LESSON PROPER/COURSE METHODOLOGY
The Philippine Economy
The Philippine national economy is composed of business enterprises,
households, and the government. Business Enterprises are said to be the leading
provider of goods and services for the people. In many studies, it is claimed that business
enterprises' existence helps alleviate poverty and gives employment to jobless people.
Examples of business enterprises include sole proprietorship, partnership, and
corporations. Households consume goods and services. In Economics, we are
considered consumers even if we do not buy every day at a store, or even if we just stay
at our homes, we still consume water, electricity, and food. Consumers are considered
as the King of Producers. For producers, do everything to produce what the consumers
are demanding. Meanwhile, the Government is responsible for collecting taxes, promoting
stability and growth, and regulating and controlling the economy.
The Philippine national economy has three major economic sectors. First is the Industry
sector, where the automotive, textiles, electronics, and food processing are the main
products. Second is the Service sector. The service sector which focuses on construction,
transportation, wholesale and retail trade, communication, insurance, and financing. The
third sector is the Agriculture sector which is the primary provider of food resources in the
Philippines and in other countries. Rice, corn, coconut, sugarcane, bananas, mangoes,
hunting, and forestry are the examples under the agriculture sector. The strength or
weaknesses of one sector affects the other sectors because of their interdependence.
However, it is the government that provides leadership in improving the economy.
The Philippines has a market economy or free enterprise type of economic system.
This means economic freedoms, like free competition, free choice of investments, and
interaction between demand and supply, determine prices.
Demand is the consumers' willingness to buy goods and services at a given price,
place, and time, while Supply is the consumers' willingness to sell goods and services at
a given price, place, and time. Under a market economy, everyone can buy and sell the
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goods and services they desire at their chosen price, place, and time. In this part, the
government's role is to extend support by giving financial assistance, training and
programs, and formulating policies that could help achieve economic growth.
Unfortunately, the Philippine economy has not developed much when it comes to people's
lives due to the traditional ways and slow development in our agricultural economy. Also,
most of the Philippines' businesses are owned by foreigners, from the production of the
goods and services to marketing and distribution, the foreigners control it. Hence, grinding
poverty has not left us.
History of the Philippine Economic Development
About 250,000 to 300,000 years ago, there were already inhabitants in the
Philippines. They came from other countries in Asia through land bridges, and over the
long years, many other foreign groups settled in the Philippines, and they lived by hunting,
fishing, and food gathering. Later civilized migrants introduced primitive agriculture and
handicrafts. The barter system was also practiced. This time, people were no longer
nomadic; they established permanent settlements, then trade with other nations came.
Under the Colonial Rule, the Philippine became the slave of three colonial masters:
Spain, USA, and Japan. For more than three centuries, we were under Spanish rule and
about a half a century under the American Regime. Japan then invaded the Philippines
for economic reasons. The Chinese ruled the retail trade business even during the
Spanish time. The Chinese populated tondo, Binondo, Santa Cruz, and Parian. The only
economic share of the Spanish rule was the encomiendas, galleon trade, and tobacco
monopoly. All these benefitted the colonial masters while the Filipinos were exploited.
Under the American regime, many Filipinos thought that the coming of the Americans
was a great blessing. At that time, the marvelous growth of factories in the US created
big problems. The Philippine economy was at its worst during the Japanese time because
goods and services were extremely scarce.
During the Republic from 1946 – 1972, the United States granted our political
independence on July 4, 1946. Filipinos rejoiced and expressed their gratitude to the US
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government to realize later that our independence was meaningless. With this, the United
States still influenced our political and economic policies.
• The Martial Law Regime from 1965 – 1986. Many infrastructures were created
in this regime like the PICC, Philippine Heart Center, Lung Center of the
Philippines, Lung Center of the Philippines, and Nayong Pilipino.
• The Aquino Administration from 1986 – 1992.
✓ Respect for human rights
✓ Promotion of social justice
✓ Wiping out poverty
✓ Attainment of economic growth
✓ Market economy
• The Ramos Government from 1992 – 1998. In this period, people
empowerment and global competitiveness was the main highlight.
Fundamental Economic Problems
1. Scarcity – all countries have economic problems. We have economic problems
because our resources – money, materials, and machines – are limited while our
human needs are unlimited. There are three reasons why we experience scarcity.
First is overpopulation; from the beginning, our resources are limited, and the
number of people is increasing every year. Therefore, the resources are not
enough for the growing population. The second reason is unjust distribution, where
people who need the resources the most end up getting little resources or nothing
at all, and those who have many resources tend to get more of the resources. The
third is because naturally, our scarce resource decreases.
2. Unemployment – is the most significant economic problem in our country. People
who are abled willing cannot find jobs. Hundreds of thousands of Filipinos like to
work in other countries for lack of job opportunities in our own country.
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Unemployment creates social problems such as housing, health and sanitation,
prostitution, robbery, etc. Jobless people go to cities to search for jobs. Most of
them cannot get jobs, so they become squatters. Moreover, to survive, they are
most likely to commit social crimes.
3. Poverty – the grim faces of poverty are all around us. Dirty individuals, young and
old, are begging in busy streets.
