Licensure Examination for Teachers

General Education: Social Science

Focus: Economics (Majorship)
Prepared by: Prof. Serafin A. Arviola Jr.
ECONOMIC ISSUES AND CONCERNS
1. Poverty and Income Distribution
Poverty line an amount of income below which a family is considered
poor
Income Poverty based from the United Nations, are those individuals
living on an income of $1 a day or less than $1/day.
Human Development Index measure of human development looking at
the following indexes: longevity, income and educational attainment
Human Poverty Index a measure of poverty looking at the income of
individuals
2. Globalization - The movement of money, goods, information and people across
nations made possible by the rapid advances in travel and communication.
Globalization of Goods through importation and exportation
Globalization of Money through official development assistance (ODA),
investments, grants, donations, etc.
Globalization of Information via internet, cable TV, education, etc.
Globalization of People through travel, scholarships, fellowships, job,
etc.
3. Development
a.
Sustainable Development
Development that meets the needs of the present generation without
compromising the ability of the future generations to meet that own needs.
United Nations declared 2005-2014 as the Decade on Education for
Sustainable Development. It pursues the following global vision:
The vision of education for sustainable development is a world where
everyone has the opportunity to benefit from quality education and learn
the values, behavior and lifestyles required for a sustainable future and for
positive societal transformation.
Dimensions of Sustainable Development
Economic Dimension
Social Dimension
Institutional Dimension
Environmental Dimension
Cultural and Spiritual Dimension
b.

The 8 Millennium Development Goals

1. Eradicate extreme poverty and hunger
Reduce by half the production of people living on less than a dollar
a day
Reduce by half the proportion of people who suffer from hunger
2. Achieve universal primary education

Ensure that all boys and girls complete a full course of primary
schooling

3. Promote gender equality

Eliminate gender disparity in primary and secondary education
preferably by 2005, and at all levels by 2015
4. Reduce child mortality
Reduce by two thirds the mortality rate among children under five
5. Improve womens reproductive health
Reduce by three quarters the maternal mortality ratio
6. Combat HIV/AIDS, Malaria and other diseases
Halt and begin to reverse the spread of HIV/AIDS
Halt and begin to reverse the incidence of malaria and other major
diseases
7. Ensure environmental sustainability
Integrate the principles of sustainable development into country
policies and programmes; reverse loss of environmental resources
Reduce by half the proportion of people without sustainable access
to safe drinking water
Achieve significant improvement in lives of at least 100 million
slum-dwellers by 2020
8. Develop a global partnership for development
Develop further an open trading and financial system, that is rulebased, predictable and non-discriminatory. Includes a commitment
to good governance, development and poverty reduction
nationally and internationally
Address the least developed countries special needs. This
includes tariff-and quota-free access for their exports; enhanced
debt relief for heavily indebted poor countries; cancellation of
official bilateral debt; and more generous official development
assistance for countries committed to poverty reduction
Address the special needs of landlocked and small island
developing States
c.

Philippine Initiatives on Sustainable Development

1. Philippine Agenda 21 in 1996
2. Philippine Council for Sustainable Development in 1997
3. Major legislations on Sustainable Development
Clean Air Act of 1999
Ecological Solid Waste Management Act of 2001

TAXATION

It is an inherent power of the state to impose and collect revenues to defray the
necessary expenses of the government.
It is compulsory contribution imposed by a public authority irrespective of the
amount of services rendered to the payer in return.
It is compulsory level on private individuals and organization by the government
to raise revenue to finance expenditure on public goods and services.

Purpose of Taxation

To collect revenue for the government

To redistribute income
To combat inflation
To correct an adverse balance of payment
To check consumption of goods which are considered undesirable
To protect local infant industries
To influence population trend
To improve unfavorable terms of trade
To reallocate resources to create a sense of identity

Sources and Origin of Taxation

The Constitution
Statutes or Presidential Degrees
Bureau of Internal Revenue regulations
Judicial Decision
Provincial, Municipal and Barrio Ordinances
Observance of International Agreement
Administrative Ruling and Opinions

Classification of Tax System

Progressive Income Tax the Higher the income the higher the tax rate.
Proportional Tax The tax rate is constant and unaffected by the level of
income.
Regressive Tax The higher the income the lower the tax rate.

Classification of Taxes

As to the subject matter Personal Property, Capitation and Poll Tax; Property
Tax; Excise Tax
As to who bears the burden Direct Tax and Indirect Tax
As to determination of the amount Specific and Ad valorem
As to purpose General and Specific
As to Scope National and Local

Types of Taxes

Direct Taxes
The burden cannot be shifted to the third party
Direct taxes are based on income and wealth
In most cases, direct taxes are progressive in nature
Direct taxes are compulsory in nature
Examples: income tax, residence tax, real state, immigration tax,
estate/gift/inheritance tax.

Indirect Taxes
The tax burden can be shifted to the third party
Indirect taxes are based on expenditure and consumption
All indirect taxes are regressive in nature

Indirect taxes are optional in the sense that they can be avoided
Examples: sales tax, import tax, VAT/EVAT

Characteristics of a Sound Tax System

Efficiency must generated revenue greater than the amount of money the
government must spend to collect taxes.
Equity individual and groups belonging to the same income bracket must be
taxed equally while belonging to different income groups must be taxed
differently.
Convenience to set up measures and procedures that will make it more
convenient for taxpayers to pay.
Stability tax system must not be too often or it will encourage tax payers to
withhold tax payment until a more preferred system is put in place
AGRARIAN REFORM
Republic Act No. 6657 The Comprehensive Agrarian Reform Law of 1988 which was
signed into law by Pres. Corazon Aquino
Meaning - The redistribution of lands, regardless of crops or fruits produced to farmers
and regular farm workers who are landless, irrespective of tenurial arrangement to
include the totality of factors and support services designed to lift their economic status
of the beneficiaries and all other arrangements alternative to physical redistribution of
lands, such as production, profit sharing, labor administration and the distribution of
shares of stocks, which will allow beneficiaries to receive a just share of the fruits of the
land they work.
Principles of Agrarian Reform
The policy of the state to pursue a comprehensive Agrarian Reform Program (CARP) to:
To promote social justice
To move the nation toward sound rural development and industrialization
To establish owner-cultivatorship of economic sized farms as basis of Philippine
agriculture.
Coverage of CARP
All alienable and disposable lands of the public domain devoted to or suitable for
agriculture
All lands of the public domain in excess of the specific limits as determined by
the Congress
All other lands owned by the governments devoted to or suitable for agriculture
All public lands devoted to or suitable for agriculture regardless of the agricultural
products raised or can be raised.
Retention Limits
Five hectares for land owners
Three hectares to be awarded to each child of the landowner subject to the
following qualification:
o At least 15 years old
o Actually tilling the soil or directly managing the farm
Beneficiaries
Agricultural lessees and share tenants
Regular farm workers

 Seasonal farm workers

Other farm workers
Actual tillers or occupants of public lands
Collectives or cooperatives
Other directly working on the land
Salient Features of CARP
CARP covers all agricultural lands and not only devoted to rice and corn
CARP covers not only those privately owned tenanted lands but also that of
agricultural land owned by Multinational Corporations and commercial farms.
Lower retention limits of three hectares
Rights of indigenous communities, to their ancestral lands are protected to
ensure their economic, social and cultural well being
In determining just compensation, the cost of acquisition of the land, the current
value of like properties, its nature, actual use and income, the sworn valuation of
the owner, the tax declarations and the assessment made by the government
assessors shall be considered.
Lands awarded to beneficiaries shall be paid to the Land Bank of the Philippines
in 30 annual amortization at six percent interest per annum.
COOPERATIVES
New Cooperative Laws Cooperative Code of the Philippines (RA 6938), Cooperative
Development Authority (RA 6939) and Executive Order 95 and 96 issued by President
Fidel Valdes Ramos.
Definition - A cooperative is:
A free association of persons voluntarily joined together
With common bond of interest
Legally constituted
Purpose of conducting an economic enterprise
Owned, controlled and administered democratically
Making equitable contributions to the capital required
Accepting a fair share of the risks and benefits
Organized in accordance with generally accepted principles
Universal Principles of Cooperativism

Open and Voluntary Membership - No artificial discrimination against

individuals because of their race, creed or political affiliation, freedom of entry
and exit of any member of the cooperative
Democratic Control In order for members to gain entry to the cooperatives,
they must purchase shares of the cooperative, obtain the right to govern the
organization, voting rights of the owner are on the basis of one person, one vote.
Limited Interest on Capital Capital in a cooperative is like a loan because the
owners of the capital can expect to received a rate of return not exceeding that of
the prevailing market interest rates on investing.
Division on Net Surplus Net surplus should be distributed as follows:
Item
% allocation
General Reserve Fund
At least 10%
Education/Training Fund
At Least 10%
Optional Fund
At Least 10%
Dividend/Patronage Refund
Remaining Balance of Savings
General Reserve Funds cover losses in operation

 Education/Training Funds for members and Management trainings

Optional Funds discretion of cooperatives for purposes of acquiring
land construction of a building or community development
Dividends/Patronage Refunds the volume of transaction that
members have with the cooperative

Continuing Membership
Pre-membership education seminar as required for entry to the
cooperative
Special trainings for the cooperative leadership and members

Cooperation Among Cooperative interlending and pooling of funds

Typologies of Cooperative
1. According to Level of Cooperatives

Primary members of which are natural

Secondary members of which are primaries
Tertiary members of which are secondary upward to one or more apex
organization

2. According to Services Rendered

Credits is one, which promotes thrift among its members, and creates funds in
order to grant loans for productive and provident purposes.
Consumer is one wherein the primary purpose is to procure and distribute
commodities to members and non-members.
Producers is one which undertakes joint production whether agricultural or
industrial;
Marketing Cooperative is one which engages in the supply of production inputs
to members and in turn market their products.
Service is one engages in medical and dental care, hospitalization,
transportation, insurance, housing, labor, electricity, communications and other
services.
Multipurpose is one which combines two or more activities o these different
types of cooperatives

3. According to Scope of Membership

Institutional Members are employees of a specific institution or corporation

Associational Members are those who have their own enterprise and belong to
specific sector or organization.
Community-Level Members are based on a defined geographical area.