This document discusses contemporary economic issues affecting Filipino entrepreneurs. It defines what an entrepreneur is and how entrepreneurship works, involving creating a business plan, acquiring resources, and providing leadership. It then discusses specific issues like investment and interest rates, rentals, minimum wage, and taxes that impact Filipino business owners. High interest rates and rents, rising minimum wage, and high taxes can all decrease opportunities for entrepreneurs by increasing costs, while low rates and tax breaks can foster more investment and business startups. The document provides background on these economic factors and their effects on Filipino entrepreneurs and small businesses.

1. Contemporary Economic
Issues Affecting The
Filipino Entrepreneur
Lesson 5

2. FR
Add a footer 2
What is an Entrepreneur?
An entrepreneur is an individual who creates a new business, bearing most
of the risks and enjoying most of the rewards. The process of setting up a
business is known as entrepreneurship. The entrepreneur is commonly seen
as an innovator, a source of new ideas, goods, services, and business/or
procedures.
Entrepreneurs play a key role in any economy, using the skills and
initiative necessary to anticipate needs and bringing good new ideas to
market.

3. FR
Add a footer 3
How Entrepreneurship Works?
Entrepreneurship is one of the resources economists categorize as
integral to production, the other three being land/natural resources, labor,
and capital. An entrepreneur combines the first three of these to
manufacture goods or provide services. They typically create a business
plan, hire labor, acquire resources and financing, and provide leadership
and management for the business.
Economists have never had a consistent definition of "entrepreneur" or
"entrepreneurship" (the word "entrepreneur" comes from the French
verb entreprendre, meaning "to undertake").

4. FR
Add a footer 4
Who are the Filipino
Entrepreneurs?
• Practicality and common sense. The most successful Filipino entrepreneurs are not
necessarily those who have the best education, or have an impressive academic
record. They are described as street smart.
• Passionate about business. When a Filipino entrepreneur decides on what business
he will establish, usually it will be related to something he or she is passionate
about. This passion drives him to learn everything possible about the products or
services he is offering to customers. The same passion also gives the Filipino
entrepreneur a strong commitment and involvement in hi/her enterprise.
• Confident and self-reliant. The Filipino entrepreneur is always hands-on and self-
reliant. When he is just starting out his business, he is practically able to do
everything involved in running it-from finding the best suppliers to renting the place
of business, to the marketing, selling and customer relations, and even accounting.

5. FR
Add a footer 5
Contemporary Economic Issues
Affecting The Filipino Entrepreneur
INVESTMENT AND INTEREST
RATE
RENTALS
MINIMUM WAGE
TAXES

6. FR
Add a footer 6
INVESTMENT AND INTEREST RATE
In putting up business, it is necessary to know the initial investment
of the entrepreneur so that he able to assess if he needs additional
investment. What is investment? It is defined as building up the
capital stock for more future production and consumption. When the
entrepreneur has no enough investment, he will resort to borrowings
or borrow from financial institutions like banks. The borrowings bear
interest rates. This is the amount of interest due per period, as a
proportion of the amount lent, deposited or borrowed.

7. FR
Add a footer 7
INTEREST RATE
– interest rates play a key role in increasing capital stock, which in turn affect
investments.
– there is a negative or inverse relationship between investment and interest
rate.
 the higher the interest rate, the lower the quantity of investments; the lower
the interest rate, the higher the quantity of investments
Effects to entrepreneur:
Low interest rate attracts more entrepreneurs to invest, while
high interest rates lessen the opportunity of the entrepreneurs to
start their business in the country.

8. FR
Add a footer 8
RENTALS
As an investor, what will you do if you don’t own land or space to be
used for your business? The answer is rent or lease a land or space.
But, how does rental affect your business operations?
Rent
– It is typically refers to the use of property for a certain
amount
– It is the price paid for the use of land and other
natural resources or factors of production that is in
fixed supply.
– Rent has been traditionally associated with land, which is
a fixed factor of production.

9. FR
Add a footer 9
RENTALS
Effects to entrepreneur:
In Income Statement, rental fee is in expense account which means
the bigger the place/space, the higher the cost. Also consider the
location; it is more costly to rent in urban areas than in rural areas. For
example, the rental fee of 100 square meter of land in Pasig City is
P50,000.00 per month, but in Pampanga with the same area is only
P25,000 per month. So, the size and location matters when planning to
rent.

10. FR
Add a footer 10
MINIMUM WAGE
Definitions of Wages
“A wage may be defined as the sum of money paid under contract by an
employer to worker for services rendered.” -Benham
“Wages is the payment to labour for its assistance to production.” -A.H.
Hansen
‘Wage rate is the price paid for the use of labour.” -Mc Connell

11. FR
Add a footer 11
MINIMUM WAGE
What is minimum wage and how it is determined? It refers to the
lowest wage permitted by law below which if paid by employer will
subject him to penalty from the government. In the Philippines, the
Department of Labor and Employment (DOLE)issued wage order for
minimum wage earners effective January 1. 2020.But how was
minimum wage determined? Minimum wage rates are determined by
factors such as poverty threshold, prevailing wage rates as
determined by the Labor Force Survey, and socio-economic
indicators (i.e. inflation, employment figures, Gross Regional
Domestic Product, among others), which insure better workers
protection.

12. FR
Add a footer 12
MINIMUM WAGE
The National Wages and Productivity Board (NWPC) Wage Order NO.
RBIII-22, the prevailing minimum wage for non-agricultural establishments
employing 10 or more workers in the region 3 except Aurora shall pay their
employees at P420.00 per day, while in the Province of Aurora, workers in
the non-agricultural sector will receive minimum salary of P413.00 daily.
Effects to entrepreneur:
Over and above minimum wage is the voluntary productivity-based pay,
which encourages workers and enterprises to become more competitive
and productive by rewarding employees supplementary pay based on the
quality of their performance.

13. FR
Add a footer 13
TAXES
Tax is the lifeblood of the economy. It fuels the social services
provided by the government to its citizen. But how does tax affect the
entrepreneur?
– Without taxes, the government will not be able to provide services
to its people, such as public works, health, education, defense and
police protection, and social services.
Taxation is the act of levying tax so that the sovereign, through its
law-making body, can raise income to defray the necessary expenses
of the government.
– It is an inherent power of the state to demand enforced
contributions from the people for public purposes .

14. FR
Add a footer 14
TAXES
Effects to entrepreneur:
High taxes tend to lessen investment because this is considered an
additional cost on the part of the entrepreneur. Low taxes mean fewer
government projects such as school buildings, roads, bridges and
providing social services to people. How can entrepreneurs gain from
tax? Government gives considerations to new entrepreneurs with tax
holiday up to 6 years and vat exemption for purchase of supplies of the
firm that is going to export 100% of its product.

16. FR
Sources
Module 5 Contemporary Economic Issues Facing the Filipino Entrepreneurs by: Sherry Amour
Boado Book Tittle: Applied Economics Diwa Publishing
Investipedia: What is Entrepreneurship?
Contemporary Economic Issues Facing the Filipino Entrepreneur
Scribbed Uploaded by: Juvell Cudal
Wages: Definition, Types and Other Details by: Manoj Kumar
https://www.economicsdiscussion.net/wages/wages-definition-types-and-other-details
Applied Economics
Quarter 1 – Module 6:
Effects of Contemporary Economic Issues Affecting the Filipino
Entrepreneur
DEPED MODULES and Commons
16