Finals Macroeconomics

PAMANTASAN NG CABUYAO
Senior High School Department

Katapatan Subdivision, Brgy. Banay-Banay, City of Cabuyao, Laguna
ABM AE12: APPLIED ECONOMICS
____________________
A COURSE REQUIREMENT PRESENTED TO
Jeremy Paul E. Gecolea, MBA
Course Professor
By
Francesca Agatha R. Euraba
March 2019
Cases:
1. Gross Domestic Product (GDP) is measured to see the overall production
of an economy. There are three approaches in measuring it namely: (1)
The Expenditure Approach, (2) The Income Approach, and (3) The
Value Added Approach. Describe and explain how each of these
approaches measure GDP. Based on your research, which of the three
approaches is best in measuring GDP? Explain your answer
comprehensively.
2. Inflation is the rate of increase in prices of commodities in an economy.

It is measured through Price Indexes—Consumer (CPI) and Production
(PPI). The Philippines had a 9% inflation rate in the last quarter last 2018.
What are the causes of this increase in inflation? Identify at least three
(3) factors and explain how each of these factors caused this increase.
What is the overall outlook of inflation for the current year, 2019?
3. Investment is the lifeblood of production and businesses in an economy.

The Philippine’s financial markets provide avenues for investment to take
place and grow. What is the current status of the Philippine Financial
Markets? Which businesses (e.g. real estate, education, food services,
BPOs, etc.) are good to invest at this 2019? Identify at least three (3)
businesses and explain why these investments are feasible for this
coming fiscal year, 2019?
4. The Association of Southeast Asian Nations or ASEAN is promoting the

ASEAN Economic Community (AEC) which aims to create a business
and investment region that could rival that of the European Union (EU).
What is the AEC? How does it aim to improve the economic status of the
region? Identify at least five (5) investment opportunities for the
Southeast Asian region? Explain these opportunities. Identify at least
three (3) investment opportunities for the Philippines. Explain these
opportunities.
Case 1
The Gross Domestic Product (GDP) is every single thing that is

produced, made and created within the geographic boundaries in which
it does matter if it is created by a foreigner or the countrymen itself. It is
usually done in a specific period of time, it is normally per annum or year,
but other countries use quarterly. It is also an important indicator in the
economy in which it helps to distinguish the flow of economics in a specific
country.
According to Kenton (2019), GDP usually includes all the

consumption of public and private, government outlays, investments,
private inventories, paid-in constructions cost, and foreign balance of
trade. Which constituent to the meaning mentioned above. This just means
that everything that is produced and consumed in the country is computed
totally without less.
Another study from Kenton (2019), that GDP is the monetary value of
all finished goods and services produced in the country area within a
specific period of time. All the produce stuff that can be consumed is
computed as a whole thing.
There could be a problem in regards to doing GDP because it may

have a double entry, as of that there is a solution that the government was
given to its people. The solution is just to add the final value of the product
itself not including the different parts of the product. For its example, our
product is a well-known running shoe, we will just get the final value of this
one, not including the separated value of the shoelace and other parts.
In accordance with the study of Amadeo (2019), it states that the

GDP affects mostly the lives of every person in the community. Such as the
personal finance of an individual, investment of a businessman and job
growth of the country. This just proves that in everything we do in this world
there is a connection within the economics. In the process of investment,
of course, the investors always look for the nation's growth rate to decide
whether they will risk their assets, in this, they do comparisons to see the best
international opportunities.
The same study from Amadeo(2019), states that GDP doesn't count
the environmental impact of the products produced in a certain country.
It means that the cost of pollution and the cost of impact on the well-being
of the person is needed for the improvement of the standard living of the
human being. It just concluded that for a human being to have a better
and easy life they must sacrifice the environment's value. At the same time,
it does not include unpaid services which connote to its undervaluing the
contribution of quality of life. Another one is it does not include the black
economy of the country or the illegal activities happen in the country.
Everything in this economy or market is not taxed and showed up in the
government records and files. Sometimes the government estimates it but
cannot actually measure accurately due to the lack of records.
There are two types of GDP according to Kenton(2019), the first one
is the Real GDP and the second one is the Nominal GDP. In the past few
years, the typical prices of the products and services began to increase
which eventually reflected the GDP, with this the economist come up with
the two types of GDP. The first one is the Real GDP, which means that if
there will be an arrival of adjustment in inflation it will be visible. The value
of economic output will be considered an adjustment for the prices. It also
narrows the difference between the annual output figures. There are other
terms for the Real GDP, it can be called constant-price and inflation-
corrected. The second one is the Nominal GDP, which ignores the inflation
and the deflation rates. It is usually higher than the real GDP and used in
comparing different quarters in the same year.
The GDP has its own growth which also increases inflation. There will
be the growth of unadjusted GDP as long as it exploits the different criteria.
If they produce a huge amount with the same prices, this implies that it
increase production and meet its increased demand. Some also, produce
the same product with the higher prices that connotes that there will be no
increase in demand. Next, is producing more with a higher price that leads
to increasing demand and a shortage of the supply. They sometimes
produce more at lower prices that eventually make its consumer to sustain
its need. The last one is the production of a lesser number of products at
much higher prices, this really increases the demand. Once the economy
is booming or increasing there is also the same effect on the GDP of the
country.
In measuring the GDP of the country it helps a lot with the concern
of the economy. It helps improve and know how the cycle of the economy
goes with a specific period of time. There are different approaches that
are used to measure the GDP of a country and they have the same results
and credibility in their data. The three (3) approaches are namely the
Expenditure, Income, and Value-Added Approach.
The first is the expenditure approach that calculates the gross

domestic products with the consumption, investment, government
spending and the net exports of the country. This is the most common way
in estimating the GDP of the country, it includes everything like public and
private sectors. This seldom produces nominal GDP and adjusting the
inflation resulting in the real GDP, it is calculated by summing up all the
expenditures in a form of final product and services.
In the site written by Ross (2019), the result of GDP is the same as
aggregate demand because of the same formula used. The aggregate
demand is used to depict the relationship between the total goods,
average price and specific intervals in supplies. It also reflects the country's
gross domestic product. The similarities between these two are that
expenditure is the reference in spending which is the same as the demand.
Technically in looking for the GDP, it is a long run while in an aggregate
demand it is a short run. They become the same if in the long run after
adjusting the price level.
There are four (4) major pieces in calculating the aggregate demand
noted by Bell (2017), namely; consumption, capital investment,
government purchasing, and net exports. In calculating aggregate
demand the consumption represents the demand for the consumer's
purchases in a particular price range. The capital investment is actually the
increase in interest rates and the expansion of the production as well as the
upgrading of the equipment. In government spending, it refers to the
number of goods and services that the government will be purchasing it
and the price in the economic cycle. Last is the net exports, that can be
calculated by subtracting the imports and exports in the country. The trade
surplus will eventually increase its exports than imports.
Kenton (2019) also added that the expenditure approach is also

called the spending approach, in which it calculates all the monetary
expenses of different groups that participate in the economy. This is
calculated as the consumer spend his money to purchase several goods
and services that eventually used by a businessman to invest or start up a
business. The government also spend for the expenditures, locals and
federal authorities on defense and non-defense goods and services of the
country such as local services, salaries, weapons and etc., there are also
different projects and services concerning to the country's citizen. The
essential measures of this approach are the total sum of everything that is
used up in developing finished products to be sold.
Next approach is the income approach which included the

categories of wages and salaries, the supplementary labor income,
corporate profits interest, and miscellaneous investments. There are two

non-income adjustments which are indirect taxes that are subsidies to add
the factor cost to market prices and depreciation that is added to
compute the net domestic products. It also equates the total output of the
nation in the income received by the residents or the citizen of the nation.
It simply equates the total products and services of the country that
produces income that is received by the workers.
There are four (4) factors of income including the employee interest
received net to the paid interest that also helps to increase the
computation of this approach. The rental incomes are also included here
which the landlords reach their quotas an income. Payment for intellectual
property and natural resources are beginning to be partly because it also
adds to the income and range of economic cycle.
Ross (2017), also added that the equation formula in solving while
using this kind of approach is GDP = COE + GOS + GMI + TP & M – SP & M. W.
Where this equation means actually means GDP = compensation of
employees + gross operating surplus + gross mixed income + taxes fewer
subsidies on production and imports. The compensation of employees
includes the total monetary amount given to the worker, it is simply as the
salary is given to the employees. (). The gross operating surplus is the sum of
surplus in which the incorporated business is computed. (). The gross mixed
income is the same as the GOS, but seldom includes the small business of
its incorporators. There is also TP & M – SP & M. W in which the taxes in production
are computer together with the subsidies on production and imports.
All the sum of the first three (3) is called total factor income that is the
factor of production in the society. It helps to measure the value of GDP at
the same time the basic prices of the final goods and services. There is a
difference between the basic prices and final prices according to Ross
(2017), it is the total taxes and subsidies that the government paid in a
specific production. So, in adding the taxes less the subsidies in the
production and imports in GDP factor it is computed. In finalization, the
income approach is calculating GDP should always be the same with the
expenditure approach thus sometimes measurements create an error in a
national statistical agency.
Welker (2019), summarizes the income approach to the
measurement of the total income earned by the household annually.
Which helps in examining the circular flow model of every nation's
economy it is demonstrated that every part of household income spent in
the product market, taxes, savings, and import spending.
There is an article written by Matthews (2012), which discusses the
different approaches that are used to compute for the GDP. He defines the
income approach as the total expenditures of every final goods and
service. There are also 4 types of GDP that includes the two types that
Kenton was mentioned. The last two are the Actual and Potential GDP, the
actual GDP is the real-time measurement of every output and services
produced that demonstrates the actual business economic cycle
happening. Next, is the potential GDP that the ideal economic cycle that
everything is stable.
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The last approach is the Value Added Approach which is more

intuitive in a way of avoiding double value of intermediate in every goods
and service. It does not isolate in only final goods and services but looks for
the value added for each one. It is simply taking the difference of the inputs
to production and the price of the output.
Beggs (2019), give an example of this kind of approach, he gave a
simple orange production process. The final orange juice is delivered by
four (4) different producers; first is the farmer who grows the oranges,
second is the manufacturer that take the oranges and eventually make it
as a juice, third is the distributor who takes the orange juices and put it on
the store shelves and the fourth is the grocery stores where the consumer
gets it into hand. As you notice in every stage there will be a positive value
added to make a higher output market value.
All the added value is presented in all stages in production in where
the GDP is counted. It is very helpful when considering the count of goods
with the imported inputs since GDP only counts the production within the
economy boarders. At the same time when you deal with goods that are
not produced at the same period as a final output, it will make you
distinguish the differences, following only those who are in GDP for that
period.
The computation of the Value Added Approach is computed as
simply as the Value of Output minus Intermediate Consumption. Another
definition is given by Chand (2018) that the concept of this approach is
referring to the added value in the raw material to the final output. The
intermediate consumption, on the other hand, is the use of intermediate
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goods in the production process, like flour for the baker. While the Value of
output refers to all the market value of all goods and services that are
produced in a period of one year.
Among all the three (3) approaches that are used in measuring the
GDP, the Expenditure Approach is the most used in estimating GDP
globally. Given that it combines all the consumption, investment,
government spending and net exports it just typically have everything that
could help to get the exact amount of GDP in the country. It also gives all
the information regarding the private sectors, includes the consumer and
private firms. Also, the government spending that is used in the border of
the country is computed. The equation of this approach is more
distinguishable and explains broadly and specific the different economic
parts of the nation building.
There are also a lot of users of this kind of approach almost every
country around the world is using this because it gives more concrete
estimation and computation for the GDP. The four main aggregates of this
approach also help to make the computation understandable and
learnable for each and every one that wants to know how this computation
is processed. Nothing is perfect so that sometimes this computation does
not meet its terms because of lack of files data but in comparing from other
approaches this give a clearer way in computing and estimating the GDP
of the country.
As the same note from Ross (2017), the expenditure approach usually
attempts in calculating GDP by evaluating all the final goods and services
purchased in the economy. The computation of the expenditure approach
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is calculated as Y= C+ I + G +(X – M), which is the equation representation

of GDP in this kind of approach. In this equation the Y is identified as the
GDP, the C is the consumption that is normally the biggest component in
the economy, it basically consists of private expenditures like household
expenditures. It may fall in the personal expenditure that has a category of
durable goods, non-durable goods, and services. I, on the other hand, is
the investment, like investing in the equipment's and does not include the
existing assets. Investment can also be the purchasing of new real estates,
it is not just all about purchasing new goods but also saving in monetary
terms. G is the government spending, it is the sum of all the expenditures of
the government that includes all the salaries of the government agencies
workers and the projects provided by local officials. All the transfer
payments are not included in this part of computation because they are
considered in the consumption part. The X represents the total gross exports
where the products and services produced in the country are exported to
the other nations. Last is the M or the imports that are the total gross imports
in the country, it is usually subtracted since they can be included in other
terms.
There are different downsides of this approach but technically the

number one is the lack of data in illegal transactions done in the country.
There are no specific and concrete data for this, so that, even other
approaches didn't have the same data.
In comparison to the income approach, it measures the total
earnings of a household while expenditure is the total amount spent on
goods for the whole year. In the value-added approach, it is about adding
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value based on the processes it meets along the way. In conclusion, the
expenditure approach is the best way in computing the GDP especially
when you have all the data regarding the expenses that have been done
for the whole period or the whole year. This also helps in critical
computation especially for the nation's Gross Domestic Product that is used
by some investors and businesses in the country.
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CASE 2
Inflation is the overall rise of prices in goods and services provided by

the economy over the period of time. The increase includes basic
commodities, the housing and other goods and services that are produced
by the manufacturers or such. If the prices increase for a few several
products it cannot be called inflation because inflation is only computed if
a lot of products and services increase its prices. It can be measured in
different ways like the GDP Deflator that is a broad index of inflation in the
economy run, Consumer Price Index that measures the price level in each
basket of the consumer products every month, and PCE Price Index that
measures inflation in the basket of goods in every household.
Moneycrashers.com, a website offers various economic definitions

and data defines inflation as a long term rise of goods and services caused
by the decreasing value of the country's currency. It also arises when it is
not adequate to match people's income. If the salaries or income of each
household does not increase along with the prices of commodities and
services, the purchasing power of each household will decrease and can
lead to an unstable and slow economy.
They also give ten (10) strategy to combat the effect of inflation in
today's generation. One is to invest in long-term that can help in saving and
earning interest at the same time. Two is the investment in commodities that
will be forever in demand and will surely act as a superior brand in the near
future. Three is to invest in gold and metals that will have an inherited value
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that will make them immune to inflation. Four is the investment on the real
estate which is seldom called a real asset, always remember that land does
not depreciate only appreciate. Five, consider Treasury Inflation Protected
Securities (TIPS) that will return your original investment along with the
percentage of inflation happen. Six is to stick with equities this means to
invest in bonds and stock markets that will eventually result in higher income
to company and investor. Seven is to consider dividend pays because it
always increases at an annual basis that can guarantee to the stock
appreciation in offering further benefits. Eight, save more the easiest and
proactive way to ensure your ability to fund a comfortable life soon. Nine,
invest collectibles this is present in buying and selling the business in which
you earn a profit by adding interest to a specific product. Ten is to
remember all of this and use for future needs.
The website also added that there could be so-called healthy

inflation, it is considered to rise approximately for about two (2) to three (3)
percent every year. Unfortunately, the main goal of this inflation is to
outpace the growth of the economy by a smaller amount every year. This
kind of healthy inflation is considered positive data that leads to increasing
household income, profitability, and capital flows in a growing economy. It
also encourages the consumer to consume products that will further help
the economy and create more jobs.
Another website that truly gives an informative data in regards to the

economy is the economic.help.org, it gives two (2) types of inflation which
are distinguished by the economist. The two (2) types are called Demand-
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Pull inflation and Cost-Push inflation, both this type triggers to increase the
total market price in the country. Demand-Pull inflation occurs when the
fast demand for goods and services in the country rises rapidly compared
to the economy's productive capacity. The rapid increase of the
productive capacity in the country may be the result if the central bank
has an overflowing supply of money which can lead to an increase in the
goods and services. While the Cost-Push inflation is when the prices of
production process inputs increase, this includes the rising of raw material
prices or a sharp rise of oil in the world market. Eventually, the high cost of
production leads to a decrease in aggregate supply and an increase in an
overall price level. In computing for the inflation in the economy, it's more
complex and dynamic.
In an article written by Bartolome (2018), it specifies that inflation is

the general increase of consumable goods and services. At the same time,
the computation is always base on CPI that helps in measuring the average
value of the standard basket of goods in every household monthly. The rate
of the CPI may connect to the changes in inflation, there are different
contributors to rapid inflation increase it may include the gas, electrical
energy and many more. She also added that once the inflation rises the
value of Philippine peso becomes lower that may result for them to buy a
lesser product with the same amount.
In connecting with the article mentioned above according to Francis

(2017), that the value of the currency in every country decreases once the
inflation increases rapidly. The inflation and price itself have a direct
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relationship when the inflation increase automatically it will reflect the

prices in the market. The economy have a decreasing buying power in
terms of goods and service. Typically, this is a sign which the currency isn't
worth value like the previous value. Once the value of the currency is
usually set by the market forces, it will depreciate in the value of foreign
exchange markets. Next is if the value of the currency is handled by the
government, the value will lead to the draining of the government's foreign
exchange reserves and will be forced to respond in devaluing the currency.
There are some cases that don't agree with the terms above. In the
case of China, its economy is rising rapidly since the 2000s. Normally, when
the country's economy grows the value of its currency usually appreciates,
but the government of China prevented this to happen because of some
policies and methods that are highly followed. In the bad side of this case,
the purchasing power of the people doesn't increase because their
currency value doesn't increase also. Their society responded by
demanding higher wages but at the same time, the prices of their goods
also increase.
There is a statement by Amadeo (2018), that when the price rises

there will be expected inflation which motivates the consumer to spend
more to avoid the future increase of the market prices. This just focus that
when the inflation rises into a small percent, it is good and can help the
economy to grow and enhance more. Also, the growing economy leads
to a decreasing number of jobless people so those who have jobs become
confident and efficient in terms of work progress.
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Recently, the Philippines experience a sudden increase in inflation for

about 9% in the late quarter of 2018. In an article by rappler.com, a website
that produces different current news locally and internationally it says that
Filipino's started to tight squeeze their pockets because of the sudden jump
of commodities and other prices. On the other hand, Bangko Sentral ng
Pilipinas (BSP) suddenly raised its interest rates because its role is to mandate
in maintaining stable prices in promoting sustainable economic growth and
value of money. And with the interest rates were calibrated to help the
economy.
In the survey conducted by TheNerve, it shows that 46 percent of the

respondents are feelingly worse in 2018 because of the higher prices of
necessities especially those that are basic and everyday needs. They also
don't have an increase in their pay checks and they only buy basic needs
for their family's consumption. The small business owners also see that the
production volume and the income just stayed or most likely down
compare from last year data. Also, the number of bank loaners increase
because it potentially helps the respondents to somehow adjust in the
sudden happening.
There are different causes why inflation suddenly arises base on the
moneycrashers website. It states that there are five (5) reasons why it
increases, it includes the money supply, national debt, demand-pull effect,
cost-push effect, and the exchange rates. With the different examples
given by the website, it gives people more concrete idea in regards to
inflation. The different causes may vary depending on the situation
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happening in a specific country. In the Philippines, it may change because

of some undetermined circumstances.
The first cause is the money supply since the gold is not only the
standard in determining the amount of currency of the country the
perception of the public in the value of money circulates. During the early
centuries the gold is the only standard used to determine the currency and
after years of modernization of the industrialized country, it changes. Most
likely the public perception of value in the currency can affect it big time
like it can be devalued. This evaluation process can force the prices to rise
due to the less worthy of the currency. The process of this money supply is
like how the antique collectors value the antique stuff, the rarer the item is
the more valuable it is. This goes the same logic with the currency, the less
the currency it exists in the money supply, the more valuable it could be.
On the other hand, the large number of monetarist economist

believes that the federal reserve of the country will not be able to control
the money supply directly but it may grow and rate faster than the
expected. This belief eventually drives up the prices recently in the market.
Also, those countries who experience a slow rate of 5 percent in their
money supply also experience low inflation rates. So this statement is just
implementing about the faster the growth of the money supply is, the faster
the increase in inflation.
According to manilastandard.net the country who experience rapid

inflation rate also experience the rapid monetary expansion. In past time
the relationship between the two always have a consistent relationship of
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all economic factor. This also suggests the economic progress of the
country will always be determined by the monetary policies has been
constantly shifting between the monetary expansion and contraction.
Once the monetary authority expands it will generally push the interest
rates too low, that will result in current investment and economic boon. The
investors will be attracted but will not be sustainable for a long period of
time.
The second cause is the approval and implementation of Tax Reform

for Acceleration and Inclusion (TRAIN) Law. This was implemented in the first
day of the year 2018, where it is the first ever package of Comprehensive
Tax Reform Program (CTRP) that was held by the administration of President
Duterte that envisioned to correct the tax system in the country to make it
more fairer and efficient. It is also designed to distribute the gains to poor
families. This also includes in the funding of more infrastructure and social
services that were provided by the government to eradicate extreme
poverty.
In the article by Abrea (2018), the TRAIN law also lowering the
personal income tax for about 8 percent, this makes the minimum wage
earners take home a bigger amount for their families. Under this law, those
who are self-employed and professionals are permitted to benefit
themselves in the 8 percent in every individual pay assessment and rate
charge. It will be accessible to those whose gross deals don't surpass the
VAT limit.
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The TRAIN Law changes many things in regards to paying taxes in an

article written by Gialogo(2018), the following are the different taxes that
changed;
Reduced Taxes
Personal Income Tax
Workers with annual pay of P250,000 or less will be excluded from the
pay of charge. Those with an assessable salary of above P250,000 will be
liable to pay the rate of 20% to 35% compelling 2018, and 15% to 35% viable
2023.
Estate Tax
The tax rate was additionally changed from 5% to 32% of the net
estate to a flat level rate of 6%. Also, the deductions were also allowed in
computing the following.
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Donors Tax
The donor’s duty rate was likewise amended to a single rate of 6%

without the connection between the contributor and the doner. In the old
law, the rates of donor’s duty were taxed by 2% to 15% if the contributor
and donor are connected, and 30% if otherwise. Nonetheless, the donation
of real property is currently subject to Documentary Stamp of Php 15.00 for
each Php 1,000.00.
Value Added Tax
There are different amendment done by the law, first is the increase
to VAT threshold from Php. 1,919,500.00 to Php. 3,000,000.00. The sales of
drugs and other medication for diabetes, high cholesterol, and
hypertension will be soon exempted to VAT. There is also an increase in the
VAT exemption for the residential unit from Php. 12,800.00 to Php. 15,000.00.
Also, the association duties like membership fees, homeowners association,
and Condominium Corporation were express as VAT exempt.
New Taxes
Sweetened Beverages
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Non-essential Services
Those who have cosmetic procedures that improve, altering or

enhancing the personal appearance is now subjected to about 5 percent.
PCSO Winnings
Already, PCSO rewards, regardless of amount, were already

excluded from the expense. Unfortunately, this law subjects PCSO winners
to give a 20 percent if their winnings extent to Php. 10,000.00
Increase Taxes
Passive Income
TRAIN forces higher taxes on some passive income, including

premium pay from the dollar and other remote cash stores.
There is likewise a critical increase in significant taxes on sale

especially the offering of stocks.
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Excise Tax
TRAIN imposes higher extract imposes on cigarettes, fabricated oils

(oil based goods), mineral items and cars.
Cigarettes
Automobiles
Those that are hybrid vehicles are imposed to pay for 50 percent of
the applicable excise taxes but those electric and pick-up vehicles are
exempted.
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Manufactured oils and other products
Documentary Stamp Tax
There was no change in the rates of the stamp but increases those
that are taxable documents.
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TRAIN actually contribute a high percentage in the recent jump of

inflation. Punongbayan (2018), said that the increase of products like
petroleum, automobiles, and sugar-sweet beverages are because of the
new excise tax that has been approved. These new excise tax has been
around the economy and raises inflation. Some of the opportunistic
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businessmen use this as an excuse to charge price increase above the

normal profits. The Department of Finance (DOF) recently revealed the
breakdown of the factors in the high inflation rate. Almost 26.70 percent
was because of the TRAINS excise taxes, 46.70 percent was because of the
profiteering of business people.
The third cause is the national debt, the constant expanding of the
nation's national obligation will eventually prompt the expanding increase
of inflation. Any technique the country takes to battle a rising national
obligation can at last lead to higher inflation. The primary system for
diminishing the national obligation is to build a bigger charge income.
Companies must earn cash for investors, so they are probably going to
respond to higher duty rates by raising costs on their products and ventures.
Higher valued products and ventures result in higher inflation. The second
methodology for diminishing the national obligation is to build the cash
supply, utilizing this cash to satisfy the current obligation, yet this can likewise
prompt inflation as the higher supply of cash makes every individual unit of
money worthless.
There are two techniques mentioned above to decrease the

national debt. First is to raise taxes and second is to print more money to
pay a debt. Unfortunately, the second technique will worsen the situation
because it will make the currency decrease its worth over the dollar.
However, the first technique will just make product prices higher and
eventually cause a higher inflation rate.
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In the article in Philstar.com, the Philippines debt rose for about Php.
27.4 billion to Php. 7.043 trillion due to the net availments on the both
domestic and foreign obligation. The total debt stock for about 34.68
percent was from foreign creditors while 65.32 were borrowed domestically.
The government borrowed from local and foreign sources to fund every
budget deficit in the local projects and services. Recently, the Philippine
government borrowed almost $167 billion dollars to be spent in the
infrastructure to be built in Duterte's administration with a slogan of ‘Build!
Build! Build!' It would definitely increase the government debt from $123
billion to $ 290 billion but does not include the interest rate of China.
The Money Enigma is a website which gives a new perspective in

regards to money and inflation. It states that the government has an
obligation to carry out the recent inflation growth rate. In a more specific
term, market sustainability over debt and deficits has a direct impact on
the market value. Cash has been a long-span value instrument output of
29
the society. If the debt accumulates to the point that it will be

unsustainable, the market will begin the discount, higher monetary base
and upward pressure to the prices. With these circumstances, the national
bank may rapidly end up in becoming impotent against its fight to inflation
and loses its control to long-term expectations.
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Case 3
Investment is an asset in which it is used in acquiring a specific goal

in generating income. It is actually purchasing it for the future to create an
interest of such that could make the amount bigger as the time goes by.
According to Chen (2018), in the economic sense the investment is a
purchase of goods that are not consumed in the present but are used in
the future to create wealth. On the other hand base on finance, it is a
monetary asset in which it is purchased with thinking that it will provide an
income in future or later behold at a higher value from its original value. The
term of investment also includes the purchases of bonds, stocks and real
estates that considered as real assets, this kind of assets usually increase its
value after times. According to the Philippine Stock Exchange, the
investment is a vehicle which the funds can be placed with expectation in
generating positive income.
The investment also adds to the economic growth of the country.

According to investopedia.com when a company usually requires a
business this allows to increase the production base that will help the
economic growth increase compare to the previous years. One of the most
known types of investment is a bank investment in which provide services
to assist an individual or a company in their associate wealth. They also
added that investment is intent on holding the assets for long term time,
they look into building their assets in their portfolio for a long period of time.
Another definition of investment was given by Acidre (2019), that

investment is a purchased item that somehow identifies by a buyer as
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something that will appreciate its value after time or be sold at a higher
price. It somehow looks like a passive income that the owner may create
wealth or income over time.
Finra.org is actually a website that gives various types of investments

that will help you achieve the financial goals you want. Every type of
investment has its own primary set of features and risk factors. The different
types of investments are stocks, bonds, investment funds, bank products,
options, annuities, and insurance.
 Stocks are the shares of the company, which means if you buy it you
have already a part of that company. It is usually broad and
describes as the company's size, type, performance during market
cycles and for the short and long-term growth of the organization or
company.
 Bonds are the types of loan that makes investor gain profit by an
exchange for the interest payment. It also specified in terms of the
repayment of principals at the bonds maturity rates.
 Investment Funds examples are mutual funds, closed-end funds, and

exchange-traded funds, the choice of yours depends on the specific
investment strategy you are looking for. It can offer diversification,
professional management and a wide variety of strategies and styles.
 Bank Products are those that provide a safe and convenient way in
accumulating the saving you earned which sometimes helps you in
32
managing your money. The different accounts in the bank offer

services that can help in liquidation and flexibility of your account.
 Options are the contracts that give a right to a purchaser that is not
an obligation in buying or selling a security, like stocks or exchange-
traded fund in a specified price within a specific period of time.
 Annuities are contracts between you and to the insurance company,

in which the insurance company promises to make payments
periodically, either starting immediately that is called immediate
annuity or either some future time it is called a deferred annuity.
 Insurance is products that come in different forms, it includes term life,

whole life, and universal life policies. There also are given variations
on the different variable life insurance and variable universal life
which are likely considered as securities.
Financial Market is a place where the transactions of trades of a

financial securities exchange. This includes the future options in a low
transaction cost that includes the securities of bonds, precious metals, and
stocks. From the word itself market which is used for exchange it could be
barter or in monetary trades.
The investopedia.com describe the financial market as a broad term

in a market place where the trading of securities that includes equities,
bonds currencies and derivatives occurred. Somehow it does not indicate
the true value of stocks because of macroeconomic force. However, the
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prices of securities have transparency to ensure the efficient and correct

prices set by the market.
According to Kenton (2018), there are different types of financial

markets that helps future investors to distinguish them in a more specific
manner. Types of financial markets are over-the-counter markets, the
financial market for funds, money market, derivatives market, and forex
market.
 Over-the-counter markets are also called secondary markets and

mostly handles exchanging of the publicly listed companies. Their
market is usually smaller as it requires less regulation and less
expensive transactions.
 Financial Markets for Bonds handles the securities in which an investor

loans for a specific period of time with an amounted interest. Bonds
were not only released in a corporation but it may also release by
municipalities, states, and the federal government.
 Money Markets are markets that trade high liquidity and short-term
maturities. Its intention is to make short-term borrowing and lending
securities with maturity within the year.
 Derivatives Market are markets that trade securities that come from
the underlying assets. The price of this contract usually determined
by the amount in the market of the underlying item.
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 Forex Markets is where the currencies were traded. It is the most liquid
market because of the cash revolving here.
The Philippine market has its rocky start in 2014 base on the website
of assetmanagement.com. It is because of the US Federal Reserve started
tapering the bond-buying program after the recovery of the US economy.
At the same time, the foreign investors decided to sell the emerging market
securities in the developing market of US and Europe securities. Philippines
has the one of the highest GDP in Asia by that time and with that
fundamental strong economy, it recovers from the 2014's shaky beginning.
In the article of Abadilla(2015), it says that the stock market of the

Philippines falls and lost its value for about 764.44 billion pesos. It is a massive
decline in the global financial market that triggers and concern the
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economy with a slump in commodity prices. The peso by that time

depreciates as its lowest point for about 31.2 centavos.
Worldbank.org updated the economic progress of the Philippines in

2016 and it says that our country remained strong in the region despite small
global growth. Also, the poverty reduction is maintained relatively with high
economic growth and more positive job trends even the shocks in
agriculture.
In an article written by Dela Paz(2017), the Philippine stocks hit the

14th time main index closed and gained 25.1 for the whole year alone. For
the past 6 months of this year, the peso gained and lowering the full year
depreciation to the currency.
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For the year of 2018, the stocks were moving like a pendulum
because it swings into low levels and sometimes record-highs. The peso
versus dollars become strong at the beginning of the year and close with
the higher amount with the same year. In terms of exports, we gained
negative because it helps weakening the peso and the way we can do
this is to purchase less from abroad. Also, some analyst encourages the
investors to look for other possible placement beside from the stocks. They
give other options like bonds, government securities, and dollar accounts.
In order for you to make sure that your money will grow and benefit
in future time, you need to start investing in a business that you like and love.
Aside from those feelings, you also need to have intuitive to choose what
business or investment could give you a higher profit. Base on my research
from different website these are the three (3) business that will be highly
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feasible for this year, 2019. These 3 businesses are the real estate, food
industry, and e-commerce industry.
Real Estate is a property that is comprised of land and structures,

together with that it is considered as a real asset. The land assets are not
just the value of land but it also adds the yields, minerals and everything
that is comprised in that area. The balance.com also define the real estate
as property, land, buildings, and air rights above land and underground
rights below land. It means that everything that the land you own has is
everything you own too with right and everything. The term real estate
means true with physical evidence. It may be utilized for business purposes
like working store or an office, mechanical purposes such in working in
mines or processing plant and the most recognize sort of land, it may be
private land that is used for lodging.
Amadeo (2019), categorize the real estate in 4 types which are the
residential real estate, commercial real estate, industrial real estate and
land. This four type helps to determine what kind of business you will enter
or even all of it. The four types are:
 Residential Real Estate includes the incorporators newly developed

and resale homes. The well-recognized classification of this type is
single-family homes. This actually includes the apartment suites,
townhouse, country estates, multi-generational, duplexes, triple-
deckers, quadplexes, and high-value homes. It is developed for the
people to live on not to make it as a commercial or an industrial area.
There is the difference within the law concerning on this.
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Base on Bankrate.com it is often the most important financial

investment to a person to own land and the value of real property on it.
With the increasing number of the population, the residential real estate is
such a good investment because of its increasing value after time. Due to
its increasing value, some people purchase and later on sell it at higher
prices to make money or either leasing or making it as a renting house.
Those who purchase land for the first time they usually buy their house in a
loan or credit form. It just goes with the thought the more the house is
satisfactory, the greater value it gains.
 Commercial Real Estates it is usually those who want to enter a

business that will have a continuous income. It includes shopping
centers, strip malls, medical buildings, educational buildings, hotels,
and offices. Also, apartment buildings like condominiums are also
part of this because it is made to owned and produce income.
 Industrial Real Estate includes the manufacturing structures, buildings,

and property, it includes the stockrooms and warehouses. Some
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structures are used to utilize the research, production, storage and

the distribution of goods.
 Lands is the vacant lands, working farms and the ranches. It is usually
categorized as the subcategories because of its undeveloped, early
development, subdivision site where the land broker transaction
happens.
With this, the Philippines have been one of the hotspots for foreigners
in terms of property buying in Asia. According to asiapropertyhq.com, the
favorable and outstanding demographics of the country makes it more
attractive to the consumer especially it affordability in terms of different
aspects. The market in real estate in the Philippines has boomed in the past
years, this follows the path of the country's strong economic growth since
2010. At this same time, it agrees to the thought that the land never
depreciates it only appreciates. The website also overviewed what will
happen in the real estate industry for the year 2019, it will be bright because
the value of the land increases over time. In the recent graphs, figures and
trends, it may result that the Manila area could be one of the best locations
to invest in real estate especially in Southeast Asia.
In the Retalk Asia website, it distinguishes the 5 trends that define

what happened to the real estate in 2018. With this trend, the Philippines
continued to see the growth within the real estate industry. As the property
cost inside the Metro Manila started to flood and the land becomes limited,
they are looking for provincial zones that will make a good reflection of a
global trend. The five are the investment of East Asia, BPO expansion in the
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region, a rise of collaboration: Co-working, Co-living, and pop-ups, more

room for growth in tourism and Retail driving logistic.
Base on the market statistic, the previous trends of the leading real
estate industries in the Philippines remains as an attractive spot in real estate
investment in 2019. The value is increasing, which depicts the high demand
and the growth of the market that makes it sustainable. The different key
drivers of the continuous success of this industries are the increasing interest
from foreign companies, Chinese investors, an increase to the purchasing
power of locals and the increasingly more remittance of money from
overseas or Overseas Filipino Workers (OFW).
In an article from business.inquirer.net, the Philippines real estate is

forecasted to maintain its growth which adds to the fact that it is a good
kind of investment for the year. All of the data gathered is based on the
research of industry leader JLL. It says that the upward trend of real estates
is because of the factors like hospitality, office, residential and retail.
Food is a very essential part of every human life, this is how every one
of us grown but how this food being process does and eventually goes to
us. Food Industries are comprised of complex activities that pertain to
supply, consumption and catering of foods. A diverse collection of business
supplies that are consumed by people all around the world. It covers all the
aspect of food production that includes crops and livestock, food
processing, packaging and labeling, and many more. It is also concerned
in processing preparing, preserving, distributing and serving foods and
41
beverages. The finished products and partially prepared ones are found
and process in this industry.
According to the New World Encyclopedia, the food industry covers

a wide range of areas such as the following;
 Agriculture
 Food Processing
 Wholesale and Distribution
 Retail
 Food Industry Technology
 Marketing
 Regulation
The demand and supply are the drivers of the food industry
according to economywatch.com. It says that the number of factors that
heightened the demand in overall food industry such as the population
growth, wealth distribution, health awareness and various types of lifestyle.
The drivers also include the quality of supply chains, the competition within
the area and the composition of your target consumers. The rising prices of
agricultural and normal commodities force the food processors to increase
the prices. Recently the food industry become has turned out to be very
different, in this the creation of new and innovative products are needed.
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According to ifexphilippines.com, in the Philippines, the retail sectors

starts to have a rapid modernization for the recent years and also the
expansion of the Philippines food retail industry has led to the increase of
the national supermarkets throughout the country. The improved
distribution system allows better storage and offers superior qualities of
products that increase the demand of the consumers. The retails chains
usually gives opportunities for everything that makes fast product turnover,
growth, and wide market base.
For the food services, the growing demand for convenience led to
the expansion of different food industries around the country. The full-
service restaurants and fast-food chains have been growing but the
competition in this segment is keen. There should be a continuous and
innovative idea that will excite and attract customers. Almost half of the
total output of the country's manufacturing is on food industries, around 23-
24% or annual GDP. As in 2016, our country is the second fastest
manufacturing in the whole ASEAN nation. Many organization chooses the
Philippines because of its low production cost that is considered lowest in
the whole of Asia.
With that, it is a good type of business and investment because food

will never be out of the way. It is the primary commodity of everyone. Food
never gets old it just needs to be innovated. The demand for food is
increasing as time goes by because of the increasing population. The
modernization will still continue after time and the overview for the following
years, it will increase which will make future investors attracted and excited.
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Once your business is a primary commodity for everyone you will surely gain
profit.
The e-commerce industry is a process in buying and selling by an

electronic means, it is subjected to application and websites that are
connected to the internet. The huge increase of popularity for the past few
decades makes this one of the best business or investment for the
upcoming years. It actually replaces the traditional ways of buying
products you needed. It is one of the most convenient ways of modern
shopping. It actually helps you to do buying and selling the products
worldwide and 24/7. The e-commerce according to e-commerce
platforms is not only about online selling and buying, but it also includes the
online auction sites, internet banking, online reservation and many more.
After decades of performing e-commerce, its growth expanded globally
and the sales can be transacted with the use of mobile phones.
As the internet becomes popular and becomes part of everyday

routine globally the acceptance and growth of e-commerce continue. The
starting of the business has never been easy but as time goes by, many
discoveries have made to make people live easy and at ease. There are
many possibilities in e-commerce and it is actually a good place to invest.
The following are the characteristics of e-commerce;
 Always open- this makes it unique because you can look on the
product you want all the time. There is no limit in business hours. A
huge convenience it gives its customers and an excellent
opportunity for its merchants.
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 Cost Savings- they have a lower operating cost compare to the

physical stores. You don't need to pay for rent and staffs that make it
very competitive on price and increases the market share.
 Automated Inventory Management- there's no need to pay for

management in operating inventory on your business. You can easily
check and monitor everything in your business or personal entities.
 Location Independence- it can be used everywhere as long as you

have internet and mobile phones or laptop.
The Philippines became the second large and rapidly developing

country for the e-commerce market. With the continuous improvement of
technology, e-commerce also increase. Base on aseanup.com the
Philippines e-commerce market revenue is about US $840 million in 2018
and an annual rate of 12%. It is expected to increase to about $1,322 million
by 2022.
45
This just makes an e-commerce a good and efficient business to

invest with. In an article by CNN Philippines, it seems like the PH e-
commerce will grow more in the upcoming years because of the number
of users in social media and amount of time spent online This makes the
Philippines as an ideal place for this type of business or industry.
Overall in choosing a business or industry you want to enter, you first

need to do research and check the available facts. This will help you
choose the best according to the facts you get or either you're intuitive.
Also, the growth of your chosen business is important to see how it grow
furthermore in future time.
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Case 4
Association of South East Asia Nation (ASEAN) is an organization that

was established on August 8, 1967. Its purposes are to accelerate the
economic development, social advancement, cultural development,
promote peace and justice, provide assistance to different regions,
collaborate effectively, and to maintain the closeness and beneficial
cooperation with each other. It also maintains the global network alliances
and partnership that involves numerous international affairs and diplomatic
mission in the world. There are different programs that ASEAN created
under them in order to create a more diverse and developed region.
According to asean.org, the original and the only direct website of

the ASEAN organization, one of their program is the making the ASEAN
Economic Community (AEC) successful and stable.
AEC or ASEAN Economic Community goal is to have an integrated

economic region. It envisions that ASEAN will be a single market and
production base with a highly competitive region that has an equitable
economic development and fully integrated global economy. At the same
time, it will be defined as a sovereign movement of goods, services, and
investments as well as an independent flow of capital and skills. With the
coordination of the trades and investment policies, and as a rules-based
organization will be strengthened and become more interesting as a single
investment destination.
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The AEC was developed because of the mandated creation of the

ASEAN Free Trade Area (AFTA) way back to 1992. During the year of 2003,
different nations leader agree on building the momentum and the progress
it gained and efforts of different country's to broaden and deepen the
cooperation between the regions. This makes the different ASEAN Region
maximize the opportunities for the mutual benefits of different integration.
There are called three (3) pillars of ASEAN Community and the two (2) are
the Political-Security Community and Socio-Cultural Community.
Base on their website, it says the AEC undergoes in a different

process in order to gain what it is right now, this includes the related
agreements, related programs, benefitting from the AEC, enabling
measures, and economically competitive region.
Related Agreements
They have agreed to various agreements in terms of supporting the AEC

program.
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The following agreement in AEC aims to:
 Encourage the different development of products, services,

investment, capital, and skills,
 An increment trade and venture among the region.
 Promote and expand the local production sharing and network
 Promote advance and more elevated level of transparency and
predictability.
Related Programs
In order to promote the investment venture, ASEAN launched

different projects like ASEAN Investment Website (AIW) that features the
viability of the area as an investment location. Also, the initiatives in relation
to the enhancement of the trade will allow the traders to submit their
documents in a specific place through electronics. They also pursuing to
ensure food safety and securities at the same time the climate change.
ASEAN Integrated Food Security (AIFS) promotes the development of
sustainable food production through agricultural infrastructure
improvements, adoption of new technologies, etc.
Benefitting from the AEC
In accomplishing the aims and goal of AEC it means that the superior
venture atmosphere in the ASEAN Region improved. It usually encourages
in the execution of exchange, services, investment, and other fundamental
changes in every ASEAN region, in this way it improves the country’s
location offers.
49
Enabling measures
ASEAN has developed into a guaranteed superior that empowers

the condition of investors in the region. It has already evolving to move
towards having a standard base and classifying its estimates that would
oversee how the direct trade and investment do in the free-flowing of
good, services, investment, capital, and skills.
Competitive Economic Region
The AEC envisions that the ASEAN will focus on financial aspect like
its competitive economic region benefiting not only through its investors but
also to its customers. This just ASEAN commit to pursuing not only region
agreements, work plans, and programs but it also covers the relevant
national laws and policies.
Recently there are many significant developments as the AEC was

implemented this includes the fair competition in the culture, more efficient
and integrated network of transportation, and energy securities. In
explaining the fair competition in the culture, the five (5) countries that the
region of ASEAN consists of Indonesia, Malaysia, Singapore, Thailand, and
Viet Nam-have implemented their separate Competition Policy Law (CPL).
While the Philippines is yet to present the challenged law, it has built up an
office for competition under the Department of Justice (DOJ). Defining the
CPL it is the relied upon part on playing in the field and cultivating the
culture of business rivalry.
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The AEC points in giving an improvement of the financial status in the

area and it is made out of the following;
 A continues progressive open market, with most intra-territorial taxes

wiped out, and formal limitations in the administration's area
evacuated
 Lowering the exchange costs because of the improved cross-outskirt
exchanging forms
 An increasingly appealing investment on routine, and a more
business-accommodating condition, with the appropriation of
normal systems and guidelines
 More noteworthy portability of gifted work
 Better availability of transport and framework.
The AEC's also envision that for the following nine years it will spread
out in the AEC Plan 2025 that incorporates the accompanying:
 An exceedingly incorporated and strong economy

 A focused, creative, and dynamic ASEAN
 Improved availability and sectorial collaboration
 A flexible, comprehensive, individuals situated and individuals
focused area
 A worldwide ASEAN.
There are different investments for the Southeast Asia Nation

according to asean.org.ph it includes the following;
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 Information-technology companies in high-income ASEAN countries

can transfer advance and proprietary technologies without risk to
their Intellectual property (for validation with ASEC)
 SMEs in the creative industries can leverage on their cultural and

artistic creativity for increased commercialization
 A businessman in ASEAN can easily transport cargoes from point A to

point B in the region because of the ASEAN Highway Network
 Investors can easily link with neighbouring Northeast and South Asian
countries through the Singapore-Kunming Rail Link
 Businesses can take advantage of the opening up and development

of remote towns for tourism purposes
 Energy-dependent investments such as those in manufacturing can

have secure, sustainable, and lower energy cost once the Trans-
ASEAN Gas Pipeline and ASEAN Power Grid are developed
 The private sector will have to increased opportunities for

involvement in the energy and mining sector in terms of investments,
financing, and technology transfer
 Retail companies such as supermarkets can offer the market a wider

range of products and may even consider creating ASEAN isles
 Exporters in ASEAN such as furniture and jewelry makers can diversify

their markets and manage business risks
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 SMEs in supporting industries can more easily integrate themselves

into the regional supply chain and global economy
 Large multinationals doing business in ASEAN have wider options in

selecting regional hubs and marketing offices
Overall there are at least five (5) best investment that can create big
opportunities in Southeast Asia Nation, it comes with the;
1. Technology
Technology has been a continuous development over the years due

to the rapid changes in demand, needs and wants of the users. From a
small to a big venture of business the technology was used for innovation
and at ease works. Also, the technology helps businesses to decrease the
risk factors that could make a big downfall to the company. The top
companies internationally and locally are using strong technology to
protect their private data that use in producing a one of a kind product.
According to forbes.com, there is three (3) reason why all companies

must invest in the technology especially in the Southeast Asia nation that is
starting to boom their economic growth. First, it is worth overhead, it means
its implementation is not that much expensive compared to others that
cause the companies big time. Second, software development in the
improvement of business, the impact of the new technology has created
popularity and make people for efficient and productive. Third, is it makes
a better interaction with the customers, you can easily interact and
53
connect to your customer that makes the connection between the two of
you become well.
There are the different profound impact that technology has done in
our everyday living so it is an opportunity and has no exception in
democratizing the investment world. It offers investors a lot of opportunities
and it offers a lot of returns to its investors. Those strong returns began to be
the foundation of a promising and emerging huge splash in the economy.
In accordance with fool.com, it says that the technology offers

different opportunities in terms of stocks for both new and experienced
investors. It also a place where a normal person can jump in the emerging
of the technology that will be an experience and belief in the future. The
technology space offers opportunities for both growth investors and
income investors, who can choose from several mature, established
companies. Of course, because this is a sector that's rapidly developing,
there's some growth opportunity even in mature companies.
Technology has been a wide and an emerging term because of it's

far beyond expanding in terms of tech stocks, computer companies. These
businesses operate in a variety of other segments that are all part of the
technology market, including but not limited to
54
Artificial intelligence (AI)
This is where computers perform errands that might have traditionally

require a human mind. Simulated intelligence in somehow incorporated
with the profound realizing and a PC’s that will be explicitly customized.
Smartphones
There are lots of secondary players that are making components,

software, apps, and phones. The smartphone is a sort of a catch-all name
for handsets products that can run apps, programs, and nearly anything
else a computer might be able to do.
Block chain
It has gotten a big value of publicity because of its technology like

bit coin and virtual currencies, it is more than that called payment method.
According to Williams (2018), block chain is "the digital, distributed, and
decentralized ledger tethered to most crypto currencies that are
responsible for recording all transactions without the need for a financial
intermediary. In other words, it's a transparent and unchanging log of all
transactions that don't involve banks acting as a third party.
Computers and software
These are the companies that create laptops, desktops, and tablets,
and the software that runs in their system. It also includes the part like the
component players like Intel and Advanced Micro Devices, which make
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the chips and processors that power computers, but also bigger well-known
brands like Apple.
The internet
Many of these are at least partially supported by advertising revenue,

though some sell subscriptions and monetize in other ways. They produce
internet advertising that gives a more affordable way of advertising the
products. At the same time the network of devices connected to each
other and the areas the public internet that allows for links. It's everything
from a smart thermostat that can adjust the temperature in your home to
complex medical equipment that can order its own repairs.
Streaming Media
The example of this is the Netflix that become an entertainment

company, but it's also a technology company that has created its own
infrastructure. Netflix creates content for its streaming platform, but it also
creates and maintains the platform itself. A company like this makes
streaming media players more of a traditional technology sector stock, but
could also be considered a member of the next category as it
manufactures devices. Streaming media has been growing as consumers
look to cut the cord with cable, a trend that has been accelerating.
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Device companies
Companies that make devices driven by technology. In many cases,

they also make the software that makes them run and gives them added
functionality.
The Cloud
A system of computer storage that allows information and services to

be accessed by devices from anywhere. It allows companies and
individuals to use services that are not resident in their devices
Cyber security
With data now housed in the cloud, on our devices, and even in the
chips in our credit cards it is keeping information security has become a
growing industry. Cyber security is about making sure information is only
accessible to the people who are supposed to see it.
Chip/Component makers:
Some technology companies don't make finished devices at all, they

make the parts that go inside them. Intel is a good example of this, as the
company makes the chips and processors that make computers work. This
segment also includes companies that make memory, screens and other
parts that go into technology devices.
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2. Real Estate
Real estate is among the best investments for your long-term goals
but approach this with caution. It follows an up-and-down cycle and an
uptrend when people are buying properties left and right, and a
downtrend is when people sell, driving prices downThis also makes an
investor gain profit by an exchange for the interest payment also it is
specified in terms of the repayment of principals at the bonds maturity
rates.
3. Agriculture
It is also one of the best opportunities because of the continuous

gradual increase of population the commodities demands go higher. In this
it can provide a stable and increasing value of money. The stability of this
kind of investment is really good in your business and at the same time the
economic growth of the country.
4. Stocks
Investing in stocks yields into high earnings when you purchase stocks
at a low market price and then sell them later at a higher price. The stock
market allows you to reap a larger return on investment than short term and
medium term instruments such as bonds and UITFs.
However, stock market prices tend to rise and fall rapidly. If the
market price goes down, you’ll lose funds. Investing in the stock market is
ideal for your long-term goals because an investing horizon of more than
58
10 years greatly minimizes your risks from market crashes, which can take
years to recover from. With the continuous increase of stock value over time
it is a great investment for everyone especially for long term goals
5. Insurances
Insurances can also yield a high interest specifically in terms of health,

education and many more. Also, they are products that come in different
forms, it includes term life, whole life, and universal life policies. There also
are given variations on the different variable life insurance and variable
universal life which are likely considered as securities.
Overall it is everything that can produce income that is believed by

the investors can be an investment. The security of the principal or the
capital in each investor is investments concern. Some of the investors
tolerate the risks and a gradual return with an association with the
increasing amounts of risks. The two essential factors that sort the
speculations from each other helps in deciding the proper ventures for the
investors.
These are the three (3) opportunities of the Philippines in terms of

investment
1. Real Estate
Due to its increasing value, some people purchase and later on sell
it at higher prices to make money or either leasing or making it as a renting
59
house. Those who purchase land for the first time they usually buy their
house in a loan or credit form. It just goes with the thought the more the
house is satisfactory, the greater value it gains. Just like investing in the stock
market for the long-term, buy-and-hold property investing allows you to
minimize your risks. Aside from a buy-and-hold strategy, you can put your
investment to work by renting your property out on online marketplaces.
At the same time, the Philippines have been one of the hotspots for
foreigners in terms of property buying in Asia. According to
asiapropertyhq.com, the favourable and outstanding demographics of
the country makes it more attractive to the consumer especially it
affordability in terms of different aspects. The market in real estate in the
Philippines has boomed in the past years, this follows the path of the
country's strong economic growth since 2010. At this same time, it agrees
to the thought that the land never depreciates it only appreciates. The
website also overviewed what will happen in the real estate industry for the
year 2019, it will be bright because the value of the land increases over
time. In the recent graphs, figures and trends, it may result that the Manila
area could be one of the best locations to invest in real estate especially in
Southeast Asia.
Investment Minimum Initial Minimum Additional

Vehicle Investment Placement
Mutual funds Php 100 to Php 5,000 Php 100 to Php 1,000
60
Php 5,000 to Php 1

Stocks Php 1,000
million
Php 1,000 to Php

Time deposit N/A
100,000
Php 25 to Php 10
UITF Php 50 to Php 1 million
million
2. Technology
The technology has also become part of the five great opportunities
in Asia. For the Philippines, it is a great investment because of the great
terms of Filipino's in terms of Social Media usage. In an article of inquirer.net,
the Philippines have been top of the world's social media users for about 67
million people that use it. The Filipino's have an average spent for about 3
hours and 57 minutes every day in the different social media sites but on
the internet itself, they spend about 9 hours and 38 minutes. The country
was ahead in terms of its usage as said by the statistics. Also, e-commerce
in this part is also connected in the big growth of the area. With these terms
it is a really good way of investing.
3. Time Deposit and Money Market Funds
Time deposits are among the best investments for beginners who are
afraid of risks yet want to earn higher interest than a traditional savings
account. Most savings accounts have interest rates of less than 1%, while
61
time deposits earn up to more than 4%. At the same time, Money Markets
are markets that trade high liquidity and short-term maturities. Its intention
is to make short-term borrowing and lending securities with maturity within
the year. With the interest yield in this field, it could really make a big impact
on the investors and economy at the same time.
Best UITF Money-Market Funds in ROI

the Philippines
UCPB Cash Management Fund 2.7077%
AB Capital Short-Term Fund 2.4029%
PSBank Money Market Fund 2.3365%
ATRAM Peso Money Market Fund 2.2591%
This table just shows the interest that could be yield can be a source
of good value and has a higher interest rate compared to others.
62
References
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the-causes-of-inflation/
Amadeo, K. (2018 August). Causes of Inflation, What Makes Inflation

Happen?. Retrieved from https://www.thebalance.com/causes-of-
inflation-3-real-reasons-for-rising-prices-3306094
Amadeo, K. (2019 January). Gross Domestic Product and How It

Affects You. Retrieved fromhttps://www.thebalance.com/what-is-gdp-
definition-of-gross-domestic-product-3306038
Asidre, J. (2019 Jannuary). Best Investment. Retrieved from https://

grit.ph/best-investments/
Bartolome, J. (2018 September). What is inflation? What causes it?

How does it affect us?. Retrieved from https://www.gmanetwork.com
/news/money/economy/666756/what-is-inflation-what-causes-it-how-
does-it-affect-us/story/
Beggs, D. (2019 January). What is Expenditure Approach. Retrieved

fromhttps://crushthecpaexam.com/accounting-glossary/what-is
expenditure- approach/
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Bell, C. (2017 October). Measuring Output Using GDP. Retrieved from

https://courses.lumenlearning.com/boundless-economics/chapter/
measuring-output-using-gdp/)
Chand, G. (2018 November). What is Gross Domestic Product (GDP).

Retrieved from https://corporatefinanceinstitute.com/resources/
economics/gdp-formula/
Chen, J. (2018 March). Investment. Retrieved from https://www.

investopedia.com/terms/i/investment.asp
Dela Paz, F. (2017 April). 5 Easy Ways To Start Investing With Little
Money. Retrieved from https://www.moneyunder30.com/start-investing-
with-little-money
Francis, L (2017 October). What are some of the factors that

contribute to a rise in inflation?. Retrieved from https://www.
frbsf.org/education/publications/doctor-econ/2002/october/inflation-
factors-rise/
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economic-community/view/670/newsid/755/about-aec.html
http://www.finra.org/investors/types-investments
https://asean.org/asean-economic-community/
https://www.bankrate.com
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https://www.businesstimes.com.sg/hub-projects/deepening-asean-
economic-integration/what-is-the-asean-economic-community
https://www.economicshelp.org/macroeconomics/inflation/causes
-inflation/
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work-in-progress/341181/)
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inflation-rate/
https://www.moneyenigma.com
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PAMANTASAN NG CABUYAO

Senior High School Department

ABM AE12: APPLIED ECONOMICS

A COURSE REQUIREMENT PRESENTED TO

Jeremy Paul E. Gecolea, MBA

Francesca Agatha R. Euraba

2. Inflation is the rate of increase in prices of commodities in an economy.

3. Investment is the lifeblood of production and businesses in an economy.

4. The Association of Southeast Asian Nations or ASEAN is promoting the

The Gross Domestic Product (GDP) is every single thing that is

According to Kenton (2019), GDP usually includes all the

There could be a problem in regards to doing GDP because it may

In accordance with the study of Amadeo (2019), it states that the

The first is the expenditure approach that calculates the gross

Kenton (2019) also added that the expenditure approach is also

Next approach is the income approach which included the

corporate profits interest, and miscellaneous investments. There are two

The last approach is the Value Added Approach which is more

is calculated as Y= C+ I + G +(X – M), which is the equation representation

There are different downsides of this approach but technically the

Inflation is the overall rise of prices in goods and services provided by

Moneycrashers.com, a website offers various economic definitions

The website also added that there could be so-called healthy

Another website that truly gives an informative data in regards to the

In an article written by Bartolome (2018), it specifies that inflation is

In connecting with the article mentioned above according to Francis

relationship when the inflation increase automatically it will reflect the

There is a statement by Amadeo (2018), that when the price rises

Recently, the Philippines experience a sudden increase in inflation for

In the survey conducted by TheNerve, it shows that 46 percent of the

happening in a specific country. In the Philippines, it may change because

On the other hand, the large number of monetarist economist

According to manilastandard.net the country who experience rapid

The second cause is the approval and implementation of Tax Reform

The TRAIN Law changes many things in regards to paying taxes in an

Personal Income Tax

The donor’s duty rate was likewise amended to a single rate of 6%

Value Added Tax

Those who have cosmetic procedures that improve, altering or

Already, PCSO rewards, regardless of amount, were already

TRAIN forces higher taxes on some passive income, including

There is likewise a critical increase in significant taxes on sale

TRAIN imposes higher extract imposes on cigarettes, fabricated oils

Manufactured oils and other products

Documentary Stamp Tax

TRAIN actually contribute a high percentage in the recent jump of

businessmen use this as an excuse to charge price increase above the

There are two techniques mentioned above to decrease the

The Money Enigma is a website which gives a new perspective in

the society. If the debt accumulates to the point that it will be

Investment is an asset in which it is used in acquiring a specific goal

The investment also adds to the economic growth of the country.

Another definition of investment was given by Acidre (2019), that

Finra.org is actually a website that gives various types of investments

 Investment Funds examples are mutual funds, closed-end funds, and

managing your money. The different accounts in the bank offer

 Annuities are contracts between you and to the insurance company,

 Insurance is products that come in different forms, it includes term life,

Financial Market is a place where the transactions of trades of a

The investopedia.com describe the financial market as a broad term

prices of securities have transparency to ensure the efficient and correct

According to Kenton (2018), there are different types of financial

 Over-the-counter markets are also called secondary markets and