Market Integration

MARKET INTEGRATION
CHAPTER 3
ECONOMY
• In any given economy, production splits into three sectors.
1. Primary sector
2. Secondary sector
3. Tertiary sector
SECTORS OF PRODUCTION
OBJECTIVES
• Show the contributions of the different financial and
economic institutions that facilitated the growth of the
global economy
• Discuss the history of the global market
• Determine different economic revolutions
• Examine the growth and dynamics of multinational
corporations that are emerging in today’s world economy.
INTERNATIONAL
FINANCIAL
INSTITUTIONS
World economy is reflected by the
phrase “When the American economy
sneezes, the rest of the world catches
a cold.”
The strength of a more powerful
economy brings greater effect on the
other countries.
FINANCIAL INSTITUTIONS
AND ECONOMIC
ORGANIZATIONS
The Bretton Wood Systems
The establishment of the Bretton Wood
Systems was because of the sufferings
caused by World War I, The Great
Depression in the 1930 s, and World
War II.
THE BRETTON WOOD SYSTEM ESTABLISHED
TWO MULTINATIONAL INSTITUTIONS
BREXIT
The British vote to leave the
European Union and the
election of Donald Trump as
President of the United States
have brought a new style of
politics, not just in the United
Kingdom or the United States,
but for the whole world.
THE GENERAL
AGREEMENT ON
TARIFFS AND
TRADE(GATT)
• General Agreement on Tariffs and

Trade (GATT) focused on trade goods
through multinational trade agreements
conducted in many “rounds” of
negotiation.
• Reduced trade and tariffs
Example: ASEAN
WORLD TRADE
ORGANIZATION
(WTO)
It is an independent multilateral
organization that because responsible
for trade in services, non-tariff related
barriers to trade, and other broader
areas to trade liberalization.
A global agency whose fundamental
aim is to facilitate trade easier for
everyone.
Example : NAFTA
INTERNATIONAL
MONETARY FUND
(IMF)and the WORLD BANK
 IMF and the World Bank were founded after the World War 1.
• Peace advocacy
• Economic stability
 The IMF’s main goal is a short term approach while World
Bank has a longer solution for economic and financial crisis.
International
Monetary Fund
Philippines gets 139.4 billion worth of
special drawing rights from IMF
boosting the country’s foreign exchange
buffer and adding a funding source for
COVID 19 expenses during the
pandemic.
World Bank
Roughly half of World Bank projects in the
Philippines have centered around rural
infrastructure, private sector infrastructure,
climate change, and civic engagement. In history
of attempting to reduce poverty, the Philippines
most recently accepting a $300 million loan for
the Pantawid Pamilyang Pilipino Program, a
conditional cash transfer program. All of the
projects that was made possible by World Bank,
deemed for long term approach to address
financial and economic crisis.
The Organization for Economic Cooperation and Development(OECD), the
Organization of Petroleum Exporting Countries (OPEC),and the European
Union (EU)
• Organization for Economic Cooperation and Development emanates from the member
countries’ resources and economic power.
• Organization of Petroleum Exporting Countries was formed because member countries
wanted to increase the price of oil, which in the past had a relatively low price and had
failed in keeping up with the inflation.
• The European Union is a political and economic union.
ORGANIZATION FOR
ECONOMIC DEVELOPMENT
AND COOPERATION
The Clean Energy Finance and Investment

Mobilization (CEFIM) program builds
upon the OECD’s strong engagement with
the Philippines and supports the country in
unlocking finance and investment flows to
achieve clean energy targets and
sustainable financial goals.
ORGANIZATION OF
PETROLEUM
EXPORTING COUNTRIES
The OPEC, along with Russia and other oil
producers announced that they would cut
production targets by 2 million barrels a day,
an action that could help Moscow pay for it’s
war with Ukraine.
Russia relies on gas and oil sales for a large
portion of it’s budget to help fund its war in
Ukraine. It supported the production cut,
which will enable Moscow to sell oil for
higher prices on global market.
EUROPEAN
UNION
Philippines benefits from European Union
through its support to political settlement
by providing humanitarian and human
rights law experts.
They also provided 1.4 billion to the
programme “Peace and Development in
the Bangsamoro Autonomous Region in
Muslim Mindanao” to improve the social
cohesion and resiliency of communities
while addressing the health, social and
economic impact of COVID 19.
NORTH AMERICAN FREE
TRADE
AGREEMENT(NAFTA)
The North American Free Trade Agreement is a trade pact

between the United States, Mexico, and Canada .
NAFTA helps in developing and expanding world trade by
broadening international cooperation.
Its purpose is to reduce trading costs, increase business
investment, and help America be more competitive in the global
market.
PRODUCTION OF A BACKPACK
HISTORY OF GLOBAL MARKET
INTEGRATION
What caused this shift in the

way people produce for their
needs?
AGRICULTURAL
REVOLUTION
People had discovered that farming yielded
more area of land meaning that farmers
could grow enough food to support larger
production of people. It is largely
sedentary unlike the mobility of hunter-
gathering.
This allowed for surpluses to be stocked up
in case of difficult growing periods to curb
starvation.
INDUSTRIAL
REVOLUTION
The Philippine economy is currently
undergoing the four industrial revolution
such mechanization, steam and water
power, mass production and electricity ,
automation and lastly cyber physical
systems.
The major industries of the Philippines
include manufacturing and agribusiness.
TWO ECONOMIC MODELS
CAPITALISM SOCIALISM
It emphasizes profit maximization It emphasizes collective goals,
and competition as the main drivers expecting everyone to work for the
of efficiency. common good and placing a higher
value on meeting everyone’s basic
needs than on individual profit.
CAPITALISM
The United States is arguably the
most well-known country with
capitalist economy, which many
citizens see as an essential part of
democracy and building the
“American Dream”
SOCIALISM
China is considered a socialist
economy because the government
still has a tremendous control over
private enterprises.
INFORMATION
REVOLUTION
Technology has reduced the role of human
labor and shifted it from a manufacturing
based economy to that one that is based in
service work and the production of ideas
rather than goods.
The Philippines played an essential role
during the information revolution since it
was one of the nations that actually created
information systems
INFORMATION
REVOLUTION
In United States, manufacturing jobs which

were the lifeblood of their economy for
much of the twentieth century have
declined in the last 30 years. Today, much
of their economy is centered in the tertiary
sector or the service industry includes
every job such as administrative assistants,
nurses, teachers and lawyers.
GLOBAL CORPORATIONS
• The companies that extend beyond borders are called multinational or
transnational corporations(MNCs or TNCs) and they are also referred to
as global corporations.
• Manufacture >distribute >market > sell
• Driven with negative and positive impacts.
EXAMPLE : McDonald’s or Coca Cola

Market Integration

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MARKET INTEGRATION

• General Agreement on Tariffs and

The Clean Energy Finance and Investment

The North American Free Trade Agreement is a trade pact

What caused this shift in the

In United States, manufacturing jobs which

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