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The Role of the Service Sector in the Economy
The Service Sector
• It consists of transportation, communications and storage, domestic trade, finance, housing, government and private services.
• It is a sector which produces services instead of just an end product which is tangible
The Service Sector
• Its primary role is to serve as facilitator in the entire process of production, distribution and consumption.
• Statistics show that the growth of the service sector has been pushed onward by :
1. Telecommunications2. Wholesale and retail trade3. Private services
The Service Sector
Telecommunications
• It provides necessary resources for or prerequisites to other industries in terms of information being delivered.
• National Telecommunications System It is an agency of the Philippine government under the
Commission on Information and Communications Technology responsible for the supervision, adjudication and control over all telecommunications services throughout the Philippines.
Telecommunications
Transportation • It may be regarded as “
place utility” to manufacturing, it takes the raw materials to the factory and converted goods to consumers.
• It is the artery for the free-flow of people, goods, and information.
Transportation • Rail transportation • Land transportation
DPWH- is in charge of building roads and bridges to ease transportation in the country • Water Transportation • Air Transportation
Finance Industry • Includes banks and
insurance companies. It is based on the principle of efficiency for it eliminates the need for barter in the trading of goods and services.
• It serves as intermediary or bridge between the fund sources and fund users
(See list of top banks in the Phils)
Wholesale and Retail Trade
• Marketing function is performed by any business that is a necessary mediator between the production or purchase of goods and services and their sale or consumption.
• Wholesaling is the sale of commodities in large quantities
• Retailing is the sale of goods in small quantities direct to the consumers for personal or household consumption.
Wholesale and Retail Trade
Wholesale and Retail Trade
• Distribution is performed by wholesalers and retailers. Each wholesaler buys from several hundred manufacturers and sells to several thousand retailers. Each retailer buys thousand of products from 10 to 20 wholesalers and sells them to thousand consumers.
Types of Retail Stores
• Specialty Store• Department Store• Supermarket• Convenience Store• Superstore
Housing
• Barriers to housing: 1. Housing finance2. High transaction and
production costs in the housing market
3. Escalating land prices
Private Services
• Consists of educational, medical, entrepreneurial, recreational, hotel, restaurant, and other services.
Significance of the Service Sector
• Source of Livelihood
• Source of Services
• Source of national income and output
Qualities of Filipino Workers in the Service Sector
1. Highly skilled workforce with strong work ethic
2. World-class proficiency in English
3. Improved methods and system
4. Intercultural skills5. Self-reliance
Institutions that help the Service SectorInstitution Functions
National Telecommunications Commission
Exercises jurisdiction over supervision and control of all telecommunications services throughout the country.
National Housing Authority Tasked to develop and implement a comprehensive and integrated housing program
Department of Trade and Industry Assigned to promote growth of enterprises and strengthen trade in the domestic and international markets.
Technical Education and Skills Development Authority
Assigned to develop the skills of middle class workers
Philippine Ports Authority Tasked to construct and modernize the different ports and modernize water transport
Institutions that help the Service SectorInstitution Functions
Department of Transportation and Communications
Tasked with the maintenance, expansion and modernization of an efficient and dependable transportation and communication system as an effective mean for economic recovery and progress
Local Water Utilities Administration Tasked with accelerating countryside water supply through service coverage, lending assistance and water infrastructure development.
Government Service Insurance System and Social Security System
Tasked with implementing programs for the protection of workers in the government and private sectors, respectively.
Challenges faced by the Service Sector
• Maintaining a sufficient pool of efficient workers
• Stiff competition from neighboring Asian countries
• Thinking small • Security risk and instability
Group Activity
• Why are Filipinos considered by many as among the most hard working, efficient, and loyal workers in the world?
• Why is it important to maintain these qualities?• Do you believe that lack of global awareness on the
advantages that Philippines can offer in the service sector affects the economy? Why or why not?
Journal Reflection
“ The highest destiny of the individual is to serve rather than to rule”