ENTREP CHAPTER 2

The Philippine Economy:

1. Sectors of the Economy – Composed of business enterprises, households, and government.

2. Economic System – A market economy or free enterprise economy.

3. Economic Development Factors – Quality of people (knowledge, skills, and values) is key to growth.

Philippine Economic Development:

1. Early Inhabitants – Settled in the Philippines 250,000 to 300,000 years ago, practicing hunting, fishing, and barter.

2. Colonial Influence – The Philippines was ruled by Spain, the US, and Japan, each exploiting the country’s resources for their benefit.

The Colonial Rule:

1. Spanish Rule – Dominated by the Chinese in retail; the Spanish introduced encomiendas, galleon trade, and tobacco monopoly, benefiting colonial masters.

2. American Rule – Free trade set up by the Payne-Aldrich Act in 1909; exploitation of natural resources by American businessmen.

3. Japanese Invasion – Driven by economic problems like population growth and raw material shortages; led to scarcity of goods and services.

4. Economic Impact – High inflation, halted production, and scarce goods during Japanese occupation.

The Republic: 1946-1972

1. Political Independence – Granted on July 4, 1946, but the US still influenced political and economic policies.

2. Bell Trade Act (1946) – Allowed American exploitation of Philippine resources in exchange for war damage payment.

3. Filipino First Policy (1958) – Introduced by President Carlos Garcia to prioritize Filipino businesses.

4. Import and Exchange Control Abolition (1960) – Under President Diosdado Macapagal.

5. Economic Issues (1965) – President Ferdinand Marcos highlighted distressed industries, unemployment, and heavy US debt.

The Martial Law Regime:

1. Economic Decay – Led to the declaration of Martial Law with US support.

2. Financial Reforms – Dominated by WB-IMF, focused on import liberalization, high interest rates, and tariff reductions.

3. Economic Devastation – Marked by political instability and economic deterioration, ending in 1986 with People Power.

The Aquino Administration:

1. Economic Recovery Priority – Focused on rural development and labor-intensive industries.

2. Development Plan Principles – Respect for human rights, social justice, poverty alleviation, and economic growth.

3. Major National Policy Thrusts – Market forces reliance, infrastructure provision, tax reforms, agrarian reform, and productivity improvement.

4. Decline in Economic Growth – In the last two years of the Aquino administration.

The Ramos Government:

1. Continuation of Aquino Policies – Inherited political stability, focusing on energy, peace, order, and local government unit strengthening.

2. Business Growth – Encouraged local and foreign investments, leading to job creation and increased incomes.

Fundamental Economic Problems:

1. Resource Scarcity – Limited resources and unlimited human needs.

2. Low Labor Wages – Contributing to poverty.

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

The Entrepreneurial Economy:

1. Free Enterprise System – Dominated by entrepreneurs, who are risk-takers and manage their own businesses.

2. Government Support – Financial and technical assistance for small-scale and micro-businesses.

3. Utilization of Resources – Encourages training the poor to become entrepreneurs, transforming idle natural resources into useful products.

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

This format is suitable for an enumeration and identification test.