BASIC ECONOMIC PROBLEMS
AND THE PHILIPPINE SOCIO
ECONOMIC DEVELOPMENT IN
st
21 CENTURY
- UNEMPLOYMENT
-POVERTY
-POOR QUALITY OF
INFRASTRACTURE
-INCOME INEQUALITY
-INFLATION
• UNEMPLOYMENT
COMMON CAUSES
-The number of people entering the
job market has been greater than the
number of jobs created.
-The rural urban migration increases
due to employment opportunities.
- The number of graduates have been
increasing over the years.
RURAL TO URBAN MIGRATION
• Few services
• Lack of Job Opportunities
• Poor transport links
• Natural disasters
• Low paying salaries
• Better Job Opportunities
• Advance High Technology
• Better transportations
• Improve living conditions
• High paying salaries
WHAT CAN BE DONE TO SOLVE
UNEMPLOYMENT PROBLEMS
1. Appropriate economic policies for labor-intensive
industries.
• 2. Improve the educational system of the country
especially in the rural areas
• 3. Minimize rural-urban migration by improving the
economic environment in rural areas.
•
WHAT CAN BE DONE TO SOLVE
UNEMPLOYMENT PROBLEMS
• 4. Proper coordination between government and the
private sector to solve the problem of job mismatch.
• 5. Slowing population growth. Philippine growth must
increase faster than the population. Limit the size of
families.
• 6. Provision of more investment opportunities to
encourage local and international investment.
POVERTY COMMON CAUSES
•Increase in the cost of living
•Unemployment
•Income inequality
•Increase in population
WHAT CAN BE DONE TO SOLVE THE
POVERTY PROBLEM?
• 1. Reduce unemployment
• 2. Appropriate policy on labor income
• 3. Provision of unemployment benefits for those who
will be unemployed due to natural or man made
calamities. Ex. Typhoon, Bombing of terrorists,
Earthquake
WHAT CAN BE DONE TO SOLVE THE
POVERTY PROBLEM?
• 4. Increase social services like education, health
care and food subsidies for sustainable poverty
reduction.
POOR QUALITY OF INFRASTRUCTURE
• 91 OUT OF 144 COUNTRIES ON POOR INFRASTRUCTURE QUALITY
• LOST ABOUT $250 BILLION IN ECONOMIC GROWTH
WHAT CAN BE DONE TO IMPROVE THE
QUALITY OF INFRASTRUCTURE?
• 1. The government shall implement fiscal reform program
• 2. Continue reform in key sectors- particularly power, roads and
water – to improve cost recovery, competition, and institutional
credibility and to sharply reduce corruption.
• 3. Improving central oversight of the planning and coordination of
investments
• 4. Focus on investments through public-private partnerships to
achieve faster delivery of service
INCOME INEQUALITY
• Income is the money that an individual earned from
work or business received from investments.
•Income inequality – refers to the gap in income that
exists between the rich and the poor.
MAJOR CAUSES OF INCOME INEQUALITY
1. Political culture “ palakasan” “utang na
loob” Ex. Voting for the wrong person
during election
2. Indirect taxes – poor people shoulder this
taxes like the Value Added Tax – 12%
3. Income Taxes Minimum Wage – No Tax A
little more than minimum wage – 32% TAX
WHAT CAN BE DONE TO SOLVE THE
PROBLEM OF INCOME INEQUALITY
• 1. Policies to enforce progressive rates of direct taxation on
high wage earners and wealthy individuals.
• 2. Direct money transfers and subsidize food programs for
the urban and rural poor.
• 3. Direct government policies to keep the price of basic
commodities low
• 4. Raise minimum wage
• 5. Encourage profit sharing
INFLATION
• -refers to the sustained and continual increase in the prices of good
sand services. Economic growth as indicated by increasing GDP, is the
factor in bringing about inflation. Hyperinflation or very high inflation
has negative effect in the economy. A period of high inflation ,slow
economic growth and high unemployment is called stagflation.
• There are four basic strategies that central banks
have used to control and reduce inflation:
• exchange-rate pegging;
• monetary targeting;
• inflation targeting; and.
• inflation reduction without an explicit nominal anchor,
which, for want of a better name, might best be
referred to as 'just do it'.
•THANK YOU FOR LISTENING
EVERYONE!
PREPARED BY : FROILAN ARROJADO