socsci

• Sectors of the economy

  • Agricultural
  • Industrial
  • Service
  • Informal
• Agricultural sector


  • Establishments primarily engaged in growing crops, raising animals, harvesting fish and other animals from farms or their natural habitats
  • Also known as the primary sector since the raw materials or main sources are from this sector
• Components of the agricultural sector

  • Farming
  • Fisheries
  • Forestry
  • Animal Husbandry
• The Philippines is an agricultural country, but the sector contributes only a small portion to its income
• Problems faced by the agricultural sector

  • Pollution and Environmental Depletion
  • Inadequacy of Capital
  • Lack of Support from Government
  • Inadequacy of Infrastructures
• Departments handling agricultural sector issues

  • Department of Agriculture
  • Department of Agrarian Reform
  • Department of Environment and Natural Resources
• Industrial sector


  • Uses products from the agricultural sector and processes them into products that are either consumed by users or sent for further processing
• Components of the industrial sector

  • Industry
  • Industrialization
  • Manufacturing
  • Construction
  • Mining
  • Electrical
  • Water
  • Gas and Energy
  • Telecommunications
  • Transportation
• Problems faced by the industrial sector

  • Skills Gap
  • Dependence on Imports
  • Environmental Concerns
  • Lack of National Industry
  • Inadequacy of Infrastructures
• Institutions overseeing the industrial sector

  • Department of Trade and Industry
  • Technical Education and Skills Development Authority
• Service sector


  • Source of labor, skills, and knowledge necessary to accomplish various economic activities
  • Largest employment share with 58.5%, more than the agricultural and industrial sectors combined
  • Business process outsourcing brings an increase in the labor force and national income contribution in the country
• Components of the service sector

  • Finance
  • Real Estate
  • Transportation, Storage, and Communication
• Institutions overseeing the service sector

  • Department of Agriculture, Agrarian Reform, and Environment and Natural Resources
  • Department of Interior and Local Government
  • Department of Labor and Employment
• Informal sector


  • Composed of tiny units involved in producing and/or distributing goods and services unregistered and not recorded in official statistics
  • While this sector is not registered with the official records and thus not taxed by law, individuals' income can still contribute to the national income through income tax and value-added tax
  • This sector may apply to those who do not have regular jobs, lack skills and education, and additional revenue
• Components of the informal sector

  • Homeworker
  • Online business/work, home business, conditional trade
  • Small Scale
  • Medium Tier
  • Black Market
• Problems faced by the informal sector


  • Decrease in tax
  • Job Security
  • Security benefits issue
  • Low wages or salary
  • Fake and illegal products
• Institutions overseeing the informal sector

  • Department of Trade and Industry
  • Technical Education and Skills Development Authority
  • Department of Interior and Local Government
  • National Economic and Development Authority
• Economic growth


  Measures the prevailing standard of living of a country, using the gross domestic product. A 3% or more increase in the growth rate is considered suitable for the economy.
• Unemployment


  Measures the number of people who are part of the labor force that doesn't have a job. An unemployment rate of 5% or less is considered acceptable for the economy.
• Inflation


  Defined as the sustained increase in the overall level of prices and is measured by the consumer price index. When the rise in prices is much faster than the rise in wages, it becomes problematic, which is why the inflation rate must be between 1-2% to be considered good for the country.
• Gross Domestic Product (GDP)


  The value of all final goods and services produced within a country in a given year
• Gross National Product (GNP)


  The sum of gross domestic product and net factor income from the rest of the world. It is based on the output of individuals and companies of a country, wherever they are situated, and GDP is based on what happens within the geographical borders of a country.
• Computing GDP or GNP


  x = Consumption + Investment + Government Expenditure + Net Exports (Exports - Imports)
• Growth Rate


  Refers to the level of economic improvement between the current and the previous year
• Computing Growth Rate


  GR = (Current GDP/GNP - Previous GDP/GNP) / Previous GDP/GNP x 100
• An unemployment rate of 5% or less is considered acceptable for the economy, while the inflation rate must be between 1-2% to be considered good for the country.
• Causes of unemployment


  • Cyclical Unemployment (short-run, changes in economic status)
  • Frictional Unemployment (long-run, voluntary change of employment)
  • Structural Unemployment (long-run, lack of skills needed by firms)
• Causes of inflation


  • Demand-pull inflation (increase in purchasing power leading to higher prices)
  • Cost-push inflation (change in price of production inputs or events influencing production process)
  • Built-in inflation (expectation of future price increases leading to wage-price spiral)