East Negros Academy, Inc.

Learning Module for Applied Economics (Week 3&4) Page 1 of 12

EAST NEGROS ACADEMY, INC.

Toboso, Negros Occidental

LEARNING MODULE FOR

APPLIED ECONOMICS
(GAS 11)
NAME OF LEARNER:

Prepared by:
JOEBERT T. AGRAVIADOR
Teacher

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 2 of 12
STUDY SCHEDULE
DEADLINE LEARNING ACTIVITIES
COMPETENCY
September 21, 2021 Examine the utility Dip:
and application of 1. Guess the Picture!
applied economics
to solve economic Deepen:
issues and problems 1. Presents the economic
issues and problems.

Do:
1. Differentiation

Deepen:
1. Explain Me!

MODULE 3&4 ECONOMIC

ISSUES AND PROBLEMS
LEARNING OBJECTIVES
1. Define poverty.
2. Identify the basic economic issues and problems.
3. Reflect the Philippines Economic problems.

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 3 of 12

DIP
Activity 1: Guess the Picture!
Directions: Guess the picture by unscrambling the letters below the
picture and give a short description.

1. KEWA FARSNIURTCURET

2. OVTERPY

3. OOFD CUSEYTIR

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 4 of 12

4. ODREMN CHTEONYGOL

5. DIPAR OPPUALNIOT GOWRTH

DEEPEN
Activity 1: Let’s go deep!
Read and Understand.
Basic Economic Problems Confronting the Development of the
Philippines in the 21st Century
Typical of a growing economy, the Philippines is confronted with several
issues and problems which prevent its citizens from realizing a meaningful
life, on the one hand, and in pushing its socioeconomic development, on the
other. A sizable proportion of its people have insufficient resources to afford
the basic goods and services, limited freedom in their choices of employment
and consumption, and a low self-esteem that weaken its people. Meanwhile,
the quality of human resources as well as its inadequate infrastructure are
constraining the economy to grow faster. In this section we will discuss some
of the basic economic problems confronting the Philippine economy. We will
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without prior written permission from the school.
 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 5 of 12
relate them to the insufficiency of resources, limited freedom, and the
formation of low dignity among our people. In addition, these issues and
problems will also be linked with the challenges that face our nation as it
moves forward to a more prosperous Philippines in the 21st century.
ECONOMIC ISSUES AND PROBLEMS
POVERTY AND UNEQUAL DISTRIBUTION OF INCOME
Poverty is a restricting condition experienced by millions of families that
prevents them in attaining the minimum level of consumption for subsistence
living.
There are two categories of poverty:
1. Absolute Poverty – is the lack of income to buy the basic food and
necessities for subsistence living. This is measured in terms of poverty
threshold and poverty incidence.
 Poverty threshold – is the income needed to purchase these
minimum nutritional requirements and other basic necessities for
daily survival.
 Poverty incidence – is the proportion of households in the
country with family income lower than the poverty threshold or
poverty line.
2. Relative Poverty – refers on the structure on how the national
income is being distributed among households in an economy. It is
measured by the Lorenz curve and the Gini coefficient.
 Lorenz Curve – shows the share of the various household
groups (ranked from the poorest to the richest) on the total
national income.
 Gini Coefficient – is a measure of income inequality derived
from the Lorenz curve.
DEMOGRAPHIC CHANGES AND ITS ECONOMIC IMPLICATIONS
The population of the Philippines has been increasing over several
decades. In 1960, the country has enumerated 27 million people. In 2015,
the population estimate for the country has reached 102 million people. After
65 years, we have increased our population by 75 million. Because of this
demographic change, the country is now considered the twelfth (12th) largest
country in the world. Although the population growth rate has fallen to 1.9%
between 2000 and 2010, the rate is still one of the highest in the region.

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 6 of 12
One of the implications of an expanded population is the enlargement
of the labor force in the future. If the economy is growing very fast, this
increase in labor may not be an issue. However, if the economy is not growing
as fast as the growth of the labor force, the problem of unemployment may
ensue. In addition, if the expanded labor force is not well-trained due to
limited resources of the family and the government, this may end up as
unemployed manpower. An expanded labor force set in an environment with
limited employment opportunities in the locality may push people to migrate
internally and externally.
LOW INVESTMENT IN HUMAN RESOURCE DEVELOPMENT
The economic transformation of any country can be traced to a certain
extent on its human resources. Although the size of the labor force can have
positive contributions on economic growth, the quality of human resources
has greater growth impact. A highly trained workforce is more productive
than a pool of unskilled workers. Skills training and investment in education
can shape human capital of a nation. But modern economies go beyond
formation of human capital and pursue the development of knowledge capital
in pushing their economies forward. Knowledge capital is formed through
heavy investments in higher education, science and technology, and research
and development.
Even if education and skills training have positive effects on the future
income streams of individuals, and the government allots billions of pesos in
the provision of education, millions of Filipino youth are still out of school and
have limited education and training. As explained in an earlier section, this
may be due to the huge opportunity costs of school attendance. Even if public
provision of basic education is almost free, poor households still incur
sacrifices or opportunity costs as their children are taken away from home
chores and farm duties to attend school. As a consequence, school
attendance and retention among children in poor households tend to be low.
With low school participation, many of these unschooled children end up with
limited employable skills which in turn can contribute to the problem of
unemployment when they become adults.
WEAK INFRASTRUCTURE
Similar to the role of human capital on economic growth, physical
infrastructure facilitates and expands transactions that likewise fuel economic
growth. We need roads, bridges, and other networks in transportation and
communication because these grids link economic sectors tightly. In addition,
a. well-developed energy infrastructure can be relied in supplying cheap
electric power to households, businesses, and other sectors. With these
efficient linkages transaction costs of many sectors is lowered thus creating
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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 7 of 12
greater income that brings about faster economic expansion. Although
there is recognition on the vital contributions of a strong infrastructure on the
economy, many low-income countries including the Philippines have weak
infrastructure. The inadequate infrastructure of a country has debilitating
effects on the individuals, households, business firms, and economy. Take
the case of the transportation system in Metro Manila. With more than 12
million people there 1s no efficient mass transit system in the megacity. As a
consequence, we have a serious traffic problem in major thoroughfares. The
huge traffic problem is very wasteful as it makes workers less productive
since they spend more time on the road commuting. Aside from reducing the
productivity of workers, congestion in our roads has also reduced national
income measured in terms of delayed deliveries, missed business
opportunities, and huge energy consumption.
The major reason for this inadequate expansion of the infrastructure is
the insufficient funds to finance the huge costs of constructing these
networks. Billions of pesos are needed to construct road projects and
highways. Construction costs of energy plants to supply electricity are also
very prohibitive. Putting up a subway for a mass transit system in a metropolis
is just like constructing several tall buildings below the ground for a distance
of several kilometers which is very costly.
PURSUING FOOD SECURITY
With more than 100 million people to feed, the concern of the
government is to ensure food security for all. This goal has been interpreted,
however, as food self-sufficiency in the light of the huge amount of arable
land devoted to the production of food grains – rice and corn. In addition,
food sufficiency 15 intimately linked with the development of agriculture as a
major economic sector of the country contributing over 11% to gross
domestic product and absorbing almost a third of labor force.
The importance of agriculture in our economy emanates from its role as
the main supplier of food grains to the growing population. More than 50%
of the more than 13 million hectares of lands for agricultural crops is devoted
to the planting of rice and corn. In addition, a substantial portion of our
people, many ot them poor, is dependent on this sector. Hence, the aim of
uplifting the productivity of the sector and the income of the farmers and
fisherfolk is an important social objective. A sluggish agriculture may result
an unstable society with the spread of poverty while insufficiency in food may
invite inflationary pressures or dependence on imports. On the other hand, a
vibrant agriculture has implications on the poverty reduction and the
development of other economic sectors.
But to equate food security with food self-sufficiency is problematic. We
know that food self-sufficiency may benefit the millions of rice and corn
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without prior written permission from the school.
 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 8 of 12
farmers as well as traders in the country but at the expense of the consumers
and other economic sectors. Pursuing food self-sufficiency by securing food
grains domestically may result in high prices for food grains in the light of the
lower prices in other countries in the region including Vietnam and Thailand.
Since food is the leading component of household expenditure, higher food
prices may inflict harm on the industrial and services sector whose workers
will demand higher wages as a result of higher food prices.
SLOW ADOPTION OF MODERN TECHNOLOGY
One common feature that prevents these economic sectors in realizing
their growth potentials is the slow adoption of modern technology in their
processes of production and distribution. Technology is the manner of
processing raw materials or intermediate inputs into transformed outputs
through the use of factor inputs. A technology that is biased in the use of
labor is called a labor-intensive technology while a capital-intensive
technology refers to use of more capital relative to labor in the production
process.
In agriculture, many of our farmers are still using traditional farming
techniques instead of advanced ones because of cheap labor brought about
by the surplus of manpower in the sector. Conventional seeds are still utilized
that are low yielding instead of the high yielding improved seeds. Information
on various ways of expanding nonfarm agricultural activities that can enhance
farm income is limited and not fully exploited. Aside from the cost of
implementing modern technology in the farm, these productivity impairing
features of agriculture can be attributed to very low research and
development in the sector and the limited agricultural extension services
given to the farmers.
In the industrial sector, the share of value added of the industrial sector
has remained a third of the gross domestic product of the country for the
past four decades. Similarly, the share of manufacturing, the biggest
component of the industrial sector, has stagnated at around 23 to 25% of
GDP during the same period. This record pales in comparison with the
economies in the region like Thailand and China that have economically
transformed characterized by substantial increases in the share of
manufacturing in the GDP of their economies over time.

ENVIRONMENTAL SUSTAINABILITY AND THE COUNTRY’S

DEVELOPMENT THRUST
The capacity of our economy to maintain its productive capacity and
pursue its development goals will be constrained by the prudent use of
natural resources for sustainable development. The environment is part of
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any form or by any means (electronic, mechanical, photocopying, recording, or otherwise)
without prior written permission from the school.
 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 9 of 12
natural resources where we derive income from the utilization of its wealth.
However, excessive use of our natural resources may compromise its ability
to provide income and other benefits in the future. In the agricultural sector
the cultivation of lands for crop production, the use of water and marine
resources and the harvesting the fruits of the forests can put pressures on
the capacity of our natural resources in generating income. Because various
types of natural resources are difficult to expand, the proper use of land, sea,
and forest should be undertaken in order to achieve a long term life for
agriculture as a source of income and employment for the country.
For example, the capacity of land resources to be productive rests on
the proper use of fertilizer and pesticides. Too much use of commercial
manufactured chemicals as fertilizers and pesticides can reduce the
productivity of lands for crop production. Meanwhile, overfishing can
drastically reduce marine resources that can be harvested in the future.
Excessive logging, on the other hand, accompanied by forest clearings forest
fire, and excessive pasturing can reduced our rain forest. With this reduction,
a number of endangered mammals and bird faunas can threaten our
ecological balance. In addition, forest degradation is one of the causes of
increasing floods and droughts in the country as well as massive erosion and
groundwater depletion.
Aside from overutilization of our natural resources, a sustainable
environment is threatened by wastes discharges by productive and
distributive activities of various sectors. In the industrial sector, the extraction
of minerals done by the mining industry can have the same environmental
effects similar to excessive logging In addition, it can destroy the productivity
of the water and marine resources nearby as it disposes its wastes. Similarly,
many manufacturing industries including cement and energy generating
plants can pollute the rivers and air with the disposal of its wastes.

DO
Activity 1: Differentiation
Directions: Differentiate the following:
1. Poverty threshold from Poverty incidence.

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 10 of 12
2. Lorenz Curve from Gini Coefficient.

3. Relative Poverty from Absolute Poverty

DEEPEN
Activity 1: Explain Me!
Directions: Explain the basic economic problems of the country.

1. Weak Infrastructure
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
2. Slow Adoption of Modern Technology
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________

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any form or by any means (electronic, mechanical, photocopying, recording, or otherwise)
without prior written permission from the school.
 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 11 of 12
3. Pursuing Food Security
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
4. Low Investment in Human Resource Development
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
5. Demographic Changes and its Economic Implications
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________
_________________________________________________

Rubrics for Explanation:

Very Satisfactory Satisfactory
Fair
(10) (8)
(5)
The idea is The idea is vague.
It is rich with ideas. good. Supporting
Principle of However, the details must be added
Content coherence and principle of to improve
cohesion is coherence and the paper.
observed. cohesion must
be observed.

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 East Negros Academy, Inc. Learning Module for Applied Economics (Week 3&4) Page 12 of 12
The paper is The paper should be
The paper has
Technicalities impressive for it written
minimal
(Subject- Verb observes the observing all the rules
grammatical
Agreement, Subject- Verb of
error.
Correct Agreement, Correct grammar.
Punctuation Capitalization,
Marks, Correct Correct
Capitalization, Punctuation marks,
and etc.) and other
grammatical rules.

REFERENCE/S
 Retrieved from:

 T. Tullao Jr. Applied Economics for a Progressive Philippines

(2016). pp 25-41. Phoenix Publishing House, Inc.

No part of this material may be reproduced, stored in a retrieval system, or transmitted in

any form or by any means (electronic, mechanical, photocopying, recording, or otherwise)
without prior written permission from the school.