national development

AP 10 - Economics: National Development

Unit 7: National Development and Sectors of the Philippine Economy

Transfer Goal

• Manifest an understanding of the value of cooperation, unity, and interdependence in achieving economic stability and development.

Enduring Understandings

• Different economic sectors require effective government policies to promote sustainable economic growth.
• Balanced development among different sectors of the economy is essential for long-term economic stability.
• Strong economic sectors help create employment opportunities and reduce poverty, leading to national development.
  1. Importance of cooperation in economic stability.
  2. Role of government policies in economic growth.
  3. Connection between balanced sector development and poverty reduction.

Essential Questions

1. What can the government do to address the country’s economic problems?
2. How does the economy grow?
3. Why is the level of productivity important in assessing the country’s economy?
4. What are the possible ways that the government can do to solve or reduce the country’s economic problems?
5. How is economic growth related to economic development?

Economic Growth

• Definition: Economic growth refers to the increase in the market value of goods and services produced in an economy over time.

• GDP Growth Data: Forecast for Q1 2025 projected at 6.93%, with other Southeast Asian countries having varying GDP growth rates as follows:

  • [Southeast Asia GDP Growth Data]
  • Major growth rates: 6.93%, 5.4%, 4.87%, 4.40%, 3.8%, 3.4%.

Gross Domestic Product (GDP)

• Definition: The total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

• Per Capita GDP: A financial metric calculated by dividing the GDP of a nation by its population.

  • Formula: $ext{Per Capita GDP} = \frac{ ext{GDP of the Country}}{ ext{Population of the Country}}$

Quarterly GDP Growth Analysis

• Philippine economic growth slowed to 3% in Q4 2025, reported as the weakest growth since pandemic slump. The quarterly GDP growth rates from Q1 2021 to Q4 2025 are as follows:
  • Q1 2021: 6.7%
  • Q2 2021: 7.0%
  • Q3 2021: 8.1%
  • Q4 2021: 7.9%
  • Q1 2022: 7.7%
  • Q2 2022: 7.5%
  • Q3 2022: 7.1%
  • Q4 2022: 6.4%
  • [Continuing the trend through Q4 2025 with data showing both growth percentages and contributing sectors].

Comparison of GDP Growth in Southeast Asia

• Assessment of the GDP growth rates of ASEAN countries from 2019 to 2025:
  • Analyzed data showed trends of economic growth among Indonesia, Singapore, Thailand, Vietnam, Malaysia, and the Philippines.
• Inferences: The graphical representation indicates significant trends and fluctuations in economic growth, revealing comparative economic performance in the region.

Measures of Economic Growth

1. Percentage rate of increase in GDP/Gross National Income (GNI).
2. Growth of the economy’s average output/income.
3. Theory of Purchasing Power Parity: When comparing across countries, GDP per capita must be presented in a single currency (often in US$) and adjusted for differences in consumer purchasing power and exchange rates.
   • Real GDP Growth Calculation: $ext{Economic Growth Rate} = 100 imes \frac{ ext{Current Period GDP} - ext{Previous Period GDP}}{ ext{Previous Period GDP}}$

Purchasing Power Parity (PPP)

• A theoretical exchange rate that enables purchasing the same amount of goods and services in every country.
• Application: Comparing the cost of a Big Mac across different nations to gauge relative cost of living.

Philippine Economic Outlook for 2025

• Inflation & Economic Growth Predictions:
  • Expectation of disinflation continuing due to falling rice prices and stable energy markets.
  • Anticipation of the Philippine Stock Exchange Index (PSEI) at 7,500, reflecting robust economic growth and improved risk premiums.
• Domestic demand expected to drive economic growth, though external demand threats may constrain growth in 2025.
• Predictions for the Peso to US Dollar exchange rates indicating a strengthening peso due to interest rate adjustments.

Economic Development

• Definition: Refers to improvements in dimensions of human welfare such as health and education, not just economic well-being.
  • Key measured dimensions include:
  • Life Expectancy: Average number of years citizens are expected to live.
  • Infant Mortality Rate: Number of children dying under age one per 1,000 live births.
  • Literacy Rate: Percentage of individuals capable of reading and writing.

Human Development Index (HDI)

• Definition: A composite index measuring a country’s progress in health (life expectancy), education (average and expected years of schooling), and standard of living (PPP-adjusted real GDP per capita).
• World Rankings and Index Values of countries such as Singapore, Malaysia, Thailand, Vietnam, and the Philippines, providing a broad perspective on human development levels.

Synthesis Questions

1. In comparing the Philippines with the most developed countries, which dimensions require improvement?
2. Suggested policies to address the development dimensions where the Philippines trails behind.
3. Evaluation of whether HDI comprehensively captures all aspects and levels of economic development, with reasonings.