Gross Domestic Product (GDP) is one of the indicators of a nation’s economic performance. A country’s GDP can be represented in Nominal Gross Domestic Product and Real Domestic Product. The Real GDP purely concentrates on the country’s growth, while the Nominal GDP includes prices and the nation’s growth rate (Thomas et al., 2022). The Philippines is one of the nations that have a dynamic Gross Domestic Product due to the performance in various economic variables from different sectors in the nation.
A decrease in tax in the Philippines will increase the nation’s disposable income, which puts the consumers in a position to spend more, increasing the nation’s Gross National Product. Increased interest rates in the Philippines have negatively moderated economic growth since it has made the cost of living to be expensive (Thomas et al., 2022). It has also reduced disposable income, which has encouraged consumers to limit their spending.
One of the main economic indicators within a nation is the unemployment rate. The main indication of poor economic performance in the Philippines is the high number of unemployed individuals due to limited opportunities (“Philippines Economy,” 2022). Another major economic indicator is consumer spending, whereby most citizens in the Philippines have recorded a decrease in consumer spending of their disposable income (Thomas et al., 2022). High consumer debt also indicates poor economic performance, where most consumers are not able to effectively service their loans.
A nation’s inability to pay its external loans from international financiers is also another main economic indicator within the Philippines. Bond yields also play a major role in highlighting a nation’s economic performance. Business expansions within a nation also depict a nation’s economic performance (“Phillippines Economy,” 2022). The difficulty in opening up new businesses or expanding existing businesses in the Philippines is a significant indicator of poor economic performance in the nation (“Phillippines Economy,” 2022). The main relationship between GDP, Net Domestic Product, National Income, Personal Income, and Disposable Income is that they are all subject to changes in tax rates.
References
Philippines economy – GDP, inflation, CPI and interest rate. (2022). FocusEconomics.
Thomas, K., Annette, K., Renzo, E., & Laborte, L. (2022). Philippines monthly economic developments (2022). World Bank.