UNIT 1: THE PERSPECTIVE OF ENTREPRENEURSHIP

TITLE OF THE LESSON: The Philippine Economy

DURATION: 3 hours

INTRODUCTION

Over the years, substantial improvements in the Philippine economy have been

brought by infrastructures, investments, partnerships with other countries, etc.

Businesses play a significant role in the growth and development of many countries,

specifically in the Philippines. As claimed by many studies, businesses provide job

opportunities and income to the people. With this, before having a thorough discussion

on the importance and contribution of businesses in the Philippine economy, let us first

talk about the Philippine economy's situation, its history, and some fundamental

economic problems that could hinder the growth of businesses and the economy.

OBJECTIVES

At the end of the lesson, the students are expected to:

1. analyze the situation of the Philippine economy;

2. understand the process of economic development in the Philippines; and

3. familiarize the fundamental economic problems.

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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.

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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 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

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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 government to realize later that our independence was meaningless. With this, the

United States still influenced our political and economic policies.

o 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.

o The Aquino Administration from 1986 – 1992.

▪ Respect for human rights

▪ Promotion of social justice

▪ Wiping out poverty

▪ Attainment of economic growth

▪ Market economy

o 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

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 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. 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.

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