Talking About Economic Systems and the Philippines

The economic systems could be seen through the way economic problems are given solutions.Usually, the difference between the economic systems has something to do with the three main factors: (1) public or private ownership rates in the production methods; (2) focus of planning; and (3) public or private decision-making rates.

What are the types of economic systems? They are the traditional economy, market economy, command economy, and mixed economy. Oftentimes, the economic system that’s chosen or established by a country is a system related to its political system. Traditional economic system is bound with the traditions and methods of ancient people. In this community, almost all economic activities are results of rituals and traditional beliefs. In a market economy, the ruling regulation is capitalism. Capitalism is a system where the capital is owned by private people who are called capitalists. Market economy is also called free enterprise or free private enterprise as it is free of regulations. It is based on “laissez faire” doctrine which means that a business or an industry is allowed to freely do activities which have competitions and free market. Command economy can be also called authoritarian socialism or an economy that is planned from the center. An example of this system is the economic system of socialist countries such as Norway, Sweden, and the Netherlands. In this system, private ownership of properties is not allowed by the government. Mixed economy is also a market economy but with government interventions. It is not a simple program. Government efforts are needed for the economy to be progressive. And the government is the body that gives solutions to economic problems. That’s why powerful, strong, efficient, and clean government is needed in countries having mixed economic system.

Capitalism is the usual economic system of democratic countries. Capital is owned by private people. Wages, prices, and productions are determined through free feedbacks or responses of the people over the needs of the market. The services that are not given by private sector are owned and managed by the government. In this system, the interest or “tubo” in Tagalog leads on the producers to manufacture goods. The decision of what will be done, how will it be done, and for whom the production will be is left on the private sector. Philippines has capitalism economic system. Only that private ownership and management of manufacturing companies are controlled by the government.

Because of the information above, we can clearly see already what is the economy of the Philippines. That is why we know that when oil prices are hiking, our government will intervene and directs the oil companies to stop price hiking because people can’t afford to pay high transportation fares everyday or buy oil products. That is why when powerful storm Ondoy had troubled Metro Manila so badly, and grocery and department store owners took advantage of the calamity and increased prices of their goods because of scarcity due to storm aftermaths, the government declared “price freeze.” And anybody who would violate shall be given due penalty. That is why there is always misunderstanding between the government and private companies.