REPUBLIC OF THE PHILIPPINES

CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

CAE 123-ECONOMIC DEVELOPMENT

MODULE 7

INTERNATIONAL TRADE AND ECONOMIC DEVELOPMENT

At the end of the topic, the students should be able to:

1. Recognize the value of international trade as it strengthens economic development

1. INTERNATIONAL TRADE AND ECONOMIC DEVELOPMENT

International Trade - Exchange of goods, services, and capital across countries, allowing
access to resources and markets not available domestically.

• Exports – goods sold to other countries

• Imports – goods bought from other countries

Significance:
Major contributor to a country’s GDP and economic growth.

Reasons Why Countries Trade

• Access to Resources: Get goods or materials they lack.

• Specialization: Focus on products they produce efficiently (comparative advantage).
• Economies of Scale: Lower production costs through larger markets.
• Variety & Competition: Wider choices for consumers, innovation, lower prices.
• Economic Growth: Export create jobs and income

Core Trade Theories

• Mercantilism: Maximize exports, minimize imports to gain wealth.

• Absolute Advantage (Adam Smith): Produce goods more efficiently than others.
• Comparative Advantage (David Ricardo): Specialize in goods with lower opportunity cost.

Trade Policies and Strategies

These are the rules and plans used by governments to control international trade. These policies
help protect local industries, control imports, and promote exports to strengthen the country’s
economy.

Trade Barriers

Trade barriers are restrictions placed by the government to control the entry of foreign goods.
Their main purpose is to protect local industries from strong foreign competition.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Types of Trade Barriers:

• Tariffs
• Quotas

Tariffs

A TARIFF is a tax imposed on imported goods. This makes imported products more expensive so
local products can compete better.

Example:
An imported phone worth ₱10,000 with a 10% tariff becomes ₱11,000.

Advantages:
Protects local industries
Generates government revenue

Disadvantages:
Higher prices for consumers
May cause trade conflicts

Quotas

A quota is a limit on the quantity of goods that can be imported. This ensures local producers have
less competition.

Example:
The government allows only 50,000 imported cars per year.

Advantages:
• Protects local industries
• Reduces foreign competition

Disadvantages:
• Can increase prices
• No tax revenue for government

Trade Liberalization

Trade liberalization is the reduction or removal of trade barriers to allow freer trade between countries.
This helps increase competition and product availability.

Example:
Reducing tariffs on laptops makes them cheaper for consumers.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Advantages:
• Lower prices
• More product choices
• Better quality

Disadvantages:
• Possible job losses
• Local industries may suffer

Organizations to note:
• World Trade Organization – promotes free and fair trade worldwide
• Association of Southeast Asian Nations – encourages freer trade in Southeast Asia

Import Substitution

Import substitution is a strategy where a country produces goods locally instead of importing them.
This helps develop local industries.

Example:
Producing local canned goods instead of importing them.

Advantages:
• Creates jobs
• Develops local industries

Disadvantages:
• Higher prices
• Less competition

Export Promotion

Export promotion encourages local companies to sell their products to other countries. This helps
increase national income.

Example:
The Philippines exports electronics and coconut products.

Advantages:
• Economic growth
• Job creation

Disadvantages:
• Dependence on global demand
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

ECONOMIC DEVELOPMENT

Economic development refers to the sustained and inclusive growth of a country’s economy. It
is not only about increasing GDP, but also about improving the overall quality of life of the
people.

It includes improvements in:

• Income levels
• Employment opportunities
• Infrastructure such as roads, schools, and hospitals
• Living standards

Economic development is a multidimensional process. It involves government policies and

programs that aim to:

• Develop better education and health systems

• Improve people’s living conditions
• improve and attract investments
• lessen poverty

How International Trade Impacts Economic Development

International trade contributes to economic development by increasing export earnings, which raise
GDP and national income. It encourages business expansion and job creation, helping reduce
poverty. Trade also attracts foreign investment and new technologies that improve productivity. As
trade grows, governments gain more revenue to support public services like education, healthcare,
and infrastructure.

Why is International Trade Important to Economic Development

International trade plays an important role in supporting economic development because:

• It increases national income through exports.

• It creates job opportunities in different sectors.
• It attracts foreign direct investment (FDI).
• It allows the transfer of technology and skills.
• It expands markets for local businesses and small enterprises.

Positive effects of International Trade for Economic Development

International trade brings several benefits that help countries grow and develop. By selling goods
and services abroad, countries earn foreign income, which boosts national GDP and increases
government revenue.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Trade creates jobs in many areas, from farming and factories to services and technology. It also
helps small and medium businesses grow, which gives more people work. As more jobs are
created, people earn more income, which helps reduce poverty and improve living standards. With
better incomes, families can afford education, healthcare, and a higher quality of life.

Trade also attracts foreign direct investment (FDI), which brings in capital, advanced technologies,
and new skills. It encourages countries to focus on areas where they are strongest, making
production more efficient. Expanding markets through international trade allows local businesses
to grow beyond domestic limits, which supports industrial diversification and long term economic
stability.

ADVANTAGES VS. DISADVANTAGES OF INTERNATIONAL TRADE ON ECONOMIC

DEVELOPMENT

Advantages:

• Increases national income and GDP

• Creates jobs in farming, factories, services, and technology
• Helps small and medium businesses grow
• Attracts foreign direct investment (FDI), bringing capital, technology, and skills
• Encourages countries to specialize where they have a comparative advantage
• Expands markets for local businesses beyond domestic limits
• Supports industrial diversification and long term economic stability

Disadvantages:

• Relying on a few exports makes economies vulnerable to price drops or global demand
changes
• Can increase income inequality between skilled workers/businesses and low skilled
workers/farmers
• Developed countries may use subsidies or high tariffs, making it harder to compete
• Unstable exchange rates and currency restrictions limit trading ability
• Expanding exports may cause environmental problems, like overusing resources or
pollution

ECONOMIC DEVELOPMENT

While "growth" is often just a rising GDP, economic development focuses on transforming the
quality of life for all citizens.

Infrastructure & Services: Trade revenue allows governments to invest in "fixed capital"—
building the roads, railways, and power grids that underpin a modern economy.

Human Capital: Exposure to international standards forces a country to upgrade its workforce's
skills. This "knowledge transfer" is as valuable as the money itself.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Poverty Reduction: Integration into Global Value Chains (GVCs)—where a country specializes in
one part of a product, like a computer keyboard—can lift millions out of extreme poverty by
providing steady, higher-paying jobs.
Stability & Peace: High levels of trade create a "mutually beneficial exchange" that makes the
opportunity cost of war too high, thereby promoting regional peace.

Key Point Summary

Core Driver: International trade is a "positive-sum game" where specialization based on

comparative advantage allows all participating nations to benefit.
Policy Balance:Nations must navigate between protectionism (shielding local jobs with tariffs)
and liberalization (removing barriers to boost efficiency).
Growth vs. Development: Trade successfully drives development only when the resulting
wealth is translated into better education, healthcare, and infrastructure.

Sustainability:Modern trade must address environmental degradation and labor exploitation to

ensure that development is truly sustainable for the long term

MODULE 8

POPULATION AND ECONOMIC DEVELOPMENT

At the end of this chapter, student will be able to:

1. Learn the basic concepts of population and its effects on Economic development
2. Understand the need to reduce population growth

1. POPULATION GROWTH

Population Growth: The increase in the number of individuals in a population over time, typically
measured as a percentage

Refers to the increase in the number of people in a population or dispersed group. The global
population
has grown from 1 billion in 1800 to 8.2 billion in 2025. Actual global human population growth
amounts to
around 70 million annually, or 0.85% per year.

Population: The total number of individuals living in a specific geographic area at a given time

The whole number of inhabitants occupying in area (such as a country or the world) and
continually being modified by increases (births and immigrations) and losses (deaths and
migrations).
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Factors Affecting Population Growth

Increase:
• High Birth Rates
• Declining Mortality Rates
• Migration and Immigration
• Health and Medical Advancements
• Technological Advancements
• Agricultural Development
• Industrialization
• Economic Growth
• Urbanization

The birth rate refers to the number of live births per 1,000 people in a population within a
specified time frame, typically a year. It is a key demographic indicator used to understand
population growth and dynamics. Birth rates can vary widely between regions and over time due
to factors such as socio-economic conditions, cultural norms, access to healthcare, and
government policies.

LIFE EXPECTANCY - The average number of years a person is expected to live, based on
statistical analysis of a specific population and time period. Influenced by factors like healthcare,
nutrition, lifestyle, socioeconomic status, and environment.

INFANT MORTALITY - is defined as the death of a baby before they reach their first birthday. It
is a critical indicator used by WHO and the CDC to measure the overall health, socioeconomic
development, and healthcare quality of a nation

FERTILITY RATE - The Latin root word isfertilis, "bearing in abundance or fruitful," fromferre, "to
bear." The ability to conceive and bear children, the ability to become pregnant through normal
sexual activity. Fertility is the ability to have babies or to [Link] fertility rates in a
community increase, more babies are born.

DEATH RATE Death rate or Mortality rate is a measure of the number of deaths (in general, or
due to a specific cause) in a population, scaled to the size of that population, per unit of time.

Natural Increase - is the difference between the number of live births and deaths, generally
calculated over a year.

Migration - Migration is the movement of people from one place to another. Migration can be
within country or between countries. Migration can be permanent, temporary or seasonal.

Benefits of Population Growth

Advantages:
• Economic Growth
• Increased Demand
• Innovation and Technological Advancements
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

• Larger Consumer Market

• Cultural Diversity and Social Development
• Agricultural and Industrial Development
• Urban Development and Infrastructure Growth
• Larger and Stronger Manpower and Human Resources

Population Decline

Also known as depopulation, refers to the reduction in a human population size in a country,
specific region or the world.

Factors Affecting Population Decline

Decrease:
• Declining Birth Rates
• Rising Mortality Rate
• Emigration
• Scarcity / Product Shortage
• Poverty / Famine
• Rising Crime Rates
• Epidemic / Pandemic Outbreaks
• Natural Disasters
• War / Conflicts

Detriments of Population Decline

Disadvantages:
• Shrinking Manpower and Human Resources
• Economic Slowdown
• Rising Aging Population
• Environmental Abandonment
• Closing of Infrastructures
• All-Encompassing Society Slowdown
• Smaller Consumer Marker
• Cultural Shifts and Dissolvement of Society

Top Countries with the Most Population

No. 1 - India
No. 2- China
No. 3- United State of America (USA)
No. 14- Philippines
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

What is Overpopulation?

Overpopulation or overabundance is a state in which the population of a species is larger than

the carrying capacity of its environment and grows faster than the resources available to support
it.

Factors that Cause Overpopulation

Sources:
• Lack of Family Planning
• Lack of Education
• Lack of Access to Contraceptives
• Poor Government Policies
• Teenage Pregnancy
• Misinformarion and Misconceptions about Family and
Pregnancies
• Cultural and Religion Beliefs
• Influence of Social Media and Society

Effects of overpopulaation

Disadvantages:
• Poverty
• Rising Crime Rates
• Scarcity
• Resource Depletion
• Low Quality of Life
• Unsustainable Society
• Increased Pollution
• Mismanagement and Neglect of Government

Linkage of Economic Development and Population

Population Growth - When more people are born, there are more workers and consumers,
which can boost the economy and society. However, if this growth happens too quickly without
proper planning, it can lead to shortages in resources like food, housing, and jobs.

Population Decline - When fewer humans are born, the average age of the population
increases,
leading to more elderly people and fewer workers. This can slow down the economy because
there are fewer people to work and support the older generation. On the positive side, with fewer
people, there might be more resources available per person, potentially improving individual
wealth.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Overpopulation - If the number of people exceeds what the environment and economy can
support, it can lead to problems like resource depletion, environmental degradation, and lower
quality of life. Managing resources becomes challenging, and sustainable development is harder
to achieve.

2. ECONOMICS OF FERTILITY

The economics of fertility analyzes childbearing as a rational decision influenced by costs,

income, and opportunity costs. Key drivers include the "quantity-quality tradeoff" (investing more
in fewer children) and the high opportunity cost of women’s time. While historically higher income
meant lower fertility, modern trends show a flatter, sometimes reversed, relationship in high-
income nations.

• Quantity-Quality (Q-Q) Tradeoff: As societies grow wealthier, parents shift from having
many children (quantity) to investing more in education and development per child
(quality). This increased cost per child leads to lower overall fertility.

• Opportunity Cost of Time: As women’s wages and labor force participation rise, the
cost of taking time off for child-rearing increases, causing a reduction in fertility.

• The New Era of Fertility: Traditionally, richer countries had lower fertility. Recent data
shows this relationship is changing. In some high-income, developed nations, higher
income is now associated with slightly higher, or at least stable, fertility rates.

• Policy Impact: The compatibility of career and family (e.g., subsidized childcare, parental
leave) is a major driver of fertility in developed economies.

• Social Comparisons: "Education fever" especially in East Asia, acts as a barrier to

higher fertility, as high private education costs create a competitive, expensive
environment for raising children.

• Consequences of Low Fertility: Falling fertility rates, which are now below the
replacement level of 2.1 in many countries, lead to aging populations, smaller labor
forces, and intense pressure on pension and social security systems.

• Social Comparisons: "Education fever" especially in East Asia, acts as a barrier to

higher fertility, as high private education costs create a competitive, expensive
environment for raising children.

• Consequences of Low Fertility: Falling fertility rates, which are now below the
replacement level of 2.1 in many countries, lead to aging populations, smaller labor
forces, and intense pressure on pension and social security systems.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

MODULE 9

POVERTY AND INCOME DISTRIBUTION

At the end of this chapter, student will be able to:

1. Recognize the measures of poverty and inequality

2. Understand the relationship between inequality and economic growth

1. MEASURES OF POVERTY

Poverty - A state or condition in which a person or community lacks the financial resources and
essentials for a minimum standard of living.

2 TYPES OF POVERTY

• ABSOLUTE POVERTY
It is when a person or household does not have the minimum amount of income needed
to meet the minimum living requirements needed over an extended period of time.

• RELATIVE POVERTY
It is when a household receives 60% of the average household income in their own
economy. They do have some money, however, not enough to afford anything above the
basics.

CAUSES OF POVERTY

STRUCTURAL AND POLITICAL CAUSES

• Conflict and War

• Corruption and Poor Governance
• Lack of Infrastructure

ECONOMIC AND SOCIAL FACTORS

* Unemployment and Low Wages

• Limited Access to Education
• Poor Healthcare Systems
• Inequality and Discrimination

ENVIRONMENTAL AND DEMOGRAPHIC FACTORS

* Climate Change
• Family Structure and Size
• Natural Disasters
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

INDIVIDUAL AND FAMILY CIRCUMSTANCES

*Illness and Disability

• Lack of Savings

POVERTY LINE

The poverty line, or threshold, is an economic tool representing the minimum income needed to
afford a basic standard of living. It allows governments to measure poverty, track progress, and
target aid to vulnerable populations.

HEADCOUNT RATIO

The poverty headcount ratio is the percentage of a population living below the national poverty
line, representing the proportion of individuals unable to meet basic needs. It is calculated by
dividing the
number of poor people by the total population, serving as a primary indicator or tracking poverty
reduction efforts.

EXAMPLE:

If a country has a total population of 10 million people, and 2 million

of them live below the national poverty line, the headcount ratio of
poverty would be:

Formula:
H = P / N × 100
Where:
H = Headcount Ratio
P = Number of People living in poverty (below the poverty line)
N = Total Population

H = 2,000,000 / 10,000,000 × 100 = 0.2 × 100 = 20%

Answer: 20% of the population lives in poverty.

POVERTY GAP INDEX

It is a measure of the degree of poverty in a country. It is defined as an extent to which individuals

on average fall below the poverty line, and expresses it as a percentage of the poverty line.

POVERTY SEVERITY INDEX

The Poverty Severity Index, also known as the Squared Poverty Gap Index, is a poverty measure
that captures not only the incidence (how many are poor) and the depth (how far below the poverty
line people are) of poverty but also the inequality among the poor.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

2. MEASURES OF INEQUALITY

Economic inequality is the difference in how assets, wealth, or income are distributed among
individuals and/or populations. It is also described as the gap between rich and poor or the
"wealth gap"
.
LORENZ CURVE

It was developed by American economist Max O. Lorenz in 1905. A lorenz curve is drawn by
plotting a country's cumulative income and cumlative workforce. The Perfect Equality Line (drawn
at 45 degrees) shows a country in which income is perfectly equally distributed, each 10% of the
population receives 10% of income. The closer a country's Lorenz is to the line of perfect equality,
the more equally distributed is their income. A larger gap between the perfect equality line and the
Lorenz curve indicates greater inequality.

GINI COEFFICIENT

The Gini coefficient, or Gini index, is the most commonly used measure of inequality. It was
developed by Italian statistician Corrado Gini (1884– 1965) and is named after him.

It is typically used as a measure of income inequality, but it can be used to measure the inequality
of any distribution such as the distribution of wealth or even life expectancy.

It measures inequality on a scale from 0 to 1, where higher values indicate higher inequality. This
can sometimes be shown as a percentage from 0 to 100%, called the “Gini Index”

INCOME QUINTILE SHARE RATIO

The income quintile share ratio or the S80/S20 ratio is a measure of the inequality of income
distribution. It is calculated as the ratio of total income received by the 20 % of the population with
the highest income (the top quintile ) to that received by the 20 % of the population with the lowest
income (the bottom quintile).

FORMULA:
S80/S20 = Total income of the richest 20% of the population / Total income of the poorest
20% of the population

INTERPRETATION OF VALUE:
●S80/S20 = 1
- Income is perfectly equal between the richest and poorest groups.
●S80/S20 = 2 - 4
- Income is a moderate income gap.
●S80/S20 = 5 or higher
- There is a large income gap or high income inequality.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

3. THE UNEQUAL BURDEN OF POVERTY

WEALTH VS. INCOME

WEALTH INEQUALITY

This refers to the uneven distribution of accumulated assets (like houses, cars, or savings) minus
liabilities (debts). It is "stored" value over time.

INCOME INEQUALITY

This is the uneven distribution of compensation (wages, salaries, or profits) within a population. It
is the "flow" of money coming in regularly.). It is "stored" value over time.

The "Unequal Burden of Poverty" isn't just bout not having money, it’s about a cycle where
technology replaces low-skill labor while wealth remains concentrated at the top. The solution isn't
to make everyone's
paycheck identical, but to use taxes and social programs to ensure that the "burden" of poverty
doesn't prevent people from accessing health and education.

4. LABOR ABSORPTION AND EMPLOYMENT

LABOR ABSORPTION

Labor absorption is the ability of the economy to provide jobs for workers.

• It shows how many people can be employed in different sectors like agriculture, industry,
and services.

• Higher labor absorption means more job opportunities.

EMPLOYMENT

Employment means having a job or work that provides income

.
• It allows people to support themselves and their families.

• Employment is an important indicator of economic growth and development.

TYPES OF EMPLOYMENT

• Full-time Employment – Regular job with stable hours and income.

• Part-time Employment – Fewer working hours than full-time.

 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

• Self-employment – Working for yourself (small business, freelancer).

• Informal Employment – Jobs not officially registered or regulated.

IMPORTANCE OF LABOR ABSORPTION AND EMPLOYMENT

*Helps reduce poverty.

• Provides income for individuals and families.
• Improves economic growth.
• Promotes fairer income distribution.

MODULE 10

HRD: A FOCUS ON EDUCATION AND HEALTH

At the end of this chapter, student will be able to:

1. Understand the significance of education and health as joint determinants of economic growth
and development
2. Recognize the need to invest in human capital as they help accelerate growth through
increased productivity and reduction in dependency ratios.

1. The Economics of Education

Education

is a very crucial aspect of human development and capital that improves the human capacity by
acquiring knowledge, skills, values and more by exposing oneself to the learning environment. It
enables individuals to contribute for the betterment of the world, bringing their expertise into action.

Types of Education

Formal Education

• Education taught in institutions such as schools and universities

• Structured and Organized

Informal Education

Education learned naturally through experiences, influence or habits It is unintentional,

notplanned and non-
structured.
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CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

Examples:

Learning slangs from friends, watching informative reels, playing games, household chores etc.

Non-Formal Education

Education learned to acquire skills outside of the traditional schooling

It is structured planned and intentional

Examples:
Seminars,team building,Community program and services, CPR training, etc.

2. Education, Labor Earnings and Productivity

IMPORTANCE OF EDUCATION IN ECONOMIC DEVELOPMENT

• REDUCES POVERTY AND INCREASE EMPLOYMENT

• Education reduces poverty by educating individuals on the long run and give them job
opportunities, therefore earning for their families.

• INCREASE WORKER'S PRODUCTIVITY

• Education allows individuals to become competent and skilled, training them to become
qualified for the job and more capable of doing a task.

• EMPOWERS DECISION MAKING AND CRITICAL THINKING

• Education guides individual’s ethics, becoming aware of their surroundings, solve

problems, reasoning and facts considerations

• EMPOWERS DISCIPLINE AND ETHICS

• Educated individuals learn discipline, understanding rights and wrongs, shaping

individual’s moral andso cial responsibility within the community.

• INCREASED INNOVATION

• Individuals experiences and learning can drive them to create a foundation of creating
new methods, fostering
• creativity, inventing of concepts and projects that can help their surroundings.

• TECHNOLOGICAL ADVANCEMENT

• Technology is constantly changing due to proposed ideas, software's and projects, and
new technologies developed can lead to convenience such as advanced AI, new game
changing inventions etc.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

CHALLENGES OF EDUCATION

• LIMITED ACCESS

• Not all students can study due to financial constraints or geographical location. This leads
to delay progress,
• unequal access and gap resulting in fewer job opportunities

• DIGITAL DIVIDE

• People don’t always have access through technologies, phones etc to communicate or
learn virtually. In addition, students may struggle to even use technology even with
access due to lack of skills needed to use them.

• POOR QUALITY

• Not all schools can deliver advance or high quality education. Schools in poor/rural areas
cannot deliver the
• same quality as urban areas due to budgets constraints and financing problems.

• BRAIN DRAIN

• A condition where highly educated and skilled individuals, who studied in their local
country, moves to other
• countries in search for opportunities or higher salaries.

• FUNDING FOR INFRASTRUCTURE

• Due to budget constraints, schools built may be small and lacks facilities such as libraries,
classrooms, computer rooms and more. This leads to a gap and can offer limited access
to materials, risks and inconvenience to the teachers and students.

LABOR EARNINGS

Labor earnings refer to the money and benefits people receive from their work, such as wages
and salaries. It is influenced by education, skills, experience, and productivity. Workers with
better skills and knowledge usually have higher earnings and better job opportunities.

IMPORTANCE OF LABOR EARNINGS

Labor earnings are important because they help people support their daily needs and improve
their quality of life. Higher earnings also allow workers to save money, support their families, and
access better opportunities. It also motivates people to study, improve their skills, and work
productively.
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

EDUCATION AND LABOR EARNINGS

Education plays a big role in labor earnings. People with higher education usually have better
jobs and higher salaries. Education helps develop skills and knowledge, which increases
productivity and economic growth.

3. HEALTH AND NUTRITION

Health-is defined by WHO or World Health organization as the State of complete physical,
mental and social well-being with the absence of infirmity or diseases.

Nutrition-It is the intake of food to be absorbed by the body to take all of its nutrients, vitamins
and minerals.

TYPES OF HEALTH

• Physical Health-pertains to the internal and external parts of the body and its ability to
function well. It allows the body to be able to perform and use its function to do tasks.

• Emotional Health-pertains to the state of being able to understand, control and manage
emotions. It involves being able to face challenges with control to one’s emotions. It
ensures one can perform their function without pressure, tension, irritability or mood
swings.

• Mental Health -pertains to the psychological well-being of an individual, their cognitive

functions, and ability to cope with stress and problems. Strong mental health helps in
focus in ork, while weaker mental health can make work tedious and inconvenient.

• Social Health-pertains to the state of being able to communicate and have stable
relationship and intercation with peers and family. It helps connect with people and avoid
conflicts and misunderstanding in labor, etc.

MODULE 11

GLOBALIZATION AND THE NEW ECONOMY

At the end of this chapter, student will be able to:

1. Discern increasing globalization and its impact on flows of capital and labor
2. Realize the changing nature of economy and its effects on globalization

What is Globalization?

Globalization is the process by which the world, previously isolated through physical and
technological distance, becomes increasingly interconnected
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CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

It is manifested by the increase in interaction between people around the world that involves the
sharing of ideas, cultures, goods, services, economic, political, cultural, ideological, investment
environmental and processes aided by information technology

HOW DOES GLOBALIZATION AFFECT THE ECONOMY

Globalization has paved the way for new markets, enhanced trade and investment, and fostered
cross-border technology and knowledge transfers. These developments have contributed to
greater economic growth, improved productivity, and job creation in numerous areas 6 worldwide

1. WORLD TRENDS IN GLOBALIZATION

1. Population trends: Decreasing population in developed countries, while increasing population

in developing countries, and increased life expectancy

2. Science and technology: Includes the Internet and other computer components as well as
GPS, genetically modified food, etc.

3. Increasing integration and interdependent: Includes all areas of economic life as well
increasing exchange of products and services across national borders through trade.

4. Governance: How national and internationa govern the economic activity and transnational
institutions

2. INFORMATION TECHNOLOGY AND THE NEW ECONOMY

INFORMATION TECHNOLOGY

Information technology (IT) is the preservation, transmission, and manipulation of data through
the use of computers, networks, software, and other digital tools. IT is essential to contemporary
governments, corporations, and interpersonal communication.

It is the primary driver of the new economy, enabling digital information, boosting productivity,
and facilitating global connectivity through computers and the internet.

IMPACT OF TECHNOLOGY ON THE CREATION OF NEW OPPORTUNITIES FOR GROWTH

• GROWTH OF DIGITAL ECONOMY – IT drives economic growth by accelerating the

adoption of digital technologies. Providing new opportunities for entrepreneurs, small
businesses, and established companies to expand their reach and scale.

• NEW MARKET AND CUSTOMERS IN AN INCREASINGLY CONNECTED WORLD –

technological advancements and digital platforms allow businesses to expand their reach
to new global markets and customers through personal engagement.
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CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

• IMPROVED ACCESS TO INFORMATION, RESOURCES, AND SERVICES –

technological advancements create growth opportunities by leveling the playing field for
businesses and individuals. There is greater access than ever before to a variety of
knowledge, research, and educational resources that can help businesses innovate and
compete more effectively

• .ENHANCED COMMUNICATION AND COLLABORATION – improved communication

platforms allow companies to connect better, operate efficiently, and engage in virtual
teamwork. These enhancements have increased productivity, accelerated decision-
making, and fostered cross-border partnerships. The advancements have opened new
possibilities for remote work, creating new opportunities for employment and
entrepreneurship.

THE NEW ECONOMY

The "new economy," driven by information technology (IT), signifies a shift from traditional
manufacturing to a knowledge based economy, characterized by increased productivity,
globalization, and the rise of digital business models.

The New Economy is the modern economic system driven by technological innovation, igitalization,
and knowledge-based industries. It is shaped by the power of information, interconnected
networks, and constant innovation.

Economic activities increasingly rely on digital networks. The speed of information transfer
influences business decisions. Economic value comes from intangible assets like data, software,
and intellectual property.

EXAMPLES OF THE NEW ECONOMY

• Streaming services (Netflix, Spotify) replacing DVDs and CDs.

• Digital wallets like GCash replacing cash-based transactions.

3. Asia and the New Economy

As of early 2026, Asia has cemented its role as the primary driver of the "New Economy," which is
increasingly defined by the integration of Artificial Intelligence (AI), green energy transition, and a
massive shift toward a borderless digital marketplace
 REPUBLIC OF THE PHILIPPINES
CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

MODULE 12

THE ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

At the end of the topic, the students should be able to:

1. Recognize environmental problems and its cause

2. Realize the implications brought about by environmental problems and its effect in the pace of
economic development

1. Environmental Problems and Economic Development

Environment - the external conditions, resources, stimuli, etc., with which an organism interacts.
or the totality of circumstances surrounding an organism or group of organisms, especially the
combination of external physical conditions that affect and influence the growth, development
and
survival of organisms.

Environmental Problems- refer to issues caused by human activities or natural processes that
negatively
affect the environment, including the air, water, soil, ecosystems, and living organisms. These
problems
disrupt the natural balance and pose risks to both the planet and human well-being.

MAJOR ENVIRONMENTAL PROBLEMS

1. Air Pollution

- The release of harmful materials into the atmosphe re by human natural activity

▪ Urban Air Pollution

• Outdoor Pollutants
• Indoor Pollutants

2. Water Pollution

- when harmful substances like chemicals, waste, or germs contaminate rivers, lakes, or oceans.
It affects aquatic life, makes water unsafe to drink or use, and harms the environment.

• Sediment
• Nutrient Overload
• Toxic chemicals
• Infectious agents
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CITY OF MALABON
CITY OF MALABON UNIVERSITY
Pampano cor., Maya-Maya Street, Longos, Malabon City

Office of the Vice President for Academic Affairs

COLLEGE OF BUSINESS ADMINISTRATION

• Pesticides
• Oil Spills

3. Waste Production

- is the creation of unwanted or unusable materials as a result of human activity. This includes
trash from homes, industries, hospitals, and agriculture.

• Solid Waste
• Hazardous Waste

4. Biodiversity Depletion

- the reduction or disappearance of biological diversity at various levels, from genetic diversity
within species to the loss of entire ecosystems

• Habitat Destruction
• Habitat degradation
• Extinction

5. Food and Supply Problems

- occur when there's not enough safe and nutritious food available or accessible. This can lead to
hunger, malnutrition, and rising food prices.

• Farmland loss and degradation

• Overfishing
• Water Shortages
• Loss of biodiversity
• Poor Nutrition

5. Deforestation and Land Degradation

-Deforestation is the large-scale clearing or cutting down of forests, usually for farming, mining,
logging, or building cities and roads.

- Land degradation is when land becomes damaged or less useful due to natural or human
causes. It includes the loss of soil fertility, erosion, desertification, and pollution of the land.

[Link] Change

- refers to long-term shifts in average weather patterns, such as temperature and precipitation,
over decades or more