Econ 51

Opal Group

Members:
Kyle Brian Cardino
Roberto Estolloso
Ralph Locsin
Jozcef Anthony Salvacion

Submitted to:
Sir Silver S.Alforque
 Per Capita Income
What is Per Capita
Per capita is a Latin term that translates into "by head," and basically means the "average per
person." Per capita can take the place of saying "per person" in any number of statistical
observances. In most cases, the phrase is used in relation to economic data or reporting, but it can
also be used in almost any other occurrence of population description.

When presenting national economic indicators such as gross domestic product (GDP) or gross
national product (GNP), people are often interested in the total but also the per capita basis.
Determining the per capita of any number is relatively straightforward. Take the total of the
number being referenced, and divide that by the number of people involved. For example, as of
2016, the United States had a population of about 320 million people and an aggregate GDP of
$16.7 trillion. In this case, the per capita income for 2016, or average income per person, was
equal to approximately $52,195.

How it is calculated?

Pci=i/P

Def:

Pci= per capita income

I= total personal income

P=total population

Ex:

Philippines income is 1.8Trillion pesos and 100 million being its total population so

I=1,800,000,000 divided by the total P=100,000,000

So the Per capita income of the Philippines is 18,000 per year.

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 Socio Economic Welfare
What is Socio Economics?
Socioeconomics is sometimes used as an umbrella term for various areas of inquiry. The term
“social economics” may refer broadly to the "use of economics in the study of society". More
narrowly, contemporary practice considers behavioral interactions of individuals and groups
through social capital and social "markets" (not excluding, for example, sorting by marriage) and
the formation of social norms. In the latter, it studies the relation of economics to social values.

Factors in Socio Economic Welfare:

Unemployment
This is the area-level proportion of unemployed adults aged 16 and older who are looking for
their first job or have worked previously, based on the total population aged 16 and older who
are currently working, looking for their first job or have worked previously.

Manual Workers
This is the area-level proportion of manual workers aged 16 and older, based on the total number
of the working population aged 16 and older.

Low Educational Attainment

This is the area-level proportion of the population aged 25 - 64 who completed their formal
schooling at the primary education, first stage of basic education or lower levels, based on the
total population aged 25 - 64.

University Qualifications
This is the area-level proportion of the population aged 25 - 64 who obtained university
qualifications at the first or second stage of tertiary education, based on the total population aged
25 - 64.
 Income

What Is Income?

Income is money that an individual or business receives in exchange for providing a good or
service or through investing capital. Income is used to fund day-to-day expenditures. People
aged 65 and under typically receive the majority of their income from a salary or wages earned
from a job. Investments such as pensions and Social Security are primary sources of income for
retirees. In businesses, income can refer to a company's remaining revenues after paying all
expenses and taxes. In this case, income is referred to as earnings. Most forms of income are
subject to taxation.

Taxable Income

Income from wages, salaries, interest, dividends, business income, capital gains and pensions
received during a given tax year are considered taxable income.

Tax-Exempt and Tax-Reduced Income

Type of income that may be tax-exempt include interest income from Treasury securities which
are exempted at the state and local levels. Types of income taxed at lower rates include qualified
dividends and long-term capital gains. Social Security income is sometimes taxable, depending
on how much other income the taxpayer receives during the year.

Disposable and Discretionary Income

Disposable income is money that’s remaining after paying taxes. Individuals spend disposable
income on necessities, such as housing, food and transportation. Discretionary income is money
that's remaining after paying all necessary expenses. People spend discretionary income on items
like vacations, restaurant meals, cable television and movies.
 Expenditures
What are expenditures?

An expenditure is cash or a cash equivalent paid in exchange for goods and services. It is often
used when people are talking about budgets. Common business expenses include payments to
suppliers, employee wages, factory leases and equipment depreciation

Capital Expenses

A good example of a common kind of expense is the Capital Expenses. Capital expenses are
typically large expenditures considered investments into a company. They include business
startup costs; business assets such as real estate, vehicles, equipment and patents; and
improvements.

Value Added Approach

What is Value Added?

Value added describes the enhancement a company gives its product or service before offering
the product to customers. Value-added applies to instances where a firm takes a product that may
be considered a homogeneous product, with few differences (if any) from that of a competitor,
and provides potential customers with a feature or add-on that gives it a greater perception of
value.

Value Added in GDP

The contribution of a private industry or government sector to overall Gross Domestic

Product (GDP) is the value added of an industry, also referred to as “GDP by industry”. If all
stages of production occurred within a country's borders, the total value added at all stages is
what is counted in GDP. The total value added is the market price of the final product or service,
and only counts production within a specified time period.
 Government’s Budget

What is a Government Budget?

A government budget is an annual financial statement presenting the revenues and spending for a
financial year that is often passed by the legislature, approved by the chief executive or president
and presented by the finance minister to the nation.

To put it simply , Government budget is the amount of money that any government would have
at its discretion at any given time and they create this budget by extracting taxes from society
and then spend the money right by use of government spending

A government budget is broken into 3 parts Revenue , Expenditure, Surpluses and Deficits

Revenue is the Governments Money.

Tax

Tax is a primary source of revenue or defined as the revenues collected from taxes on income
and profits, social security contributions, taxes levied on goods and services, payroll taxes, taxes
on the ownership and transfer of property, and other taxes. There are various types of Taxes such
as:

Direct Tax-Taxes from Income

Indirect Tax-Taxes from consumption

Other sources of Revenue besides taxes may include Sale of government property and
Privatization of state-owned property.

Governments Expenditures

Using the revenue accumulated mainly through taxes will be used to provide a nation in which
there are three types of expenditures for this budget.
Current Expenditure

Current expenditure is expenditure on goods and services consumed within the current year,
which needs to be made recurrently to sustain the production of educational services. Minor
expenditure on items of equipment, below a certain cost threshold, is also reported as current
spending which is just day to day costs such as salaries and wages for all public employees and
their equipment

Capital Expenditure

Money spent by a business or organization on acquiring or maintaining fixed assets, such as

land, buildings, and equipment , But for the government it’s all about infrastructures

Transfer Payments

A payment made or income received in which no goods or services are being paid for, such as a
benefit payment or subsidy which is just money transferred from one group of people in society
to the other, an example of this is welfare and unemployment benefits.

Surpluses and Deficits

In any given time period, the government's budget can be either in deficit or in surplus. A deficit
occurs when the government spends more than it taxes which can lead to national debt; and a
surplus occurs when a government taxes more than it spends which lowers the government’s
debt .
 THE BUDGETING PROCESS

What is Government Budgeting?

Government budgeting is the critical exercise of allocating revenues and borrowed funds to
attain the economic and socia l goals of the country. It also entails the management of
government expenditures in such a way that will create the most economic impact from the
production and delivery of goods and services while supporting a healthy fiscal position.

Processes:

Budget Preparation
Budget preparation for the next budget year proceeds while government agencies are executing
the budget for the current year and at the same time engaged in budget accountability and review
of the past year's budget.

The preparation of the annual budget involves a series of steps that begins with the determination
of the overall economic targets, expenditure levels, revenue projection and the financing plan by
the Development Budget Coordinating Committee (DBCC). The DBCC is an inter-agency body
composed of the DBM Secretary as Chairman and the Bangko Sentral Governor, the Secretary of
the Department of Finance, the Director General of the National Economic and Development
Authority and a representative of the Office of the President as members.

Budget Autorization
In accordance with the requirements of the Constitution, the President submits his/her proposed
annual budget in the form of Budget of Expenditure and Sources of Financing (BESF) supported
by details of proposed expenditures in the form of a National Expenditure Program (NEP) and
the President's Budget Message which summarizes the budget policy thrusts and priorities for the
year.

In Congress, the proposed budget goes first to the House of Representatives, which assigns the
task of initial budget review to its Appropriation Committee.
Budget Execution and accountability
Budget execution starts with the release of funds to the agencies. To accelerate the
implementation of government programs and projects and ensure the judicious use of budgeted
government funds, the government adopted the Simplified Fund Release System (SFRS)
beginning 1995.

In contrast to the previous system of releasing funds based on individual agency requests, the
SFRS is a policy-driven system which standardized the release of funds across agencies which
are similarly situated in line with specific policy initiatives of the government.

Cognizant of the fact that no propitious results can be obtained, even with maximum funding, if
agency efficiency is low and funds are wastefully spent, systems and procedures are set in place
to monitor and evaluate the performance and cost effectiveness of agencies. These activities are
subsumed within the fourth and the last phase of the budget process-the budget accountability
phase. At the agency level, budget accountability takes the form of management's review of
actual performance or work accomplishment in relation to the work targets of the agency vis-à-
vis the financial resources made available.

Also, detailed examinations of each agency's book of accounts are undertaken by a resident
representative of the Commission on Audit (COA) to ensure that all expenses have been
disbursed in accordance with accounting regulations and the purpose(s) for which the funds have
been authorized.