CENTRAL BICOL STATE UNIVERSITY OF AGRICULTURE

-CALABANGA CAMPUS
CALABANGA, CAMARINES SUR

NAME: JOSEF MATTHEW FLORES DATE SUBMITTED: DECEMBER 10, 2018

YEAR/SECTION: BSIT HRM 2A RATING:

REACTION PAPER NO. 2

1. From the different economics system model, which do you think is being practice in our country? Why?

Elaborate your answer. (10pts.)

2. Discuss on the status of our economic situation with the 6% inflation rate in the country as of November

and the continued price rollback of petroleum product. (10pts.)

3. Explain each of the criteria of choosing the best economic system and tell weather our country has able

to achieve this. Why? Support your answer. (35pts)

4. What are the economic goals? How can we achieve this goals?
1. From the different economics system model, which do you think is being practice in our country? Why?

Elaborate your answer. (10pts.)

Among the different economic models, Socialism is what I think is the system being practice with in

Philippines. It is because of these factors: Pilipino’s have most likely, private –owned business however it was

regulated by the government. It has a cooperative private as well as a public corporation where everyone can

own a share, and most specially government plays a large role in international trade.

2. Discuss on the status of our economic situation with the 6% inflation rate in the country as of November

and the continued price rollback of petroleum product. (10pts.)

a. Discuss on the status of our economic situation with the 6% inflation rate in the country as of November

There are two main types of inflation according to Business Daily News (2018): demand pull and cost

push. Demand Pull is fueled by income and strong consumer demand, demand-pull inflation occurs when the

economy demands more goods and services than are available. Cost-push inflation happens when the demand

for goods increases because production costs rise to the point where fewer goods can be produced. Both drive

prices upward.

Based on the definition of kinds of inflation, Demand Pull inflation is what I think the reason behind

high inflation rates in the Philippines. Gasoline Cost rise because of a tight gasoline supply that is coupled with

robust demand from other large consumers like china and the united states to support the gasoline market

Philippine Information Agency (2018). Another factor is the enactment and implementation of TRAIN law

(Tax Reform for Acceleration and Inclusion). Selected goods and gasoline are now on its highest price because

of the tax that have impose to them, causing a significant effect of price hike.

b. Discuss the continued price rollback of petroleum product.

The single greatest factor of continued price rollback in the price of petroleum products is the price of

crude. This is not surprising as, according to the Department of Energy (DOE) about 57% of the cost of

providing gasoline to consumers comes from the price of crude Philippine Information Agency (2018). And

since oil is a globally traded, understanding oil prices requires a look at global supply and demand. Currently,

there has been an overall rise in the global demand for oil. However, it is also determined by the Peso in

connection with U.S. Dollars.

3. Explain each of the criteria of choosing the best economic system and tell weather our country has able

to achieve this. Why? Support your answer. (35pts)

Although probably not the absolute best system which could arise in the future, I believe that the current best

system is Capitalism. This system allows for private enterprise and the coordination and efficiency brought

about through free market competition. It also allows for government intervention in the case of economic

crises and to ensure more equality among different classes with transfer payments to those who cannot afford

things like healthcare, education and unemployment. Our Country does not achieve it yet however, the kind of

Economic system does not reflect the economic growth of the country, it is the mindset of its population

(Pilipino). If the Philippine Government has solved its non-economic problem like educating illiterate and

improving the human discipline, we can improve our economy just like Singaporeans did to their country

4. What are the economic goals? How can we achieve this goals?

The goal of economic development is to create wealth for the economy. That goal has nothing to do with how

equitably the wealth is distributed. However, it is easier and more sustainable to increase the wealth of an

economy if everyone gains rather than just a few. Economic Goals can be achieve by:

 Avoid Colonial mentally, buying Goods and services to local business rather than buying and depending

on the imported supply.

 Increase of the productivity of the people in the country by increasing employment rates.

 Save petrol and diesel. Use public transport.

 Add competitive ability to any of the industries functioning in the country,

 or work towards expanding the nation's capacity to compete industries where philippines is

uncompetitive as of now.

Online References:

https://pia.gov.ph/news/articles/1013353/ Multiple factors cause continuous oil price increase

https://www.businessnewsdaily.com/3443-what-is-inflation.html/ Types of Inflation