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EFFECTS OF THE VARIOUS SOCIO-ECONOMIC FACTORS AFFECTING BUSINESS AND INDUSTRY
1. EFFECTS OF THE
VARIOUS SOCIO-
ECONOMIC FACTORS
AFFECTING BUSINESS
AND INDUSTRY
AN AUDIO-VISUAL PRESENTATION BY GROUP - 9
2. PESTLE (POLITICAL, ECONOMIC,
SOCIAL, TECHNOLOGY, LEGAL
AND ENVIRONMENTAL)
ANALYSIS
Conducted by owners before forming a
business to make a strategy on
reducing the effect of these external
factors.
4. GOVERNMENT BUDGET
• A government budget is a financial
plan of a government for a specified
period of time, most of the time in a
fiscal year.
• Exhibits the resources available and
how will it be collected and spend over
the year.
6. Illustration 1.1 shows that the priority of the budget is the
Social Services which accounts 36.7% of the budget. Social
services focus on programs and projects for education,
housing, health and social welfare that will elevate the
lives of Filipinos. The second priority is the Economic
Services accounting 28.4% amounting to 1,068.4 billion of
pesos. Economic services are programs and projects of the
government to boost the country’s economy by way of
expanding investments in infrastructure, tourism, trade,
and escalate the generation of employment opportunities.
7. Illustration 1.2 Proposed 2019 Budget, By Major Expense Items
Source: Department of Budget and Management
8. Illustration 1.2 exhibit the priorities of budget based on
expenses like for an instance, the top priority is personnel
services expense which represents the fund for the payment
of the following:
9. PERSONNEL SERVICES
EXPENSE:
1. Salaries, wages and other kinds of
compensation of all the government
employees regardless of status.
2. Hiring of additional teachers, police
officers, and jail guards.
3. Pensions of military/uniformed
personnel.
10. Influences the business by maintaining
and improving the status of the country’s
economy.
For example, the Department of Public
Works and Highways (DPWH) and the
Department of Trade and Industry (DTI)
jointly agreed on the funding of the roads
and bridges which will lead in boosting
the businesses and trade areas.
12. HOUSEHOLDS
• Are the final consumers of products
and services.
• They make demands in the market.
• Households’ tastes and preferences
will determine what to be produced by
the firms.
14. Illustration 2.1 shows the total population, number of
households, and average number of households. This
represents the average number of persons per family. Why
do you think it’s important to recognize the average number
of members per household? This is because you can
establish the demand for your product per household. The
greater the average number of members per household the
greater the demand for the product and services.
15. Average Income - this
determines the purchasing
power of each household
Purchasing Power - this refers
to the level of goods and
services that their income can
buy
16. Illustration 2.2 Total Annual Family Expenditure, by Major Expenditure Group, by Income Class
and by Region: 2018
Source: Philippine Statistics Authority
17. Illustration 2.2 shows that on all income classes, the
expenditure per households for foods, house rental and
utilities accounted at 42.6%, 12.2%, and 8.2% respectively.
It also shows that only a mere 2.8% and 2.7% was open for
education and health. Due to limited purchasing power of
Filipino households they have become price sensitive and
only be able to afford low quality products and services
Households below this poverty line only relies to the
government for the others essentials goods and services
like, medicine and healthcare. Other non-essentials are not
contemplated due to limited in budget.
20. There are external factors that configure
the foreign exchange market (foreign
currency inflows and outflows) through
trading, capital movements, and financial
flows.
21. TRADING
Includes remittance from overseas
contract workers and profit
remittances of foreign companies to
their domestic countries.
22. CAPITAL MOVEMENTS
Include both short and long-term
foreign investments in the country and
investments abroad of resident
citizens of the Philippines.
24. BALANCE OF PAYMENTS
(BOP)
Are aggregate receipt that shares all the
money transfers coming in and out of the
country in different areas of the economy
within a certain time period.
25. In economic sense, if a BOP is on a surplus, this means
that exports exceeded imports or that more foreign
currencies are being sold for pesos than those being
bought with pesos. In contrast, a BOP deficit means
imports exceeded exports or less foreign currencies are
being sold for pesos than those being bought with
pesos.
27. Illustration 2.3 shows how money, goods, and services flow in an
economy between households and firms. In this model,
households provide factors of production, such as labor and
capital, to firms in exchange for income (wages, rent, interest,
and profit). Firms, in turn, use these factors of production to
produce goods and services, which they sell to households. The
income received by households is then used to purchase goods
and services produced by firms, completing the circular flow.
In the context of the circular flow model, the system net flow
measures the difference between the total income earned by
households and the total spending on goods and services. If the
system net flow is positive, it indicates that households are
saving some of their income. If it is negative, it means
households are borrowing or using up savings to finance their
spending.
29. Illustration 2.4 shows that the country imports more
electronic and equipment products as investment as capital
goods for the development of production process in different
sector of economy. This advancement of technology can
eventually lead the Philippines to fully have industrialized
type of economy.
31. Illustration 2.5, on the contrary, shows that by major type
of goods, exports of manufactured goods accounted for 83.9
percent of the total exports or a value of USD4.82 billion in
December 2019. It went up by 19.2 percent from USD4.04
billion export value registered in December 2018.
It also shows that our country imports as much as we
export, it will be interpreted as we hardly earn foreign
currencies.
