Wednesday, March 9, 2011

Reaction Paper on the Economics Video + Learnings

What I have learned during the film viewing in econ was that there are different types of market as discussed by Mr. Timothy Taylor, the speaker. The different types of market are perfect competition where firms are small with identical products and all are price takers, Monopoly where there is only one seller, Oligopoly where firms are small but they have all or most of the revenue in the industry, and Monopolistic Competition where there are many sellers but have different or only similar products. Mr. Timothy also discussed about the antitrust enforcement and other methods that the government uses, particularly in the United States, to protect competition in the market and to protect the consumers against unfair pricing by firms especially the monopolistic ones.

What I have learned in the film has made me more aware of what is happening in the economy. Everyday, different things are happening in the market but most of us do not notice it. Each and everyone of us is part of a big spectrum in the economy. We participate in it through our spending. Without people who participate in the market, be it monopoly or perfect competition, there would be no economy. Our demands as consumers determine the amount of supply that the producers would provide.

Since there are different types of market, there are also different ways pricing. The monopoly has the greatest power in controlling the price like in gasoline and the least is the perfectly competitive firms like in “sari-sari” stores but in every changes in the price, all types of firms are affected that is why the government has to create ways to control or maintain the fairness of the competition through antitrust enforcement. The government has to protect the welfare of the people through creating laws and through participating in the economy.

If the government would just allow big companies to merge and become a monopoly, the people and smaller firms would suffer allot. So the government really has to weigh their decisions very well when it comes to this matter. If the government fails to make the right decision then people would create a strike and it would be very bad to the economy.

In the Philippines, the biggest companies are the oil companies. Rumors has been spread that these firms are performing as a monopoly that is why when they rise the price of the gasoline, they do it simultaneously thus affecting the prices of other goods. The people were badly affected by it specially the less fortunate ones. The government said they had investigations about this matter but there were no proofs found if these were true. All I can say though is that true or not, the government still must control the price for the sake of the people and for the love of competition. :D

Monday, February 28, 2011

Reaction Paper for February: The Real February Issue

2011 10:48 PM
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Growth seen slowing down in 2011, 2012
MANILA, Philippines – Benefits of the country's economic growth over the years have failed to trickle down to over a third of the population who are poor, the World Bank said in a report released Wednesday.
The Philippine economy grew 7.3% in 2010, the highest in 34 years, aided by the recovery of exports and manufacturing, accommodative monetary and fiscal policies as well as election spending.
However, in its quarterly report entitled "Robust growth, Stubborn poverty", the World Bank said: "For all the macroeconomic resiliency and strength that the Philippine economy manifested in recent years, growth continues to bypass many of the poor."
The multilateral lender noted that implementation of government policies on social protection will be critical in addressing poverty in the next few years, with growth expected to continue.
Economic expansion is forecast to slow down to 5% in 2011, and 5.4% in 2012, in the absence of the government stimulus program and election spending.
But the World Bank said growth could be higher if the investment climate improves.
Trickle-down effect
Latest official poverty data confirmed a disconcerting lack of poverty reduction response to economic growth in the Philippines, the World Bank said.
From 2003 to 2009, an additional 3.3 million Filipinos became poor, pushing the total to 23.1 million. This increase nudged poverty incidence from 24.9% of the population in 2003 to 26.4% in 2006 and 26.5% in 2009.
From 2003 to 2006 and to 2009, average real gross domestic product (GDP) growth reached 5.4% and 4.3%, respectively.
"As these growth rates imply a significant increase in real GDP per capita, it transpires that the distribution of the gains from growth have eluded the bottom fourth of the Filipino population."
However, the World Bank cited a bright spot amid the disappointing poverty numbers: income distribution among the poor improved between 2006 and 2009 as the poverty gap declined.
The lender attributed this to the rapid expansion of the government's conditional cash transfer (CCT) program.
The CCT program operates in 80 provinces, covering 1 million households by end of 2010. For 2011, the program is budgeted to cover 2.3 million poor households, or about 60% of poor households compared with 26% of poor households last year.
"The recent scale-up in the 2011 budget bodes well for the fight against poverty," the World Bank said.
Economic growth drivers
Strong private investments and favorable consumer and business sentiments will help buoy economic growth this year.
The World Bank's 5% growth forecast is below the 7% to 8% target of the Philippine government for 2011.
“Strong private investment in the fourth quarter of 2010 and bullish business confidence are encouraging signs that the economy can attract investments needed to boost potential growth and generate more jobs," World Bank Country Director Bert Hofman said.
Exports are expected to remain strong on the back of a robust electronics industry.
On the supply side, the services sector will remain the main driver, followed by industrial production. Barring any major calamity, the agricultural sector would also contribute strongly to growth.
For 2012, GDP growth is expected to expand by 5.4% as investment accelerates, thanks partly to the implementation of the priority infrastructure programs of the Aquino administration under the Private-Public Partnership or PPP scheme.
Rising oil, food prices
The only factors that could weigh down on growth, however, are rising international oil and food prices.
"These shocks, the report said, could slow the economy down and raise inflation," the World Bank said.
Global oil prices have reached 2-year highs on political turmoil in the Middle East and North Africa. However, government authorities said this would have no immediate impact on local fuel prices as supply remains assured.
On food prices, the World Bank said: "Food prices are expected to rise moderately."

REACTION

I was riding a jeepney and as it came to a stop a blind man assisted by his wife begged money from us. After a few meters and the traffic light turned red, kids went to our jeepney, and like the first, pleaded for money. When I passed San Pedro Street, I saw more blind men on the street requesting for alms. I also observed that plenty of individuals, even families with babies, sleep on the sidewalk covering themselves with cartons and plastics at night. These sights make me wonder that if we have been progressing, why are these individuals still on the street? Then I read this news and I think I found my answer.
The World Bank’s comment is good to hear that we have progressed economically but at the same time it is disappointing to hear that this growth was not fairly distributed. I then realized that still in the Philippines trend that the rich becomes richer and the poor all poorer is still the same. The number of squatters and homeless even here in Davao are increasing while rich people keep on increasing their properties.
Here is another danger, the increasing prices of oils and food in the global market especially now that there is a conflict between oil-producing countries Middle East and Africa. I cannot imagine how the less fortunate people could cope with that? Even the slightest increase in rice and oil already leads to so many harmful effects on my poor Filipino fellow. What then would happen to us? That is so hard to picture out.
But then on the bright side, I know that the Filipinos will always find a way to live and be happy. Despite the hardships in life, Filipinos have always been positive. Besides, our attraction for investments are strong now compared to the last one. Even the World Bank admits that. Then there are still projects coming our way that will help our economy improve better and help our GDP increase a little like PNoy’s PPP. Filipinos are optimistic so I feel confident that someday, my less fortunate people would improve their living. We can surpass it all.

I believe that what we have to do now is to prove to the World Bank that they are wrong. Easy to say but hard to do. Well, come what may, what matters most is that I am positive and may we all be positive that blessings would come to our country, the corruption would be solved so that the saying the rich become richer and poor become poorer would no longer exist in our beautiful paradise, home of the greats, Philippines.

Sunday, January 30, 2011

Reaction Paper for February

Japan's PM urges China to increase global role

EDITH M. LEDERER, Associated Press

01/30/2011 | 12:13 AM

DAVOS, Switzerland — Japanese Prime Minister Naoto Kan challenged China on Saturday to assume global responsibilities appropriate to its new status as the world's second largest economic power.

China eclipsed Japan in the No. 2 spot last summer after three decades of very rapid growth. The World Bank and other analysts are already predicting that China could overtake the United States and become the world's biggest economy in the coming decade.

When Kan was asked after a speech at the World Economic Forum if he was worried about being eclipsed by China, he said it was "something that is welcoming," adding that China's economic growth will have a "positive impact" on his country economically and socially.

He also said China should have "greater responsibilities internationally" with such a large economy. "And I do hope that China recognizes this important responsibility that it bears and acts accordingly," the Japanese leader added.

China, one of five permanent U.N. Security Council members with veto power, has put aside its traditional reluctance to become involved in global affairs as well as a more active player on international issues.

Despite its opposition to sanctions in principal, China has supported four rounds of U.N. sanctions against Iran over its nuclear program. But Beijing has frustrated the U.S. and its Western allies by leveraging its role as a supplier of food and fuel to North Korea that has stemmed efforts to force Pyongyang to return to six-party talks on its nuclear program.

In his speech, Kan said "the world faces major changes that can be likened to a tectonic shift both in national security and in economic fields" — Asia is "the center of major tectonic changes," he said.

Against this background, he said, the Japan-U.S. alliance "is becoming even more important" and should continue to play a key role in fostering peace and prosperity in the Asia-Pacific region.

"For Japan, its relationship with China, which is expanding influence in Asia as it achieves remarkable economic growth, is extremely important," Kan added.

"Both Japan and China have important responsibilities to bear in the international community, and will need to enhance cooperation in a wide array of fields such as economy, regional stability, and global environment," he said.

Kan said he flew from Tokyo to Switzerland for one day to address the VIP gathering of leaders from business, politics, academia and other fields in Davos because the forum's themes of confronting the new global reality and promoting innovation and the green economy match his own perspective.

He said there is growing concern in Japan "that in the midst of its economic stagnation the minds of its people including the youth are becoming inward-looking."

"Opening the nation is needed through breaking out of this stifling atmosphere in people's minds and in economy," Kan said. "At the same time, forging new connections between individuals is needed so that the opening of the nation will not bring about rupture among people."

The prime minister said Japan's economy will remain open, and the country will continue to promote innovation to help preserve the environment which it is already doing with Japanese-produced hybrid vehicles that enjoy a 90 percent global market share and LED lights.

"Both have the potential to reduce CO2 emissions by around 40 percent compared to conventional products," he said.—AP

Reaction

China is now number 2 in the world economy next to United States, but it is number 1 in pollution contribution in the whole world.

China has progressed because of its biggest industrial powers in the world. Yet these powers also demonstrate a direct link between them and environmental damage.

Today, public health is at great risk because of the pollution caused by industrial emissions. Safe drinking water is also scarce in China. In fact, a gray covering now wraps the skies of China. And, there are around 500 million people who suffer from drinking unsafe water.

The current Chinese government is having difficulty fighting this problem; authorities know that it will take decades before the damage caused by pollution will be undone.

All of these make me agree with Japan telling China to be more responsible in their activities. I know it is not bad to progress as long as it does not harm the environment. I wonder if China really is proud of surpassing Japan because I think Japan even deserves more to be number 1 than US because their industrialization entails responsibility. It does not only think of their country but of the whole world. Their inventions and researches are not for their own sake but for all of the people.

But then I realized, who am I to judge China when our country is also polluted? Who am I to accuse China of being irresponsible when I myself am? Yes China may be number 1 in pollution but when it comes to environmental changes, all of us have to be responsible like Japan. Blaming people or countries is not the answer. All we can do is to remind ourselves and others of our responsibility. We cannot change China if we will not change ourselves. This is a hard thing to do and it is just up to us.

I hope not only China would improve their global role but also the other countries, like Philippines, as well. Also, I hope Japan would not only urge China but also the people not just in Japan, in China but of all the whole world. Most of all, I hope all of us would convince ourselves to preserve the environment. :D

Wednesday, December 29, 2010

Economics Class: End of the Month Reaction Paper

Aquino wants early submission of 2012 budget proposal

abs-cbnNEWS.com

Posted at 12/29/2010 5:28 PM | Updated as of 12/29/2010 5:28 PM

MANILA, Philippines - After passing next year's national budget on schedule, the Aquino administration also wants an early submission of the budget for 2012.

Department of Budget and Management (DBM) chief Florencio Abad said the target submission of the 2012 spending bill was set a day after President Benigno Aquino delivers his State of the Nation Address (SONA) on July 25.

The President, Abad said, has approved the new budget calendar, which starts with the budget call and forum with all government agencies and corporations on January 6 and 7.

“The 2011 Reform Budget, the first financial blueprint of the Aquino Administration, was enacted on time, the first time it has happened in 11 years. We are committed to making sure that subsequent budgets under this government will be passed on time,” he said.

The Constitution mandates the Executive branch to submit its outlay to Congress within 30 days after session opens or around August.

In the past, the budget call was issued in April or May of the year prior to the fiscal year of the budget.

The 2011 budget proposal was submitted on August 24, 29 days after Aquino delivered his SONA. The budget call was released on May 12.

The P1.645-trillion outlay for next year, meanwhile, was signed into law by Aquino last Monday.

Abad said the new budget calendar dedicates February 2011 for consultations by 6 pilot departments with civil society organizations (CSOs) at both their central offices and regionally, through the Regional Development Councils.

“This new consultative budget preparation process is in line with the Aquino government’s commitment to ensure good governance through citizen’s participation,” he said.

He said the 6 departments include Education, Health, Social Welfare and Development, Agriculture, Agrarian Reform and Public Works.

REACTION

So P.Noy really is doing his best for better governance, huh? Well that is really great! Ever since P.Noy occupied the seat of presidency there were a lot of immense changes in the government. Of course there were also flaws but overall, for me, his performance is really outstanding than the past presidents of the Philippines this later generation.

Let us take for example this news. The 2011 budget has just been signed and now the government is already preparing for the 2012’s. Isn’t it amazing? For me it is! It makes me feel somehow at ease that the future of our country has been planned really well. If this would continue - having budget with reasonable cause on time – then, I guess, we are not far from progressing. I am so happy with all of these government’s on time budget signing, implementing and planning that I want to jump. Yahoo! J To think that there even are consultations about financial planning implies that P.Noy’s administration is indeed serious in meeting the needs of the people through various departments plus the involvement of the citizens. This is what I could say a government for the people, to the people and by the people.

Seriously, all I want is for the best of this country. This on time budgeting sure is a good step. Gradually, with the help of God, we will have a name in the economy. This would not be achieved if the people would not work. That is why I want to start with myself not only through praying but by being responsible in fulfilling my duties as a citizen like following the rules of the society or complying with my duties as a daughter and as a student. It is in no doubt would require hardwork and being responsible is a huge challenge, however, why not try, right?

I just wish though that nothing bad would happen again like any tragedy i.e. landslides, typhoons and summary killings as well as war. Also, I hope that the transparency that his Excellency is showing would not be put to waste because of some TRAPOs in the government.

These performances that P.Noy is showing makes me believe that I voted the right person. I wish this would not change.