The industry Sector
sector produces the food we eat, the
raw materials for the clothes we wear and the
houses we live in.
Service Sector of Industry includes the following:
1. transportation, communication, and storage
4. Ownership of dwellings and real estate
5. Private services
6. Government services
The chemical transformation of organic and inorganic matter into
finished products, either by the use of machines or by hand., at a
place like a factory or at home.
Mining and Quarrying
These are industries which extract minerals and other precious
metals from the country’s mineral resources.
These refers to buildings, factories and other structures. They are
fixed capitals wherein manufacturing and transactions are
Electricity, Gas and Water
These are usually termed as WIP-water, illumination and power
which are very necessary to carry out production.
Business and Commerce Sector
Commercial activities are usually undertaken by business
organizations ranging from the simple sole proprietorship to the
CONTRIBUTION OF COMMERCE AND INDUSTRY TO
GROWTH AND DEVELOPMENT
MAJOR FORMS OF BUSINESS
-simplest of the three forms of business
organizations. Such is owned and operated by a
1. The desire to be one’s own boss-shouldering the
responsibilities and making all the decisions.
1. Responsible for all business debts.
2. Limited resources which also limit the possibilities
-owned by two or more people who agree to pool their
resources in a common fund with aim of sharing whatever profit
or losses they will get from their partnership.
1. In the Philippine laws, partnership is recognized as a legal
2. It has a better chance of succeeding due to availability
1. Has unlimited liability.
-a business organization that produces the biggest
percentage of goods and services today.
-owners of the corporation
1. Owners have limited liability.
2. Can raise huge amounts of capital for the business
through the sale of stocks.
3. Unlimited life
1. Managers who are stockholders may not have the
interest of the welfare of the
business at heart.
2. Payment of profits in the from of dividends which are
-an organization or business enterprise owned, patronized
and managed by its members.
Kinds of Cooperative
1. Consumers’ Cooperative.
-organized by the members of a group who pool their
resources together to put up a business managed, operated, and
owned by the members themselves.
2. Producers’ Cooperative.
-when people join together and pool their capitals, buy
land, sell their own products out of their produced goods, then
these people are forming a producers’ cooperative.
3. Formers’ Cooperative.
-considered as a business enterprise owned and
operated by the farmers.
KINDS OF FARMERS’ COOPERATIVE.
1. Farmers’ Cooperative Marketing Association
-the problems of the farmers center on the marketing of
2. Samahang Nayon
-organization of farmers in a barrio.
3. Kilusang Bayan
*Credit Union- cooperative association organized by a
group of people with a common goal or thrift.
Savings function- the member is encouraged to save by
opening savings account.
Credit function- has two kinds:
a. Provident loan- given for emergency purposes
b. Productive loan-used for capital that can give the
member an income.
DIFFERENT FUNDINGS OF A CREDIT UNION
1. Fixed deposits
-when the member joins the credit union, he gives
a certain amount which is fixed by the board of
2. Savings deposits
-the member is encouraged to deposit to the
credit union in the form of savings deposit.
3. Fees and Fines
-taken from the members in the form of service
fee, membership fee and fines.
4. Reinvestment of Patronage Fund
-at the end of each year the members of the
credit union receive a patronage dividend.
-comes from loans given to members.
• Carry out negotiations for the
negotiations for the transfer of
goods and services.
• Do not buy or sell goods; they only
help in facilitating the transfer of
such goods from sellers to buyers.
•Gather is to gather the sellers and buyers
where negotiations for purchases or sales of
goods can take place.
•May get the products from agricultural
producers and sell them in the form of balancefrom-total sale to the sellers.
• They take the risks of taking commodities
despite possible loss due to price fluctuations.
General Merchandise Store
• These are the stores
that offer a wide
variety of goods for
• Defined as a retail establishment that
employs at least two or more, has sales of
apparel and soft goods.
a. furniture, home
furnishings, appliances, radio and TV sets
b. general apparel for the family; and
c. household lines and dry goods
Discount Department Store
• Sells limited assortments
of merchandise at
reduced prices is called
a discount store.
• Began in the 1930s.
• Designed to enable the
customer make his
purchases with a little or
no assistance from store
• Served as a post
office, a tavern, an inn
and the center of
and some other
inexpensive items to
the consumers of the
• Sells only one
• Offer a wide assortment
of the goods they carry,
supply sound product
provide efficient service.
•Done by marketing of goods directly to the
•Includes cosmetics, encyclopedia, and
• Sells through the use of catalog or pamphlet
that describes its goods in detail.
• Established catalog centers which contain only
catalogs for the customers to choose their
• Can be found anywhere
you go. Candy, drinks
(hot or cold), and ice
cream are the most
common items sold.
• Consumers are willing to
pay extra for the
convenience of having
•Food service industry is growing because more
and more people are interested in eating out.
•Success of the different chains of eateries like
Jollibee, McDonald’s, Wendy’s and the like can
testify to this.
• People who travel extensively for both
business and pleasure find it easy to rent a
space for lodging either in a hotel, hostel or
• Offered by the different financial institutions
such as banks, savings and loan associations,
insurance companies, stockbrokers, small loan
companies and finance firms are demanded
by the consumers.
• Provide them with the information involved in
carrying out the services they offer.
Recreation and Tourism Services
• Most popular types are bowling lanes, golf
courses, theaters, recreation centers,
bookstores, pet shops, music stores, travel
agencies, and video houses.
• Main function of airlines, rail roads, bus
companies, jeepneys and shipping lines is to
transfer the customer from one place to
• Provide accommodations, arrange space, sell
tickets, and make adjustment in itineraries.
• Concerned with personal care.
• Barber shops, beauty parlors, photography
studios, and dance studios are examples of
this kind of retailing.
• Offer repair services
such as on watches,
cars, television sets,
• Many have
sections to answer
the needs of the
Importance of Retail Trade
1. Retail trade serves as intermediary between
the final consumers and manufacturers.
2. Retail trade brings about a balance in the
exchange within the economic system.
3. Retailers assume the risk by buying
merchandise without any guarantee that all
the products bought will sell.
4. Retailers extend credit to the consumers to
be able to sell the products.
5. Retailers bring buyers and merchandisers
together by purchasing products in large lots.
6. Retailers provide customers with a wide
range of choice of goods and a quick delivery of
products to the consumers.
7. Retailers attract consumers through
advertising and other types of promotions.
8. Retailers provide producers with useful
information on consumer buying habits.
9. Retails can encourage or discourage the sale
of certain products.
10. Retail trade is the shortest distance between
the manufacturer and consumer.
Nationalization of the Retail Trade
Pursuant to the provisions of Republic Act
No. 1180 known as the Retail Trade
Nationalization Law as amended by Presidential
Decree No. 714, section 79 (B) of the Revised
Administrative Code, retail business is defined
according to the following:
1. Retail business shall mean any
act, occupation or calling of habitually selling
directly to the general public
merchandise, commodities or goods for
consumption, but shall not include:
a. Sales by a manufacturer, processor,
laborer or worker to the general public
the products manufactured, processed
or produced by him if his capital does
not exceed five thousand pesos.
b. Sales by a farmer or agriculturist of the
product of his farm.
c. Sales by a manufacturer or processor, in the
Philippines or its subsidiary affiliate company,
to industrial, commercial and agricultural users
or consumers who use the products bought to
render service to the general public or to
produce or manufacture goods which are in
turn sold by them in accordance with the Retail
Trade Nationalization Law.
d. Sales by a hotel owner, keeper, lessor or
concessionaire, and lessee operating a
restaurant, irrespective of the amount of
capital provided that the restaurant is
necessarily included in, or incidental to the
e. Sales by a manufacturer or processor to the
government and its agencies, including
government-owned and controlled
f. Sales at wholesale.
History of the
Nationalization of Retail
The movement to nationalize
the retail trade started in 1900 to
1929. Although there were no
concerted efforts for its full
implementation, it paved the
way for a more sustained
movement to nationalize the
The most important factors
which led to nationalization of
the retail trade in the country are
1.Chinese control of the retail
2.Rise of economic awareness
education, system of
4.Rise of nationalism.
The need to nationalize the retail trade gathered
momentum in 1930 to 1944. Organizations such
as Ang Bagong Katipunan were established to
strengthen the movement.
It was only between 1945 and 1953 that Congress
was convinced of the urgency and necessity of
Several Filipino groups were organized to enhance
its full implementation.
The most important of these groups
Filipino Retail Business Movement (FILREMO)
United Filipino Retailers Cooperative
Nationalization Movement of the Philippines
Philippine Chamber of Commerce
Pagkakaisa at Tangkilikan
National Economic Protectionalism Association
Pera-pera Movement of 1938
Filipino Retailers Merchants Association of 1948
Father of FILREMO
Considered the most persistent advocate of
the Retail Trade Nationalization Act, he was
even called the Father of the Retail Trade
Through an agreement called the
Cuenco Resolution, the delegates of
the constitutional convention were
convinced that Congress was
authorized to pass a law which
nationalizes the retail trade.
It was under the administration of
President Ramon Magsaysay when
House Bill No. 2523 was approved
and finally Republic Act 1180 became
It was that beginning May 15, 1954,
“no alien and no association not
wholly controlled by Filipino citizens
can be permitted to engage in the
retail trade in the Philippines.”
Meaning, that those aliens and
associations already engaged in retail
trade on or before May 15, 1954 may
continue their business.
It is further stated that alien retailers
who were allowed to engage in retail
trade because they were actually
engaged in this business on or before
May 15, 1954, shall not be allowed to
establish or open new stores or
Distribution of Products
for Local Consumption
The transport of goods
from one port to
another within the
Local ports such as
Bataan and Manila are
considered two of the
five busiest coastwise
trading centers. Other
busy ports are in
Cebu, Davao and
The movement of
goods from one airport
to another within the
Large and busy airports
are in Mindanao and
The province of Bicol
registered the largest
percentage of outflows
as well as inflows, with
the NCR in close
Lack of capital curtails further production of
goods and services and this situation
militates against the primary function of
distribution which is to increase consumer
Financial restraints often force wholesalers
and retailers to stop their business, thus
resulting to a lag in the system of distribution.
The marketing of commodities is very crucial
to the whole system of exchange.
Promotion of Domestic Trade
Fielding of rolling
stores in areas affected
by Mt. Pinatubo
eruption like Tarlac,
Zambales. This is to
ensure the continuous
supply of basic
Mobilization of food
caravans which deliver
meat, fruits, fish and
vegetables from the
provinces to the
various wet markets in
Promotion of Domestic Trade
Continuous supply of
basic commodities at
reasonable prices in
depressed areas of the
country through the
establishments of 142
Bantay Bilihin Tindihan.
“bagsakan” centers for
fresh fruits and
vegetables in Quezon
City and in Manila.
Promotion of Domestic Trade
Buying at wholesale activities for some
selected items such as sugar, flour, hardware
and cement, including purchase of goods for
the relief operations of DSWD under the
“Hatid Butil” and “Hatid Liempo” projects.
Agencies that Promote Domestic
Bureau of Trade Regulation and Consumer
Bureau of Domestic Trade Promotion
Bureau of Patents, Trademarks and
Bureau of Product Standards
Videogram Regulatory Board
Laws that Promote Domestic
Consumer Act of the Philippines
RA No. 6969 known as Toxic Substances and
Nuclear Waste Control Act
Senate Bill 1556
House Bill No. 554
The Informal Economic
Sector or Underground
Professor Edgar L.
Leigs says that the
or the informal
economic sector does
not only exist in
nations, but also exists
in industrialized and
like the United States.
Components of the Informal Sector
The Illegal Economy
The Unreported Economy
It consists of activities
Refers to the economic
which are pursued even if
they violate legal statutes
that define the legitimate
forms of commerce.
activities that circumvent
and evade the tax code.
Components of Informal
This consists of economic
activities that should be
recorded in national
accounting system but is
not fully or properly
The Counter Trade or the
Sophisticated Version of Barter
This may be considered an
informal economy due to
the minimum use of
Why does Underground Economy
A growing distrust in government especially
with the increasing rate of graft and
Counter trade ensures that developing
countries such as the Philippines will have a
lesser need to borrow from multilateral
institutions like the IMF in order to import
more goods and services from other
State of Underground Economy
in the Philippines
In the February 1994 issue of Recent Economic
Indicators, they analyzed the currency in
circulation which in real terms increased by
about 52.7% while real GNP increased by only
17.7% over a 13 year period. On the
assumption that the informal sector started
from 0 in 1980 and that the velocity of money
has been constant, they calculated that the
size of the informal economy in 1992 relative
to GNP was about 30%.
Underground Economy and Its
Effects on the Nation’s Economy
Underground Economy contributes to the
noncollection of taxes due the government
and leads to the continuous violation of
economic laws and regulations.
Undergrounds Economy breeds lawlessness
or disregard for law and order.