ENTREP CHAPTER 2

Sectors of the Economy

Composed of business enterprises, households, and government.

Economic System

A market economy or free enterprise economy.

Key factor in Economic Development

Quality of people (knowledge, skills, and values) is key to growth.

Early Inhabitants of the Philippines

Settled 250,000 to 300,000 years ago, practicing hunting, fishing, and barter.

Colonial Influence in the Philippines

The Philippines was ruled by Spain, the US, and Japan, each exploiting the country’s resources.

Spanish Rule

Dominated by Chinese in retail; introduced encomiendas, galleon trade, and tobacco monopoly.

American Rule

Free trade set up by the Payne-Aldrich Act in 1909, focused on exploiting natural resources.

Japanese Invasion

Driven by economic problems like population growth and raw material shortages.

Economic Impact of Japanese Occupation

High inflation, halted production, and scarcity of goods.

Political Independence of the Philippines, 1946

Granted on July 4, 1946, but still influenced by the US.

Bell Trade Act (1946)

Allowed American exploitation of Philippine resources in exchange for war damage payment.

Filipino First Policy (1958)

Introduced by President Carlos Garcia to prioritize Filipino businesses.

Import and Exchange Control Abolition (1960)

Implemented under President Diosdado Macapagal.

Economic Issues of 1965

Highlighted distressed industries, unemployment, and heavy US debt under Ferdinand Marcos.

Economic Decay (Martial Law Era)

Led to Martial Law declaration, supported by the US.

Financial Reforms during Martial Law

Dominated by WB-IMF, focused on import liberalization and tariff reductions.

Economic Devastation by 1986

Marked by political instability and economic deterioration.

Economic Recovery Priority (Aquino Administration)

Focused on rural development and labor-intensive industries.

Development Plan Principles (Aquino)

Respect for human rights, social justice, poverty alleviation, and economic growth.

Major National Policy Thrusts (Aquino)

Market forces reliance, infrastructure provision, tax reforms, and productivity improvement.

Decline in Economic Growth (Aquino's Last Two Years)

Experienced a downturn in economic performance.

Continuation of Aquino Policies (Ramos Government)

Inherited political stability focusing on energy and local government units.

Business Growth under Ramos

Encouraged investments leading to job creation and increased incomes.

Fundamental Economic Problems

Resource scarcity, low labor wages, and high unemployment.

Resource Scarcity

Limited resources versus unlimited human needs.

Low Labor Wages

Contributing factor to poverty.

Unemployment in the Philippines

The biggest issue, causing many Filipinos to seek jobs abroad.

Free Enterprise System

Dominated by entrepreneurs, who are risk-takers managing their businesses.

Government Support for Entrepreneurs

Provides financial and technical assistance for small-scale and micro-businesses.

Utilization of Resources

Encourages training the poor to become entrepreneurs and transform idle resources.

Human Capital

The key to economic growth lies in the people’s values, skills, and knowledge.