Which type of spending is excluded from GDP: roads, teachers’ salaries, or social welfare?
Answer (1)
Social welfare, or transfer payments like 4Ps cash grants or SSS pensions, are excluded from GDP. That’s because they don’t involve payment for a product or service in return. They are simply cash transfers from the government to individuals. For example, if a senior citizen in Quezon City receives ₱1,000 from the government every month as a pension, that’s not counted as government spending in GDP because no new goods or services were created in that transaction.
