OF AGRICULTURE AND GDP (%), 2018 PRICES, 1960–2019  GDP SHORTCOMINGS ▪ Non-market Transactions – homemade production, childcare, homemade services like repairs and maintenance ▪ Distribution, Kind, and Quality of Products ▪ Underground Economy ▪ Economic Bads Licensure Exam for Agriculturists // Review Materials // Kringle Marie P. Mercado, L.Agri, MSc, MBA