Chapter 3 – Economic Development and Entrepreneurship

CHAPTER 3 – ECONOMIC DEVELOPMENT AND

ENTREPRENEURSHIP

Learning Objective:
At the end of the chapter, you are expected to:

1. Describe the Economic landscape in the present time.

2. Discuss the role of employment as contributory factor in economic
development.
3. Discuss the different factors in determining economic growth.
4. Discuss the role of education in economic development.

The Philippine economic landscape remains to be the spring board of

questions when economic development is the focus of discussion. The
leaders of this nation aim greatness for the Filipino people especially during
the time of election. Politics becomes an investment for power and money
and it is not the true essence of public service.

Two important factors hinder our growth as a nation:

1. Poverty is the making of its people and the kind of leaders that holds
the wheels of economic fortune.

Our country is still dominated by poverty and the unjust

distribution of wealth. Income is in the hands of the few
opportunists. Power is in the hands of traditional and family
politicians as they collect wealth through graft and corruption.

2. Population explosion is another factor that contributes to the poverty of

our nation.

We cannot increase the size of the land that is cultivated by the

farmers, yet the family size continues in number. Productivity in
agriculture remains the same through the years. Economic
activities in the countryside remain in the hands of few
entrepreneurs who take advantage in the marketing of products
to the urban center.

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The following factors are contributory determinants to our slow growth

in economic development as a nation.

1. THE FILIPINO VALUES AND CULTURE

a. Love for Imported Products – The country’s colonization for

centuries has developed in the Filipinos a culture of dependence
and love for foreign products. We still feel that imported products
are superior in quality and we look upon our own products as
inferior. We love the taste of imported chocolate, love the design of
imported clothing than those made locally. Buying imported goods
develops the economy of the foreign countries and drains the
Philippine economy.

b. Our Values of BAHALA NA - A true Filipino entrepreneur will not

put his destiny in the hands of the BATHALA. He must act with
strong determination and push for the development of his ideas.
Innovation and the creation of more goods and services are in the
hands of entrepreneur who has the ability to make new and
innovative products or create a new channel of distribution.

c. Our Crab Mentality – crab mentality is the action of people to pull

down others who are about to get out of the verge of poverty and
reach for their success. Enviousness is the making of people who
could not think better for himself. There are many of us who
destroy others yet when he look at the mirror we are not better than
them. An example of Lito opening a Sari-Sari store and Lino
opening the same kind of the business on the other corner.
Thinking that someone on the other corner is making good in selling
barbeque or a Litsong Manok, he opens the same outlet not
thinking that competition is pulling down both of their profit. Why
can we not think of anything better rather pulling the other fellow in
his entrepreneurial activity?

d. The Mañana Habit - MAMAYA NA or BUKAS NA is a culture that

is brought to us by the colonizers who were fond of SIESTA after
lunch time. The real entrepreneurs do not believe in siesta as they
keep working until things are done according to their plans. Hard
work and dedication are the qualities in the making of successful
entrepreneurs.

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e. The Value of Time – when we are invited to attend a party, a

meeting or a gathering we often say “Filipino time” meaning to say
we do not come on the specified time instead we are always late in
attendance. We take all the time in our hands, not thinking that the
meaning of progress rest in our value of this precious gift of time.
Our Asian neighbour, such as the Japanese and the Chinese are
noted for their sense of value for time. They became successful
because they are always on time. Meeting with them is meeting on
the dot or else you will not be able to get important business with
them. Time wasted is opportunity lost in making a fortune.
Entrepreneurs get the golden opportunity as they do not lose time
to make money and fortune.

f. Our Values of HIYA – HIYA could be a positive value in dealing with

business condition. It could be a propelling reason for us to create
better service and proper dealings in business transaction. Our
beautiful country is noted for hospitality, a value that many people
of the world admire, yet many foreigners are afraid to go to our
country because there are still some of us who are “WALANG
HIYA”.

g. Fiesta and Social Occasions – the celebration of fiestas of Saints

that we inherited from the Spanish colonizers could be another
factor in the slow development of our economy. People especially
in the country side would
have all their savings spent in a day of the fiesta, entertaining guest,
only to find out the next day that there is no more rice to feed their
children. There could be nothing wrong with celebration as it is a
part of happy Filipinos. The negative side is the little money that we
could spent in more important business that would generate more
profit in the long run.

2. EMPLOYMENT OPPORTUNITIES
Employment opportunities remain to be elusive among Filipinos.
The industries in the economic zones and other urban centers could
not accommodate the growing employable people. Majority of the
workers still receive minimum wages that barely support the needs of
five members of the family. For example a family of seven with the
father as the breadwinner with a minimum wage of P350.00 a day can
only be consumed for food. Other basic needs are not met.

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a. Employment is One Great Factor in Economic Development

The entrepreneur provides the necessary work for people

that propel the economic development of the nation. The money
in circulation for wages and salaries will help local industries to
develop new products and services that generate more small
and medium enterprises.
Contractual employment is still the name of the game in
most factories as multinational corporations still take advantage
of the low labor cost. Workers are lured to this opportunity as
there exist no better employment. The national labor laws still
favor multinational interest for fear that they will pull out their
investment when better employment terms will be implemented.
More regular employment also mean more income taxes from
employees. Security of tenure will provide a peace of mind
among local employees to support their children’s education.
b. Income Opportunity in the Countryside is still subsistence in
nature
Most people are still dependent on old farming and
fishing system. We have not introduced modern farming
technology and the proper culture of our fishery resources. Our
corals and fish sanctuary are damaged by destructive methods
of fishing. Our vast shoreline should be developed into haven
for fishery development if new methods and technologies could
have been put in place to supply the food of the nation. We
need to introduce new technology to make farming more
productive with the introduction of new technology to improve
irrigation, to improve working condition, and to increase
productivity of the farmers. Technology is one important factor
in the development of the economy and entrepreneurial activity.
Upgrading of technology in farming and fishing can boost the
income opportunity in the countryside.

3. The Failure to Develop Better System Education

The government spent billions of money for education to

prepare the population for gainful employment or to become small and
medium entrepreneurs. Our aim is to be morally, spiritually and
economically stable for them to live decently as we eradicate them from
the bondage poverty.

We have many underemployed and unemployed college

graduates with the hope of them passing the licensure examination and

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getting employed locally of abroad. The quality of education failed to

make them pass the examination and many ended in other occupation.
Many ended up as factory workers, security guards and househelper.

The product of education should match the need of the industry.

A mismatch is a wasted investment. The new K to 12 Educational
Program of the Aquino administration could be an answer to this
elusive educational development that will help propel the economy of
the country.

4. Availability of Needed Capital

The banks are sources for limited capital for small and medium
enterprises. These resources are available in the banking institution.
The poor people are not aware of these great opportunities and they do
not know how to go about it to avail of the funds. Small business
owners tend to avail of the loan from money-lender or “bumbay” to help
them finance their business.

Based on the above discussion, entrepreneurial activities in the local

levels and the countryside have not develop when all the opportunities were
provided by the government for local entrepreneurs. We remain to be poor
and the potential entrepreneurs continue to search for available funds to
finance their enterprises.

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Chapter 3 – Economic Development and Entrepreneurship

ACTIVITY 5 – ECONOMIC DEVELOPMENT AND ENTREPRENEURSHIP

Instruction: Interview at least five (5) different entrepreneurs/small business

owners in the locality and find out the problems they face and the support they
need from government and private assistance agencies. Use the sample matrix
below. It is encouraged that the interview should be conducted through mobile
phone or by the use of social media following the safety protocols by IATF.

Owner’s Name: ________________________________________________

Type of business/product/service offered:
_____________________________________________________________
_____________________________________________________________

Brief Description/Remarks by
Types of Problems
Interviewer

Problems with family, relatives,

workers, and other interpersonal
relationships

Problems with money, including

where to borrow money from and
how to borrow money

Problems with how to use

technology; lack of modern
technology

Problems with family, relatives,

workers and other interpersonal
relationships

Problems with raw materials and

where to source them

Problems with high cost of raw

materials

Problems with easier ways to

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produce a product or deliver a

service

Problems with transportation and

moving the goods from the
production area to the market

Problems with importation of raw

materials and machinery

Problems with government support

for lending and finding capital and
other assistance required

Problems with peace and order

within the vicinity of the production
area

Other perceived problems

Collate the answers from above. Rate these problems from “most
common” to “least common”. Imagine how the problems could be
answered or solved by filling out the second and third columns of the matrix
below.
Most common
Possible solutions from Possible solutions from
problems ranked from
government agencies private agencies
highest to lowest

ACTIVITY 6 – ENTREPRENEURIAL BENEFITS TO LOCAL COMMUNITY

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Chapter 3 – Economic Development and Entrepreneurship

Instruction: Using the figure below, think of the ways by which

entrepreneurship becomes beneficial to the entrepreneur as well as to the
whole community. Fill in the appropriate boxes.

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