The Philippine Economic Sectors

Table of Content

The Philippine economy relies on three primary sectors: industry, service, and agriculture. These sectors are assessed according to their GDP contributions. Over the years, the service sector has demonstrated consistent growth, whereas agriculture has declined. In 1997, agriculture accounted for 20% of GDP, industry contributed 32%, and services dominated with 48%. The GDP growth rate in 1999 was recorded at 3.2%. Economists attributed this slow growth to the underperformance of the industry sector, which grew by only 0.%.

In 1999 and 2000, political crises in the Estrada administration hindered maximum economic growth. However, the agriculture sector saw a significant rebound, with a growth rate of 6.6 percent, the highest in decades. The retail sector also performed well, contributing to a growth rate of 3.9 percent in the services sector.

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Despite losing confidence from foreign and international lending agencies due to these political issues, the GDP in 2000 still showed positive growth of 3.9 percent. Furthermore, the industry grew four times faster compared to its growth rate in 1999.

Services saw a considerable 4.4 percent increase in growth compared to its 1999 statistics. The progress of agriculture was not an inherent development, but rather a deliberate shift for early humans during the Stone Age. They reluctantly and gradually abandoned their previous lifestyle due to the increased labor involved in cultivating plants instead of hunting and gathering. Nonetheless, some communities like the Bushmen of Southwest Africa still maintain their hunter-gatherer way of life today. However, between approximately 8000 and 3500 B.C., more people started depending on cultivated crops and domesticated animals for their sustenance.

During the time around 7000 B.C., certain communities had reached a level of advancement in their tools and skills that allowed them to support towns with populations over one thousand. Two examples of such towns are Jericho in the Jordan River valley and Catal Huyuk in present-day Turkey.

By 3500 B.C., agricultural societies in the Middle East had developed enough specialists to establish the first civilizations. This significant transformation of society had implications for individuals’ lives and human history as a whole, similar developments occurred elsewhere.

The specific reasons behind the transition from a hunter-gatherer lifestyle to an agrarian one between 8000 and 5000 B.C. remain unknown due to the absence of written records documenting the adoption of animal domestication practices and plant cultivation during that period.

The retreat of the glaciers around 12,000 B.C. at the end of the last Ice Age may have influenced climate, leading to a decrease in available game for human hunters in regions like the Middle East where agriculture emerged and animals were domesticated. Climate shifts also impacted the distribution and growth patterns of crucial crops such as wild grains for hunters and gatherers. The transition from nomadic hunting to sedentary farming was likely driven by both changes in climate and an increase in human population.

The population growth may have been a result of climate and environmental changes, which led hunting bands to migrate to less affected areas. Alternatively, population growth could have occurred within these unaffected regions, as hunting and gathering patterns became more productive. Peoples such as the Natufians discovered that they could significantly increase the size of their human communities by extensively collecting wild grains.

As the population increased, more attention was focused on the grain harvest, leading to the deliberate and organized cultivation of plants and the agrarian revolution. The cultivation of cereal grains by early societies involved the observation of these plants growing in the wild and the collection of their seeds while gathering other plants. In areas such as present-day Turkey, Iraq, Syria, Jordan, Lebanon, and Israel, wild barley and wheat grew extensively during the Late Paleolithic era. It is possible that hunting-and-gathering groups in these regions experimented with planting and caring for these seeds, either purposefully or by chance through observing the growth of seeds near their campsites. However it began, the adoption of agriculture was a gradual process. Archeological evidence suggests that early agriculturists maintained their hunting-and-gathering practices as a means to safeguard against the constant threat of famine.

But as ancient civilizations started to develop their farming techniques, they began to cultivate various crops, including legumes like peas and beans, fruits, and olives. Consequently, their need for activities other than agriculture decreased. Initially, early farmers likely scattered wild seeds, which saved labor but resulted in lower potential yields. However, as time passed, they began to prioritize selecting the best grains for seed and blending different strains to enhance crop yields and resistance against plant diseases.

As the need to care for plants and rely on farming increased, certain nomadic groups chose to create permanent settlements, while others continued with a mix of hunting and shifting cultivation to stay mobile. While it is possible that some animals were domesticated before agriculture emerged, these two processes together brought about a major change in human culture called the Neolithic (New Stone Age) revolution. The domestication of different animal species happened in various ways, influenced by both the animals’ traits and their interactions with humans.

Originally, dogs were wolves that either hunted humans or scavenged at their campsites. It was discovered as early as 12,000 B.C. that wolf pups could be tamed and trained to track and corner game. Over time, certain breeds of dogs emerged that were skilled at controlling herd animals like sheep. By capturing and taming the leaders of relatively docile and defenseless sheep herds, they could be controlled effectively.

Sheep, goats, and pigs were first domesticated in the Middle East between 8500 and 7000 B. C. These animals were also scavengers at human campsites. Horned cattle, on the other hand, were tamed later around 6500 B. C. They were faster and better able to defend themselves than wild sheep. Some archeologists argue that the central place of bull and cattle symbolism in sacrificial and fertility cults of early peoples suggests that the initial motivation for their domestication was religious rather than for food and clothing purposes. Domesticated animals like cattle and sheep provided additional sources of protein-rich meat and milk to New Stone Age humans.

The variety of materials for crafting clothes, containers, shelters, and boats expanded with the use of animal hides and wool. Animal horns and bones were also useful as needles and utensils. It should be noted that plows and wheels were not introduced until the Bronze Age (c. 4000-3500 B.C.), which restricted the use of animal power for farming, transportation, or travel in the Neolithic period. Nevertheless, evidence indicates that people in northern regions used tamed reindeer to pull sledges while those in southern areas relied on camels for transporting goods.

More importantly, the Neolithic peoples utilized domesticated herd animals as a consistent source of manure to enhance the soil and ultimately improve crop yield, which gradually became their main source of sustenance. The spread of the Neolithic revolution saw the coexistence of sedentary agricultural communities with numerous bands of hunters, gatherers, migratory cultivators, and hunters and fishers. Despite the increased labor in cultivation and initially limited improvement in security or living standards, many groups persisted with tested subsistence strategies.

Despite the prevalence of sedentary agriculture as the primary means of living for most humans, hunter-gatherers and shifting cultivators have persisted in various regions across the world. In areas like the Americas, where horses and most herd animals were absent, nomadic hunting cultures became the main alternative. The domestication of animals gave rise to pastoralism, which has emerged as the strongest competitor to sedentary agriculture on a global scale. Pastoralism thrives in semiarid regions like central Asia, the Sudanic belt south of the Sahara desert in Africa, and the savanna zone of East and South Africa, where dense or large populations cannot be supported. The nomadic lifestyle of herding has fostered independent and resilient communities, proficient in military skills necessary for their survival and to challenge more densely populated agrarian societies. Horse-riding nomads who herd sheep or cattle have dismantled powerful kingdoms and laid the groundwork for vast empires. Additionally, the camel nomads of Arabia played pivotal roles in the ascendance of Islamic civilization.

Before the Industrial Revolution, proficient military organizations were developed by nomadic peoples in Central, East, and South Africa. Over time, sedentary societies encroached upon their territories, causing a decline in these nomadic cultures.

During the Neolithic revolution (around 8000-5000 B.C.), agriculture was not the main source of sustenance for human societies. However, those who adopted agriculture thrived and grew in size and influence. They also shared their farming techniques with other groups.

The cultivation of wheat and barley expanded across the Middle East and extended eastward to India. These crops also spread northward to Europe, where oats and rye were later included. From Egypt, the cultivation of grain crops and fibers—like flax and cotton, which were used for clothing—spread to peoples along the Nile, throughout the African interior, along the North African coast, and across the extensive savanna zone south of the Sahara desert. In the 2nd millennium B.C., agriculture in the African rainforest zone further south developed independently, relying on root crops like cassava and tree crops such as bananas and palm nuts.

During the Neolithic period in northern China, an agricultural system centered around millet emerged in the Huanghe or Yellow River basin. This system gradually expanded eastwards towards the North China Sea and southwards towards the Yangtze basin. In mainland Southeast Asia, a separate agricultural revolution began before 5000 B.C., based on rice. This revolution slowly spread to South China, India, and the islands of Southeast Asia.

In Mesoamerica (present-day Mexico and Central America) and Peru, agrarian systems developed based on crops such as maize (or corn), manioc, and sweet potato. These crops had already spread across various regions of the Western Hemisphere long before Christopher Columbus arrived in the Americas in 1492. They had reached areas ranging from temperate woodlands on the North Atlantic coast to rainforests of the Amazon region.

As a result, different agricultural production patterns were disseminated across all inhabited continents except Australia wherever there was sufficient rainfall and suitable temperatures. This marks the second part of the Agrarian Revolution and is known as the Neolithic Transition.

With the advancement of agriculture, humans started to dramatically alter their living environments. A increasing number of humans became settled farmers who cleared the land around their settlements and managed the growth of plants and grazing animals. The expanding presence of humans was also evident through the continuous growth in size and quantity of settlements. These settlements were established in both familiar regions and new areas made accessible by farming.

The transition to the Neolithic period saw sedentary farmers playing a crucial role in significantly increasing the human population. Before agriculture was introduced, there were around five to eight million people for thousands of years. However, by 4000 B.C., after countless centuries dedicated to farming, the population had skyrocketed to an estimated 60 or 70 million individuals. Despite this dramatic change, hunting-and-gathering bands still existed in regions between cultivated areas and continued engaging in warfare and trade with settled communities.

The establishment of villages and cultivated fields had a major impact on human settlements globally, signifying a crucial moment in history. The Neolithic period saw the rise of settled farming communities, which sparked rapid advancements in technology and social structures. This shift brought about the creation of diverse agricultural tools like soil preparation digging sticks, forest-clearing axes, and the introduction of plows.

Techniques of seed selection, planting, fertilization, and weeding showed continuous improvement during the Neolithic period. In various regions, human societies developed methods for storing rainwater and redirecting river water to irrigate plants. The construction of reservoirs and canals, as well as the use of dikes and sluices, allowed for better water storage and control. This progress greatly enhanced the ability of humans to modify their surroundings, particularly by protecting the vulnerable soils in tropical or semitropical regions from the damaging effects of sunlight and heavy rainfall.

The availability of better tools and the establishment of permanent settlements led to the development of larger, more sophisticated, and spacious housing as well as the construction of centers for community rituals. Different regions used various building materials, with early agricultural communities using sun-dried bricks, wattle (branches woven together and often coated with mud), and stone structures. As farming became more advanced, it became necessary to improve techniques for storing harvested food. Initially, baskets and leather containers were used, but during the early Neolithic period, pottery became known to many cultures in the Middle East. Pottery was preferred due to its ability to provide better protection against moisture and dust for stored foods.

Houses in early agricultural settlements usually had designated storage areas and were typically built around clay or stone hearths, which were ventilated through a roof hole. These houses often became targets of nomadic bands or rival settlements due to the stored food. Consequently, fortifications were added to enhance protection. Reliable and diverse food supplies, along with sturdy walls and houses, greatly enhanced the safety and well-being of human groups. Thus, these conditions facilitated higher reproduction rates and lower mortality rates, particularly during periods of abundant crop yields.

During the Neolithic period, humans had domesticated numerous food plants that are still cultivated today by the 6th millennium B. C. In addition to these food crops, people were also cultivating plants like flax and cotton, which could be used for making clothing, tents, and rugs in various regions including the Middle East. The advancement of tools and hides led to the emergence of new methods of water transportation. Paddles and dug-out canoes could be carved using axes, enabling travel across large bodies of water.

Skin-covered boats and reed-and-log rafts were effective forms of water transport, even after the introduction of the wheel in Afroasia during the 4th millennium B. C. Water transport continued to be more efficient than land, especially for transporting bulk goods, until railways revolutionized land transport in the 19th century A. D. The surplus production enabled by agriculture was a crucial factor in the social changes of the Neolithic revolution.

Surpluses in the Neolithic period allowed cultivators to barter their excess crop for the specialized services and goods of non-cultivators, such as toolmakers and weavers. This led to the differentiation of human communities based on occupation. As a result, political and religious leaders emerged and eventually formed elite classes, engaging in ruling and ceremonies as their primary roles. However, the specialized production of stone tools, weaponry, and possibly pottery held greater significance in the development of agriculture compared to the formation of elites.

In the beginning, every household made its own tools, weapons, baskets, and clothing. But over time, some families or individuals who excelled at these skills started producing extra items and trading them for food. Certain villages became known for making specific materials that other regions needed. For instance, axes made from flint were highly sought after because of their durability. These axes were vital for clearing forests and expanding agriculture across Europe.

The demand for flint was high in villages near flint deposits, allowing villagers to sustain themselves through mining or crafting flint heads for trade with distant communities. These exchanges established patterns of specialization and trade between regions. However, the development of dedicated merchants seems to have occurred during the later growth of cities. It is challenging to determine the exact influence of transitioning to agriculture on the social structure of these communities.

It is probable that occupational differences increased social distinctions, but there was no clear social stratification that created class identity. Leadership was mostly communal, although there may have been alliances between villages in certain regions. Based on studies of present-day societies living at a similar level of development as the Stone Age, like those in New Guinea, property during the Neolithic era was collectively owned by the community. Alternatively, all households within the community were granted access to village lands and water.

It can be deduced that women were crucial in the domestication of plants due to their important roles as plant gatherers in pre-farming societies. However, there is evidence suggesting that their status deteriorated in various agricultural communities. While women continue to work in the fields in many cultures, men took over physically demanding tasks such as land clearing, hoeing, and plowing. Men also gained exclusive access to new tools and weapons developed during the Neolithic era and later periods, and they held control over the essential irrigation systems that emerged in early agricultural hubs.

Although men were primarily responsible for taming, breeding, and raising large animals in farming and pastoral communities, Neolithic art indicates that worship of female deities in earth and fertility cults was still prevalent. However, the shift to sedentary agriculture may have resulted in a decline in women’s social and economic status. This transition to agriculture played a significant role in the development of civilization in the Middle East and Africa by 4000 B.C., as explored in “The Causes of Civilization.”

Agriculture was the main reason for the rise of civilization in the Middle East. This progress led to further advancements and ultimately the emergence of civilization. However, other factors like new inventions and organizational structures also contributed to this process around 4000 B.C. This important period occurred not only in the Middle East but also in different regions.

The thriving agricultural communities that emerged relied on localized production. These communities were able to sustain their populations despite the frequent challenges posed by adverse weather conditions and harvest problems. However, the limited surplus generated by localized agriculture prevented the development of specializations within the community, thus hindering the progress towards civilization. Even the establishment of small regional centers like Jericho or Catal Huyuk did not lead to significant advancements. These centers remained primarily focused on their local economy, with minimal trade and specialization.

During the Neolithic revolution in the Middle East, it was crucial to involve more regions in the practice of agriculture. By 4000 B.C., large nomadic groups were limited to the southern part of the region, specifically in the Arabian Peninsula’s deserts. The spread of agricultural knowledge was slow, but eventually, the vast majority of the Middle East and some surrounding areas adopted this way of life. However, agricultural communities in 4000 B.C. closely resembled those from 4000 years before. A hypothetical observer from just before 4000 B.C. would have anticipated the gradual expansion or independent development of agriculture in various parts of the world, considering the Middle East’s agricultural growth. Some regions like central Asia, northern Africa, southern Europe, and portions of India had already embraced agriculture. On the other hand, nearby regions like Italy would remain untouched for another 1500 years. Meanwhile, a separate Neolithic revolution was beginning to emerge in Central America.

Although it was essential, it did not guarantee a civilizational revolution within key agricultural regions. The dynamic implications of agriculture resulted from several factors coming together to create an unexpected development of civilization. While the introduction of agriculture did not ensure further change, it did play a role in encouraging new forms of social organization. Settled agriculture, in contrast to slash-and-burn methods, typically involved the establishment of property rights to identify land ownership belonging to a family, village, or landlord.

The introduction of improvements like wells or irrigation measures, which could be monopolized or inherited, was only incentivized by property. However, property necessitated the development of new laws and enforcement methods, leading to a more extensive government. This, in turn, created possibilities for trade and innovation in agriculture, along with the emergence of government figures to enforce regulations. Ultimately, farming fostered the formation of larger and more stable communities compared to pre-Neolithic times.

The movement of most hunting peoples was in small groups consisting of no more than 60 individuals, as moving to a single spot would deplete the game. However, settled agriculture brought about different constraints. Communities began to form around the fields that were cleared and enhanced. In several early agricultural regions, such as the Middle East, the necessity for stability was driven by the requirement for irrigation systems. The success of irrigated agriculture relied on collaborative efforts among farmers to construct and upkeep irrigation ditches and sluices.

The reason why early agricultural societies preferred village communities instead of isolated farms was because they required irrigation and protection from marauders. These villages, which consisted of several hundred people, typically engaged in extensive irrigation projects to ensure a steady water supply for large areas of land. The construction of large-scale irrigation systems along major rivers like the Tigris-Euphrates or the Nile necessitated the organization of large labor forces.

Furthermore, regulations were needed to ensure equitable access to the water supply for users near the river’s source and in villages adjacent to the river. This necessitated a larger scale of political and economic organization. The ability of irrigated land to consistently generate surpluses and the need for new forms of organization were crucial factors in the development of civilization. Therefore, it is not coincidental that the earliest civilizations emerged in proximity to major rivers and flourishing irrigation projects.

Civilization in Mesopotamia and Egypt involved both economic surplus and the ability to integrate large areas along rivers. The coordination between regions, initially driven by irrigation needs, led to various connections such as shared cultures, trade, and common political institutions. In addition, innovations in tools and specializations emerged around 4000 B.C., with a focus on addressing agricultural challenges and encouraging collaboration among villages. These inventions primarily took place in the Middle East, where agriculture was well-developed, and ultimately contributed to the productivity of Middle Eastern agriculture, leading to consistent surpluses that played a significant role in shaping civilization.

The implementation of the first potter’s wheel around 6000 B.C. resulted in a succession of technological advancements. This innovative tool expedited the production of ceramic pottery, enabling more efficient food preservation and enhancing food availability. Additionally, the proliferation of pottery-making specialists fostered a bartering system involving pottery for sustenance. The introduction of enhanced tools further contributed to the refinement of wooden and stone products.

Obsidian, a hard stone, started being utilized for tools during the late Neolithic years. The wheel was another innovation originating from the Middle East. Although wheeled vehicles were initially slow, they played a crucial role in monumental construction projects that involved the transportation of large stone blocks to temple construction sites. Shipbuilding also underwent gradual improvement. These developments, which improved production and trade opportunities, laid the foundation for the emergence of civilization with the ascent of Sumerian society along the Tigris-Euphrates.

During the emergence of the first civilization, a significant technological change occurred as metal started to be used for tools and weapons. Around 3000 B.C., copper was combined with tin, resulting in the creation of bronze. This advancement took place in the Middle East and around the Black Sea region. The utilization of metal enabled the production of a broader variety of tools compared to stone or bone counterparts. Moreover, these metal tools were lighter and could be manufactured more effectively. Consequently, this transition from the Neolithic Age to the Bronze Age happened primarily in the Middle East.

The eastern Mediterranean and central Asia quickly embraced the transition, benefiting from metal hoes, plows, and other tools. These implements were highly valuable to both agricultural societies and herding tribes. Moreover, the introduction of new technology led to increased specialization, with groups of artisans focusing on metal production and exchanging their products for food. The widespread use of bronze further enhanced trade, as tin was particularly scarce. As a result, by 2000 B.C., trade became a major driving force behind the extensive growth of sea routes.

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The Philippine Economic Sectors. (2017, Feb 24). Retrieved from

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