FIRST SEMESTER SY: 2022 - 2023

EDEV:ECONOMIC DEVELOPMENT

FINAL MAJOR OUTPUT

MA. JESSEL V. LOSITO

BSA 2Y1-1

MS. MILJOY R. MANALO

EDEV311 TEACHER
FOUR PHASES OF
BUSINESS CYCLE
EDEV 311 FINAL MAJOR OUTPUT
 FOUR PHASES OF BUSINESS CYCLE
• BOOM/PEAK/PROSPERITY • DEPRESSION/SLUMP/TROUGH
- In this level, we experiencing low - In this level, consumers can’t
unemployment rate and there are a afford to buy goods and services
lot of consumers who want to buy and a lot of businesses have closed
goods so other businesses use this and their investment need to
opportunity to increase the prices backed out.
of goods to have high income and
investment.

• RECESSION/CONTRACTION • RECOVERY/EXPANSION
- In this level, we experiencing high - In this level, some of the
unemployment rate and decreasing businesses and investment are
the number of consumers who want slowly operating. The consumers
to buy goods and services that is afford to buy goods and services are
why businesses income and continues improving.
investment will also decrease.

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FOUR PHASES OF BUSINESS CYCLE

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 FOUR PHASES OF THE BUSINESS CYCLE

BOOM/PEAK/PROSPERITY LEVEL OF THE PHILIPPINES

- Declaration of martial law -

The GDP of the Philippines rose Aimed at promoting sustainable

during the martial law, rising from to stimulate economic growth,
$8.0 billion to $32.5 billion in lower unemployment and
about 8 years. Massive financing underemployment, and boost
from commercial banks, which
made up around 62% of the income were stepped up. In
external debt, powered this contrast to the employment
growth. The Philippines, a situation, which tripled in that
developing nation, was one of the same time period from 10.2 to
biggest borrowers under the 29.0 percent, the unemployment
martial law. These aggressive rate dropped from 5.2 to 0.9
moves were seen by critics as a percent between 1978 and 1983.
means of legitimizing martial law As a result of more women
by purportedly enhancing the
chances of the country in the looking for job in the market, the
global market. The majority of the labor force in the Philippines
funds were used to pump-prime increased at an average rate of
projects that would boost tourism 10.47 percent between 1970 and
and infrastructure. However, the 1983.
Philippines fell behind its
Southeast Asian peers in GDP
growth rate per capita despite
having aggressive borrowing and
spending programs. The nation's
average growth rate from 1970 to
1980 was only 3.4 percent, while
Your
that of Date Here
its neighbors Thailand,
Malaysia, Singapore, and
Indonesia was 5.4 percent.
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 FOUR PHASES OF THE BUSINESS CYCLE

RECESSION/CONTRACTION LEVEL OF THE PHILIPPINES

-Philippine economy under the pandemic: From Asian tiger to sick man again-

The Philippines' economy had one That happened before COVID-19.

of the highest rates of growth in The pandemic was a harsh
2019. As the Ferdinand Marcos reminder that a growth paradigm
government came to an end in driven by services and
the middle of the 1980s, it finally remittances doesn't fare well in a
lost its reputation as the "sick pandemic. The Philippines
man of Asia" that it had acquired witnessed one of the Association
during the economic collapse. The of Southeast Asian Nations'
nation's economic resurgence (ASEAN) biggest contractions in
began in the decade before the 2020 when its economic growth
pandemic after decades of stalled and fell into negative
arduous reform, not to mention territory for the first time since
repaying debts accrued during the 1999. Additionally, even though
dictatorship. The Philippines was the administration expects a little
hailed as the next Asian tiger recovery in 2021, most analysts
economy because of its over 6 are worried about a poor and
percent average yearly growth disappointing recovery as a result
between 2010 and 2019 of the nation's protracted
(calculated using data from the lockdown and failure to switch to
Philippine Statistics Authority on a more effective containment
GDP growth rates at constant policy.
2018 prices).
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 FOUR PHASES OF THE BUSINESS CYCLE

DEPRESSION/SLUMP/TROUGH LEVEL OF THE PHILIPPINES

-Philippine economy under the pandemic: From Asian tiger to sick man again-

First, it seems that the economic That happened before COVID-19. The management of the pandemic
system of the Philippines is more The pandemic was a harsh was also difficult. Lockdown is
open to disease breakout. helpful if it gives a nation more time
reminder that a growth paradigm to improve its healthcare and test-
Although it is based on the driven by services and
movement of people, the growing trace-treat systems. These are the
sectors of tourism, services, and remittances doesn't fare well in a foundations for more effective
pandemic. The Philippines disease containment. But if a nation
remittances are all prone to doesn't improve these mechanisms,
lockdowns brought on by witnessed one of the Association
it wastes the time that lockdown
pandemics and a drop in of Southeast Asian Nations' gives it. This appears to be the case
consumer confidence. Domestic (ASEAN) biggest contractions in for the Philippines, which garnered
lockdowns and mobility 2020 when its economic growth headlines across the world for
restrictions decimated the retail stalled and fell into negative conducting one of the longest
industry, dining establishments, territory for the first time since lockdowns in history during the
and hotel sector, while pandemic but was unable to flatten
international travel plummeted 1999. Additionally, even though their COVID-19 curve. The
and tourism came to a grinding the administration expects a little Philippines is currently striving to
standstill. Although the country's recovery in 2021, most analysts upgrade to a more effective
business process outsourcing are worried about a poor and containment strategy amid growing
(BPO) industry is fortunately fears over the delta strain that has
disappointing recovery as a result spread throughout Southeast Asia
shown some resilience, its key of the nation's protracted and is once again headed for
markets have been severely lockdown and failure to switch to another harsh lockdown as of the
affected by the pandemic, a more effective containment time of writing. It appears to be
necessitating a quick upskilling trapped with intermittent
and adaptation to new prospects policy.
lockdowns, which are extremely
under
Yourthe
Datenew
Herenormal. detrimental to the economy and are
likely to lower expectations for
future COVID-19 increases.

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 FOUR PHASES OF THE BUSINESS CYCLE

RECOVERY/EXPANSION LEVEL OF THE PHILIPPINES

- Philippines on track towards strong recovery -

Philippine economic managers The economy expanded by Medalla noted that the hawkish
are confident that the country is 7.8 percent in the first half of US Federal Reserve, which
on track towards a strong the year, exceeding the 6.5 to delivered aggressive rate hikes to
recovery from the impact of the 7.5 percent target set by combat inflation, the impact of
global health crisis. “This is not economic managers. The the Russia-Ukraine war, and the
without basis. country fell into recession with weakening peso have prompted
Businesses,consumers, and the a GDP contraction of 9.6 the BSP to withdraw COVID-19
government all agree that the
percent in 2020 as the support measures earlier than
Philippines is on track towards a
strong recovery,” Pangandaman economy stalled due to strict expected. The Philippines is fully
said. According to the Bangko COVID-19 quarantine and prepared to address ongoing
Sentral ng Pilipinas (BSP), the lockdown protocols. To control economic risks, according to
Philippine economy is robust inflation and stabilize the Finance Secretary Benjamin
enough to withstand rate peso, the central bank raised Diokno, who also encouraged
increases intended to contain interest rates in May. Inflation investors to conduct business
escalating inflationary pressures in the first nine months of the there while the government
and stabilize the peso. "The year averaged 5.1 percent, implements the required policies
Philippine economy has problems exceeding the BSP's target range and reforms. "The Philippines'
but it can navigate in this of two to four percent, after high economic activity and rising
uncertain times," BSP Governor accelerating to 6.9 percent in investor confidence signal a rapid
Felipe Medalla told participants of September from 6.3 percent in recovery and robust economic
the roundtable August.
discussion.Medalla said a 25-
growth," Diokno said.
basis point increase translates to
about
YouraDate
fiveHere
basis points cut in
growth rates.

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While our prospects are promising, the Philippines is using
the necessary policy tools to address ongoing risks, Diokno
said. In his dialogue, the DOF chief noted that the pandemic-
induced socioeconomic scarring, erratic geopolitical tensions,
and elevated "The government has intensified measures to
help increase the domestic supply by ramping up local
production, ensuring timely imports of goods, fertilizers, and
raw materials, and improving distribution efficiency," Diokno
added. The Finance Secretary detailed the structural reforms
that would attract advantageous foreign investments and
create high-value jobs in the country. Additionally, the
Marcos government is stepping up its efforts to ensure a
sufficient supply of power to enable the economy to
continue operating. "I've worked for four Presidents, and I
think this is our—the Philippines' moment," said Marcos.
Come to Manila, then," Diokno concluded. Sarah Lynne
Daway-Ducanes, the NEDA's assistant secretary for planning,
gave a presentation on the Philippine Development Plan,
growth drivers, and forecast. Companies doing business in
the Philippines are assessing the implications of COVID-19 on
the country’s economy. They are likely to find that three
shifts introduced during the pandemic will persist into the
future:Your Date Here
economic activity will be digitally enabled but also
hyperlocal; the wealth gap is widening, and new consumer
segments have emerged; and the pandemic is likely to result
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in a greener and more sustainable economy.
The outlook for the economy varies by sector; businesses in the
consumer and retail sectors are probably going to experience a
muted recovery through 2022 (Exhibit 2), but consumer demand for
necessities is still very strong and some discretionary spending is
probably going to recover in line with other nations in the region.
Consumer habits like value hunting, digital migration, and the
homebody economy that were learned during the pandemic may
stick.
The tourist recovery could be delayed until 2024 by obstacles, but the
travel and hospitality industries are on track to outperform 2019
growth in 2022. Companies might take specific steps in the interim to
reinvent themselves and recover from the pandemic. In the financial
services industry, the banking sector's recovery from its decline in
return on equity in 2020 could take up to five years (Exhibit 3). Digital
banking and e-wallet services are becoming actively used by more
Filipino consumers.

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 REFERENCES

• Philippines economic outlook 2022 | McKinsey

• The Philippine Economy in 2022 (ahk.de)
• Philippines on track towards strong recovery | Philstar.com
• Economic history of the Philippines – Wikipedia
• The Philippine economy under the pandemic: From Asian
tiger to sick man again? (brookings.edu)

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