Political Economy 101 | Cebu Daily News

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It is always interesting to analyze the political economy, especially during an election period.

Political economy is about how politics affects economics and economics affects politics.

Economic conditions have a powerful impact on elections. Voters on different sides of every economic issue are fighting their battles in the political arena.

Every country in the world was exposed to the same virus, but countries had different responses and policies.

The current administration in the Philippines has failed to “flatten the curve” of Covid cases and has instead succeeded in flattening the economy.

The Philippines experienced a gross domestic product (GDP) contraction of -9.6% in 2020, the worst in Asia that year and the worst in the Philippines’ economic history since post-World War II, according to a manifesto recently published by alumni and students of the University. from the Philippine School of Economics (UPSE).

In addition to flattening the economy, the current administration has also dramatically increased public debt, from 8.22 trillion pesos (real and secured) in 2019 to 10.25 trillion pesos in 2020 and 12.15 trillion pesos in 2021. .

High public debt will require high and multiple taxes. The Philippines should avoid this situation of more taxes.

The manifesto briefly outlined the proposed path for hope and economic recovery for a better Philippines.

The manifesto was signed by more than 400 UPSE alumni and more than 150 students expressing their support for the candidacy of Leni Robredo and Kiko Pangilinan in the upcoming elections on May 9.

The manifesto pointed out that Robredo has shown that having big agency budgets via big taxes and huge loans is no guarantee for real public service and improving the lives of Filipinos. ordinary.

The six-year budget (2017-2022) of the Office of the Vice President (OVP) was only P0.6 to P0.9 billion per year, still below P1B/year.

The total budget for 2022 is 5 trillion pula, while the OVP budget is only 0.7 billion pula, which is 0.0001 or 1% of 1%. So for every P100 in the total budget, the OVP budget is only P0.01 – not even P1 but only 1 centavo.

Compare that to the President’s office budget which is 8.24 billion pesos plus discretionary and intelligence funds of 65.10 billion pesos.

And yet, Robredo was able to inspire trust and transparency and attracted many private donations during the pandemic that enabled his office to provide PPE to many frontline health workers and Covid treatment kits to poor households.

Economics wasn’t my first choice when I took the UP entrance exam in the mid-1980s, but another quota course, accounting.

I ended up cherishing my course, BS Economics, which is a four-year undergraduate degree in economic theory, econometrics, and applied economics, involving a deluge of formulas and graphs.

It is certainly not an easy course as it requires a high level of mathematical and statistical skills and the ability to apply economic principles and models to problems in business, finance and the public sector.

In general, economics is the study of scarcity and its implications for the use of resources, the production of goods and services, the growth of output and welfare over time, and a large variety of other complex issues of vital interest to society.

Economy is derived from the Greek word oikonomia, which in turn is made up of two words: oikos, which is usually translated as “household”; and nemein, which best translates to “management and dispensation.”

We read the book “The Wealth of Nations” by Adam Smith (1723-1790), one of the most influential economists in history, where he argued for free trade, market competition and the morality of private enterprise.

One of the basic principles that I recall is the law of supply and demand, which defines the relationship between the price of a given good or product and people’s willingness to buy or sell it. sell: when the price goes up, people are ready to supply more and ask for less and vice versa when the price goes down.

We have covered the relationships between variables, formulas and graphs. A variable is simply a quantity whose value can change. A graph is a graphical representation of the relationship between two or more variables.

UPSE was established in 1965 and is known for its graduates who have been vigorously trained and prepared to become leaders in various fields.

Many of the key players in government, business, civil society and academia received their formal training in economics at UPSE. One of them is Vice President Leni Robredo of the 1986 lot.

I completed my bachelor’s degree in economics in 1991, then continued my studies at UP College of Law. Robredo was our guest speaker during my group’s Silver Jubilee return in 2016.

We need a leader who sees economics as a vital branch of knowledge and essential to good governance.

(Atty. Dennis R. Gorecho leads the Seafarers Division of Sapalo Velez Bundang Bulilan Law Firms. For comments, email [email protected]or call 09175025808 or 09088665786)

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