Republic of the Philippines

Sorsogon State University – Bulan Campus

Bulan Sorsogon
Business Management Education Department

COMPILATION OF
REPORTS
(Economic Development)

Submitted by
Bachelor of Science in Accountancy

Academic Year 2022 – 2023

INTRODUCTION

Economic Development studies the transformation of emerging nations into more

prosperous nations. Strategies for transforming a developing economy tend to be unique
because the social and political backgrounds of countries can vary dramatically. Not only
that but the cultural and economic frameworks of every nation is different also, such as
women's rights and child labor laws. The development of a country has been associated
with different concepts but generally encompasses economic growth through higher
productivity, political systems that represent as accurately as possible the preferences of
its citizens,  factors such as health, education, working conditions, domestic and
international policies, and market conditions with a focus on improving conditions in the
world's poorest countries. Some aspects of development economics include determining
to what extent rapid population growth helps or hinders development, the structural
transformation of economies, and the role of education and healthcare in development.
They also include international trade, globalization, sustainable development, the effects
of epidemics, such as HIV, and the impact of catastrophes on economic and human
development.

These processes describe the State's capabilities to manage its economy, policy, society
and public administration. That is why, economic development policies attempt to solve
issues in these topics. With this in mind, economic development is typically associated
with improvements in a variety of areas or indicators such as literacy rates, life
expectancy, and poverty rates, that may be causes of economic development rather
than consequences of specific economic development programs. For example, health
and education improvements have been closely related to economic growth, but the
causality with economic development may not be obvious. In any case, it is important to
not expect that particular economic development programs be able to fix many problems
at once as that would be establishing unsurmountable goals for them that are highly
unlikely they can achieve
ACKNOWLEDGEMENT

The success of any project depends largely on the encouragement and

guidelines of many others. We take this opportunity to express our gratitude to the
people who have been instrumental in the success of this project.
We would like to show our greatest appreciation to our Professor, Mr. Gilbert Gile
who supported and helped us to finish this project. We can’t say thank you enough for
his tremendous support and help. Without his encouragement and guidance, this project
would not have materialized.
We would also like to express our gratitude towards our parents for their
encouragement which helps us in completion of this project and also for financial means
they gave us. Also to express our special gratitude and thanks to our blockmates and
friends who have willingly helped us out with their abilities.
We thank almighty God for giving us the courage and determination, as well as
guidance in completing this project despite of all the difficulties we encountered.
 TABLE OF CONTENTS
INTRODUCTION 2
ACKNOWLEDGEMENT 3
CHAPTER 1: GROWTH AND ASIAN EXPERIENCE 7
LEARNING OBJECTIVES......................................................................................................8
INTRODUCTION......................................................................................................................8
TOPICAL OUTLINE.................................................................................................................8
DISCUSSION...........................................................................................................................9
CONCLUSION........................................................................................................................16
CHAPTER 2: THE ASIAN CRISIS AND RECENT DEVELOPMENT 17
LEARNING OBJECTIVES....................................................................................................18
INTRODUCTION....................................................................................................................18
TOPICAL OUTLINE...............................................................................................................18
DISCUSSION.........................................................................................................................19
CONCLUSION........................................................................................................................25
CHAPTER 3: AGRICULTURE 26
LEARNING OBJECTIVES....................................................................................................27
INTRODUCTION....................................................................................................................27
TOPICAL OUTLINE...............................................................................................................27
DISCUSSION.........................................................................................................................27
CONCLUSION........................................................................................................................30
CHAPTER 4: INDUSTRIALIZATION AND STRUCTURAL CHANGE 32
LEARNING OBJECTIVES....................................................................................................33
INTRODUCTION....................................................................................................................33
TOPICAL OUTLINE...............................................................................................................33
DISCUSSION.........................................................................................................................34
CONCLUSION........................................................................................................................38
CHAPTER 5: INTERNATIONAL TRADE AND INVESTMENT 39
LEARNING OBJECTIVES....................................................................................................40
INTRODUCTION....................................................................................................................40
TOPICAL OUTLINE...............................................................................................................40
DISCUSSION.........................................................................................................................41
CONCLUSION........................................................................................................................46
CHAPTER 6: SAVINGS AND THE FINANCIAL SYSTEM 47
LEARNING OBJECTIVES....................................................................................................48
INTRODUCTION....................................................................................................................48
TOPICAL OUTLINE...............................................................................................................48
DISCUSSION.........................................................................................................................49
CONCLUSION........................................................................................................................58
CHAPTER 7: POPULATION 59
LEARNING OBJECTIVES....................................................................................................60
INTRODUCTION....................................................................................................................60
TOPICAL OUTLINE...............................................................................................................60
DISCUSSION.........................................................................................................................60
CONCLUSION........................................................................................................................63
CHAPTER 8: POVERTY AND INCOME DISTRIBUTION 64
LEARNING ACTIVITIES.......................................................................................................65
INTRODUCTION....................................................................................................................65
TOPICAL OUTLINE...............................................................................................................65
DISCUSSION.........................................................................................................................66
CONCLUSION........................................................................................................................69
CHAPTER 9: HUMAN RESOURCES DEVELOPMENT: A FOCUS ON EDUCATION
AND HEALTH 70
LEARNING OBJECTIVES....................................................................................................71
INTRODUCTION....................................................................................................................71
TOPICAL OUTLINE...............................................................................................................71
DISCUSSION.........................................................................................................................72
CONCLUSION........................................................................................................................77
CHAPTER 10: GLOBALIZATION AND THE NEW ECONOMY 78
LEARNING OBJECTIVES....................................................................................................79
INTRODUCTION....................................................................................................................79
TOPICAL OUTLINE...............................................................................................................79
DISCUSSIONS.......................................................................................................................79
CONCLUSION........................................................................................................................87
CHAPTER 11: THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENT IN ASIA
88
LEARNING OBJECTIVES....................................................................................................89
 INTRODUCTION....................................................................................................................89
TOPICAL OUTLINE...............................................................................................................89
DISCUSSIONS.......................................................................................................................89
CONCLUSION........................................................................................................................91
REFERENCES (Websites) 92
REFERENCES (Books) 96
CURRICULUM VITAE ………………………………………………………………………...98
 CHAPTER 1
GROWTH AND ASIAN
EXPERIENCE
LEARNING OBJECTIVES
1. Explain the growth experienced by the Asian.
2. Understand how the Asian growth and its contribution to their economic growth.
3. Identify the source of economic growth of the Asian countries.
4. Discuss the factors affecting the Asians economic growth.

INTRODUCTION
Asia, the biggest and most populous of the continents, has experienced the
fastest rate of global wealth growth since 1960. The economy of Asia comprises about
4.7 billion people (60% of the world population) living in 50 different nations.
Over a period of nearly 30 years, the economies of developing Asia1 have
impressively expanded. Real GDP in the region increased from approximately $3.3
trillion in 1980 to an estimated $24.5 trillion in 2009. Comparatively, the global economy
increased by only three times during the same time period, a difference of 7.5 times.
While the average global income increased by less than twofold during that time, real
per capita GDP more than quadrupled. Such strong, sustained growth has undoubtedly
increased incomes, helped millions of people escape poverty, and increased developing
Asia's influence on the global economy. While still below the global average, developing
Asia's per capita GDP is quickly catching up.
With that, this growth has not happened across the continent at the same rate.
The eastern half of Asia—ten countries, including China, Hong Kong, Indonesia, Japan,
Korea, Malaysia, the Philippines, Singapore, Taiwan Province of China, and Thailand—
put forth a better performance overall, though there were regional variations in
performance as well.
The western part of Asia grew during this time at a rate that was roughly equal to
that of the rest of the world. The Philippines had the worst performance, with annual per
capita growth of only about 2%, or about average for non-Asian nations. Better
performance was seen in China, Indonesia, Japan, Malaysia, and Thailand, which saw
growth rates of 3-5 percent.
As the region aids in bringing the world economy out of recession, Asia's
influence in the global economy has grown more profound than ever. Although it is
generally anticipated that Asia's economic growth will continue, it is unlikely that
economies like the PRC, India, and Viet Nam, which recently experienced very strong
growth, will continue to grow at such a rapid rate over the course of, say, the next 20
years. Thus, it would be intriguing to learn how the economic landscape of Asia will
change over the next two decades.

TOPICAL OUTLINE
A. The Growth Experienced by the Asian
● China slowdown deepens
● Financial conditions tighten
● Ramifications of war
● Rising prices
● Targeted fiscal support
● Integrated, multifaceted, tailored response
B. East Asian Miracle
 C. Main Characteristics of Countries in “East Asian Miracle”
D. Source of Growth of East Asian Economies
E. Measuring the Countries’ Economic Growth
F. General Fragility of Conclusions about the Nature of the Growth Process in East
Asia
G. Factors Affecting the Asian's Economic Growth
i. Population Development
ii. Migration
iii. Technology, Industrialization, and Labor replacement
iv. Social development, Education, and Health
v. Future of work
vi. Income and Wealth Inequalities

DISCUSSION
THE GROWTH EXPERIENCED BY THE ASIAN

The global economic outlook has darkened, and growth across Asia and the
Pacific is poised to slow further amid the continuing impact of Russia’s invasion of
Ukraine and other shocks.

● China slowdown deepens

China, Asia’s largest economy, saw a significant deceleration in the second quarter
as the zero-COVID policy prompted lockdowns for major cities and supply-chain hubs.
Accordingly, our full-year growth forecast is lowered to 3.3 percent from 4.4 percent in
April, and we expect 4.6 percent growth next year, a reduction of 0.5 percentage points.

Such a decline in activity, which also reflects a prolonged and intensifying slump in
the real estate sector, is likely to have sizeable spillovers on regional trading partners.
Japan and Korea, the two largest regional economies integrated closely with global
supply chains and China, will also see growth slow on weaker external demand and
disruptions to supply chains.

But despite China’s recent slowdown, signs of a rebound in economic activity are
emerging as some pandemic restrictions on mobility are now being gradually eased. The
resilience of manufacturing and rebound in tourism is supporting a gradual rebound in
Malaysia, Thailand and the Pacific island countries.

● Financial conditions tighten

Most emerging market economies in Asia, excluding China, have experienced capital
outflows comparable to those in 2013, when the Federal Reserve hinted it might taper
bond buying sooner than previously expected, causing global bond yields to rise sharply.
The outflows have been especially large for India: $23 billion since Russia’s invasion of
Ukraine. Outflows have also occurred from some advanced Asian economies such as
Korea and Taiwan Province of China, as the Fed signals continued rate hikes and
geopolitical tensions reverberate.

Asia’s share of total global debt has increased from 25 percent before the global
financial crisis to 38 percent post-COVID, raising the region’s susceptibility to changes in
global financial conditions. Sri Lanka is an extreme case where the run up in debt
became unsustainable and the economy lost access to global capital markets, leading to
a default on its external obligations.

● Ramifications of war

While growth is weakening, Asian inflation pressures are rising, driven by a global
surge in food and fuel costs resulting from the war and related sanctions. That hits the
poor and vulnerable the hardest, who are least able to cope, hurting consumption and
raising the chances of social unrest, as seen in Sri Lanka, and in other countries.

● Rising prices

Asia’s growing inflation pressures remain more moderate compared with other
regions, but price increases in many countries have been moving above central bank
targets.

● Targeted fiscal support

Fiscal policy will need to tighten in countries facing elevated debt levels, providing a
complement to monetary efforts to tame inflation. At the same time, targeted and
temporary fiscal transfers to support vulnerable people facing renewed shocks,
especially from high energy or food prices, is necessary.

Such fiscal support must be budget-neutral in most cases, funded by raising new
revenues or reorienting budgets to avoid adding debt or working against monetary
policy. Exceptions to this are China and Japan, provided medium-term fiscal policies
remain anchored.

Beyond this, global and regional collaborative solutions that reduce trade policy
uncertainty, roll back damaging trade restrictions, and avoid the most severe
fragmentation scenarios are urgently needed to boost productivity and improve people’s
living standards. Economic reforms over the next two to three years should aim to
increase aggregate supply to tackle rising inflation, address longer-term challenges such
as climate change adaptation, invest in human capital, enhance the green transition, and
promote digitization.

● Integrated, multifaceted, tailored response

In sum, several economies will need to raise rates rapidly as inflation is

broadening to core prices, which exclude the more volatile food and energy categories,
to prevent an upward spiral of inflation expectations and wages that would later require
larger hikes to address if left unchecked.

At the same time, further rate rises will squeeze budgets for consumers,
companies and governments that took on substantial debt during the pandemic.

While precise policy advice will differ for each country, flexible exchange rates
alone may not suffice and be feasible in all countries, and other measures such as
foreign exchange interventions, macro prudential policies, and capital-flow management
may be useful tools to help anchor expectations and manage systemic risks.

The Fund has recently developed the Integrated Policy Framework to guide
economic policy making exactly under circumstances such as this. The Fund also
remains a committed partner to countries to help weather the storm on the horizon
through its financing function.

Countries should not wait until it is too late—either to adjust their policy mix
where necessary or to rebuild their external financing buffers where appropriate.

EAST ASIAN MIRACLE

The rapid expansion of many East Asian economies over the past 30 years has
astounded the economics community and inspired a deluge of books and articles that
attempt to explain the phenomenon. Articles on the reasons why the region's most
prosperous economies—Hong Kong, Korea, Singapore, and Taiwan Province of China
—have expanded, to put it mildly, consistently refer to the phenomenon as "miraculous."

"East Asian Miracle" – is the term coined by the World Bank to describe the
advancement of many East and South East Asian economies from low income to middle
income status in the last 50 years. This is due to their successes in overcoming the
development challenges that developing countries typically face.

MAIN CHARACTERISTICS OF COUNTRIES IN “EAST ASIAN MIRACLE”

● More rapid output and productivity growth in agriculture;

● Higher rates of growth of manufactured exports, with their share of world exports
of manufactures leaping from 9 percent in 1965 to 21 percent in 1990;
● Earlier and steeper declines in fertility;
● Higher growth rates of physical capital, exceeding 20 percent of GDP on average
between 1960 and 1990, supported by higher rates of domestic savings
● Higher initial levels and growth rates of human capital; and
● Generally higher rates of productivity growth.

GROWTH SOURCE OF THRIVING EAST ASIAN ECONOMIES

(1) Accumulate physical and human capital;

o Building human capital.

o Creating effective and secure financial systems.
⮚ Increasing savings
⮚ Increasing Investments

(2) Allocate this capital to highly productive investments; and

o Letting markets work: flexible labor markets.

o Assisting the market: capital markets.

(3) Acquire and master technology and achieve rapid productivity growth.

o Absorbing foreign technology.

o Promoting specific industries.
o Encouraging export strategies.

MEASURING THE COUNTRIES’ ECONOMIC GROWTH

● GNP or the Gross National Product.

 − One way of measuring the performance of an economy.
● Development Economist
− Todaro and Seers have suggested the elimination of GNP as a yardstick.
− They proposed to measure economic growth in terms of poverty,
inequality, and unemployment.
● Reduction or elimination of poverty.
● Eradication of inequality.
● Minimizing unemployment.

THE GENERAL FRAGILITY OF CONCLUSIONS ABOUT THE NATURE OF THE

GROWTH PROCESS IN EAST ASIA

A growth accounting exercise for the Four Tigers during 1960-90 along the lines
suggested by Young (1994a) has been conducted using conventional parameters and a
conventional method of extrapolation. The capital stock in these economies is assumed
to be 0 in 1900 and subsequently to increase by investment flows less depreciation.

The outcomes of this growth accounting exercise are shown in Figures 1-4. In
Figure 1, the growth rates of output per person for the Four Tigers between 1960 and
1975 and 1975 and 1990 are contrasted with those for the rest of the world. The growth
rates of the individual Tigers are shown in this figure's first four bars. The fifth bar, which
represents the rest of the world, gives the simple average growth rate for 100 countries
(row). The sixth bar shows the global average growth rate plus a standard deviation of
1.96 (row + 1.96sd). Growth rates are classified as "high" if they are higher than the row
but lower than row + 1.96 standard deviations, "very high" if they are around this value,
and "outstanding" if they are higher than this value.

● Figure 1 demonstrates that Singapore's growth rate was outstanding during the
first period and very high during the second, while growth rates in Hong Kong,
Korea, and Taiwan Province of China were very high in the 1960–75 period and
outstanding in 1975–90.
 ● The growth rate of labour participation, which was generally high for the Four
Tigers and outstanding in the case of Singapore between 1960 and 1975, is
depicted in a similar way in Figure 2.
● In Figure 3, the growth rate of capital per person from 1975 to 1990 is shown in
the first panel. Hong Kong had a high rate of capital accumulation, Singapore
and Taiwan Province of China had a very high rate, and Korea had an
exceptional rate. The estimated rate of productivity growth between 1975 and
1990 is shown in the second panel of Figure 3 as outstanding for Hong Kong,
very high for the Chinese province of Taiwan, between high and very high for
Korea, and high for Singapore.
● Figure 4 compares the Four Tigers' rates of technological progress (total factor
productivity) from 1975 to 1990 to those of Japan and the United States during
the same period. The first panel of Figure 4 shows that productivity growth in all
Four Tigers far outpaced productivity growth in the United States. Three of the
four (except Singapore) also outpaced Japan's productivity growth. The second
panel of Figure 4 depicts the proportion of output per person growth that can be
explained by productivity growth. It demonstrates that, in the case of the Four
Tigers, this proportion was not consistently different from that of Japan and the
United States: it was marginally higher for Hong Kong and Taiwan Province of
China and marginally lower for Korea and Singapore.

FACTORS AFFECTING THE ASIAN'S ECONOMIC GROWTH

1. Population and Development

As we all know population growth affects urbanization, labor force growth, and the
number of dependents workers must support. On the other hand, we consider the
relative merits of birth control programs and socioeconomic development in reducing
population growth.
 ▪ Asia's annual growth, 1.3% ( birth rate 20% and death rate of 7%), will decline to
1.1 percent in the 25 years, 2000 to 2025, it is by for the most heavily populated
region, with more than 60 percent of the world's people.

THE DEMOGRAPHIC TRANSITION

▪ In the ancient and medieval periods, famine, disease, and war were potent
checks to population growth throughout the world.
▪ The Demographic transition is a period of rapid population growth between a
preindustrial, stable population characterized by high birth and death rates and a
late, modern stable population marked by low fertility and mortality.

THE FOUR STAGE DEMOGRAPHIC AND MORTALITY THEORY:

Stage 1. HIGH FERTILITY AND MORTALITY

High mortality rates were inevitable in the absence of modern sanitation, medicine,
industry, agriculture, trade, transportation, and communication.

Pre-modern socioeconomic groups, such as village communities, tribes, lineages, and

principalities, were small and largely self-sufficient. Even so, food shortages brought on
by floods, droughts, insect plagues, and warfare, although confined to a small locality,
were very serious. Roads and vehicles for transporting surplus food from other areas
were rarely adequate to the need during these times.

STAGE 2: DECLINING MORTALITY

This stage began in 19th-century Europe as modernization gradually reduced

mortality rates. Food production increased as agricultural techniques improved. The
introductions of corn and the potato, either of which could sustain a large family on a
small plot of land, were especially important at this time. Improvements in trade,
transportation, and communication meant people were less vulnerable to food short-
ages. Death from infectious diseases, such as tuberculosis and smallpox, declined as
nutrition and medical science improved, and after the introduction and adoption of soap,
cheap kitchen utensils, and cotton clothing led to better personal hygiene. Drainage and
land reclamation reduced the incidence of malaria and respiratory diseases (Ehrlich,
Ehrlich, and Holdren 1977:186–192)

In the late 1930s, average life expectancy in developing countries was 32 years
compared to 56 in developed countries. Life expectancy in LDCs increased to 63 in
1994, compared to 76 in the developed countries (Table 8-2). Since World War II,
mortality rates have dropped sharply in developing countries because of declines in
infant mortality and better medical treatment for major infectious diseases – malaria,
cholera, yellow fever, typhoid fever, smallpox, tuberculosis and other respiratory
ailments.

> Higher life expectancy increased incentives to invest in human capital, which
exerted a positive effect on economic growth, spurring the Industrial Revolution.

STAGE 3: DECLINING FERTILITY

 What are the most important determinants of fertility decline? There are two
competing answers. Organized family-planning programs, which provide propaganda
and contraceptives to reduce the number of births, is one answer. The other is
motivating birth control through the more complicated processes of education,
urbanization, modernization, and economic development.

BEYOND STAGE 4: A STATIONARY POPULATION

World Bank projections indicate that most developing countries will not reach an
exact replacement rate before 2020 to 2040. At this rate, the average woman of child-
bearing age bears only one daughter – her replacement in the population. However,
population momentum or growth continues after replacement-level fertility has been
reached because previous fertility rates have produced an age structure with a relatively
high percentage of women in or below reproductive age. Thus, most developing
countries will not have a stationary population.

2. Migration

In the poorest countries of Asia, emigration still predominates. For these countries,
remittances remain a considerable part of GDP. However, fluxes of emigration and
remittances can change quickly. China, South Korea, Thailand, Malaysia, and Sri Lanka
will need immigrants to maintain favorable dependency rates and economic growth,
while countries in South Asia as well as Indonesia and Laos can ‘afford’ emigration.
Labor shortages in the region can only be avoided if Asian countries improve their
collaboration for an orderly migration regime.

3. Technology, industrialization, and labor replacement

Technological development and industrialization have played a major role in the fast-
growing Asian countries with a virtuous growth path and superior labor market
outcomes. In the transition to more service-oriented activities, new technologies can
dramatically boost changing globalization patterns highlight the need for
complementarities between economy-wide and targeted approaches. How Asian
countries strike this balance will be instrumental in their future success.

4. Future of work

The discussion on the future of work is often couched in terms of how automatization is
affecting the high-end manufacturing industries in Asia. Yet this seems mainly to apply to
China and South Korea. Robots have primarily been employed in the automotive,
electrical, and electronic industries. In many labor-intensive industries, such as garment-
making, widespread automatization is not yet a reality. The experience of China when it
developed its industrial base while maintaining agricultural output could be an example
for other Asian countries.

5. Social development, education, and health

Major increases in literacy and secondary education attendance are common

characteristics of Asian countries with high or medium growth rates and good labor
market outcomes. In countries which lag behind in achieving full literacy and secondary
education attendance, growth and productive employment will remain constrained.
Countries that have progressed well in these areas need to be aware of the fast changes
in the labor market caused by the technological development. This requires changes in
school curricula and systems of continuous learning and upgrading of skills.

6. Income and wealth inequalities

Income inequality in most of the Asian countries has increased or remained stable.
Most notable is the increase in India and China. A strong contributing factor for this is the
declining wage share, indicating that capital owners capture productivity gains to a larger
degree than workers. With growing inequality, the economic growth of the past is not
sustainable. High inequality and faltering growth will lead to social unrest and to
deteriorating labor markets, undoing for some countries the gains achieved.

CONCLUSION
Asia, being the biggest continent in land has experienced growth over the past
few decades. The development of Asia have expanded in terms of economic aspects.
Although Asia is the largest continent, we cannot hide the fact that countries outside the
Asian territories affect its financial condition. Lots of factors are affecting the economic
growth of Asia, such as the population; being the most populated region, migration,
technology which have and still playing a major role in the fast-growth for the better
future

Fertility decreases with economic development, urbanization, industrialization,

mobility, literacy, female labor force participation, reduced income inequality, and greater
family-planning efforts. However, these efforts are not likely to be successful unless
socioeconomic development and improved income distribution make birth control seem
advantageous. Development and family-planning programs have both contributed to the
decrease in fertility rates since the 1960s.

Investment in human capital includes expenditures on education, training,

research, and health, enhancing a people’s future productivity.

Taking everything into account, considering diversity of experience, the variety of

institutions, and the wide range of policies, there is no single model for success. Rather,
each of the thriving Asian economies studied used a mix of policies at different points in
time to perform the functions required for rapid growth: rapid accumulation, efficient
allocation, and higher productivity growth.

Asia's economies must either increase their rates of factor accumulation or boost
productivity if it is to maintain its robust growth. To accomplish these, authorities can
implement a variety of reforms.
 CHAPTER 2
THE ASIAN CRISIS
AND RECENT
DEVELOPMENT
LEARNING OBJECTIVES
1. Define what Financial Crisis in Asia is and explain why did it happens.
2. What are the effects of the Post-Crisis in Asian economy.
3. Explain how did the Asian countries manage and create development.

INTRODUCTION
The steady growth of the Asian economies was abruptly interrupted by the
financial crisis that beset the region in 1997. In July that year, the Thai baht was
attacked, primarily by currency hedge funds. These funds became active in four
Southeast Asian currency markets in June-September 1997, setting off a chain of
competing devaluations that blew up into a regional financial crisis. A feature of these
competing devaluations was the sequencing of the devaluations; the Thai baht first
began to decline in June 1997, and was followed by the Malaysian ringgit, the
Indonesian rupiah, and the Philippine peso in July.
The Asian Financial Crisis is a crisis caused by the collapse of the currency
exchange rate and hot money bubble. The financial crisis heavily damaged currency
values, stock markets, and other asset prices in many East and Southeast Asian
countries. On July 2, 1997, the Thai government ran out of foreign currency. No longer
able to support its exchange rate, the government was forced to float the Thai baht,
which was pegged to the U.S. dollar before. The currency exchange rate of the baht thus
collapsed immediately.
Just weeks after Thailand stopped defending its currency, Malaysia, the
Philippines, and Indonesia were also compelled to let their currencies fall as speculative
market pressure built. By October, the crisis spread to South Korea, where a balance-of-
payments crisis brought the government to the brink of default.
Other economies also came under pressure, but those with solid economic
fundamentals and hefty foreign exchange reserves fared much better. Hong Kong
fended off several major but unsuccessful speculative attacks on its currency, which is
pegged to the U.S. dollar via a currency board system and backed by massive U.S.
dollar reserves.

TOPICAL OUTLINE
4.2- Why did this crisis happen?
4.2.1 The Bubble Economy
a) Inadequate fund management system
b) Ineffective sterilization of capital inflows
c) Restrictions on foreign banks entry
d) Nonperforming loans
e) High costs of financial services
f) Balance sheets
4.2.2 External Sector Difficulties
a) Rapid growth in current-account deficits
b) Overvalued exchange rates
c) The collapse in exports
4.2.3 Contagion, Globalization, and Financial Integration
a) Role of institutional investors
b) How strong was this contagion effect?
4.3- Post-Crisis Experience
4.3.1 The World Economy
4.3.2. Economic Growth
a) Exchange rates
b) Equity Prices
c) Restructuring
4.3.3 Economic Recovery
4.3.4 Emerging Development Divide in Asia?
4.3.5 Social Impact of the Economic Crisis
4.4- Lessons and Prospects for the Future
4.4.1 An Agenda for Reform
a) Debt restructuring
b) Private-sector credit lines
c) Reform exchange-rates regimes
d) Capital account reform
e) International portfolios controls
f) Establish minimum international standards of financial practice
g) Information and transparency
h) Global surveillance
i) Reform of financial markets
j) Greater competition
k) Consolidation
l) Supervision and regulation
m) Accounting and disclosure
n) Stock markets
o) Trade Policies
p) Foreign direct investment
q) Human capital
r) Better understanding of the crisis process
s) New data
t) New analysis
4.4.2 Some Policy Implications
4.5- Summary and Development in the New Millennium
4.5.1 Global Recession in 2008 & 2009, and Development in Asia
4.5.2 Volatility in Commodity Markets, Global Recession And Asian Growth
DISCUSSION
4.2- Why did this crisis happen?
1. The stock market, real estate, and bank credit bubble that had developed in the
first half of the 1990s. These developments, combined with a reliance on short
term external borrowing and a belief that the U.S. dollar to local currency party
would be maintained, resulted in highly leveraged and vulnerable financial sector
that caved in once currencies came under attack and confidence waned.
2. A series of developments in the external sector that led to a rapid increase in the
current account deficit, a real-rate overvaluation, and a consequent decline in
export competitiveness and earnings.
3. Spillover or contagion effect whereby pressure on the currency and financial
markets spread from country to country, exacerbating the crisis and weaknesses
in the financial sectors of the various economies.
4.2.1 The Bubble Economy
a) Inadequate fund management system – the financial sectors in these countries
were unable to efficiently handle and disburse the massive inflows of foreign
funds, which allowed them to invest as much as 40-50 percent of GDP when
economic growth was in excess of 8 percent per annum. More than US 400
dollar billion was invested from overseas sources during the first half of the
1990s. Stock market values also rose rapidly, and a property boom ensued. Tis
was unsustainable and consistent with efficient resource allocation.
b) Ineffective sterilization of capital inflows – The sterilization mechanism that could
have been used to choke off some of the excess demand generated by the influx
of capital was constrained by thin markets for government securities and a fixed
exchange rate. In such a situation, the greater the level of sterilization
undertaken, the greater the tendency for the spread between domestic and
offshore interest rates to increase. This simply provided an even larger
inducement for capital inflows.
c) Restrictions on foreign banks’ entry – Another factor that aggravated theses
problems was the restriction on the entry of foreign banks and financial
institutions. Apart from Hong Kong and, to a lesser extent, Singapore, East Asian
countries do not encourage the entry of foreign firms providing financial services,
compared with other countries at similar levels of development. They are also
more highly regulated. Consequently, the financial sectors were less
“internationalized” in terms of competition from financial service providers based
in other countries. In his respect, the financial sectors in these countries were in
marked contrast to the trade goods sector and capital movements that are highly
internationalized in all the East Asian countries. This segmentation lowered the
diversification of financial institutions in these countries, and thereby increased
the risk of bank failure. At the same time, internal liberalization allowed domestic
banks to enter new markets where returns were higher but where risks were also
higher. Offshore banking was one area where lending boomed in 1995 and 1996,
particularly in Thailand. The returns on borrowing overseas at low interest rates
and relending to local businesses at much higher rates was lucrative, but tended
to ignore the exchange-rate risk. Furthermore, there might have been an implicit
understanding that a bankrupt bank would be bailed out by the government. This
created a moral hazard problem and contributed to an even higher level of risk
taking.
 d) Nonperforming loans - As the economies overheated in 1995 and 1996, banks
made many risky loans. Supervision and regulation of the financial systems in
these countries were inadequate. Unsound projects were approved,
uncollateralized loans were made, offshore dollar borrowing, which were
unhedged, ballooned – taking advantage of low interest rates in the United
States.
e) High costs of financial services – Cross-country empirical evidence compiled by
the World Bank suggests that the limited internationalism of the financial sector
also led to higher costs of financial services (higher interest margins and lending
rates) to borrowers and slower institutional development. Nevertheless, it was the
combination of devaluation and stock market collapse hat exposed the financial
sector to severe balance sheet problems. This was because many firms had
made unhedged borrowing from the cheaper offshore dollar market.
Furthermore, loans were often made with the shares as collateral.
f) Balance sheets – The extent of balance sheet troubles is difficult to measure
without careful country-by-country analysis. As the crisis and post-crisis period
evolved, the evidence suggests that balance sheet have been helped
considerably by the recovery in demand and the resumption of economic growth
in 1999, 2000, and 2001.
4.2.2 External Sector Difficulties
a) Rapid growth in current-account deficits – as the boom of the early 1990s
progressed, current-account deficits also grew as offshore borrowing increased.
While exports were growing rapidly, these current-account deficits were viewed
as a positive sign that growth-enhancing and capacity-expanding investments
were taking place. During this phase of rapid growth, current-account deficits of
up to 5 percent of GDP were thought to be easily sustainable, according to
conventional wisdom. Even the more conservative IMF and the World Bank did
not have any qualms about deficits of 3 percent of GDP. By 1995 and 1996, only
the current account of Thailand was in the dangerous zone of nearly 8 percent of
GDP. However, Malaysia, the Philippines, and Korea were all flirting with a 5
percent current-account deficit by 1996, and this loomed large as merchandise
export growth started to soften. On the other hand, Singapore and Taiwan had
very large current surpluses and seemed immune from any financial turbulence
that might arise in other economies in the region.
b) Overvalued exchange rates - Prior to the crisis, the exchange rates for most
Asian currencies were loosely tied to the U.S dollar. Although ostensibly tied to a
basket of currencies. The Thai baht was pegged to an exchange rate of 25 baht
per U.S. dollar and varied within a very narrow rage. The Philippine peso moved
more but not beyond a band of 25-27 pesos per U.S. dollar.
c) The collapse in exports - In 1996, export-growth performance fell substantially,
particularly from 1995 when exports had been performing spectacularly. It has
been widely speculated that China played an important role in this. China had
devalued its currency by about 25 percent a year or so earlier and had become
quite competitive in a number of markets f a consolidation of the dull exchange-
rate system, and most trade had been taking place at a lower rate for several
years.
4.2.3 Contagion, Globalization and Financial Integration
- Several other factors have been suggested, including a slowdown in growth in Europe
and a currency appreciation when the U.S. dollar strengthened.
- The developing Asian countries trade with Europe was limited and this downward trend
was more than offset by a strong growth in trade with the United States.
- Nevertheless, there were certainly other critical world trends that influenced events as
the crisis unfolded. They were mainly related to the interaction between two relatively
new phenomena: globalization and international capital mobility
● Globalization linked the East
Asian markets for goods and assets much more closely to the markets of other
countries. This linkage resulted from the liberalization of trade in goods and capital in the
East Asian countries
● The liberalization of trade in capital similarly increased the stock of foreign-owned
capital, and foreign debt, such as corporate bonds denominated in foreign
currencies. This increased the exposure of corporations in these economies to
shocks in capital markets.
ROLE OF INSTITUTIONAL INVESTORS
● The other variable in this international equation is the large investment funds that
played a key role in the crisis. A more closely integrated world economy enables
institutional investors to have much more knowledge about other parts of the
world economy and act quickly based on this knowledge.
HOW STRONG WAS THIS CONTAGION EFFECT?
● One view of the contagion effect is that Thailand served as a "wake-up call" to
investors in the Asian region. However, once it happened, there are two possible
competing explanations for the spread to other countries.
- The first is the herd instinct or contagion effect as investors bailed out of all countries
without discrimination.
- Arguing that other countries were forced to undertake competitive devaluation to keep
pace with Thailand as markets recognized the need to remain competitive.
● However, evidence from research on the early warning systems suggest that
most of the other countries were ripe for some currency adjustment since their
currencies were overvalued, they had large current-account deficits, experienced
low export growth, and made many suspect loans in the bubble economy that
had evolved. The possible exceptions were Singapore and Taiwan.
4.3 POST-CRISIS EXPERIENCE
4.3.1. THE WORLD ECONOMY
● Commentators from international institution were initially quick to discount the
impact of the current crisis in the world economy.
● However, weaknesses in Korea and Japan surfaced towards the end of 1997
and this tended to have wider implications.
● Asia as a whole, including India and China, which both grew rapidly, registered
growth of between 1 and 2 percent (Asian Development Bank, 2002).
ECONOMIC GROWTH
-The overall economic growth in the Asian economies did not immediately reflect events
in the financial sector and in foreign exchange markets. However, 1998 was a bad year
for most countries in the Asian region.
Important factors in the resumption of growth:
● Exchange Rate
− Exchange rates have strengthened from their lows in the first part of
1998. This extends all currencies, even the Indonesian rupiah, the most
adversely affected currency.
● Equity Prices
− Stock prices also rebounded. Stocks market elsewhere in Asia also
rebounded as funds from the rest of the world started to return.
● Restructuring
− Many weaker firms throughout the region went out of business during the
Asian financial crisis. Those that survived were operating more efficiently.
Banks started to become more stringent about lending and took greater
care to evaluate borrowers.
4.3.3 ECONOMIC RECOVERY
Recovery came through a revival of domestic demand supported by exports and
restoration of investor confidence. Softer budget deficits and lower interest rates also
underpinned the recovery.
EMERGING DEVELOPMENT DIVIDE IN ASIA
An analysis of the performance of the countries in Southeast and East Asia since
the crisis suggests that a development divide may be emerging between these two
regions. Putting China together with Taiwan, Korea, and Hong Kong as East Asia, and
grouping the five major Southeast Asian countries together, that reveals several
interesting features.
SOCIAL IMPACT OF THE ECONOMIC CRISIS
The credit crunch made banks reluctant to lend and firms were starved of
working capital; currency depreciation made it difficult for firms to service external debt;
inflation accelerated and purchasing power fell as the price of imports increased and
government revenues came under strain when the tax base contracted and incomes fell.
As a result, there was a fall in output, an increase in unemployment, and the
incidence of poverty.
4.4 LESSONS AND PROSPECT FOR THE FUTURE
Based on the reform agenda prescribes by international banks and aid agencies
after the crisis, listed below are the items that could be helpful in Speeding up reform in
the crisis-affected countries in Asia.
● DEBT RESTRUCTURING - It is the process of negotiating the terms of the debt
so the payments are more manageable.
 ● PRIVATE SECTOR CREDIT LINES - Given the limited resources of the IMF and
the conceptual difficulties with the notion of an international lender of last resort,
establishing Credit lines with private sector can somehow beneficial to the
governments.
● REFORM EXCHANGE RATE REGIMES - The results of "hot" money Outflows in
times of crisis that lead in abrupt currency devaluations was one of the problems
faced by developing countries in Asia. In connection, exchange rate reforms
have often aimed at floating the rate in an attempt to unify the official and parallel
markets for foreign exchange.
● CAPITAL ACCOUNT reforms - The capital account on a national level,
represents the balance of payments for a country. The capital account keeps
track of the net change in a nation's assets and liabilities during a year. The
capital account will inform the economists whether the country is a net importer
or exporter of capital.
● INTERNATIONAL PORTFOLIO CONTROLS. An international portfolio is a
selection of Stocks and other assets that focuses on foreign markets rather than
domestic ones. In this case, the UNCTAD suggests to explore controls on
international portfolio investment at the Source of the lending.
● ESTABLISH MINIMUM INTERNATIONAL STANDARDS OF FINANCIAL
PRACTICE. Auditing and accounting practices will vary considerably across
Countries. As a result, it is difficult for lenders to gauge the financial Conditions
borrowing banks and business firms.
● INFORMATION AND TRANSPARENCY. The Asian crisis has reinforced the
need to pay greater attention to constructing Conform standards for accounting
and financial reporting.
● GLOBAL SURVEILLANCE, Global surveillance can be defined as the
Surveillance of Entire Population across borders. Its existence was not widely
acknowledged by governments and mainstream media.
● REFORM OF FINANCIAL MARKETS. The financial sector reforms refer to steps
taken to reform the banking system, capital market, government debt market,
foreign exchange market, etc.
● GREATER COMPETITION. In arguing for greater Competition, we must
remember that each of the Crisis that we have look at came after the
liberalization of banking regulations, which resulted in a more-to-more risky
assets.
● CONSOLIDATION. It is the Quality of state of being united. To illustrate,
government moved closely to close the worst-performing banks in Latin America.
● SUPERVISION AND REGULATION. Supervision involves examining the
financial Conditions of individual banks and evaluating their compliance with laws
and regulations.
● ACCOUNTING AND DISCLOSURES. Accounting and disclosure rules will help
to expose weaknesses before they fester
STOCK MARKETS. A major reform would be the introduction and development of
derivatives market, especially those permitting better hedging of " equities exposures.
TRADE POLICIES. Further reforms of trade policies are desirable.
FOREIGN DIRECT INVESTMENT. Another critical area is FDI incentives. These
incentives were a factor in the rapid expansion of FDI and capital formation.
HUMAN CAPITAL. Finally, more long-term measures need to be taken to address the
shortage of human capital required to upgrade the productivity capacity in skilled and
knowledge-intensive industries.

BETTER UNDERSTANDING OF THE CRISIS PROCESS. The Asian crisis, as many

crises before, was unanticipated.
NEW DATA. Is there new information that should be monitored in order to anticipate
another crisis of this type?
NEW ANALYSIS. None of the models that had been previously devised by economists
to predict potential crisis were able to do so.
4.5.1 Global Recession in 2008 and 2009, and Developments in Asia
The rapid deterioration in economic growth in the industrialized countries that
began in late 2007 and continued and intensified in 2008 has created additional
challenges for the developing economies of Asia. Slower growth in Asia in 2009, and
perhaps 2010, is anticipated as a result of a slowdown in export demand from Europe,
Japan, and the United States. It is difficult to predict how long this recession will last,
when it will bottom out, and when industrial economies will return to full employment of
labor and capital resources.
4.5.2 Volatility in Commodity Markets, Global Recession, and Asian Growth
As the global financial and economic crisis deepened in the last quarter of 2008,
the run up in commodity prices that had caused concern about inflation earlier in the
year began to diminish. World food prices that had more or less doubled between
January 2006 and May 2008 began to moderate as the recession deepened. Such
volatility caused sharp changes in the balance of payments and put pressure on
governments to adjust their budgets to reflect these dramatic shifts. This has also
generated uncertainty in the business community and a dampening impact on
investment

CONCLUSION
The Asian financial crisis that took the world by surprise 20 years ago was a
major turning point for many of the region’s economies. The crisis exposed structural
weaknesses and policy distortions in crisis-affected countries, along with poorly planned
financial liberalization and premature capital account opening. Going forward, Asia
needs to pursue broad-based reforms to address new and remaining vulnerabilities and
safeguard financial stability. Twenty years after the Asian financial crisis, Asia stands
strong. Yet, Asia should not be complacent, and remain vigilant against a buildup of
financial imbalances, ready to act if risks materialize, and proactively address structural
weaknesses through broad-based reforms.
Significant challenges remain while new vulnerabilities emerge from the steady
rise in dollar-denominated debt, increasing private sector debt, and a pickup in
nonperforming loans in some emerging Asian economies. With more pronounced global
financial cycles, increasingly interconnected financial institutions and markets are also
building the channels to fan global shocks.
 Three key lessons are drawn from Asia’s crisis experience: (i) maintaining sound
macroeconomic fundamentals is a prerequisite for economic and financial resilience; (ii)
deepening and broadening financial systems is essential to boost both financial
efficiency and resiliency; and (iii) greater regional cooperation efforts are needed to
reinforce regional financial safety nets for financial resilience.

CHAPTER 3
AGRICULTURE
LEARNING OBJECTIVES
1. Identify the contributory factors of Agricultural sector to the economic
development and its transformations in Asia.
2. Evaluate the micro and macroeconomics aspect of Agricultural Development.
3. Areas of concern of modernizing agriculture and rural welfare.

INTRODUCTION
Agricultural sector plays a vital role that contributes to country’s economic
growth. The content of this study will help to learners to understand how important
agriculture is.

TOPICAL OUTLINE
The following topics will be highlighted and discussed thoroughly:

● Agriculture and Economic Development

● Agricultural Transformation in Asia
● The Microeconomics of Agriculture in Asia
● Macroeconomic Aspects of Agricultural Development
● Modernizing Agriculture and Rural Welfare: Lessons and Policy Issues

DISCUSSION
Agriculture and Economic Development
Agriculture and economic development are significantly related to each one of them.
Most countries rely on the agricultural sector and the fact that this sector provides our
daily needs, the food. The concept of industrialization does not merely focus on how the
farmers can feed themselves but in general, the growing population of the society.
There are several agricultural contributions to growing economy and other modern
sectors.
1. Labor
Over 70% of the workforce in agriculture-based employment in poor and medium-
income economies, the agriculture sector is virtually the only source of increased
labor power for the urban sector.
2. Capital
Agriculture can also be a major source for modern economic growth. Capital may
build up to support the start of industries.
 3. Foreign Exchange
Agricultural products serve as the principal source of foreign exchange. As such, the
agricultural sector’s ability to supply foreign exchange enables the economy to import
capital equipment and intermediate goods necessary for its continual growth.
4. Rich Market Economy
The local population is dependent on products from the agricultural sector, its income
is also directed towards the economy.
● Lewis-Ranis-Fei (LRF) economic model is a concept that captures the
transition of an economy from being mainly agricultural to industrial-based
structural change.
Agricultural Transformation in Asia
The Agricultural employment share distribution in Taiwan was observed that it
diminishes up to 10% per year from the year 1955-1998. Southeast and East Asia had
both high rates of economic growth and agricultural growth, while South Asia had lower
rates of growth both in agriculture and in GDP. However, this isn’t always the basis since
some countries doesn’t rely merely on agricultural products and doesn’t have the ability
to produce agricultural products.
● Productivity in Agriculture
Timmer (1991) showed that agricultural productivity growth is generally higher
than that of industry at the beginning of the process when industry is still weak and in
need of protection from foreign competition. Differences in the average productivity of
labor has is interconnected with production function and technological change.
● Agricultural Development in Moonsoon Asia
The nature of the weather cycle in Asian agriculture requires some adjustments
to the model of interaction between agriculture and industry as proposed under the LFR
model. This model suggests that the opportunity cost of labor shifting from agriculture to
industry was zero, yet this concept doesn’t hold in Asia. The agricultural surplus was
important for two reasons: (1) it gave more income to buy more consumer goods and (2)
it permitted some workers to migrate to the cities to work in newly established industries
without diminishing overall agricultural output.
● The Efficiency of Traditional Agriculture
Traditional Agriculture includes cultivation, crop rotation, water use, and the use
of farm animals to take into account differences in soil fertility, variations in weather
factors, and the availability and quality of traditional seeds and other varieties. In
tentative conclusion, the traditional agriculture is reasonably efficient, although some
minor improvements could be made.
The Microeconomics of Agriculture in Asia
Looking at the decision-making process at the farm level, the aim is to translate
the inputs of land, labor, fertilizer, pesticides, irrigation, and mechanization into higher
levels of output. By focusing on what worked to raise yields in Asian agriculture, we can
shorten the list considerably.
 Three (3) aspects of modern agriculture: (1) the use of improved varieties ot he
green revoluion, (2) the extension of irrigation and the resulting double-cropping, and (3)
the use of fertilizers, pesticides, and herbicides.
Macroeconomics Aspects of Agricultural Development
− Agriculture in Asia is primarily intensive rather than extensive. It is
significant to employ appropriate labor- intensive technology.
− Bonus from exchange rate that tended to undervalue of currency. It is
because agricultural products were more tradable than industrial goods.
− Import- substitution policies were abandoned.
− Interventions designed to protect an industry or a sector or a factor of
production usually have unintended and often adverse impacts
Modernizing Agriculture and Rural Welfare: Lessons and Policy Issues
Mechanization and the Demand for Labor
Agricultural main concern:
When an where Mechanization should be introduced.
Macroeconomics policy follows a neutral exchange rate policy that does not either
overvalue or undervalue the exchange rate
Technological Transfer, Growth, and Equity

Technology - higher - yielding varieties or new methods of crop rotation and cropping
systems, or improved irrigation and fertilization, has been the major factor
contributing to increased productivity in agriculture in Asia during the past Fifty years.

Example :
The use of high-yielding varieties developed thirty years ago brought about
substantial increases in productivity for rice and wheat.

Less water and arable land change the balance of factors responsible for growth in
yields and production. Water available for aquifers are being pumped faster than they
are being recharge that will limit its future use for irrigation and extension of double
cropping, as well as put pressure on water availability, particularly during periods of
drought. Growing water shortages throughout the Asia will constrain further extension of
irrigation networks, as well as present challenges for maintaining or increasing
agricultural productivity
● Genetic Engineering
Genetically modified organism (GMOs) - produced by transferring a gene or set of genes
conveying specific desirable traits within or across species. 
● Zero Tillage :
Zero tillage minimise or eliminates tilling of the land and retaines crop residues as
ground cover. Zero tillage saves on labor and energy required to overturn :
1. Soil 
2. Conserves soil fertility 
3. Increases tolerance to drought 
4. Reduces greenhouse gas emissions 
Zero tillage requires:
1. Weeding 
2. Occasional use of pesticides 
⮚ This system saves water, and reduces production cost and the incidence of
weeds and pests. 

● Research and development :

Markets for agriculture products function fairly well. Markets are competitive,
products are relatively homogeneous, and research has shown that farmers in Asia
respond to changes in relative product prices by adjusting the area planted
accordingly. There is often lag in this process, however, with best practice farmers
making quickest adjustments. An improved farm extension network is a key factor for
reducing this lag. Better dissemination of new developments in seeds, crop rotation,
new varieties, and so forth, can be spread easily through the extension system. 

● Food prices and linkages to energy:

In the past few years, there has been increasing volatility in the prices of primary
products and energy. Price roller-coaster aggravates uncertainty in the agricultural
sector and creates a climate on increased risk aversion. Increase in fuel costs and
wary of further declines in commodity prices, farmers are likely to maintain the status
quo, producing what they are used to and reducing investment in new technology,
cropping techniques or new varieties which are not good for the continued growth
and vitality if the agricultural sector. 

● International Trade and Resource Transfer:

Asia - primary product of exporters (e.g., Korean and Taiwan) 
East Asia, Southeast and South Asia - net food importers 
The structure of tariffs and the level of protection of agricultural form international
competition tend to vary inversely with the level of income. 

⮚ Demand for agricultural protection increases as the share of agricultural in GDP

declines and per capita incomes increases. 

⮚ High tariffs harm the developing countries in that they would be able to produce
and export more products if tariffs were lower. Developing countries must lobby
for these tariffs to be lowered in stages. 

Shifts Out of Primary Grain Production :

Mix of agricultural goods produced in Asia, 

Primary food grains such as:

*rice
*wheat
*sorghum 

Secondary food crops:

*livestock 
*tree crops 
*horticulture 
*fishing 
 ⮚ It Occurred changes in comparative advantage, relative prices, profitability,
which diversification of agriculture.

CONCLUSION
Agriculture nowadays continues to impact the lives of millions. However, there are
several issues affecting the improvement in the lives of the people including the growth
of the population, migration, and the impact of new technology.
In order to raise the income of the poor farmers, an increase in productivity is
required. This is a challenge as it must be recognized that labor-intensive technological
change would most benefits small farmers and landless laborers. Secondly, it is
important to realize that rapid population growth and the lack of opportunities for
migration and/or off-farm employment are deterrents to poverty reduction. Thirdly, the
education system and redistribution of assets is also important. Lastly, extensive
research and development, together with the implementation and dissemination of ways
to increase agricultural yield and productivity, become more pressing as the extension of
irrigation and cultivated area becomes more limited in Asia.
Throughout the discussions regarding the status of Agricultural Sector in different
countries, we can arrive with various conclusions:
1. After the postwar, the main source where people lies their foundation to survive
is in agricultural sector.
2. The development of technology for the purpose of producing agricultural
products is helpful and the traditional ones are also efficient to the rise of
Agriculture.
3. The single-decision of the agriculture inputs is to increase the level of
productivity.
The modernization applied to agriculture can be harmful to humanity, such that
transforming into more productive that could possible impact greatly to the increase
growth.
 CHAPTER 4
INDUSTRIALIZATION
AND STRUCTURAL
CHANGE
LEARNING OBJECTIVES
1. To differentiate the difference between structural change during the pre-historic
time compared to what now.
2. Define industrialization and explain briefly.

INTRODUCTION
Industrialization and structural change refer to the process of economic
transformation that occurs when a society shifts from an agrarian or pre-industrial
economy to an industrial one. This process involves the development of new
technologies, the growth of new industries, and the emergence of new forms of
economic organization. It also involves changes in the structure of the labor force, the
emergence of new social classes, and the emergence of new forms of political and
economic power. Industrialization and structural change have been a major force in the
development of the modern world, and have had a profound impact on the global
economy.

Economic growth studies have revealed a lot of evidence of similarities in the

development patterns of most countries. There is always the risk that unique historical,
economic, and political factors will be overlooked in cross country studies, but when
countries are grouped according to size, resource endowment, and trade orientation,
factors that promote consistency in structural change patterns appear to predominate.
The identification of 'normal' patterns of structural change and industrialization is useful
for policymakers because it raises important issues about the nature and consequences
of structural change, as well as appropriate policy responses.

TOPICAL OUTLINE
1.1
● WHAT IS INDUSTRIALIZATION?
● INDUSTRIAL REVOLUTION
● LATER PERIOD OF INDUSTRIALIZATION
● ASIAN TIGERS
● EFFECTS OF INDUSTRIALIZATION
● MODES OF INDUSTRIALIZATION
● SOCIALIST INDUSTRIALIZATION
● EXAMPLES OF INDUSTRIALIZATION
• MANUFACTURING
• MINING
• TRANSPORTATION
 • RETAILING
● IMPACT OF INDUSTRIALIZATION TO SOCIETY
● INDUSTRIAL ACTIVITY
● NON-INDUSTRIAL

1.2
● WHAT IS STRUCTURAL CHANGE?
● GLOBAL STRUCTURAL CHANGE
● STRUCTURAL CHANGE IN THE PHILIPPINES
● IMPACT OF STRUCTURAL CHANGE IN THE PHILIPPINES

DISCUSSION
1.1 WHAT IS INDUSTRIALIZATION?

• The process of industrialization is when a country or region switches its economic

emphasis from industry to agriculture. A crucial element of this change is the use of
automated mass production techniques.

The positive characteristics of industrialization include economic growth, a more efficient

division of labor, and a growth spurt in technological innovation.

UNDERSTANDING INDUSTRIALIZATION

Government policy, labor-saving inventions, entrepreneurial ambitions, and a

demand for goods and services can all contribute to industrialization. It has far-reaching
consequences for the population, causing a wave of migration from small farms to cities
and towns where jobs can be found. The most dramatic example in recent history is that
of China, where government policy changes in the late twentieth century led to the
country's transformation from a subsistence farming economy to a global manufacturing
powerhouse.

THE INDUSTRIAL REVOLUTION

In the Western world, industrialization is most commonly associated with the late-
nineteenth-century European Industrial Revolution and the subsequent burst of
industrialization in the United States during the nineteenth century.

In Europe, the era was marked by a surge in local manufacturing of goods for
export, made possible by a growing consumer population. Through technological
innovations such as steam-powered machinery, the United Kingdom played a
disproportionate role in the process. World War II created an unprecedented demand for
certain manufactured goods, leading to a buildup of production capacity. Post-war
prosperity provided further catalysts that kept capacity utilization high and stimulated
further growth.

LATER PERIODS OF INDUSTRIALIZATION

World War II generated unprecedented demand for certain manufactured goods,

resulting in an increase in production capacity. Postwar prosperity provided additional
catalysts for maintaining capacity utilization and stimulating further growth.
 In this period, the causes and effects of industrialization were innovation,
specialization, and wealth creation.

THE ASIAN TIGERS

The late 20th century was marked by rapid industrialization in other parts of the
world, notably Asia. The Asian Tigers (Hong Kong, South Korea, Taiwan, and
Singapore) all participated in economic growth based on manufacturing for global
customers.

China experienced its own industrial revolution after moving away from a strict
communist model.

EFFECTS OF INDUSTRIALIZATION

The nineteenth-century innovations enabled mass production of commercial

goods. Transportation, finance, and communications industries all expanded to support
the new manufacturing capacity as manufacturing activities expanded.

It also resulted in increased labor specialization and the ability of cities to support
larger populations, resulting in a rapid demographic shift. Many people left rural areas in
search of work in emerging industries.

For some, the Industrial Revolution resulted in unprecedented increases in

wealth and financial well-being. As consumer demand for more goods and services
increased and business creation increased to meet the demand, a larger middle class
emerged.

MODES OF INDUSTRIALIZATION

Various industrialization strategies and methods have been used throughout

history, with varying degrees of success.

The European and American Industrial Revolutions began with mercantilist and
protectionist government policies that aided the early growth of industry. Later, these
countries adopted a laissez-faire or free-market approach, which encouraged foreign
trade and opened up new markets for industrial output.

In the post-World War II era, developing countries in Latin America and Africa
pursued an import-substituting industrialization strategy that included trade protectionist
barriers combined with direct subsidization or nationalization of domestic industries.

Almost simultaneously, parts of Europe and several East Asian economies

pursued an alternative export-led growth strategy. This strategy placed a premium on
the deliberate pursuit of foreign trade.

SOCIALIST INDUSTRIALIZATION
 The socialist nations of the 20th century repeatedly embarked on centrally
planned programs of industrialization. These include the first and second five-year plans
in the Soviet Union and the Great Leap Forward in China.

EXAMPLES OF INDUSTRIALIZATION

Industrialization is dependent on growth and innovation in at least four industries.

● Manufacturing

The invention of machines, which greatly increased the production of goods, marked
the beginning of industrialization.

Eli Whitney patented the cotton gin in 1794 as one such invention. The machine,
whether hand-cranked or steam-powered, greatly increased the speed with which cotton
fluff could be separated from its seeds before being woven into cloth.

Another invention was the spinning jenny, which could multiply the number of
spindles that a single spinner could handle at the same time while weaving cotton or
wool.

The steam engine, an improved version of which was invented by Scottish engineer
James Watt in 1763, was perhaps the most important invention of all. The Industrial
Revolution was propelled by coal-powered steam engines.

● Mining

Many of the great inventions of the nineteenth century were created to benefit the mining
industry.

The first working steam engine was created to assist in the removal of flood
water from coal and tin mines, where it frequently disrupted production.

The steam-powered locomotive was first used to transport ore from mines.

Dynamite was first used to blow up rocks that were impeding mining operations
after it was patented in 1867.

● Transportation

The nineteenth century saw unprecedented innovation in methods of transporting

goods from and to marketplaces. Among them are:

• The locomotive powered by steam. The Stephenson's Rocket prototype, introduced in

1829, served as a template for the production of vehicles to haul raw materials and
finished products for the next 150 years.

• The steamship. The introduction of the steamboat, which adapted steam technology to
river craft, greatly expanded and accelerated the transport of goods and people.

● Retailing

Prior to contactless payments and self-service checkouts, there were retail

innovations designed to appeal to 19th century shoppers.
 The shopping mall. John Wanamaker's was the first "store for everything," a six-story
retail wonderland that opened in the heart of Philadelphia in 1887.

Sears' catalog. It wasn't the first catalog, but it was the first to reach nearly every
consumer in America with a diverse array of goods ranging from children's clothing to
prefabricated houses.

HOW DOES INDUSTRIALIZATION AFFECT SOCIETY?

How Has Industrialization Affected Society?

Industrialization generates jobs, attracting people from farms and villages to

cities where manufacturing occurs. Regardless of how difficult those jobs were, they
were frequently preferable to the precarious existence of a small farming family.

As a result, a new generation of urban consumers has emerged. Businesses of

all kinds spring up to supply these consumers with goods and services. A larger middle
class of artisans and shopkeepers emerges over time.

A large working class emerges, and their conditions are frequently much harsher.
The evolution of labor unions is a direct result of the conditions faced by the Industrial
Revolution's powerless workers.

What Exactly Is Industrial Activity?

Any business process required to create a manufactured product is considered

industrial activity. A manufactured product may be sourced, processed, assembled,
repaired, or dismantled as part of the activity.

What Exactly Is Non-Industrial?

Non-industrial is most frequently seen in zoning regulations or discussions about

zoning regulations.

This is a broad category that could include anything except manufacturing and
manufacturing sourcing, such as mining.

1.2 WHAT IS STRUCTURAL CHANGE?

Structural change is a process of economic transformation in which the relative

importance of different sectors of the economy shifts over time. This shift is typically from
an economy dominated by agriculture and other primary industries to one dominated by
the secondary and tertiary sectors, such as manufacturing and services. Structural
change is a key factor in economic development and is often associated with increased
productivity, higher incomes, and improved living standards.

GLOBAL STRUCTURAL CHANGE Globally, structural change has been occurring for
centuries as economies have shifted from agrarian to industrial and now to post-
industrial societies. In recent decades, the process of structural change has accelerated
with the growth of the service sector and the emergence of new technologies. According
to the World Bank, the share of employment in services across all countries increased
from 56% in 1990 to 64% in 2018. The share of employment in industry declined from
33% to 25%, while the share of employment in agriculture decreased from 11% to 11%.
STRUCTURAL CHANGE IN THE PHILIPPINES In the Philippines, structural change
has been occurring since the 1950s when the country shifted from an agrarian economy
to one based on industry and services. According to data from the Philippine Statistics
Authority, the share of employment in agriculture decreased from 44% in 1960 to 28% in
2018. The share of employment in industry increased from 15% to 22%, while the share
of employment in services increased from 41% to 50%.

IMPACT OF STRUCTURAL CHANGE IN THE PHILIPPINES

Structural change in the Philippines has had a significant impact on the country's
economy. According to the World Bank, the Philippines has seen a significant shift from
an agricultural-based economy to a services-based economy over the past two decades.
In 1990, agriculture accounted for 33.6% of GDP, while services accounted for only
24.3%. By 2018, services had grown to account for 54.3% of GDP, while agriculture had
declined to only 13.2%.

The shift from an agricultural-based economy to a services-based economy has

been driven by a number of factors, including increased investment in infrastructure,
improved access to technology, and increased foreign direct investment. These changes
have led to an increase in employment opportunities in the services sector, particularly in
the areas of finance, business process outsourcing (BPO), and information technology
(IT).

The structural change has also had an impact on poverty levels in the
Philippines. According to the World Bank, poverty levels have declined significantly since
1990, with the poverty rate falling from 33.1% in 1990 to 16.6% in 2015. This decline is
largely attributed to increased employment opportunities and higher wages in the
services sector.

Structural change in the Philippines has had a profoundly positive effect on the
country's economy and its citizens. The transition from an agricultural-based economy to
a services-based economy has created more employment opportunities and higher
wages, leading to a decrease in poverty levels and an increase in living standards for
many Filipinos. This shift has enabled the country to become more competitive in the
global market, allowing it to attract foreign investment and create new economic
opportunities.

Structural change is an important process for economic development and has

been occurring globally for centuries. In recent decades, this process has accelerated
with the growth of the service sector and the emergence of new technologies. In the
Philippines, structural change has been occurring since the 1950s with a shift away from
agriculture towards industry and services

CONCLUSION
For better or worse, industrialization gave birth to the modern world we know
today. You'd have to look far and wide to find a place on the planet that hasn't been
affected by industrialization, and those places are likely to be soon.
The European and American Industrial Revolutions brought the world into the modern
era. Other regions, particularly in Asia, followed suit later. The process will continue into
the twenty-first century.
 Industrialization and structural change have had a profound impact on societies
around the world. It has led to increased economic growth, improved living standards,
and greater access to goods and services. However, it has also caused environmental
degradation, increased inequality, and displacement of people from their traditional
livelihoods. As such, it is important to ensure that industrialization and structural change
are managed in a way that benefits all members of society. This can be done through
the implementation of policies that promote sustainable development, equitable access
to resources, and the protection of vulnerable population.

CHAPTER 5
INTERNATIONAL
TRADE AND
INVESTMENT
LEARNING OBJECTIVES
1. To understand the traditional arguments of how and why international trade
improves the welfare of all countries
2. To review the history and compare the implications of trade theory from the
original work of Adam Smith to the contemporary theories of Michael Porter
3. To examine the criticisms of classical trade theory and examine alternative
viewpoints of which business and economic forces determine trade patterns
between countries
4. To explore the similarities and distinctions between international trade and
international investment

INTRODUCTION
Trade is central to ending global poverty. Trade is the concept of exchanging
goods and services between two people or entities. International Trade is then the
concept of this exchange between people or entities in two different countries. Countries
that are open to international trade tend to grow faster, innovate, improve productivity,
and provide higher income and more opportunities to their people. Open trade also
benefits lower-income households by offering consumers more affordable goods and
services. Integrating with the world economy through trade and global value chains
helps drive economic growth and reduce poverty-locally and globally. The International
Trade and Investment examines the causes and consequences of trade between and
among nations and regions. It considers how transportation costs, tariffs, and other
factors affect geographic specialization and commercial flows.

TOPICAL OUTLINE
DISCUSSION
● Classical Theories
o Mercantilism – today referred as “neomercantilism” which obtains to
achieve and maintain a trade surplus. This theory argues that the nation
should maximize exports and minimize imports. However, mercantilism
ignores the overall benefits of free trade. Supporters of mercantilism are
the labor unions to protect home-country jobs, farmers to keep crop
prices high, and domestic manufacturers who rely on exports of their
product.

o Absolute Advantage Principle - Refers to the ability of a nation to

produce a good more efficiently than other nations because of its superior
resources. It argues that a country should produce only those products in
which it has a clear advantage or can produce using fewer resources than
another country. It emphasizes the absolute cost of production. For
example, Based in Brazil, Vale is the world’s largest producer of iron ore.
Vale has enough iron ore at its operation in Carajás in the Brazilian
Amazon to remain a market leader for a century.

o Comparative Advantage Principle – it rises from natural endowments,

deliberate national policies, or the collective acts of the firms in an
industry. This principle argues that it is beneficial for two countries to
trade even if one has absolute advantage in the production of all
products. What matters is not the absolute cost of production but the
relative efficiency with which it can produce the product. Each country
benefits by specializing in the goods in which it has comparative
advantages and importing those goods in which it lacks such advantages.
A country maximizes its economic success by focusing on those
industries in which it has the most comparative advantages.

o Factor Proportions Theory - Also known as Factor Endowments Theory

and Heckscher–Ohlin Theory. This theory argues that each country
should produce and export goods that intensively use factors of
production that it holds in abundance, and import goods that intensively
use relatively scarce factors of production. This theory considers two
factors of production; labor and capital. A country that is relatively labor
abundant or capital abundant should specialize in the production and
export of that product which is relatively labor intensive or capital
intensive. For example, large countries in geographic terms tend to
specialize in producing land-intensive goods, such as crops, minerals,
and forest products.

o International Product Life Cycle Theory – it concerns the stages of

product development in the international market. This is best explained by
the “Product Life Cycle Theory” developed by the researcher Raymond
 Vernon in 1960’s which explains the cycle that products go through when
exposed to an international market. The cycle describes how a product
matures and declines as a result of internationalization. The major stages
of a product life cycle are as follows:
1. Research and Development – starts when a product is first
conceived and continues until launch.
2. Introduction – the phase where a product is officially introduced
into the marketplace.
3. Growth – the stage where the product sales are increasing at its
fastest rate.
4. Maturity – marks the period where product sales growth rates are
beginning to slow.
5. Decline – the phase of the cycle where sales growth begins to
decline
There are also three stages contained within the theory namely;
1. New Product – the cycle always begins with the introduction of a
new product. In this stage, manufacturers in a developed country
will innovate a new product. The market for this product will be
small and sales will be relatively low as a result. Vernon deduced
that innovative products are more likely to be created in a
developed nation because the buoyant economy means that
people have more disposable income to use on new products.
2. Maturing Product – at this point, when the product has firmly
established demand in developed countries, the manufacturer of
the product will need to consider opening up production plants
locally in each developed countries to meet the demand. As the
product is being produced locally, labor costs and exports costs
will decrease thereby reducing the unit cost and increasing
revenue. Product development can still occur at this point as there
is still room to adapt and modify the product if needed.
3. Standardized Product – competitive product offers saturate the
market which means that the original purveyor of the product
loses their competitive edge on the basis of innovation. In
response to this, rather than continuing to add new features to the
product, the manufacturers focuses on driving down the cost of
the process to manufacture the product. They do this by moving
productions to nations where the average income is much lower
and standardizing and streamlining the manufacturing methods
needed to make the product.

o New Trade Theory - A modern economic theory developed by Paul

Krugman to explain international trade and globalization using the
economies of scale, network effects, and first-mover advantage. It is a
contributing component in explaining the expansion of globalization. It
implies that less developed, underdeveloped nations may find it difficult to
establish some industries as they enjoy economies of scale like the
industrialized world. It is mainly a result of the scale efficiencies existing
among mature enterprises and not of any inherent comparative
advantage. Network effects and economies of scale have the potential to
 be so potent that they could even defeat the more well-known concept of
comparative advantage. As a result, some industries might not notice
noticeable changes in opportunity costs between the two countries at a
particular time. A country, however, may profit from its specialization if it
concentrates on a particular industry due to economies scale and other
network advantages.

● Contemporary Theories
o Competitive Advantage of Nations – a 1990 work of economics by
American author Michael E. Porter. According to him, what affects a
nation’s standing are five relatively unchangeable factors; land, location,
natural resources, labor, and population size and trends. Porter argues
that viewing national competitiveness in this way encourages the idea
that economic opportunity in the global marketplace is something to be
passively watched. Instead, for him, the concept of national productivity is
not a meaningful term because countries don’t compete like businesses
do. This means that understanding national competitiveness starts with
individual companies’ performance, aggregating these solitary results into
“Clusters” which group of firms that are interconnected because they
belong to related industries and may have supplier or client relationships
and are often geographically linked. There are two key sources of
national competitiveness according to Porter:
1. Innovation - refers to the introduction of new materials, products,
methods, or ideas, in order to introduce a new product, or to make
improvements to an existing product or to a method of doing
something.
2. Productivity – it is the value of the output produced by a given
unit of labor or capital. It is also a key determinant of national
living standards and national per-capita income growth. As their
productivity rises, firms use their resources more efficiently. And
as the collective productivity of the firms in a nation rises, the
overall productivity of the nation rises too.

o Michael Porter’s Diamond Model – it enables to predict or evaluate

cluster activities which relies on a four-factor system namely:
1. Firm Strategy, Structure, and Rivalry – For a company to grow,
its structure and business strategy must synergize with the local
business environment. Direct competition with other firms ideally
propels each individual company to use the skills and resources
necessary to increase innovation and productivity, and to try to
beat its local rivals. When several companies experience this kind
of stimulus, their cluster thrives.
2. Demand Conditions – when a local market consists of customers
who demand high quality and differentiated products, companies
trying to fulfill these demands will necessarily be forced to
innovate to survive. As a result, a company that thrives in a
competitive and aggressively demanding local marketplace will
also do well on the global market because it will have honed its
products.
3. Related and Supporting Industries – all companies rely to some
degree on suppliers for parts, raw materials, and the exchange of
 information-and usually participate in this cycle as both suppliers’
customers, and suppliers themselves. When a company’s supply
chain firms are productive, high-quality businesses themselves
with the ability to thrive in the local and global market, that
company will also enjoy increases to its own efficiency,
productivity, and innovation.
4. Factor Conditions – of course, it matters what natural resources
infrastructure, population, skills, capital, and land are available to
a given cluster and to a nation. Porter emphasizes the
“specialized factors” of skilled labor, capital, and infrastructure,
which are harder to generate quickly because they require long-
term investment and cultivation. Consequently, clusters that have
access to these specialized factors have an advantage over those
that don’t. Conversely, factors such as resources and land are
easier to work around through trade or technological innovation,
so they matter less to competitive advantage.

o National Industrial Policy - An economic development plan developed

by the government to cultivate or support promising industries with
potential for regional or global domination. Initiatives typically emphasize:
1. Tax incentives
2. Monetary and fiscal policies
3. Quality educational system, K-12 and beyond
4. Investment in national infrastructure, including digital technologies
5. Well-developed regulatory and legal systems
6. Preference for market forces to allocate resources
7. Emphasis on free trade
Example of this is Singapore which developed probusiness,
proinvestment, export-oriented policies. It made strategic investments in
key corporations. The approach stimulated economic growth that
averaged 8 percent annually for four decades beginning in the early
1960s.
● Firm Internationalization
o Internationalization Process of the Firm – Internationalization
describes designing a product in a way that it may be readily consumed
across multiple countries. This process is used by companies looking to
expand their global footprint beyond their own domestic market
understanding consumers abroad may have different tastes or habits.
Internationalization requires modifying products to conform to the
technical or cultural needs of a given country.

o Born Globals and International Entrepreneurship – Born Globals are

defined as “entrepreneurial start-ups that, from or near their founding,
seek to derive a substantial proportion of their revenue from the sale of
products in international markets”. Born global is a type of company that
from the beginning of its activities pursues a vision of becoming global
and globalizes rapidly without any preceding long term domestic or
internationalization period. Usually, born global companies are small
 companies, technology oriented companies that operates in international
markets from the earliest days of their establishment.

● FDI-Based Explanations
Foreign Direct Investment (FDI) is a category of cross-border investment in which
an investor resident in one economy establishes a lasting interest in and a
significant degree of influence over an enterprise resident in another economy.
FDI is a key element in international economic integration because it creates
stable and long-lasting links between economies. FDI is an important channel for
the transfer of technology between countries, promotes international trade
through access to foreign markets, and can be an important vehicle for economic
development.
o Monopolistic Advantage Theory - prefer Foreign Direct Investment
because they can more effectively use their monopoly power, that is,
control of their core resources and capabilities, to achieve success in the
foreign market. Key sources of monopolistic advantage include
proprietary knowledge, patents, unique know-how, and sole ownership of
other assets

o Internalization Theory - the theory explains how the entities chooses to

acquire and internally maintain one or more value-chain activities. The
internalization of value-chain activities provided by direct ownership
provides the entities with greater control over its foreign operations.
Internalization avoids the drawbacks of dealing with external partners,
such as reduced quality control and the risk of losing proprietary assets to
outsiders.

o Dunning’s Eclectic Paradigm - According to this view, the decision on

whether or not a firm will enter a foreign country via FDI is determined by
three types of advantages:
1. Ownership-specific advantages – similar to competitive
advantages, they are the knowledge, skills, capabilities,
relationships, or physical assets that the firm owns.
2. Location-specific advantages – similar to comparative
advantages, they are specific advantages in the country the MNE
has entered, or seeks to enter, such as natural resources, cheap
labor, or knowledge workers
3. Internalization advantages – based on internalization theory,
they reflect the control obtained from internalizing production,
distribution, or other value chain activities in the firm’s foreign
operations

● Non-FDI-Based Explanations
Non-Foreign Direct Investment also referred to as “Foreign Portfolio Investment”,
takes place when companies, financial institutions or individuals buy stocks in
companies on a foreign stock exchange. This type of investment is not made with
the intention of acquiring a controlling interest in the issuing company. Typically,
this type of investment is short-term in nature and is made to take advantage of
favorable changes in exchange rates or to earn short-term profits on interest rate
 differences. It can also help to strengthen the domestic capital markets by
enhancing liquidity and contribute to improve their functioning.
o International Collaborative Ventures – sometimes called international
partnerships or international strategic alliances, are essentially
partnerships between two or more firms. They help companies overcome
together the often substantial risks and costs involved in achieving
international projects that might exceed the capabilities of any one firm
operating alone. Groups of firms sometimes form partnerships to
accomplish large-scale projects such as developing new technologies or
completing major undertakings such as powerplants.

CONCLUSION
International Trade and Investment is helpful in driving one’s economy to
success. It gives us the chance to have different opportunities, to improve, to innovate,
to grow, and made the trade across borders easier, logistics services more reliable, and
streamlined procedures for clearing customs. The theories and models that support
international trade and investment help create a global trading system that is more open,
reliable, and predictable for all.
 CHAPTER 6
SAVINGS AND THE
FINANCIAL SYSTEM
LEARNING OBJECTIVES
1. Present the terms related to Savings and Financial System.
2. Determine the used of different variables and models in addressing the financial
crisis in Asia.
3. Discuss the motives of savings and its importance & Identify Institutional
Features and roles of banking system as Financial Intermediary.
4. Give conclusions and the recommended actions in addressing issues in relation
to how it contributes to the Economic Development.

INTRODUCTION
Saving plays a key role in determining growth. It is also important to know how
saving behavior is conditioned in order to explore the implication for macroeconomic
policy and the impact of changing government policies. Much of the literature on the
developing countries deals with how these models can be used and tested. This chapter
aims to summarize the impact of different variables on saving behavior for the
developing countries, instead of looking deeply into alternative tests for these models.
Following a review of saving behavior, the chapter continues with a discussion of
banking and credit markets in the developing countries with particular reference to the
economies in Asia.

TOPICAL OUTLINE
I. Some Saving Models
A. Keynesian and Income Constrained Models
B. Income Smoothing Models: The Permanent Income and Life Cycle
C. Determinants of Savings
i. Real Interest Rates
ii. Role of the Government
iii. Growth in Income
iv. Population Age Structure
v. Level of Income
vi. Terms of Trade
vii. Degree of Financial Liberation & Stability
II. Determinants of Saving in Developing Countries & in Asia
A. Determinants of Saving in Developing Countries
B. Determinants of Saving in Asia
III. Introduction to the Financial System
IV. Banking& the Financial System
 A. Financial Repression
B. Financial Liberalization
C. Asian Expenses of Financial Liberalization
D. Measures of Financial Repression
V. Financial Liberalization & Developing Countries
VI. The Financial Crisis of 1997
VII. Informal Finance
A. A Rational for Informal Finance and a simple Taxonomy of Informal Financial
Institutions
B. Money Lenders, Landlords, and Pawnshops
C. Non-Governmental Organizations (NGO’s)
D. How large is the Informal Finance Sector in Developing Asia?
E. Establishing Linkages between Informal Finance and the Banking Sector
F. Informal Finance and Monetary Policy
VIII. Global Financial Crisis of 2008/2009 & Its Impact on Asian Financial Markets

DISCUSSION
Some Saving Models

The aggregation of business, government and private saving is called the total
saving that have a significant impact at both the individual and economy-wide levels in
long and short terms. In developing countries, most saving is accumulated by private
households and the unincorporated business sector. Government saving has not grown
much in the developing countries and corporate saving is relatively small.
Notwithstanding, virtually all research in this area has been devoted to the study of
private and household saving. There have been two major developments in the theory of
personal consumption and saving since Irving Fisher (1930) and Frank Ramsay (1930)
set up saving as a choice between present and future consumption in the 1920's.

● Keynesian and Income Constrained Models

In the Keynesian Model, saving is primarily a function of current income, and

borrowing to sustain income is not considered. These models start with the simple
observation that consumption may depend upon current income. In the simple models of
consumption behavior presented at the beginning of an economics course, the
consumption function is presented as a linear function of income while saving forms the
residual. This model was overtaken by more plausible theories in the 1960s and 1970s
that allow for consumption and income smoothing over time-that is, borrowing to smooth
consumption so that it does not depend completely on the current level of income.
Nevertheless, the simple Keynesian model featuring the importance of present income
has made a comeback with the work of Deaton (1989, 1991, 1992) and Hall (1978) Hall
argues that expected future income is subject to random changes so that current income
is the only reliable predictor of current consumption and saving. Alternatively, income
smoothing does not occur or is weak and this vitiates the life cycle model.

There are several possible reasons for this:

 ⮚ Income smoothing is not possible because of borrowing constraints and
imperfect capital markets
⮚ Income smoothing is not applicable since many generations live together,
weakening the need for individuals to save
⮚ Future incomes are uncertain so it is difficult to plan over a lifetime. This is
particularly true when individuals are self-employed or depend upon
agriculture harvests. It has also been shown that the poor usually have a very
short time horizon and a high discount rate. This is why it is difficult for them
to break out of the cycle of poverty. Thus, in these models people do not
optimize their potential over their life cycle. Rather, consumption is more
closely related to current income
● Income Smoothing Models: The Permanent Income and Life Cycle Hypothesis

These are models that allows for consumption smoothing over some time horizon
without constraint. Families can borrow and save at will in order to smooth their
consumption patterns to compensate for fluctuations in income. The time horizon in
these models can either be a person's lifetime or a longer (sometimes infinite) time
horizon. The Permanent Income Hypothesis (PIH) of Friedman (1957) and Hall (1978)
assumes an infinite lifetime horizon. In the Friedman version, consumption is based on
permanent income, and all transitory income is saved. Permanent income is determined
as a declining weighted average of past income.

In the Life Cycle Hypothesis (LCH), Modigliani (1970) assumes a finite horizon
(lifetime). There is a time profile of saving and consumption that leaves the individual
either with no saving at death, of a predetermined bequest at death. This model is
characterized by a hump in the saving function during the maximum earning years.

It is important to know which of these competing theories is most appropriate for the
developing countries. Saving is a key variable in determining growth, as we have seen
earlier. How saving behavior is conditioned is also significant in order to explore the
implications for macroeconomic policy and the impact of changing government policies.
Much of the literature on the developing countries deals with how these models can be
used and tested.

● Determinants of Savings

In this section, we look at the variables that have been incorporated into regression
models of saving behavior. Several saving models in the economic literature are
reviewed here to determine which variables are the key influences of saving behavior. It
is assumed here that the variables on the right-hand side of these regressions are the
causes of changes in saving and not the other way around. If causation runs in the other
direction, and indeed it might, and if the lags are long, we do not introduce any bias by
testing simple models. However, the fact that saving can cause changes in, say, income
and income growth may contribute to a virtuous growth cycle, where rapid growth leads
to an increase in savings. It would also be worthwhile to look into different statistical
techniques for testing models of saving behavior.

⮚ Real Interest Rates - Higher real interest rates stimulate saving by offering
higher financial returns for abstaining from consumption through the
substitution effect. On the other hand, higher interest rates result in more
income for creditors and this stimulates consumption through the income
 effect Furthermore, a negative income effect could manifest as a decline in
pension contribution when interest rates rise.
⮚ Role of the Government - If the government raises taxes (increases
government saving) incomes will decline and private saving can also be
expected to diminish, other things being equal. The effects on saving will
depend upon whether the change in the fiscal deficit occurs through a change
in the tax rate or in the rate of government spending. Increased government
spending may lower the resources available to the private sector and hence,
have a negative effect on private saving independent of its impact on the
deficit. There is some evidence that governmental in large developing
countries, as proxied by the share of government expenditures in gross
national product (GNP), may have a negative effect on private saving. This
could result from the crowding out of private investment (and saving) by the
public sector.
⮚ Growth in Income - If workers believe that a change in income is permanent,
in a LCH/PIH world, consumption would be adjusted upward accordingly and
the current saving rate could fall. On the other hand, those who do not earn
from current income but from accumulated assets, such as those who are
retired, might dissave at a lower rate as a result of the wealth effect of more
rapid income growth. The increase in income could also have an impact on
the rate of return on capital and hence the real interest rate.
⮚ Population Age Structure - The saving rate is expected to decline as the
population ages. A country with a very low dependency rate (large working
population as a ratio of total population) can be expected to have a higher
saving rate in an LCH model. The young and the retired are usually
dissavers. However, these macroeconomic results across countries are in
conflict with some microeconomic studies which show that age consumption
profiles do not differ enough to explain why aggregate consumption should be
affected by demographic factors. The LCH assumption that lifetime income is
all "used up" at the moment of death, may also be erroneous. Since the time
of death is uncertain, bequests may not be planned.
⮚ Level of Income - If LCH and PIH are correct, then saving should not be
related to current income. However, several researchers have found that
current income is an important explanatory variable. These results lend
partial support to the idea that there are liquidity constraints and/or that
income smoothing may be in response to short-run income fluctuations. It
also suggests that precautionary saving motives are stronger than life-cycle
effects in the developing countries.
⮚ Terms of Trade - The terms of trade effect works through an unanticipated
and transitory increase in inconie by an improved trade balance. Since
changes in the terms of trade are usually viewed as tem porary, they would
be incorporated into the LCH/PIH framework as transitory, with a strong
positive effect on saving. The empirical literature finds this to be generally
supported.
⮚ Degree of Financial Liberation & Stability - A general rule of thumb regarding
saving would be that financial stability and liberalization are positively related
to the rate of private saving, other things being equal. A predictable and
stable financial environment that offers a range of financial instruments can
be expected to call forth a higher level of saving from the private sector than
a volatile and capricious financial and economic environment. However, an
alternative view would be that increased volatility could lead to a greater
 ⮚ A precautionary motive for saving. Therefore gives no guidance apart from
the recognition that a more liberal environment should lead to higher saving
rates.

Determinants of Saving in Developing Countries & in Asia

● Determinants of Saving in Developing Countries

The Massion et al. (1995) study reports a number of regression. The results show
that the rate of growth of GDP, the terms of trade, per-capita income, total wealth, the
dependency ratio, and the current account surplus/GDP are all significant explanatory
variables for a large sample of developing countries over a long period. All the variables
have the expected signs.

● Determinants of Saving in Asia

Given their high and rising saving rates, Asian economies have been the subject of
considerable research. In an early contribution focusing on the region, Susan Collins
looks at rising national saving rates in nine Asian developing economies (plus Turkey)
over the period 1960-84. She concludes that high growth rates, a low dependency ratio,
and high income levels are all positively associated with saving rates. She argues further
that there are structural differences between low-income and middle-income countries in
the determinants of savings.
Charles Horioka and Akiko Terada-Hagiwara find that domestic saving rates in
developing Asia rose during the period 1966-2007. They conclude that the main
determinants of those trends were the age structure of the population (especially the
elderly dependency ratio), income levels, and the level of financial sector development.
They forecast that over the next two decades the domestic saving rate in developing
Asia as a whole will remain roughly constant, despite rapid population aging in most of
those economies, in part because the negative impact of population aging on the
domestic saving rate will be largely offset by the positive impact of higher income levels.
National saving comprises saving by households, corporations, and the government.
Household savings typically has attracted most of the attention of researchers because it
is more amenable to theoretical modeling than the other components of nations saving,
and because its determinants can be analyzed using household-level survey data.
Corporate saving (retained earnings) has received less attention, but in fact has been
the key driver behind the surge in national savings in major Asian emerging markets
during the latter half of the last decade. While household saving rates have also trended
up in most major Asian economies, one prominent Asian economy where the household
saving rate has fallen quite significantly over the last two decades is Korea. Young Jun
Chun evaluates the effects of population aging and fiscal policies on national saving in
Korea. Using a life-cycle model that incorporates a generational accounting approach,
he argues that rapid population aging and the long-term budgetary imbalance have and
will continue to drive down the national saving rate in Korea.
Introduction to the Financial System
According to definition, the financial system is an important part of contemporary
economies. Financial system is known as the collection of national, international, or
industry-specific organizations and procedures that allow the exchange of money.
A country's financial system includes:
(a) banks and nonbank lenders
(b) insurers
(c) securities markets and;
(d) investment funds.
In the majority of Asian nations, commercial banks are the main component of
the financial system. But informal financial institutions also have a significant impact.
Informal Financial Institution includes:
(a) informal moneylending
(b) loan brokers and;
(c) burial societies.
Banking& the Financial System
Banking System - is a group or network of institutions that provide financial services
for us. These institutions are responsible for operating a payment system, providing
loans, taking deposits, and helping with investments.
The banking and financial systems in the rising countries of Asia have developed
throughout the colonial era. The banking system and commercial banks predominated
these financial systems. The banking systems were under the control of the government
while commercial banks were often either owned by or under the control of the central
bank.
 ⮚ Financial Repression
Financial repression is the belief that an economy's banking institutions are unable to
operate to their fullest capacity due to a number of government rules, laws, and other
non-market constraints.
Governments can use financial repression as a concealed way of obtaining money
from the economy to pay off their debts. A government uses deceptive techniques, such
as zero interest rates and inflationary policies, to steal growth from the economy in order
to pay off its own obligations. Some of the strategies might even be straightforward, such
forbidding the possession of gold and limiting how much currency can be converted into
foreign currency. Financial Repression are methods for governments to increase tax
income and domestically-held debt.
Financial repression is also useful for governments to control capital and have its
citizens consume the bulk of domestic government debt.
This means a country’s population is no longer has many choices when investing
their savings. Rather than having money leaving the country to attract foreign assets, it
is funneled towards the government.
Direct lending to the government, interest rate limits, restrictions on international
capital flows, lending standards, and a closer relationship between the government and
banks are only a few examples of financial repression methods. The term was initially
used to point out bad economic policies that held back the economies in less developed
nations.
⮚ Financial Liberalization
Financial liberalization is defined as the removal of government intervention from
financial markets. Liberalization includes eliminating the restrictions that characterize
financial repression. These policies reduce the government’s interference in financial
markets, leading to the privatizing of state-owned banks; introducing the convertibility of
the currency on the capital account, improving prudential regulation; and promoting local
stock markets. In the past three decades, both industrial and emerging market countries
have moved toward this form of liberalization of their financial systems.
Together with these measures, price levels should be effectively controlled to
keep inflation to a minimum. In this way, positive real interest rates can be easily
maintained.
In the 1960’s and 1970’s, the commercial banking system was tightly controlled
and operated by the government and it was believed that one purpose of the banking
system was to help further the government’s objective of making loans to subsidized
sectors through a process of direct credits. Private banks were thought to be unwilling to
provide such loans. Furthermore, credit allocation plans were implemented, and interest
rates were controlled. In order to reduce the cost of government debt, banks were forced
to hold government debt. Because the banking sector was governed by the government,
prudential rules were largely ignored.
In the 1980’s and early 1990’s, financial liberalization began in the NIEs and in
Southeast Asia. As restrictions on private and foreign banking were loosened, more
competition was made possible. While directed credit and requirements to hold sizable
amounts of government securities were eliminated, interest rates were significantly
liberated. As they grew increasingly independent and broke free from the Treasury's
control, an appearance of independence was also visible.
With the exception of Sri Lanka, South Asia's rate of development was slower
due to fewer changes being made and the continued repression of the financial system's
structure.
⮚ Measures of Financial Repression
Nevertheless, substantial evidence of financial repression remained in several
countries. This is shown by some aggregate measures of financial deepening. One such
widely used measure of financial repression and the financial liberalization is the ratio of
money plus quasi money to GDP/GNP. The ratio rises from liberalization and falls with
financial repression.
The liberalization measures, however, were not supported by stricter prudential
restrictions, and numerous pre-liberalization practices remained as a result. As a
consequence, there were poor loans made and bank assets became increasingly
vulnerable as the inflation of the mid-1990s grew.
In the 1980s, banks in the Philippines were also liberalized. As a result, the banking
system was basically in private ownership. There are only two development banks
distribute money to struggling rural businesses and a few urban sectors. Up to 40% of a
company may be owned by foreigners, but foreign banks are not permitted to open any
branches outside of Manila. Interest rates are not regulated and reserve requirements
are low. There are some directed credit allocations but they apply mainly to rural banks.
Due to these reforms and the challenges encountered in the 1970s, the Philippines'
financial sector did not have a high level of power and influence in the early and middle
1990s. As a result, it was able to withstand the financial crisis without the need to
establish an asset management company to handle bank loans. The absence of a
prudential and regulatory system, however, as well as the existence of corruption and
crony capitalism, have weakened the financial sector.
Financial Liberalization & Developing Countries
The Financial Crisis of 1997
The Asian financial crisis, also called the “Asian Contagion,” was a sequence of
currency devaluations and other events that began in July 1997 and spread across Asia.
The crisis started in Thailand when the government ended the local currency’s de facto
peg to the U.S. dollar after depleting much of the country’s foreign exchange reserves
trying to defend it against months of speculative pressure.
Just weeks after Thailand stopped defending its currency, Malaysia, the
Philippines, and Indonesia were also compelled to let their currencies fall as speculative
market pressure built. By October, the crisis spread to South Korea, where a balance-of-
payments crisis brought the government to the brink of default.
Other economies also came under pressure, but those with solid economic
fundamentals and hefty foreign exchange reserves fared much better. Hong Kong
fended off several major but unsuccessful speculative attacks on its currency, which is
pegged to the U.S. dollar via a currency board system and backed by massive U.S.
dollar reserves.
Informal Finance
INFORMAL finance are the loans that are undertaken for launching of new
business by providing capital through private contracts between lenders and creditors
when official banks are not available.
INFORMAL finance has been eminent to some population that are unable to
obtain credit from different institution of formal sector.
Some example of informal finance are 5'6, ROSCO and people in the area that
are not registered business who are willing to lend money with certain interest that may
agree upon.
Informal finance may have disadvantages like less requirements, accessible, low
initial deposit or collaterals and easy to negotiate especially for those people who do not
power.
⮚ Rational for Informal Finance and a simple Taxonomy of Informal Financial
Institutions
Informal finance plays a crucial role since large segment of the population face
impediment.
1. Access to banking facilities is limited for the squatters, slum residents, and in
some are of rural economy.
2. Banks lend primarily for investment and not for consumption.
3. Transactions and appraisal cost are high proportion of the potential loan or other
transaction and this discourages lending.
4. The banks lack information about the credit worthiness of potential borrowers.
5. These borrowers do not have sufficient capital to a submit a credit report.
6. Banks believe that the borrowers are too poor to repay at a commercial rate of
interest.
⮚ Money Lenders, Landlords, and Pawnshops
Money lenders refers to a person or a group that are willing to lend money in returns
of interest. Landlords are owner of a particular asset which can be rented and as a
return of rental payment on later date depending on the agreement. Interest rates can be
higher than formal institution, in some instance the rates decreases provided by
evidence of competition depending on the situation. Pawnshops depend on the reselling
an item that is pawned, often paying discounted price to ensure making some returns
and or charging high rates of interest for redemption of an item.
⮚ Non-Governmental Organizations (NGO’s)
A non-governmental organization that function independently in any government.
NGO's can operate outside the formal banking system or become a member of the
formal banking community.
The following are the examples of NGO in the Asian region.
− GRAMEEN BANK IN BANGLADESH
The grameen Bank is the most successful NGO, which become a rural banking
cooperative and copied in many countries. The scheme of Grameen Bank is owned
primarily by its depositor, who is also its primary borrowers. In this manner it can be
classified as a cooperative. The Bangladesh government provided some startup capital
but the government share has gradually reduced. It depends on the borrowers to self-
enforce repayments, since the borrower is also a shareholder.
By working in this cooperative type of environment, enforcement and monitoring
costs are minimized. The risk default is shifted from GB to the borrower since is shared
with each other. Potential borrower knows that their default will penalize. Borrowers are
charged the prevailing commercial loan rates and there is neither a tax not a subsidy.
− BANK GADANG BALI IN INDONESIA
The Bank GADANG BALI started as a small lending business which led to a
successful microcredit scheme in Bali, Indonesia, turned into a local bank with many
branches in Bali. They offer small loans and deposits and send mobile van around the
country side every day to collect deposits, loan payment and extend new loan.
The success of GADANG Bali is also a rural setting where many small borrowers
and savers come from similar social economic circumstances.
⮚ How large is the Informal Finance Sector in Developing Asia?
Estimates of informal credit are available for new countries as reported in Ghate
(1994). The proportion of outstanding household debt to the formal sector was quiet
substantial in the early 1980. Ghate has reported that the proportion has decreased
compared with estimates made in the earlier period, it has a possibility that this trend
has continue to exert an effort to extend number of bank branches, consumer lending
has increased and efforts have been made to make funds available to the poor. Informal
lending would also have decreased as the extent of poverty has been reduced, the
rural sector has shrunk, and the non-poor have accumulated assets that can be used
collateral.

Household Borrowing in Rural Sector in Seven Asian Countries in the late

1970's and 1980's

KIND OF BANGLA INDIA PHILIPPINE THAILAN KORE MALAYS SRI

BORROWING DESH S D A IA LANK
A

Proportion of
borrowing
from the
informal 36 80 70 52 50 70 45
sector (by
rice farmer)

Proportion
bof
outstanding 39 40 23 44 51 62 N/A
household
debt owed to
informal
 sector (rural
plus urban)

Money lenders refer to a person or a group that are willing to lend money in returns
of interest. Landlords are owner of a particular asset which can be rented and as a
return of rental payment on later date depending on the agreement. Interest rates can be
higher than formal institution, in some instance the rates decreases provided by
evidence of competition depending on the situation. Pawnshops depend on the reselling
an item that is pawned, often paying discounted price to ensure making some returns
and or charging high rates of interest for redemption of an item.
⮚ Establishing Linkages between Informal Finance and the Banking Sector
⮚ Informal Finance and Monetary Policy
Through inflation tax that results to increase in price will affect the monetary policy on
informal finance. Since majority of informal finance are in poor people who are limited
with their resources and unable to accumulate savings. To help poor to continue make
difference in raising standards of living, monetary policy will prevail in maintaining stable
price level for objective.
Monetary policy is a management of money supply and interest rate and demand
side of economic policy used by governments.
Global Financial Crisis of 2008/2009 & Its Impact on Asian Financial Markets
Financial crisis is one of the remarkable and consistent features in economy that is
continuously occurs. The impact of power exort demand and the outflow financial capital
from the Asian region were investigated. Borrowers default on mortgage and all other
investment tied to lose value. The financial crisis caused by the unprincipled investment
banking and insurance practice passed all the risk to investors. The stock market began
to fall and other major business worldwide began to fall. It results to a worldwide layoff of
employment. Asia's export and growth drop due to severe retreat in the advance
economics and drop of global trade.
However the impact of crisis on the trade potential of one country needs to understand
it's behavior if it will affect the economic growth. Since 1970's the East Asian economic
experienced withdraw of cross border flows that results to severe financial crisis.

CONCLUSION
The big issue of Saving and the Financial System was covered in this chapter.
The discussion of reasons for saving and the function of the banking system as a
financial middleman in mobilizing savings and converting them into profitable
investments have both been covered. This chapter focused on how important saving has
been to Asia's economic growth and how it interacts with other factors to change and
modify saving behavior. The banking system's institutional characteristics have been
emphasized, such as its propensity to act as a financier for the government by providing
funding for initiatives that it finds important.
The rapid financial liberalization that has occurred in Asia has been emphasized.
However, there hasn't always been due consideration given to updating and changing
the institutional framework and rules governing the financial system. Due to this, there
was a financial bubble before the Asian financial crisis. Despite these obstacles, the
continued mobilization of savings is a vital component of the wellbeing and continued
expansion of the economies in developing Asia.
 CHAPTER 7
POPULATION

LEARNING OBJECTIVES
1. To understand how population/growth affects long-term economic viability.
2. Identify how population stabilization relevant to population increase.
3. To discuss the benefits and costs of population growth.
4. Explain how the rate of rise in per capita income and population growth are
related.

INTRODUCTION
Population is a complete set of individuals, whether that group comprises a
nation or a group of people with a common characteristic, has various definitions
depending on its nature. It refers to the total number of people or organisms in a specific
area or region. It can also refer to people living in a particular country, city, or part of the
world.
Economic Growth is the increase or improvement in the inflation-adjusted market
value of the goods and services produced by an economy over time. Statisticians
conventionally measure such growth as the percent rate of increase in the real gross
domestic product, or real GDP.
 World Population has reached 8 billion people on November 15, 2022 according
to the United Nations. The current population of the Philippines is 113,369,333 as of
Tuesday, February 7, 2023, based on Worldometer elaboration of the latest United
Nations data.

TOPICAL OUTLINE
I. The relationship between population growth and economic growth
II. Significance of population in economic growth
a) Labor Force
b) Consumer Base
c) Innovation and Creativity
d) Tax Revenue
e) Aging Population
III. Basic Demography
a) Birth Rate
b) Death Rate
IV. Population Growth and Income Growth
V. How population affects the economic development of a country

DISCUSSION
The relationship between population growth and economic growth
Population growth affects many phenomena such as the age structure of a
country’s population, international migration, economic inequality, and the size of a
country’s workforce. These factors both affect and are affected by overall economic
growth. High population growth in low-income countries could hinder their progress,
while low population growth in high-income countries is likely to cause social and
economic issues.

The discrepancy between the population growth rate and the income growth rate is
roughly reflected in the growth rate of per capita income. The total income divided by the
population is what determines per capita income. Economic notions like population
growth and economic growth don't always apply to all nations equally. As an example
Economic development may be sped up by population growth and a nation with a higher
population will be able to raise its output more than a nation with a smaller population.
However, having a high population does not guarantee that a country's economy will
grow. Many analysts think that economic growth in high-income nations is anticipated to
be relatively moderate in the upcoming years, in part because population growth in these
nations is anticipated to reduce significantly (Baker, Delong, Krugman, 2005). Rapid
population growth is now widely acknowledged to hinder development efforts and
exacerbate already existing development-related issue. The overall picture of the
connection between population growth, economic development, and economic growth is
therefore very obvious.
Basic Demography
Birth rate: The ratio between births and individuals in a specified population and time.
Death Rate: The ratio of deaths to people in a population during a specific time period:
the incidence of fatalities in a population during a specific time period (like one year),
which is often stated as a number per 1000 or 100,000 people: MORTALITY RATE
It is possible to determine if a region's population is increasing or decreasing by
comparing its birth and death rates. When the birth rate exceeds the death rate, we can
conclude that the population is expanding because more individuals are being "added"
to the area than are being "taken away." According to logic, the population would be
decreasing if the birth rate was lower than the death rate and growing if they were equal
(i.e., more people were being "taken away" from the area than were added to it). With
this knowledge, we might compare the birth and death rates of any two nations and
determine which one has a quicker population growth rate.
How population affects the economic development of a country
Population growth can be a potential catalyst for economic development. Effect
of population growth can be positive or negative depending on the circumstances. A
large population has the potential to be great for economic development. In a country
with abundant resources and money - a rich country -perhaps more people is a good
thing. But that isn't always the case in countries with limited resources. Limited
resources and a larger population puts pressures on the resources that do exist.
World population continues to grow and is expected to peak around 2100 at a
level of almost 11 billion. Most of this growth will take place in low-income and lower
middle-income countries.
Developing countries typically have fragile infrastructure and low average per
capita income. Therefore, population growth will not directly lead to economic growth. In
fact, population growth will likely cause economic stagnation in developing countries.
Because of the momentum of past growth, it is unlikely that the increase of
global population over the next 30or 40 years will be substantially faster or slower than
anticipated in the population projections of the United Nations.
Rapid population increase can exacerbate the challenge of ensuring that
future development is sustainable and inclusive. Achieving the Sustainable Development
Goals, particularly those related to health, education and gender equality, can contribute
to slowing global population growth.
In countries with relatively high levels of fertility today, investments in
education and health can significantly increase the positive but temporary economic
impact of a favorable age distribution created by a sustained decline in fertility.
Population growth magnifies the harmful impact of economic processes on the
environment; yet the rise in per capita income has been more important than population
growth in driving increased production and. consumption.
Countries with the highest per capita consumption of material resources and
emissions of greenhouse gases are generally those where income per capita is high, not
those where the population is growing rapidly.
More affluent countries bear the greatest responsibility for moving rapidly to
achieve net-zero emissions of greenhouse gases and for implementing strategies to
decouple human economic activity from environmental degradation.
 Wealthy countries and the international community can support low-income and
lower-middle-income countries by providing the necessary technical and financial
assistance so that their economies can grow rapidly using technologies that will
minimize future greenhouse gas emissions.
The world’s poorest countries have some of the fastest growing populations: the
population of low-income countries, located mostly in sub-Saharan Africa, is projected
almost to double in size between 2020 and 2050, accounting for most of the global
increase expected by the end of the century.
Significance of population in economic growth
Population is one of the most important factors that can influence the economy of
a country. The following are some of the ways in which population can affect the
economy:
Labor Force: Population determines the size of the labor force, which is a crucial factor
in the production process. A larger population means a larger pool of workers that can
contribute to economic output and growth.
Consumer Base: Population also represents the potential consumer base for goods and
services, which is essential for businesses to thrive. A larger population means a larger
market for products and services, leading to higher demand and potentially higher
revenue.
Innovation and Creativity: A larger population can also mean a more diverse and
creative workforce that can drive innovation and entrepreneurship. With more people
comes more ideas, leading to more innovative products and services.
Tax Revenue: Population size can also affect government tax revenue. A larger
population means a larger tax base, which can provide more revenue for public goods
and services such as education, healthcare, and infrastructure.
Aging Population: However, an aging population can also have a significant impact on
the economy, as it can lead to a decline in the labor force and a decrease in consumer
spending.
In summary, population size and structure can have a significant impact on the
economy of a country, affecting everything from labor force to innovation to government
revenue. It is essential for policymakers to understand the role of population dynamics in
the economy to make informed decisions about economic policies and investments.
Population Growth and Income Growth
Population can have a significant impact on the economy of a country. The size
and growth of the population can affect the labor force, consumer demand, and the
overall economic output of a country.
A large population can be both an asset and a liability, depending on how
effectively the resources are utilized and managed. For example, the country China and
Somalia, China has a current population of 1,453,810,875 and its annual GDP was
121.02 trillion yuan ($17.94 trillion) in 2022, while Somali has a current population of
18,143,378 and its GDP was $1.443 billion. But a high population does not necessarily
equate to a high economy.
A low population does not necessarily mean a low economy.
 For example, Brunei and Kiribati, Brunei has a current population of 448,402 but
its annual GDP was $27 billion, while Kiribati has 124,225 and its annual GDP was 0.25
billion. Countries with low populations may face certain economic challenges, such as a
smaller domestic market and a limited pool of labor, they may also have advantages,
such as lower overhead costs, lower demand for resources and infrastructure, and a
more focused approach to economic development.
In many cases, countries with low populations can achieve a high standard of living
and a strong economy by focusing on niche industries, developing innovative
technologies, or leveraging their natural resources.
Ultimately, the relationship between population and economy is complex and
influenced by many factors, and it is not possible to make a simple correlation between
the two.

CONCLUSION
We conclude that Population growth may or may not be beneficial to economic
development, Depending on the state of a country's economy. A huge population could
be very beneficial for economic growth. The global population is predicted to peak at
over 11 billion people in 2100 as it continues to increase. The majority of this expansion
will occur in low- and lower-middle-income nations. Infrastructure in developing nations
is frequently flimsy, and average per capita income is low. Making future development
sustainable and inclusive can be challenging, and rapid population growth can make it
even more difficult.
 CHAPTER 8
POVERTY AND
INCOME
DISTRIBUTION

LEARNING ACTIVITIES
1. Define the definition of poverty.
2. Explain the main causes of poverty.
3. Differentiate between Conservative and Liberal view of poverty.
4. Discuss the key programs to help reduce poverty in the Philippines.
5. Define Income Distribution and how it is measured.
6. Discuss the determinants of income and how it is distributed.
7. Economic Policy for Income Distribution.

INTRODUCTION
The study of poverty and income distribution is an important aspect of economic
development. It involves the analysis of the distribution of resources and income within a
society, and how it affects the well-being of individuals and the growth of the economy
as a whole.
Poverty refers to a lack of resources, both material and non-material, that
prevent individuals or households from fulfilling their basic needs and participating fully
in society. The study of poverty includes examining the causes of poverty, such as lack
of access to education, health care, and employment, as well as its consequences, such
as malnutrition, disease, and reduced economic growth.
Income distribution, on the other hand, refers to the way that the total income
generated by an economy is distributed among its individuals or households. Inequality
in income distribution can have a significant impact on poverty levels and economic
growth, as it affects the ability of individuals and households to access the resources
and opportunities needed for a better standard of living.
In the study of poverty and income distribution, economists use a variety of data
and methods to understand the distribution of resources and income in different
societies and over time. This can involve analyzing data on income, consumption, and
wealth, as well as using mathematical models to study the distribution of resources and
income.
Overall, the study of poverty and income distribution is important for
understanding the factors that contribute to economic growth and development, and for
designing policies that can help reduce poverty and promote more equitable income
distribution.

TOPICAL OUTLINE
I. Poverty
a. Definition
b. Concepts of poverty
II. Main causes of poverty
a) Vulnerability to Natural Disasters
b) Other causes
III. Conservative Vs. Liberal View of Poverty
IV. Key Programs/Strategies to Help Reduce Poverty in the Philippines
a) Republic Act No. 8425 institutionalizing the Social Reform and Poverty Alleviation
Program.
b) Republic Act No. 11310 Institutionalising the Pantawid Pamilyang Pilipino
Program (4Ps)
c) Republic Act (RA) No. 10931, otherwise known as the Universal Access to
Quality Tertiary Education Act
d) Republic Act No. 11223 also known as Universal Health Care Act
V. Income Distribution
a) Definition
b) Measurement
VI. Distribution of Income
a) Equity
b) Efficiency
VII. Economic Policy
a) Monetary Policy
b) Fiscal Policy
DISCUSSION
Poverty
− Poverty is about not having enough money to meet basic needs including food,
clothing and shelter.
− It refers to the lack of adequate financial resources such that individuals,
households, and entire communities don't have the means to subsist or acquire
the basic necessities for a flourishing life.
Concepts of Poverty
• Absolute poverty -a situation where individuals do not have access to the basic
requirements of life—food, shelter, clothing.
• Relative poverty - A situation where individuals are excluded from being able to take
part in what are considered the normal, acceptable, standards of living in society.
Causes of Poverty
A main cause of poverty in the Philippines is the vulnerability to natural disasters.
Natural disasters in the Philippines have caused US$23 billion in damages since 1990,
which continues to delay the development process.
According to the Data Warehouse (DW), the Philippines is the most vulnerable country
to typhoons, earthquakes and volcanic eruptions in the world.
The other causes includes the following:
• Climate change
• Lack of Education
• Inequality or social injustice
• Lack of access to clean water and nutritious foods
• Lack of access to basic healthcare.
• High inflation rate
• High levels of population growth
Conservative Vs. Liberal View of Poverty
The Conservative View
• Conservatives advocate the “stick approach”—you don’t work, you don’t eat
• Most conservatives believe that the social programs of the 1960s and 1970s not only
did not work but that they caused more poverty by destroying people’s incentive to work.
• Most conservatives believe that too much is being done to try to help the poor.
The Conservative Solution
• Provide the poor with jobs mainly through Private Sector
• Cut the poor off from Public assistance
The Liberal View
• The Liberal View advocates the “carrot approach”—training and jobs.
• Most liberals believe that had there been no 1960s and 1970s social programs, there
would have been even more poverty than we have now.
• These programs prevented a bad situation from getting worse.
• During times of rising unemployment, especially among black males, it is a victory just
to keep the poverty rate from rising.
• Most liberals believe that too little is being done to help the poor.
The Liberal Solution
• Minimise Employment discrimination
• Provide the poor with better education and trainings
• Provide the poor with million or government jobs
Key Programs/Strategies to Help Reduce Poverty in the Philippines
⮚ Republic Act No. 8425 institutionalising the Social Reform and Poverty
Alleviation Program - Social Reform and Poverty Alleviation Programme, known
as the "Social Reform and Poverty Alleviation Act". It is the policy of the State to:
adopt an area-based, sectorial and focused intervention to poverty alleviation
wherein every poor Filipino family shall be empowered to meet its minimum basic
needs of health, food and nutrition, water and environmental sanitation, income
security, shelter and decent housing, peace and order, education and functional
literacy, participation in governance, and family care and psycho-social integrity.
⮚ Republic Act No. 11310 Institutionalising the Pantawid Pamilyang Pilipino
Program (4Ps) - The Pantawid Pamilyang Pilipino Program (4Ps) is the national
poverty reduction strategy and a human capital investment program that provides
conditional cash transfer to poor households for a maximum period of seven (7)
years, to improve the health, nutrition and education aspect of their lives.
⮚ Republic Act (RA) No. 10931, otherwise known as the Universal Access to
Quality Tertiary Education Act - Is “an act promoting universal access to quality
tertiary education by providing free tuition and other school fees in State
Universities and Colleges, Local Universities and Colleges, and State-Run
Technical-Vocational Institutions. A factor of systemic poverty is a lack of access
to education in impoverished areas. People gain basic skills and increased job
opportunities through education, which can help to combat poverty in the
Philippines.
⮚ Republic Act No. 11223 also known as Universal Health Care Act - The UHC Act
provides access to the full spectrum of healthcare by enrolling citizens in the
National Insurance Program and granting health coverage to all. While
healthcare is not completely free, those in poverty will have more access to
health services. Additionally, the Philippines will allocate more funds to
PhilHealth, which will improve the quality of service and lower the cost of
medicine.
INCOME DISTRIBUTION
Income Distribution - A statistical measurement of how people earn and receive different
amounts of income. An equality with which income is distributed among all the people of
a society. Income represents a flow and it can be in the form of wages, dividend, interest
benefit payment, income from self employment and inheritance.
Two kinds of Income
1.Earned Income
2.Unearned Income
Measurement of Income Distribution
Measurement of income has various metrics to use and this includes the following:
⮚ Lorenz Curve - Portrays the graph between the difference of cumulative shares
of people from lowest to highest income and cumulative share income earned.
⮚ Gini Coefficient - The proportion of the area taken by the Lorenz curve in relation
to the overall area under the line of equality.
DISTRIBUTION OF INCOME
Equity - Refers to the fairness in economics. A fair distribution of income means that
income is distributed in a way that ensures fairness and that everyone has equal
opportunities.
Efficiency - Maximum benefits of society from scarce resources. Allocative efficiency
occurs when consumer goods are distributed in an economy in such a way that each
unit is consumed by the person who values that unit the most relative to all other people.
ECONOMIC POLICY
It refers to the government making decisions in a planned way to influence its economy
and deal with various national issues. Common types of economic policy can include
monetary policy and fiscal policy.
TYPES OF ECONOMIC POLICY
⮚ MONETARY POLICY - It is the method by which the monetary authority/central
bank controls the money supply within the economy.
⮚ FISCAL POLICY - It is the use of taxes, government transfers, or government
purchases of goods and services to stabilize the economy.
CONCLUSION
The study of poverty and income distribution is a crucial aspect of economic
development as it provides insights into the well-being of individuals and the society as a
whole. It is widely recognized that poverty and income inequality can have a significant
impact on economic growth, social stability, and human development. Economists have
developed various theories and models to understand the causes and consequences of
poverty and income distribution. include education, health, gender, race, technology,
globalization, and government policies.
In conclusion, the study of poverty and income distribution is essential for
understanding the complexities of economic development and for designing effective
policies to reduce poverty and inequality. Policymakers need to consider a wide range of
factors and adopt a holistic approach in addressing the challenges posed by poverty and
income distribution.
 CHAPTER 9
HUMAN RESOURCES
DEVELOPMENT: A
FOCUS ON
EDUCATION AND
HEALTH

LEARNING OBJECTIVES
1. To determine whether health and education have a significant value on the
development of our economy.
2. To know the effect of human resource through health and education to the
growth of economy in Asian country.

INTRODUCTION
In our modern economy, people give emphasis on the development of human
resources particularly in health and education as those aspects become the vital
component in stimulating rapid economic growth. While physical capital and natural
endowments of land and resources are also important, human resource play a critical
role in bringing about the structural and technological transformation that are required to
industrialized and raise per-capita income rapidly.
Human capital is defined as human capacities that raise productivity. Labor
productivity increases in particular are essential for sustained growth in the economy.
The improvement of human capital has therefore become a prime objective in economic
development in many countries, including those in Asia.
The policy imperative for Asia is one of pursuing economic growth and
development alongside continual investment in its people through the provision of
education and better health. Human capital investment in health and education are an
effective mechanism for bringing marginalized groups into the mainstream.
This chapter focuses on how the Asian economies have been able to undertake
such investments and how resources have been devoted to the task of raising
educational attainment and improving health to complement the growth of physical
capital and adopt to a dynamic economics environment, both domestically and
internationally. Also in this chapter, some of the issues and challenges faced by these
Asian economies in their efforts to provide health and education service for their
population.

TOPICAL OUTLINE
1.1. Overview of Education
1.1.1 Factors Affecting the Deterioration of Education
1.1.2 Education on Labor Earnings and Productivity
1.1.3The Virtuous Cycle of Education
1.2. Education in Asia
1.3. Issues in Education Policies
1.3.1 Greater Privatization of the School System
1.3.2 Teacher's Pay, Class Size, and Educational Efficiency
1.3.3 Quality versus Quantity of Education
1.3.4 Tertiary Subsidies and the Brain Drain Problem
1.3.5 Inequality Effects and Missing Credit Market
1.3.6 Implications for Policy
1.4. Health and Economic Development in Developing Countries
1.4.1 Health Patterns and Trends
1.4.2 Aspects of Health
1.5. HIV/AIDS in Asia
1.5.1 Economic Impact on Asia
1.5.2 Vulnerable Groups
 1.5.3 Measures to Contain the Spread

DISCUSSION
AN OVERVIEW OF EDUCATION
In general, education is a broad form of human learning. It can either be formal,
and informal. Children tends to learn things nor gain knowledge through their parents or
relative. The environment that the children highly affect their learning capacities. The
rapid expansion of the public educational system occurred worldwide from the 1960s up
to this day. Many countries in the developing world made a commitment to provide
universal primary education and to make a sustained effort to spread education more
widely at a secondary level. Governments have been willing to spend significant
proportion of their national income on public education as well as the parents, who are
willing to devote a larger part of their disposable income to the education of their
children.

FACTORS AFFECTING THE DETERIORATION OF EDUCATION

Growing real income per capita contributes to the rise on the demand for public
education. The population of school-age children has significantly increased in emerging
nations due to the rapid growth of the population. This has put more strains on the
educational system’s capacity, which has led to alterations in schedules, a decrease in
spending per student, bigger classes and in certain cases pooled textbooks. Considering
the scarce resources and growing demand for public education services in developing
countries over the past few decades.
In some developing countries, the shortfall in the supply of educational services relative
to demand has led to the growth of privately funded school. However, private school
system may perpetuate the maintenance of social elites as the rich would send their
children to better private school and the poor would have to be satisfied with an inferior
public school system. As a result, in many developing countries where private schools
have been allowed to flourish, this twin system of providing educational service to the
population has led to inequalities in "quality," a dichotomy that continues into the
provisions of tertiary level education. It also affects the employment outcome as
employers in such developing countries tend to favor graduate of private schools over
their public-school counterparts.
EDUCATION ON LABOR EARNINGS AND PRODUCTIVITY
EDUCATION INCREASES LABOR MARKET EARNINGS
There is considerable evidence that education and experience a large proportion of the
variation in labor market earnings. This is true for many different countries and is a
powerful reinforcement on the importance of education as a tool for lifting incomes,
alleviating poverty, and improving income distribution.
EDUCATION AND PRODUCTIVITY
⮚ Education might enhance the productivity of measured inputs, including that of
an hour of labor.
 ⮚ Education reduces the cost of adjusting to changes in the mix of inputs and
outputs to production
⮚ Education increases the ability of workers to adapt to new technology and their
willingness to change the traditional way of doing things.
THE VIRTUOUS CYCLE OF EDUCATION
Women’s education has a positive external impact by lowering fertility and infant
mortality rates and improving the quality of children who do survive, who typically have
higher educational and health standards. In this “virtuous cycle” at home, take better
physical care of themselves and their children, and feel strong sense of responsibility for
them.
According to women’s beliefs, which are particularly relevant to women’s political
empowerment, positive methods aiming at speeding women’s descriptive representation
could be useful instruments for eradicating cultural barriers to women’s political
empowerment. Increased women’s confidence in their abilities to lead has been shown
to positively affect women’s representation in parliaments, which support the importance
of culture and the election of women to public office.
BARGAINING MODELS
The household can be viewed as a bargaining situation between husband and wife.
Having a higher education raises the opportunity cost of having children and increases
the bargaining power of the mother within the home, allowing her to obtain more
resources within the family for herself and her children. Both models are difficult to
estimate, given the scarcity of data, and are complicated by the fact that often the
husband's education tends to be highly correlated with his wife.
EDUCATION IN ASIA
⮚ In most nations in the Asian region, the rapid expansion of educational
opportunities is seen as a key strategy toward sustained growth and long-term
national development.
⮚ The income per capita and its dependency ratio plays a vital role in determining
the educational attainment of the population. These are the crucial determinants
of the economy's ability to lift the average educational attainment of its
population.
⮚ Education expenditure absorbs a much larger proportion of government budgets
than most other expenditures.
⮚ Education is one of the most important ingredients in maintaining the rapid
growth for the economies in Asia.
⮚ Countries with low income per capita spend the least on primary education.
⮚ Enrolment rates over the past years somehow developed. Primary Education
became accessible in most countries.
⮚ Philippines could be put in the high-level category since its mean years of
schooling was quite high by 1980 and continue to improve in the 1980s and
1990s.
⮚ In the study of Cohen (2002), the rates of return in poor countries have increased
in the past few decades which contradicts the assumption that poor countries
would decline to return to education because globalization demands for low-
skilled workers in these countries.
 ⮚ Gender disparities exist at all levels of education but tend to fall as income rise
as the literacy differentials.
⮚ The result for South Asia illustrates a discrimination against women. However, in
Southeast Asia, the enrolment rate for women in tertiary education was higher
than men.
GENERAL ISSUES IN EDUCATION POLICY
● Greater Privatization of the School System
In the study of Jimenez (1987), administrators in private school who are finance by
local funds have greater incentive to minimize cost while maintaining quality. These help
in reducing the budget burden on the public purse because of these competitive factors.
In conclusion, the unit cost of education tends to fall with the size of enrolment in the
school.
● Teacher's Pay, Class Size, and Educational Efficiency
In the study of Leroy (1995), the student-teacher ratio does not have much effect on
educational outcomes when the range is 25 to 50 students per teacher. Therefore, it
may be a good strategy to increase class size while improving teacher quality for poorer
countries.
● Quality versus Quantity of Education
Higher quality, higher quantity, and good family background are probably highly
correlated. Thus, the returns to education must be interpreted carefully. Extending the
same quality of education to a wider cohort will probably result to a lower rate of return.
This is because some of the increase in wages or earnings will be attributed to the
increase in quality of education, whereas the quality of education and the background of
the student will also be important determinants of earnings on their own account.
● Tertiary Subsidies and the Brain Drain Problem
Tertiary education tends to be much more costly relative to primary education in
developing countries than it is in developed countries. The wage differentials between
the tertiary graduate and those who obtained less years of schooling tend to be higher in
developing vis-a-vis developed countries. The external benefit of education diminishes
with more years of schooling — that higher levels of education, greater benefits accrue
to the individual more than the society.
Brain drain is often observed in developing countries. It concerns the immigration of
skilled or highly educated people from developing countries to develop countries. The
immigration happens not only within the national boundaries but also internationally.
● Inequality Effects and Missing Credit Market
The educational levels and quality of education in Asia vary widely among countries.
Every country follows policies depending on the status of the existing system. In
many instances, The existing system tends to perpetuate the education of the ruling
class and discriminate against the education of "gifted” poor children, particularly in
rural areas where facilities for primary education may be weak. In order to address
the inequalities is to develop a well-functioning credit market. Low level of wealth
hinders productive educational choices because of the failure of credit markets.
 Implications for Policy
1. Curbing population growth means lower dependency rates and increases the
ability of the society to educate its population with the same resource base.
2. It pays to educate teachers more intensively and to pay them well, even at
the expense of having a slightly larger classes.
3. It is advantageous to spend on education for girls and primary education in
general. Investment in these areas shows high payoffs, both in social and
private returns.
4. If pays to encourage private providers of tertiary-level education and possibly
at the secondary level as well if they do not already exist.
5. Experiments with higher pupil-teacher ratios and decentralization of authority
over school management, the curriculum, and the budget may also be
advantageous.
HEALTH AND ECONOMIC DEVELOPMENT ON DEVELOPING COUNTRIES
Health is the overall being of an individual (physical, mental, and social state of
the person) (WHO). It is the absence of illness and infirmity and it also refer to the
general well-being of the population. In relation to health, we will talk about morbidity and
mortality rates, which refer to the chances of a person becoming sick or dying
(presumably due to illness). Morbidity is difficult to measure because the only available
information to measure it is through the trips of the doctor to estimate the probability. As
we know not everyone sees the doctor when they become sick or ill most especially in
developing countries where in the problem is worse since access to medical services
can be remote measurement of morbidity. On the other hand, mortality rate is closely
monitored. In most countries national statistics agencies maintain data bases of births
and deaths in the economy. It provides important clues to the general well-being of
population that is used to form another set of health measures. But not all the time it is
always available or reliable. There are other statistics that are commonly used like infant
mortality, life expectancy and birth, crude birthrates, and crude death rates. Healthy
population is an important ingredient for economic growth and development
Beside increase in quantity and improving the quality of human resources there
are sickness like malaria and typhoid fever which blocked the access to many parts of
Latin America, Africa, and Asia before 20th century. Even today there is sickness called
schistosomiasis located in section of Africa that is unsafe for them to enter lakes and
streams. Also, trypanosomiasis (an African Sleeping sickness) that restricts the range of
life stock industry. Until now there is no chemical means of control have been discovered
for either of this disease.
HEALTH PATTERNS AND TRENDS
Health conditions have been improving gradually over the years. Life expectancy
is higher in developed countries than in developing countries due to availability of safe
water, sanitary facilities, immunization, and access to health services in most countries,
Asia, and other parts of the world
Income is the major force driving improvements in health for many countries.
Decline in death occurs when countries become industrialized and living standards and
income rise. With the help of advance medical technology both rich and poor countries
have lived longer. The assessment of progress towards development and health goals,
as well as the direction of resource allocation, depends on the statistics on population
and health indicators at the global, regional, and national levels. Timely data are needed
to monitor progress on increasing life expectancy and reducing age- and cause-specific
mortality rates
Aspect of Health
Good health for every citizen is an important goal and a basic human need. There
are 3 main aspects in the context of their implications
⮚ Environmental Health – clean water and provision of an adequate waste disposal
system can control infectious and parasite diseases. Also improving ventilation
and space minimize the spread of tuberculosis most specially in urban slums in
developing countries.
⮚ Malnutrition and Food consumption – person not having enough food to eat that
causes sickness and premature death. Right amount and kind of food for young
is very important as it affect the adult population in the future. Consumption of
food and other goods or services is determined by income, prices, taste.
⮚ Medical Facilities and Services – developing countries experience very
inadequate in providing for the needs of growing population like few stablished
health center, insufficient medicine supply and lack of trained health personnel.
HIV AND AIDS IN ASIAN COUNTRIES
The widespread of many diseases all around the world have affected a lot of low-
and middle-income countries. But, in particular, HIV continues to be a major global
public health issue having claimed 40.1 million lives so far. According to WHO, in 2021,
1.5 million people contracted with HIV and 650000 people died from HIV related cases.
HIV virus reached the Asian country on mid-1990s affecting mainly the drug users. The
absolute number of people having HIV/AIDS in Asia and Africa are quite comparable on
account of the fact that Asia includes countries that have some of the largest population
in the world.
Economic Impact on Asia
There are several mechanisms through which HIV/AIDS can affect the workings
of economies. First, unlike most other deadly diseases, HIV/AIDS directly affect people
of working age. It is debilitating disease which can directly reduce worker productivity
significantly. The general weakness of workers affected by the virus can result in high
absenteeism rates. Secondly, the susceptibly of working-age individuals can lead to a
potential reduction in saving rates and disposable incomes. Thirdly, high rates of AIDS-
related death reduce stocks of human capital
Vulnerable Groups
Four major groups exhibit a very high incidence of HIV/AIDS: sex workers (both male
and female) and their clients, men who have sex with other men, and intravenous drug
users. In many Asian countries, men visit sex workers on an intermittent basis: 5-20
percent according to an ADB study. In some countries such as China, there is also a risk
from infected blood. The rates of infection have been sampled in this groups and found
to be quite high-up to 40 percent or higher in several surveys in Asian economies among
sex workers and intravenous drug users. (ADB, 2002.)
Measures to contain the Spread
To contain HIV/AIDS, it is necessary to control the spread from these highly infected
groups as well as foster behavior within these groups that will reduce the threat of
transmission the disease. Several ways to do this that have proved quite successful in
Asian Economies.
1. Promote the use of condoms among sex workers and bisexual men.
2. Publicize the necessity for using measures to protect against AIDS, such as
condoms, and highlight the importance of not sharing needles.
3. Make condoms and needles widely available and at reasonable prices or
supplied free in clinics.
4. General promotion of HIV/AIDS awareness through public media and non-
governmental organizations (NGO), as well as newspaper and magazine
articles.\
These methods have been reasonably effective in the economies where they have been
widely adopted, including Thailand and Cambodia. They need to be extended to other
countries where efforts have been curtailed by social customs, religions, or the lack of
budgetary resources devoted for it.

CONCLUSION
In this Chapter, a better and broader view on health and education have been
discussed. Various factors affecting the development of human resources especially
health and education in Asian countries have been emphasized in this chapter. We have
noted the important role that the health and education have played on the development
of human resource on Asian countries, and we have also emphasized the mutual
relationship between these two variables. Growing economies will and have a great
impact on the improvement and development of our educational, health and nutrition
standards. In conclusion, focusing on health and education is a crucial yet effective step
in human resources development.
In order to attain economic growth, the government must pay attention to the factors that
affect the overall economy, to improve health and education status of the population,
most especially the youth who is bound to contribute for the future economy.
 CHAPTER 10
GLOBALIZATION AND
THE NEW ECONOMY

LEARNING OBJECTIVES
1. Define globalization and the New Economy.
2. Identify the world trends in globalization.
3. Understand the trends in Asian Economy.
4. How does the Asian Economy deal with globalization issues?
INTRODUCTION
Globalization refers to the ongoing economic, social and political integration of
economies around the world that has been taken place since World War II. Primarily, it is
an economic process. As a result, international flows of capital and labor risen over the
decades. Trade in goods and services and capital flows through foreign direct
investment (FDI) and financial investment in equity and debt have been accelerating
rapidly between countries. Consequently, international frameworks have been setup to
deal with global issues such as the safeguarding of the international financial
transactions and intellectual property rights. On the other hand, new economy, refers to
industries that use innovative and state of the art technologies to improve their
efficiency, productivity, quality, customer’s satisfaction, profitability and nation’s gross
domestic product (GDP).

TOPICAL OUTLINE
I. World Trends in Globalization
a) International Trade
b) Financial Flows
c) Labor Migration
d) Foreign Direct Investment and Multinational Enterprises (MNEs)
II. Asia and Globalization
a) Trade in Asia
b) Labor Migration and Remittances in Asia
c) Role of International Institutions
III. How have the Asian Economies dealt with the Globalization Issues?
a) China
b) India
c) Philippines
IV. Has globalization been good for developing countries?
V. Information Technology and the New Economy
a) Nature of the New Economy in the Industrial Countries
b) Economic Performance in the New Economy
c) Asia and the New Economy

DISCUSSIONS
World Trends in Globalization
● International Trade
The impact has been greater for countries that traded extensively in the initial period
following the World War II, but it has also been substantial for large land-based
economies where trade has traditionally been a smaller GDP. World trade in exports
increased more than 20 percent in the past decade, compared with the 1980’s—from
18.2 percent world income in the 1980’s to 22 percent in the 1990’s, according to the
IMF. This is because world trade grew nearly twice as fast as world income in the 1980’s
and the 1990’s, on average. Current IMF figures show that the amount of world trade in
exports has escalated to 28 percent of world income in the 2000’s.
● Financial flows
 Financial inflows that fall under the description of short-term capital/financial flows
include short-term bank loans, short-term portfolio investment, such as equities, and
government securities and (non-inter) bank deposits. There has been enormous volatility
in most of these components. Consider, for example, the two components of short-term
credit (including trade credit) and portfolio equity investment. In the past thirty years,
there have been two surges in these investments in the developing countries.
The first cycle started in the second half of the 1970’s and was the result of a surge
in short-term bank lending. There was virtually no portfolio investment in the developing
countries at that time. This cycle lasted until the second oil shock and the ensuing debt
crises in Latin America.
The second boom began in the late 1980’s and lasted until the Asian financial crisis
in 1997. This boom resulted from an increase in both portfolio investment and short-term
credit. It was geographically more broadly based than the earlier boom, extending
beyond Latin America to include most of the Asian developing countries.
Both short-term loans and portfolio equity investments fell rapidly in the second half
of the 1990’s, the former as a result of the Mexican crisis of 1995, and the latter following
the Asian financial crisis of the 1997.
● Labor Migration
Globalization had the major effect of opening up the awareness of migration
opportunities on the pull side, as well as revealing to potential migrant the chance to
improve their standards of living, through better and more comprehensive information on
the push side. Markets for labor have arisen and been publicized by recruiting agents
that advertise positions in the sending counties.
The economics of international migration and the impact that globalization can have
on the flow of migrants is complicated by the nature of the flow of human resources, as
opposed to the investment of capital. The flow of migrants is much more restricted than
the flow of capital. In many ways the flow of legal immigrants is constrained by
immigration quotas that are determined on a country-by-country basis, which may or
may not be affected by globalization
● Foreign Direct Investment and Multinational Enterprises (MNE’s)
Foreign direct investment goes beyond trade and portfolio flows as a mechanism for
linking economies. Wholly-owned foreign firms or domestic firms with foreign partners
serve as a continuing linkage between best practice foreign technology and local firms
and developing countries through transfers of various aspect of innovation, accounting,
management, inventory management, quality control, marketing and distribution.

Asia and Globalization

● Trade in Asia
Intraregional trade within Asia has grown faster than income in the past 20 years.
The volume of intraregional trade has grown more rapidly for some countries than has
the overall volume of trade.
 After independence many countries in Asia sought to develop industries of their own
to produce substitutes for their former imports. This happened under both socialist and
no socialist regimes. A few countries—Japan the most notable among them—lacking
natural resources but endowed with an educated labour force, opted for promoting new
industrial production for export instead of import substitution. In general this strategy has
paid off better, particularly for Japan and the “four tigers”—Hong Kong, South Korea,
Taiwan, and Singapore. At the beginning of the 21st century nearly all countries were
responding to the globalization of production by promoting exports and opening
domestic markets to international competition to varying degrees. Such liberalization
exposed those economies to the volatility of international markets, and there were major
currency collapses and episodes of capital flight in the late 1990s. Although most Asian
economies had begun to recover by 2000, there was still a legacy of unemployment,
poverty, and resentment for many.
● Labor Migration and Remittances in Asia
In the realm of international trade, the volume of intraregional trade within Asia
increase rather dramatically in the past couple of decades, particularly in the NIEs.
Migration has also increase but it is more difficult to assess the magnitude of the shift,
primarily because much of the migration has been irregular or illegal.
Richer countries that grew rapidly in the 1980s and 1990s have low levels of
unemployment and are, in fact, experiencing a growing need for a variety of skilled
workers that are in short supply in the domestic labor force. While the movement of
unskilled workers has received wide publicity, there is also a strong flow of immigrants in
some skilled and professional occupations. The main recipients of this new wave of
migration are Japan, Singapore, Taiwan, and more recently, Malaysia and Thailand,
Japan, and Taiwan have attracted labor from all over the Asian region, while Singapore
has experienced a large migration from Malaysia especially from adjacent locations on
the Malaysian mainland, either on a daily basis or more permanently.
● Role of International Institutions
The role of international institutions in the process of globalization has been
multifaceted at one level, the flow of resources to the developing countries generated by
these institutions has fallen quite drastically in the past three decades. Flows of
international assistance into Asian developing countries have been confined primarily to
South Asia in recent years.
How have the Asian Economies dealt with the Globalization Issues?
● China
a) Seeks to reduce its reliance on essential external inputs . Trade and
investment links are being reshaped to be more resilient and to further
China’s development goals. The role of international exchanges has
switched focus from exports and foreign investment to accessing
strategic technology and know-how.
b) Aims to internalize global value chains and finance by leveraging its
large domestic market. Onshoring the production of critical inputs by
foreign companies in areas vital for China builds economic self-
reliance and contributes to developing indigenous alternatives,
bringing their technology and production within the CCP’s jurisdiction.
 c) Integrate with global financial markets and promote the yuan abroad ,
for example with greater access to foreign financial service providers
● India
a) Global trade Reform. In March 2020, the Indian government
announced a scheme of production-linked incentives to promote
domestic manufacturing capabilities and reduce the country’s
dependence on energy imports.4 India has become increasingly
wary of joining new trade blocs to which it has been invited, most
recently the Regional Comprehensive Economic Partnership
(RCEP).
b) Protectionist Pivot. The slowdown in India’s exports, the country’s
weak integration into global value chains, its limited success in
labor-intensive goods, and its increasing interdependence with
China have led to debates about India’s stance toward trade. It is
no longer easy to make the case that falling tariffs coincide with a
rapid rise in exports. This has created opportunities for segments
of Indian industry to demand protection and fiscal support. The
language of self-reliance has gained currency in this context.
c) Shifting Global Economic Order. To understand how India’s
stance toward the world trade order might change in the coming
years, it is important to take stock of the country’s role in current
global trade negotiations. Twenty years after it was kicked off, the
failure of the WTO’s Doha Development Agenda is increasingly
clear—as is the resultant pause in multilateral rulemaking.
Although India sometimes took an intransigent position toward this
agenda, it would not be fair to blame the country for its failure,
because neither did developed nations stay true to the agenda on
issues like
● Philippines
a) Migration. International migration from the Philippines increased
further as data from the United Nations indicate that the ratio of
Filipino migrants to the country’s total population went up from
3.5% in 1995 to 5.4% in 2017,5 and the ratio of the stock of
overseas Filipinos to the country’s total population increased from
9.4% in 1997 to 10.4% in 2013.
b) Macroeconomic and distributional impacts of globalization in the
Philippines. While the foregoing trends show continuing trade,
migration, and financial integration of the Philippines, an
unintended consequence is the greater exposure of the country’s
domestic economy to migrant returns and volatility spillovers from
other countries’ equity markets. However, the country’s
participation in the globalized world of trade, finance and migration
has resulted in tangible benefits, including low and stable inflation,
a low unemployment rate, more than adequate gross international
reserves, and a sound and fundamentally strong banking system.
c) Trade openness. From the 1990s to the 2000s, trade openness in
the Philippines improved from 88.1% to 101.0% of the country’s
gross domestic product (GDP) (Graph 1). Contributing to this
increase were the country’s efforts towards a more open trade
policy starting in the 1980s. This trade openness also reflected
declining transport costs and improved information and
 communications technology that supported the development of
complex GVCs, particularly in electronics and electrical
components, allowing companies to manage their production
more efficiently (Dudley (2017)).
Has globalization been good for developing countries?
● Industrial countries do not transfer enough technology to developing
countries
The argument here is that while some technology is transferred, it is
almost never at the cutting edge, and there is often very little actual transfer of
technology: Korea is a case in point. Much of the technological transfer from its
partners in the automobile industry was made only at the urging of the Korea
partner.
● Intellectual property of industrial countries is protected at the expense of
the developing countries
The protection of intellectual property is required in order to provide
incentives for new research and development. This is why patent laws were
developed and enforced.
● Subsidies to farmers in industrial countries are in violation of free trade
Food subsidies to farmers in the industrial countries’ lower prices in the
international market, increase the export of farm products from these countries,
and reduce the imports from developing countries.
● The structure of aid, technological transfer, and local content requirements
make it difficult for agricultural exporters to move up the ladder to export
manufactured goods
It is important to recognize that the power of moving away from
commodities cannot be underestimated. Prices for commodities such as coffee,
cocoa, rice, sugar, and tin have dropped dramatically over the last twenty years,
and this deterioration in terms of trade is an important reason that living
standards have fallen so dramatically.
● International agencies such as the IMF and the World Bank have not served
the interests of the developing countries
Immigration laws have not been adjusted as quickly as regulations on the
international flow of other resources. One way to address this problem would be
to extend schemes for short-term migration that already exists in some areas.
For example, short-term immigration of Turkish workers to Germany, workers
from Indonesia to Malaysia, as well as from several countries to Singapore, and
from the Asian economies to the Middle-East oil producers already exist. By
extending these kinds of arrangements in a formal way, there could be greater
benefits to other developing countries. Dani Rodrik (2002) estimates that it could
generate US$200 billion annually in wages to the poor, as well as additional
technological transfer.
● Immigration has been restricted even as capital has move more freely
 Immigration laws have not been adjusted as quickly as regulations on the
international flow of other resources. One way to address this problem would be
to extend schemes for short-term migration that already exists in some areas.
For example, short-term immigration of Turkish workers to Germany, workers
from Indonesia to Malaysia, as well as from several countries to Singapore, and
from the Asian economies to the Middle-East oil producers already exist. By
extending these kinds of arrangements in a formal way, there could be greater
benefits to other developing countries. Dani Rodrik (2002) estimates that it could
generate US$200 billion annually in wages to the poor, as well as additional
technological transfer.

Information Technology and the New Economy

a. Nature of the New Economy in the Industrial Countries
There are two or three fundamental changes that have taken
down place in United States and other industrial countries which have led
to the characterization of the new economy. The trend toward
globalization have resulted in a rapid growth in international trade and a
reduction in the barriers to trade. It has also resulted in the rapid growth in
foreign direct investment and portfolio investment. The share of
international trade in total GDP has risen in many countries even in large
and diverse countries like the United States and Australia. Since the
collapse of the Soviet Union and the establishment of the World Trade
Organization, the trend toward the wide use of markets has also spread
to all the corners of the world. The European Union (EU) and the NAFTA
as well as the Asia-Pacific Economic Cooperation (APEC) forum and
ASEAN have also contributed to the spread on trade and free market
forces.
The second trend is the revolution in information technology. This
is a multifaceted revolution and involves the rapid development
computing equipment, including much better speed transmission of
information relay stations, satellite, and fiber optic cables. This has
combined with the rapid spread of computer to homes and offices to
create a service sector specializing in the provision and analysis of
information and visual images that is growing much faster than the rest of
the economy. Combined with the growth of the Internet, information
technology has the potential to reduce costs and increase efficiency to
such as extent that the sustainable growth increase substantially.

b. Economic Performance in the New Economy

It is difficult to quantify the impact of changes in technology on
economic performance simply because, technology is difficult to quantify.
Neoclassical growth theory has basically given up trying to estimate the
impact of technology. The Solow Model says that the impact of
technology may raise productivity such as management and industrial
organization. In the case of the “new economy”, measuring the impact of
information technology, computers and the Internet on economic
performance is complicated by the fact that they are so closely
 interrelated to each other that the breakdown of individual components is
difficult and also the lack of a long time to analyze.
In one scenario, the initial impact of the Internet is to lower costs
and prices. In the following round, cheaper input prices lead to changes in
production plan, including more spending on information processing and
more productions plan.

The Potential Impact of the "New Economy" on Developing Asian Countries

● GROWTH OF TRADE WILL CREATE ADDITIONAL OPPORTUNITIES
The volume of world trade has been growing faster than income for
several decades and barriers to trade have been falling rapidly. More openness
in trade and also in the flow of capital should facilitate the spread of the "new
economy" to the emerging economies, particularly those for which international
trade has played a significant role in economic development.

● KNOWLEDGE INTENSITY AND TELECOMMUNICATIONS/COMPUTERS

WILL CREATE OPPORTUNITIES FOR THE EXPORT OF SKILL-INTENSIVE
SERVICES
Singapore, India, and the Philippines have already developed substantial
software and data entry platforms in the past decade. In the future, this expertise
will be extended to help these economies to enter into the knowledge and
information aspects of the "new economy" more fully. In the case of India, there
is a risk of dualism arising as the modern technology sector outpaces the more
traditional sectors of the economy.

● GROWTH OF THE INTERNET COULD CREATE A MORE LEVEL PLAYING

FIELD
The capacity of poorer countries to market retail products and to bid for
subcontracting jobs in the industrial countries could very well be enhanced by the
spread of the Internet. However, the extent of this penetration will depend greatly
on whether these developing countries can compete in this market by supplying
quality products or inputs in a timely manner. The Internet has the capacity to cut
the search costs and improve economic efficiency but only if this new technology
is embraced by a wide section of the economy. this proves successful, new
Internet companies will be able to take advantage of economies of scale in a truly
world market.

● OPPORTUNITIES FOR ACCESS TO CAPITAL WILL INCREASE AS FDI

GROWS AND AS THE WORLD STOCK MARKETS BECOME MORE
INTEGRATED
There are a number of instances where new high-tech companies in
developing countries have been able to access venture capital funds from the
industrial countries.

● THERE WILL BE GREATER PAYOFFS TO IMPROVING EDUCATION AND

COMPUTER SKILLS
There is substantial evidence in the theory of human capital that the
returns to education are quite high. The emphasis in the past had been on
 returns to women's education and the synergies that these investments have with
health, fertility, population growth, and infant mortality.

Policies for Promoting the “new economy” in Asia

● DEVELOPING ENTREPRENEURSHIP
It is essential to have a strong entrepreneurial culture that is supported by
appropriate government policies in order for innovation and adaptation of new
technologies to take place. A wide array of government policies at both the
microeconomic and macroeconomic levels, as well as institutional support would
enhance the level of entrepreneurship.

● CLOSING THE DIGITAL DIVIDE

The digital divide can be defined as the ability to access, exchange. and
process information through digital equipment. If firms have to rely on foreign
technology and value chain networks established by multinationals, then it will be
difficult for domestic firms to capture new export markets and penetrate existing
markets. Therefore, the multinational firm can play an even more pivotal role in
helping developing countries to cross the digital divide. At the same time.
because of growing international competition, it will be difficult to protect
economic rents and main product niches. There is a growing tendency for
products to be concentrated in a few economies led by multinational firms. Large
firms will also benefit because they have an advantage in processing information
and can benefit from economies of scale in doing so. They also have the capital
to undertake changes in products quickly when new technology comes on
stream.

● THE ROLE OF GLOBAL PRODUCTION NETWORKS

The importance of information technology in integrating subcontractors into the global
production networks cannot be overemphasized. For example, in Taiwan,
subcontractors in both original equipment manufacturing (OEM) and own design
manufacturing (ODM) (recall the definitions in Chapter 6) had to develop an information
network to service brand-name manufacturers. New information technologies have
allowed brand-name pro- duction and marketing on a global scale, and this has enabled
marketing firms to bargain for a better deal from suppliers and contractors. These firms
rely on subcontractors such as the OEM/ODM sub- contractors to supply goods from
production lines, after-sales service, and sometimes even product design.
Subcontractors coordinate inventory and shipment schedules with the marketing firm
and this requires information technology connections that may be expensive but serves
to cement the relation- ship between the subcontractor and the marketing firm. The
development of these global production networks tends to deepen market concentration
as brand names dominate the market because of their ability to produce and distribute
on a worldwide scale. It also tends to increase the size and concentration of
subcontractors.
CONCLUSION
This chapter has included material on two separate but related issues:
globalization and the "new economy". These topics are interrelated to the extent that
there is a growing tendency for production and international trade to be complimentary.
With this trend have come a number of interrelated issues and challenges they must be
faced collectively by the world economic community. These issues require attention from
not only individual governments but also all governments in the "global village".
There are a number of issues that have arisen as a result of the seemingly
breakneck pace of globalization. Many of these issues were mentioned and discussed in
Chapter 4. In the context of a reform agenda for Asia in the aftermath of the Asian
financial crisis, they include issues such as debt restructuring, establishing credit lines
with the private sector by international lenders such as the IMF, reforming currency
exchange rate systems, including capital- account reforms international portfolio
controls, prudential accounting and other regulations, as well as FDI and trade policies
and human development.
These issues are also pertinent to a wider global agenda. They can be extended
to include the broader issues of environmental degradation and poverty. Within the
context of the major international institutions that deal with global issues, such as the
World Bank, the IMF and the World Trade Organization, some observers believe that
these two issues have not been given sufficient attention.
 CHAPTER 11
THE ENVIRONMENT
AND SUSTAINABLE
DEVELOPMENT IN
ASIA
LEARNING OBJECTIVES
1. To maximize the probability of achieving sustainable development. To minimize
the chances of environmental degradation.

INTRODUCTION
1.1 The term "sustainable development" first came to prominence in the world
Conservation Strategy(WCS) in1980.
1.2 It achieved a new status with the publication of two significant reports by Brundtland
on: North andSouth: a programme for survival and common crisis (1985)
1.3 Our Common Future (1983) and has gained even greater attention since the United
NationsConference on Environment and Development (UNCED) held in Rio de Jenerio
in June 1992.

TOPICAL OUTLINE
● WHAT IS DEVELOPMENT
● SUSTAINABLE DEVELOPMENT
● VIEWS OF SUSTAINABLE DEVELOPMENT
● CONCEPT OF SUSTAINABLE DEVELOPMENT
● PILLARS OF SUSTAINABLE DEVELOPMENT
● APPROACHES TO SUSTAINABLE DEVELOPMENT
● SUSTAINABILITY PRINCIPLES

DISCUSSIONS
WHAT IS DEVELOPMENT?
− Generally Development is the gradual growth of a situation that becomes more
advanced and strong than previous one.
− Development is intended to bring a positive change for human being and its
surroundings. Development may take place by bringing about a change in policy,
projects and legislation.
− Development is a unfolding of human potentials for meaningful participation in
economic, social, political and cultural process and institutions, so that people
can improve their conditions.
SUSTAINABLE DEVELOPMENT
Sustainable development is development that meets the needs of the present without
compromising the ability of future generations to meet their own needs.
Gro Harlem Brundtland first introduced the concept of sustainable development in
1987. He was then the Prime Minister of Norway and chairman of the World Commission
on Environment and Development
4 MAJOR COMPONENTS
⮚ The climatic change
⮚ Nutrient cycles
⮚ Hydrological cycle
⮚ Biodiversity
EXAMPLE OF SUSTAINABLE DEVELOPMENT:
SOLAR ENERGY. The greatest advantages of solar energy are that it is completely free
and is available in a limitless supply. Both factors provide a huge benefit to consumers
and help reduce pollution. Replacing non-renewable energy with this type of energy is
both environmentally and financially effective.
WIND ENERGY. is another readily available Wind energy source. Harnessing is the
power of wind energy necessitates the use of windmills; however, due to construction
cost and finding a suitable location, this kind of energy is meant to service more than just
the individual. Wind energy can supplement or even replace the cost of grid power, and
therefore may be a good investment and remains a great example of sustainable
development.
CROP ROTATION. This farming practice is beneficial in several ways, most notably
because it is chemical- free. Crop rotation has been proven to maximize the growth
potential of land, while also preventing disease and insects in the soil. Not only can this
form of development benefit commercial farmers, but it can also aid those who garden at
home.
PILLARS TO SUSTAINABLE DEVELOPMENT
1. SOCIAL DEVELOPMENT
2. ENVIRONMENTAL DEVELOPMENT
3. ECONOMIC DEVELOPMENT
ECONOMIC DEVELOPMENT
⮚ Economic Development Appropriate economic policies
⮚ Efficient resource allocation
⮚ More equitable access to resources
⮚ Increasing the productive capacity of the poor
SOCIAL DEVELOPMENT
⮚ Social development
⮚ Improved income distribution
⮚ Gender equity
 ⮚ Investing in basic health & education
⮚ Emphasizing participation of the beneficiaries
DESIRED OUTCOME OF SUSTAINABLE DEVELOPMENT
⮚ Clean water & air
⮚ Fertile soil & good food
⮚ A livelihood & a healthy economy
⮚ An optimum population size
⮚ Safety from poverty & disease
⮚ Social contact & sense of community
⮚ Work, rest & celebration
⮚ Opportunities to learn
PRINCIPLES OF SUSTAINABLE SOCIETY ARE:
⮚ Respect and care for the community of life
⮚ Improve the quality of human life.
⮚ Conserve the Earth’s vitality and diversity
⮚ Minimize the depletion of non-renewable resources.
⮚ Keep within the Earth’s carrying capacity.
⮚ Change attitudes and practices.
⮚ Enable communities to care for their own environments
⮚ Provide a national framework for integrating development and conservation.
⮚ Respect and care for the community of life
⮚ Create a global alliance
SUSTAINABILITY PRINCIPLES
⮚ Reduce dependence upon fossil fuel, underground metals, and minerals
⮚ Reduce dependence upon synthetic chemicals and other unnatural substances
⮚ Reduce encroachment upon nature
⮚ Meet human needs fairly & efficiently
WHAT IS OUR GOAL IN SUSTAINABLE DEVELOPMENT?
Sustainable development requires the active involvement of all stakeholders:
government, NGOs, privatesectors, but also civil society. It is not just politicians, or
policy makers who decide what SD should be like
WHAT IS NEEDED TO ACHIEVE THE SUSTAINABLE DEVELOPMENT?
⮚ Eco Friendly
⮚ Present generation should be aware for needs of presence and future
generation.
⮚ And ensure the productive assets available to future generation are not.
⮚ Such technologies need to be developed and implemented which help to
conserve resources,
⮚ Prevent unnecessary pollution and help restore the environment wherever

CONCLUSION
We need to spread social awareness to bring massive change in social attitude. Action
must be taken against the backdrop of serious inequities and their impact.
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CURRICULUM VITAE
AGNE, ANGELA G.
J. Gerona, Bulan Sorsogon
09504127797
agneangela917@gmail.com

PERSONAL INFORMATION:
Birthday: October 15, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Zaldy B. Agne
Mother’s Name: Hilda G. Agne

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
ALINDOGAN, LANCE
Coron-Coron, Matnog Sorsogon
09673917231
alindoganlance1@gmail.com

PERSONAL INFORMATION:
Birthday: November 22, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Alan G. Alindogan
Mother’s Name: Emma P. Alindogan

EDUCATIONAL BACKGROUND:
Secondary: Quezon National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
AZAÑA, JHON SHEN
Danao, Bulan Sorsogon
09318919151
ajhonshen@gmail.com

PERSONAL INFORMATION:
Birthday: August 31, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name:
Mother’s Name: Sherylan A. Cabarles

EDUCATIONAL BACKGROUND:
Secondary: Danao National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
BUIZA, KEANALYN G.
Zone 2, Bulan Sorsogon
09488684097
keanalynbuiza@gmail.com

PERSONAL INFORMATION:
Birthday: October 01, 2003
Age: 19 years old
Religion: Born Again
Civil Status: Single
Father’s Name: Jonjon E. Buiza
Mother’s Name: Arlene E. Buiza

EDUCATIONAL BACKGROUND:
Secondary: Immaculate Conception Academy of Bulan Inc.
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
BACOLON, JILLIAN G.
Aquino, Bulan Sorsogon
09496503648
bacolonjill@gmail.com

PERSONAL INFORMATION:
Birthday: August 27, 2004
Age: 18 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name: Reynaldo Bacolon
Mother’s Name: Jean Bacolon

EDUCATIONAL BACKGROUND:
Secondary: Solis Institute of Technology
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
BAGUIO, NICOLE B.
Bolo, Matnog Sorsogon
09095859834
baguionicole8@gmail.com

PERSONAL INFORMATION:
Birthday: October 25, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Joel P. Baguio
Mother’s Name: Nora B. Baguio

EDUCATIONAL BACKGROUND:
Secondary: Matnog National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
BAUTISTA, KIMBERLY S.
Otavi, Bulan Sorsogon
09128077040
bautistalee2@gmail.com

PERSONAL INFORMATION:
Birthday: June 24, 2003
Age: 19 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name: Rolando Bautista
Mother’s Name: Oliva Bautista

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
BUENAFLOR, ERIKA B.
Zone 5, Bulan Sorsogon
09512763037
buenaflor.erika0@gmail.com

PERSONAL INFORMATION:
Birthday: January 30, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Irvin G. Buenaflor
Mother’s Name: Jerelyn B. Buenaflor

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
CARLOTO, SHANE JAY
Cogon, Gubat Sorsogon
09701914338
shacarloto@gmail.com

PERSONAL INFORMATION:
Birthday: March 23, 2003
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name:
Mother’s Name: Luisa Carloto

EDUCATIONAL BACKGROUND:
Secondary: Gubat National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
CELADENIA, ELOISA A.
Ginablan, Pilar Sorsogon
09630035089
eaceladenia0630@gmail.com

PERSONAL INFORMATION:
Birthday: June 30, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Christopher m. Celadenia
Mother’s Name: Elsa A. Celadenia

EDUCATIONAL BACKGROUND:
Secondary: Salvacion National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
DELA CRUZ, MARDIE G.
Bariis, Matnog Sorsogon
09631603264
mardiedelacruz0113@gmail.com

PERSONAL INFORMATION:
Birthday: October 13, 2001
Age: 21 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Nemecio V. de la Cruz Jr.
Mother’s Name: Juliet G. de la Cruz

EDUCATIONAL BACKGROUND:
Secondary: Panacan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
DOMALIN, ANDREA O.
Zone 8, Bulan Sorsogon
09307895151
adomalin499@gmail.com

PERSONAL INFORMATION:
Birthday: February 25, 2002
Age: 21 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Alvin N. Domalin
Mother’s Name: Ana C. Obo

EDUCATIONAL BACKGROUND:
Secondary: Sorsogon National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
ELQUIERO, RACHELLE ANN F.
Brgy. 2, Sta. Magdalena Sorsogon
0916485013
elquierorachelleann@gmail.com

PERSONAL INFORMATION:
Birthday: February 09, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Ruel Elquiero
Mother’s Name: Michelle Furiscal

EDUCATIONAL BACKGROUND:
Secondary: Sta. Magdalena National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
ENOLVA, ALLIYAH CRISTY B.
Osmeña, Bulan Sorsogon
09687565422
enolvaalliyahcristy@gmail.com

PERSONAL INFORMATION:
Birthday: June 15, 2004
Age: 18 years old
Religion: Born Again Christian
Civil Status: Single
Father’s Name: Kenneth E. Enolva
Mother’s Name: Anacris B. Enolva

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
ESTOPACE, MIKYLLA B.
Fabrica, Barcelona Sorsogon
09319312301
mikyllaestopace@gmail.com

PERSONAL INFORMATION:
Birthday: May 06, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Rey H. Estopace
Mother’s Name: Josefa B. Estopace

EDUCATIONAL BACKGROUND:
Secondary: San Antonio National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
FLORALDE, ARIEL B.
Guruyan, Juban Sorsogon
09187257783
ayefloralde@gmail.com

PERSONAL INFORMATION:
Birthday: April 28, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Alejandro Floralde
Mother’s Name: Evelyn Floralde

EDUCATIONAL BACKGROUND:
Secondary: Holy Spirit Academy of Irosin
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
FORTES, SAMANTHA NICOLE E.
San Francisco, Bulan Sorsogon
09798262929
samantha.fortes2003@gmail.com

PERSONAL INFORMATION:
Birthday: August 21, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Renoel G. Fortes
Mother’s Name: Mary Grace E. Fortes

EDUCATIONAL BACKGROUND:
Secondary: San Francisco National High School
TVL – Contact Center Services
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
FREZA, ALLESSA
Poblacion 4, Sta. Magdalena Sorsogon
09158366945
allessaf53@gmail.com

PERSONAL INFORMATION:
Birthday: July 18, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Carlito Dona Jr.
Mother’s Name: Jonalyn Freza

EDUCATIONAL BACKGROUND:
Secondary: Veritas College of Irosin
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
FURAQUE, MICHAEL B.
Obrero, Bulan Sorsogon
09271687318
mikezchuenlee@gmail.com

PERSONAL INFORMATION:
Birthday: August 4, 2002
Age: 20 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name: Arthur Furaque
Mother’s Name: Jocelyn Furaque

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GALOSO, RUBYLYN M.
Porog, Bulusan Sorsogon
09705202447
rubylyngaloso6@gmail.com

PERSONAL INFORMATION:
Birthday: June 01, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Roberto E. Galoso
Mother’s Name: Lorilyn E. Galoso

EDUCATIONAL BACKGROUND:
Secondary: Bulusan National High School
Science, Technology, Engineering and Mathematics
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GARCIA, ALLIAH G.
Zone 7, Bulan Sorsogon
09150076882
garciaiyapatch@gmail.com

PERSONAL INFORMATION:
Birthday: January 18, 2004
Age: 19 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name: Allan Deo L. Garcia
Mother’s Name: Carol G. Garcia

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GAÑAS, NICA G.
Lalud, Bulusan Sorsogon
09634117204
nicaganas@gmail.com

PERSONAL INFORMATION:
Birthday: March 21, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Nathaniel F. Gañas
Mother’s Name: Emily G, Gañas

EDUCATIONAL BACKGROUND:
Secondary: Talaonga National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GELILIO, TRICIA S.
Nasuje, Bulan Sorsogon
09634117204
triciagelilio7@gmail.com

PERSONAL INFORMATION:
Birthday: September 07, 2001
Age: 21 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name: Enrique B. Gelilio
Mother’s Name: Nanette S. Gelilio

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GERANCO, GAD L.
Otavi, Bulan Sorsogon
09120335696
gerancogad12@gmail.com

PERSONAL INFORMATION:
Birthday: October 12, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: George Geranco
Mother’s Name: Rowena Geranco

EDUCATIONAL BACKGROUND:
Secondary: Southern Luzon Institute – K.R. Asuncion Memorial School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GIBA, KRISTINE JOY G.
San Juan Bag-o, Bulan Sorsogon
09501372268
kristinejoygiba51@gmail.com

PERSONAL INFORMATION:
Birthday: July 27, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Pedro G.Giba
Mother’s Name: Arlene G. Giba

EDUCATIONAL BACKGROUND:
Secondary: San Juan Bag-o High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GIBAGA, ANTONETTE F.
Otavi, Bulan Sorsogon
09299739309
annegibaga03@gmail.com

PERSONAL INFORMATION:
Birthday: November 05, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Manuel Gibaga
Mother’s Name: Leonora Gibaga

EDUCATIONAL BACKGROUND:
Secondary: Saint Louise de Marillac School of Bulan
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GILLEGO, ALKHEN JOHN G.
San Francisco, Bulan Sorsogon
09079108926
alkhenjohnggillego1723@gmail.com

PERSONAL INFORMATION:
Birthday: November 17, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Andres J. Gillego
Mother’s Name: Marianne G. Gillego

EDUCATIONAL BACKGROUND:
Secondary: Sisters of Mary School –Adlas Inc.
TVET/TLE/TVL
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GINGA, ALLYCA B.
Obrero, Bulan Sorsogon
09517203489
allycaginga18@gmail.com

PERSONAL INFORMATION:
Birthday: August 25, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Fernando N. Ginga
Mother’s Name: Vilma B. Ginga

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GLORIAT, MARIA CHRISTINA M.
G. Del Pilar, Bulan Sorsogon
09506165296
machristinagloriat@gmail.com

PERSONAL INFORMATION:
Birthday: May 05, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Domingo G. Gloriat
Mother’s Name: Anita M. Gloriat

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GOBOLE, BEA G.
Magsaysay, Bulan Sorsogon
09482849312
beagobole5@gmail.com

PERSONAL INFORMATION:
Birthday: June 21, 1999
Age: 23 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Salvador H. Gobole
Mother’s Name: Norie G. Gobole

EDUCATIONAL BACKGROUND:
Secondary: The Sisters of Mary of Bannaeux
TVL: Industrial Arts
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GODILO, NICOLE G.
JP Laurel, Bulan Sorsogon
09109869184
godilonicole@gmail.com

PERSONAL INFORMATION:
Birthday: June 01, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Bernardo Godilo
Mother’s Name: Jennifer Godilo

EDUCATIONAL BACKGROUND:
Secondary: Southern Luzon Institute – K.R. Asuncion Memorial School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GOJIT, NOIME G.
Zone 7, Bulan Sorsogon
09634920256
gojitnoime20@gmail.com

PERSONAL INFORMATION:
Birthday: May 20, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Noel H. Gojit
Mother’s Name: Geraldine G. Gojit

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GRACILLA, DARLENE JADE O.
Fabrica, Bulan Sorsogon
09770377870
darlenegracilla8@gmail.com

PERSONAL INFORMATION:
Birthday: March 09, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Darren G. Gracilla
Mother’s Name: Leny O. Gracilla

EDUCATIONAL BACKGROUND:
Secondary: Immaculate Conception Academy of Bulan Inc.
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GRANADO, JERALD G.
Otavi, Bulan Sorsogon
09501023317
jeraldgranado2@gmail.com

PERSONAL INFORMATION:
Birthday: August 21, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Anronico E. Granado
Mother’s Name: Araceli G. Granado

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Science, Technology, Engineering and Mathematics
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GURAY, SHANICA R.
San Juan Bag-o, Bulan Sorsogon
09519320198
shangurayrubia@gmail.com

PERSONAL INFORMATION:
Birthday: March 30, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name:
Mother’s Name: Glenda R. Guray

EDUCATIONAL BACKGROUND:
Secondary: San Juan Bag-o High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
GUTLAY, JHON ALFRED G.
Butag, Bulan Sorsogon
09812948796
gutlayjohnalfred@gmail.com

PERSONAL INFORMATION:
Birthday: September 08, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Feliciano O. Gutlay
Mother’s Name: Lolita G. Gutlay

EDUCATIONAL BACKGROUND:
Secondary: Saint Louise de Marillac School of Bulan
Science, Technology, Engineering and Mathematics
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
JAZARENO, CLAIRE B.
Guruyan, Juban Sorsogon
09093811018
jazarenoclaire@gmail.com

PERSONAL INFORMATION:
Birthday: July 03, 2004
Age: 18 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Ernesto E. Jazareno Jr.
Mother’s Name: Emma B. Jazareno

EDUCATIONAL BACKGROUND:
Secondary: Guruyan National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
JUDIN, SHEENA MAE A.
Gulang-gulang, Irosin Sorsogon
09358181846
judinsheenamae@gmail.com

PERSONAL INFORMATION:
Birthday: July 17, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Ricardo Judin
Mother’s Name: Purisima Judin

EDUCATIONAL BACKGROUND:
Secondary: Gallanosa National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
LADO, MARK JASON
Gulang-gulang, Irosin Sorsogon
09953636701
markjasonlado26@gmail.com

PERSONAL INFORMATION:
Birthday: May 09, 2003
Age: 19 years old
Religion: Iglesia ni Cristo
Civil Status: Single
Father’s Name:
Mother’s Name: Marissa Lado

EDUCATIONAL BACKGROUND:
Secondary: Gallanosa National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
LATONERO, FRANZEL XYRONE O.
JP Laurel, Bulan Sorsogon
09510166797
pransellatonero@gmail.com

PERSONAL INFORMATION:
Birthday: August 13, 2003
Age: 19 years old
Religion: Baptist
Civil Status: Single
Father’s Name: Medel Latonero
Mother’s Name: Fria Oli

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
LOMOCSO, KURT RUZEL F.
Coron-Coron, Matnog Sorsogon
09664076652
lomocsokurt04@gmail.com

PERSONAL INFORMATION:
Birthday: April 16, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Antolin Lomocso
Mother’s Name: Marife Lomocso

EDUCATIONAL BACKGROUND:
Secondary: Quezon National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
LUSTAN, CHRISTIAN LOUIS G.
San Juan Bag-o, Bulan Sorsogon
09685286561
genrtiachrist@gmail.com

PERSONAL INFORMATION:
Birthday: February 03, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Nero V. Lustan
Mother’s Name: Arlene G. Lustan

EDUCATIONAL BACKGROUND:
Secondary: San Juan Bag-o High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
MARINDA, JOANN F.
Namo, Bulan Sorsogon
09128701615
marindajoann09@gmail.com

PERSONAL INFORMATION:
Birthday: October 29, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Romeo G. Marinda
Mother’s Name: Virginia P. Marinda

EDUCATIONAL BACKGROUND:
Secondary: Bulan National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
MENDOZA, IRISH HAZEL L.
Aquino, Bulan Sorsogon
09278424371
mendozarish19@gmail.com

PERSONAL INFORMATION:
Birthday: September 19, 2004
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Henry M. Mendoza
Mother’s Name: Meshel L. Mendoza

EDUCATIONAL BACKGROUND:
Secondary: Solis Institute of Technology Inc.
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
MOLINA, JOYCE G.
San Francisco, Bulan Sorsogon
09305090602
joycemolina79@gmail.com

PERSONAL INFORMATION:
Birthday: June 01, 2003
Age: 19 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Cesar M. Molina
Mother’s Name: Jocelyn G. Molina

EDUCATIONAL BACKGROUND:
Secondary: San Francisco National High School
General Academic Strand
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
QUIÑONES, MONICA BEA R.
Buenavista, Gubat Sorsogon
09708264354
monicabea2004@gmail.com

PERSONAL INFORMATION:
Birthday: July 07, 2004
Age: 18 years old
Religion: Foursquare (Born Again)
Civil Status: Single
Father’s Name: Nicanor E. Quiñones
Mother’s Name: Maricel R. Quiñones

EDUCATIONAL BACKGROUND:
Secondary: Gubat National High School
Science, Technology, Engineering and Mathematics
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy
TOLENTINO, JENNY A.
Carriedo, Irosin Sorsogon
09959686221
tolentinojenny331@gmail.com

PERSONAL INFORMATION:
Birthday: November 10, 2002
Age: 20 years old
Religion: Roman Catholic
Civil Status: Single
Father’s Name: Jonathan M. Tolentino
Mother’s Name: Wenelyn A. Tolentino

EDUCATIONAL BACKGROUND:
Secondary: Gallanosa National High School
Accountancy and Business Management
Tertiary: Sorsogon State University – Bulan Campus
Bachelor of Science in Accountancy