The document discusses contemporary economic issues faced by Filipino entrepreneurs, including challenges in acquiring capital, high interest rates, and the impact of minimum wage laws. It also addresses the factors hindering entrepreneurial success, such as poor public services, lack of financial support, and insufficient marketing and management skills. Solutions and recommendations for overcoming these obstacles are presented, emphasizing the importance of self-growth and adaptability in the business environment.

1. CONTEMPORARY ECONOMIC ISSUES
FACING THE FILIPINO
ENTREPRENEURS

2. Direction: Consider yourself as a young entrepreneur, imagine how your
business will go by looking at the Business Model below, write down your
own interpretation and explanation of the business model presented.

5. What is Entrepreneurship?
Entrepreneurship is
the art of turning an
idea into a business.
Venture Capitalist (Fred Wilson)

6. Entrepreneurship is the ability to know what
products and services are needed by people
and to be able to provide these things at the
right time, at the right place and to the right
people, and at the right price.
What is Entrepreneurship?

7. What Entrepreneurs Do?
Entrepreneurs assemble and then integrate all the
resources needed –the money, the people, the business
model, the strategy—needed to transform an invention
or an idea into a viable business.

8. What are the Economic Issues faced by Filipino
Entrepreneurs?
? ? ? ?

9. INVESTMENT AND INTEREST
RATES
CONTEMPORARY ECONOMIC ISSUES FACING THE
FILIPINO ENTREPRENEURS

10. When an entrepreneur starts, the very first issue
that they encounter is how they will get their capital.
Some entrepreneurs really do not have the capital
in the beginning, some may have (out from their savings),
but acquiring capital usually comes in a form of loan in a
bank or any other financial institutions or some get
financial assistance from the government.
Entrepreneurs shoulder higher rates of interest
from the loan they made from a financial institution.

11. Investment is an asset or item acquired with
the goal of generating income or appreciation.
INVESTMENT
Appreciation refers to an increase in the value of
an asset over time.

12. INVEST TO EARN A
RETURN
Investing includes the purchase of new plants,
new equipment, new homes and net increases in
inventories.
Investing generally refers to using one's savings
in a way that earns a return.
TWO TYPES OF INVESTMENTS
. Long-term Investment, . Short-term Investment

13. These are assets of the company which
include stocks, bonds and real estate. Long-
term investments are assets that a company
intends to hold for more than a year.
LONG-TERM INVESTMENT

14. This is an investment that will mature to cash
within a one-year time period and is
considered liquid. When someone invests in
short-term stock and bonds, the thinking is
that these assets can be cashed in quickly.
SHORT-TERM INVESTMENT

15. An asset is liquid if the owner can readily
access it, and it has an established market
where prices cannot be manipulated by one
buyer or seller.
SHORT-TERM
INVESTMENT

16. Short-term investments have two main
requirements.
1. These must readily be convertible to cash.
2.Management must intend to convert or sell
the investment within 3 to 12 months.
INVESTMENT
SHORT-TERM

17. INTEREST RATES
The interest rate is the amount a lender charges for the use
of assets expressed as a percentage of the principal. The
interest rate is typically noted on an annual basis known as
the annual percentage rate (APR).
The assets borrowed could include cash, consumer goods,
or large assets such as a vehicle or building.

18. A loan that is considered low risk by the
lender will have a lower interest rate.
A loan that is considered high risk will have a
higher interest rate.
INTEREST RATES

19. When are interest rates
applied?

20. Businesses take loans to fund capital projects and
expand their operations by purchasing fixed and
long-term assets such as land, buildings, and
machinery. Borrowed money is repaid either in a
lump sum by a pre-determined date or in periodic
installments.
INTEREST RATES

21. The money to be repaid is usually more than the
borrowed amount since lenders require compensation
for the loss of use of the money during the loan
period. The lender could have invested the funds
during that period instead of providing a loan, which
would have generated income from the asset.
INTEREST RATES

22. The difference between the total repayment
sum and the original loan is the interest
charged. The interest charged is applied to
the principal amount.
INTEREST RATES

23. Assume that you have P500,000 worth of savings and you want
to raise P1,000,000 to start your own business. You could borrow
funds from a bank, form a corporation and sell stock to the
public, or sell corporate bonds.
Which of these alternatives would you choose? Explain how you
would try to convince the bank or investors to provide you with
the funds you need.

24. RENTALS
CONTEMPORARY ECONOMIC ISSUES FACING THE
FILIPINO ENTREPRENEURS

25. A property from which the owner receives
payment from the occupant(s), known as
tenants, in return for occupying or using
the property.
RENTALS

26. Republic Act 9653, better known as the Rent Control
Act of 2009, is the law that protects housing tenants
(especially in the lower-income class) against
unreasonable rent increases. It also provides the
eviction rules that both landlords and tenants must
observe.
RENT CONTROL ACT IN THE
PHILIPPINES

27. The Civil Code has lease provisions that cover
rentals above PHP 10,000 and those not
covered by the Rent Control Act of 2009,
including commercial spaces and rent-to-own
units.
CIVIL CODE OF THE PHILIPPINES

28. MINIMUM WAGE
CONTEMPORARY ECONOMIC ISSUES FACING THE
FILIPINO ENTREPRENEURS

29. This refers to the minimum amount of
remuneration that an employer is required to pay
wage earners for the work performed during a
given period, which cannot be reduced by
collective agreement or an individual contract.
MINIMUM WAGE

30. This law establishes a minimum amount
that an employer can pay a worker for
one day of labor.
MINIMUM WAGE LAW
For example, the current minimum wage for nonagricultural work
is P491 a day and an average of P410 a day for agricultural work.

31. TAXES
CONTEMPORARY ECONOMIC ISSUES FACING THE
FILIPINO ENTREPRENEURS

32. A tax is a mandatory financial charge or some
other type of levy imposed upon a taxpayer by a
governmental organization in order to fund various
public expenditures.
TAXES
Failure to pay, along with evasion of or resistance
to taxation, is punishable by law.

33. Taxes are considered inflows for the
government and outflows for firms.
The way a tax is imposed often is justified in the
basis of one of two general principles: the benefits
received and the ability to pay.
TAXES

34. This principle relates taxes to the benefits
taxpayers receive from a public good.
BENEFITS-RECEIVED TAX
PRINCIPLE
For example, gasoline tax payments increase the more
people drive. The more people drive, the more they
benefit from roads that the gasoline tax finances.

35. to taxes relates t
ABILITY TO PAY TAX
This approach
PRINCIPLEhat those with
a greater ability to pay are taxed more.
Income and property taxes usually rely on the
ability to pay tax approach.

36. There are four main types of national internal revenue taxes:
income, indirect (value added and percentage taxes), excise and
documentary stamp taxes, all of which are administered by the
Bureau of Internal Revenue (BIR).
Corporate Income Taxes - The regular corporate income tax (RCIT) is 30% on
net taxable income. There is a minimum corporate income tax (MCIT) equivalent
to 2% of gross income, which applies beginning on the fourth year of commercial
operation.
Withholding Taxes - Most income is subject to withholding of taxes. If the payor
is classified as a top-20,000 corporation or a top-5000 individual engaged in
business, it is required to withhold on all payments for the purchase of goods (1%)
and services (2%). Withholding taxes on income subject to the RCIT are creditable
against the calculated liability.

37. Indirect Taxes - A 12% VAT is imposed on the gross selling price on the
sale, barter or exchange of goods and properties, as well as on the gross
receipts from the sale of services within the Philippines, including the lease
of properties.
Excise Taxes - In addition to VAT, excise taxes are imposed on the
following: alcohol, tobacco, petroleum products, automobiles, mineral
products, and nonessential goods such as jewelry and precious stones,
perfumes, yachts and other sport vessels.
There are four main types of national internal revenue taxes:
income, indirect (value added and percentage taxes), excise and
documentary stamp taxes, all of which are administered by the
Bureau of Internal Revenue (BIR).

38. Documentary Stamp Tax - A documentary
stamp tax (DST) is required for certain
documents, transactions or instruments specified
in the tax code when the obligation or right arises
from Philippine sources or when the property is
situated in the Philippines.

39. 8 Things that Hinder the Success of Filipino
Entrepreneurs
Entrepreneurship is cool, challenging and fulfilling.
However, it is also hard to succeed. In the Philippines,
aspiring Filipino entrepreneurs face even harder challenges
than their counterparts from the other parts of the world.
There are many external and internal factors that hinder
entrepreneurs in our country in their journey to
entrepreneurial success. The following are only some of
those things:

40. 1. RED-TAPE Despite of the Anti-red tape law in the Philippines, too much
bureaucracy in the government is still palpable. Business owners and
entrepreneurs are still suffering from expensive and time-consuming business
registration and compliance processes. Many entrepreneurs dream of having a
duly registered business and wish to have income tax returns, but the government
is making it hard for them to realize their dreams because of red-tape.
What to do?
Despite of red-tape, entrepreneurs should still work harder and produce more
patience to comply with the government’ requirements. Remember to comply first
before you complain
8 Things that Hinder the Success of Filipino
Entrepreneurs

41. 2. POOR PUBLIC UTILITY SERVICES
Entrepreneurs in the Philippines, especially in the provinces, are
continuously annoyed by brownouts and slow internet connection. These poor
services do not only destroy the efficiency of their business operation but also
cause them a lot of stress.
What to do?
Consider buying a generator or better use solar power which is a more
environment-friendly source of electricity. For the slow Internet, if a reliable
Internet connection is vital to your business operation, try to find a better location
where internet is faster.
8 Things that Hinder the Success of Filipino
Entrepreneurs

42. 3. LACK OF FINANCIAL SUPPORT
For startup owners who are not yet earning operating income, getting financial aid
from the government or obtaining a loan from banks in the Philippines seems to be
impossible.
To get a loan, you must have a collateral or show some years of operating income. It
seems that the ones who can borrow money are those who don’t need to borrow. We can
understand the banks because it’s their business but for the government, I don’t get it.
What to do?
Get financial help from your family or from your close friends who can lend you
money with zero or little interest. Start a professional service business where you only sell
your talents and skills and don’t need big money to operate it.
8 Things that Hinder the Success of Filipino
Entrepreneurs

43. 4. LACK OF MARKETING SKILLS
Entrepreneurs need to sell, build good customer relationships, earn lasting
profits, and continuously grow their business. But many aspiring entrepreneurs in the
Philippines don’t spend enough on marketing campaigns.
They rely too much on their product while forgetting the other elements of
marketing, such as place, price, people and promotion.
What to do?
Learn the fundamentals of marketing and practice your marketing skills. Also
consider hiring a marketing strategist or outsourcing a marketing firm to delegate the
important marketing tasks that your business needs in order to succeed.
8 Things that Hinder the Success of Filipino
Entrepreneurs

44. 5. INEFFECTIVE MANAGEMENT
Many entrepreneurs have passion for business, but don’t have a passion
for management and leadership. Managing and organizing things inside a
business is a tough job. Leading people is an even tougher job.
Without the ability to motivate employees and build stronger teams in their
companies, entrepreneurs cannot succeed and grow their business.
What to do?
Practice your management and leadership skills. Attend seminars and
workshops to champion the leader in you. Learn how to be compassionate and
how to make other people happy. You have to make your team happy, motivated
and more productive.
8 Things that Hinder the Success of Filipino
Entrepreneurs

45. 6. INABILITY TO INNOVATE
Technology evolves rapidly, so as the people. New business processes and
marketing methods emerge. For example, online channels like search engines and social
media are now vital for business promotion. Without adapting to these new strategies and
changes, entrepreneurs cannot become competitive.
What to do?
Know your competition. Spy on your competitors. Don’t be left behind and lose
your competition. Understand that technology is not a problem but rather an opportunity or
a power that you should harness to advance your business. To start adapting to new
technologies, start from the basics. You don’t need to know it all at once. Read a book,
read a blog, or get a mentor to teach you
8 Things that Hinder the Success of Filipino
Entrepreneurs

46. 7. LACK OF CUSTOMER CARE
Businesses need to consistently satisfy and make their customers happy. Without
giving satisfaction to customers, a business cannot survive in a long run. Many
entrepreneurs focus on earning money rather than earning loyal customers.
Consequently, their profit doesn’t last for long.
What to do?
Listen to your customers to understand their current and future needs. Get
feedbacks by putting a suggestion box in your store of office. Interact and answer your
customers’ questions and inquirers online and offline. Moreover, you can also be a
customer of your own business to understand its strengths and weaknesses.
8 Things that Hinder the Success of Filipino
Entrepreneurs

47. 8. LACK OF SELF-GROWTH
Finally, what hinders the success of some Filipino entrepreneurs is the lack of
personal development. They lack self-control to concentrate on their core goals. They lack
self-leadership to lead others.
They also lack patience, compassion and some love to always make their
customers smile. Without good habits and personal qualities, an entrepreneur cannot
advance. Without self-growth, an entrepreneur cannot also achieve business growth.
What to do?
Have enough time to spend alone with yourself. Use this time to meditate and
reflect on things that will help you understand yourself better. Think about your past
mistakes and learn how to correct them so that you can learn from them and become a
better person. Don’t forget to ask advice from your friends, parents and life coach.
8 Things that Hinder the Success of Filipino
Entrepreneurs

48. Activities will be
given

49. REFERENCE:
▶ https://donboscolms.com/wp-content/uploads/2020/10/Lesson-5_Contemporary-
Economic-Issues.pptx
▶ https://www.youtube.com/watch?v=LWaOf5wFyS8