A NATIONAL STRATEGY

Lester A. Gonzales

STRATEGY
Nations need strategies to achieve
national advancement.
To achieve these goals , policies have
to be formulated and enforced.

These policies include macro and

micro
policies.

MACRO
POLICIES

Macroeconomics is a branch of the

economics field that studies how
the aggregate economy behaves. In
macroeconomics, a variety of
economy-wide phenomena is

MACRO POLICIES
INCLUDES:

FISCAL POLICY
MONETARY POLICY
EXCHANGE RATE
INCOME POLICY

thoroughly examined such

as,inflation,price levels, rate of
growth, national income,gross
domestic productand changes
in unemployment.
Source:
http://www.investopedia.com/terms/m/macroeconomics.asp

Policy
objectives

Stable and sustainable economic growth and development

Stable prices
Full employment
Balance of payments
Care for the environment
An equitable (fair) distribution of income
Sound public finances

FISCAL
POLICY
Fiscal policy is the use of government spending and
TAXATION to influence the economy.
Fiscal policy is largely based on the ideas of
British economist John Maynard Keynes (18831946),
who believed governments could change economic
performance by adjusting tax rates and government
spending.

Tax Revenue
Tax collections comprise the biggest percentage of revenue collected. Its
biggest contributor is theBureau of Internal Revenue(BIR), followed by the
Bureau of Customs (BOC). Tax effort as a percentage of GDP has averaged at
roughly 13% for the years 2001-2010.

Source:https://en.wikipedia.org/wiki/Fiscal_policy_of_the_Philippines

Causes of deficits:
Mismanage
Misallocate
Misspend
Corruption

Effective February 1 , 2006, pursuant to the approval

of the President , the VAT rate shall be 12%.
Source: ftp://ftp.bir.gov.ph/webadmin1/pdf/28115rmc%20no.%2008-2006.pdf

MONETARY
POLICY
Monetary policy is the macroeconomic policy laid down by the central
bank. It involves management of money supply and interest rate and is the
demand side economic policy used by the government of a country to
achieve macroeconomic objectives like inflation, consumption, growth and
liquidity.
SOURCE:: http://economictimes.indiatimes.com/definition/monetary-policy

Federal Reserve

Bangko Sentral ng Pilipinas

The central bank Influences the money supply

in three ways:

-Buying and selling treasury bills.

-Setting the discount rate.
-Establishing reserve requirement.

POLICY ON THE EXCHANGE

RATE
The exchange rate of an economy affects aggregate demand through
its effect on exports and imports, and policy makers can exploit this connection.

A Weaker Yen Helps Japanese Exports and GDP Growth

Japanese exports have been rising for a fourth month in a row in June,
boosted by a weak yen and a revival in demand from Europe. Exports
rose 7.4% from a year earlier and sales to the European Union (EU) rose
by 8.6%.The Japanese yen has weakened 25% against the US dollar
since November last year after a series of aggressive policy moves by
Japan. A weak currency makes Japanese goods cheaper for foreign buyers.
Meanwhile, imports into Japan rose 11.8% from a year ago, resulting in a trade
deficit of 180.8bn yen ( 1.2bn).

Source: Adapted from news reports, 2013

For an import-dependent country like the Philippines.

There is almost no part of the economy that is not affected by them in some way, the
country imports virtually all of its fuel, most of its transportation equipment, and a very
large proportion of the raw materials and intermediate goods needed for manufacturing.

In general, a weaker peso supports

exports by effectively making them
less expensive; increased export
activity should lead to expanded
production and employment, and
contributes directly to GDP by
reducing the trade deficit or
increasing its surplus.

A peso that is too strong makes exports

uncompetitive.
Imports
become
cheaper, but unless this causes an
increase in consumption sufficient to
compensate for a deeper trade
imbalance due to decreased exports,
GDP growth will suffer.

Source: http://www.manilatimes.net/impact-exchange-rates/118508/

MICRO
POLICIES
Microeconomics is the branch of economics that analyzes the
market behavior of individual consumers and firms in an attempt to
understand the decision-making process of firms and households.
It is concerned with the interaction between individual buyers
and sellers and the factors that influence the choices made by
buyers and sellers.
Micro policies include:
Trade policy
Policy on foreign investments
Policy on privatization or
nationalization
Economic policy
Competition policy
Subsidy policy

TRADE POLICY
Laws related to the exchange of goods or services involved
in international trade including taxes, subsidies, and
import/export regulations.
Examples of trade agreements in the
country:

Philippines-Japan Economic Partnership

Agreement (PJEPA)
ASEAN Free Trade Agreement (AFTA)
ASEAN-Australia-New Zealand Free
Trade Agreement (AANZFTA)
ASEAN-China Free Trade Agreement
(ACFTA)
ASEAN-India Free Trade Agreement
(AIFTA)
ASEAN-Korea Free Trade Agreement
(AKFTA)

Source:
http://www.dti.gov.ph/dti/index.php/resources/tradeagreements

FOREIGN DIRECT
INVESTMENT
A foreign direct investment (FDI) is an investment made by a
company or entity based in one country, into a company or entity
based in another country.
Philippine Daily Inquirer
01:16 AM July 12th, 2016
Net inflows of job-generating foreign direct investments (FDI) jumped to the highest-ever
monthly figure of $2.2 billion in April as the Philippines economic star shone in the region and
attracted greater investor interest, the Bangko Sentral ng Pilipinas said Monday.
According to the BSP, the bulk of the net inflows in April was made up of debt instruments
overseas-based parent firms lending to their affiliates in the country in order to finance existing
operations as well as expansion, which hit $1.3 billion, up 371.6 percent year-on-year.
Source:
http://business.inquirer.net/211801/net-fdi-inflow-hits-record-2-2b-april

PRIVATIZATION & NATIONALIZATION

Nationalization is the act of
taking property previously
owned by individuals or
other legal entities such as
companies or municipalities
into the ownership of the
state.

Privatization is the act of

transferring property
previously owned by the
state into the ownership of
individuals or other legal
entities.