La Consolacion College of Iriga

San Francisco, Iriga City – 4431

Tel. No.: 299-2340 Fax No. 299-70-77

Self-Learning Module
in
Applied Economics

Module 6: Types of Industries

Semester: First Semester, Academic Year 2021-2022
Course Code: AE BPS 5
No. of Units : 3
No. of Hours : 3 Hours/Week

Jeorgette N Maninang
Instructor
 Desired Learning Outcomes
At the end of this module, learners are expected to:
identify the different forms of business organization
identify the different levels of industry and types of industries in the Philippines
differentiate the products and services provided by the different industries
apply the tools and techniques learned in identifying business opportunities

Introduction:
One does not form a business or decide for an industry overnight. It requires not just
planning and analysis but essential business knowledge and concept that will benefit not just the
established entity but the whole sector.

Activity 1
List down at least 10 existing businesses in your locality and identify its owner/s.

Name of Business Name of owner (s)

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

Analysis:
Why do you think businesses exist in a society? Do you think it is easy to create or
establish a business? What do you have to do if you want to put up a business in your locality?

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
_____________________________________________________________________________.
Lesson Proper:

How business will be structured is important in establishing a business. The following are
basic forms of business organization.

Sole Proprietorship
This is also referred to as Single Proprietorship - business with only one owner who
operates the business all by himself or employ employees. Its owner may be called as sole
proprietor (male)/ sole proprietress (female). Singly, he/she takes the full control and
management of the entity, enjoys all the profits and shoulders all the losses.
This is the simplest but most numerous form of business organization as it is easy to
establish. In the Philippines, one who decides to form this business registers through the Bureau
of Trade Regulation and Consumer Protection (BTRCP) of the Department of Trade and
Industry (DTI). The business may use fictitious names or otherwise known as trade names.
As much as the owner can freely mix personal assets with business assets, he/she bears an
unlimited liability. This means that the creditor may proceed upon the owner’s personal assets to
answer for the debts/obligations made in the course of business operations.
In terms of taxation, the government imposes tax to the owner and business once as the entity
takes no separate legal existence considering that the owner and the business is only one.

Partnership
This business is owned by two or more persons – minimum of 2 and without limit as to
the maximum owner it can have.
As defined by law, Article 1767 of the Civil Code of the Philippines provides: By the
contract of partnership two or more persons bind themselves to contribute money, property, or
industry to a common fund, with the intention of dividing the profits among themselves. One
who contributes money or property is a capitalist partner while the partner who contributes his
labor, skill or expertise is an industrialist. Division of profit and losses is in accord with the
partners’ agreement and in absence, it is deemed that all owners have equal share.
In comparison with a corporation, partnership is easier to create but just like a
Corporation, it shall be registered in the Securities Exchange Commission (SEC). Partnership
however takes its separate legal existence the moment the contract of partners begins or without
regard as to its registration to the SEC.
Each partner in the business has its rights in the business. Each shall has a share on the
profits and property of the entity. Moreover, each has the right to participate in the management,
inspect partnership books or demand for a formal accounting. Coupled with this are the
obligations each has to bear - to give contribution and share in the losses.
Generally, the partnership has unlimited liability where owners are personally liable for
business debts.
The life of a partnership can be easily ended through dissolution or liquidation.
Dissolution refers to changes in the relationship among the partners. The entity may be
dissolved by reason of insolvency, civil interdiction, death, insanity or retirement of any of the
partners. Liquidation ends business operations and terminates the life of the entity. During
liquidation, assets are sold, liabilities are paid and the residual assets are distributed among the
partners.
Usually, partnership is formed for the exercise of profession.

Corporation
By law, A corporation is an artificial being created by operation of law, having the right
of succession and the powers, attributes, and properties expressly authorized by law or incident
to its existence.
Highlight 4 points about a Corporation
It is an artificial being. It is an entity separate and distinct from its owners.
It is created by operation of law. It needs to be registered to acquire personality. It cannot
be formed by a simple contract or agreement between persons.
It has the right of succession. Ownership properties can be passed by sale, donation or
any other mode of transfer.
The law is the source of powers and attributes of a corporation. The law can likewise
restrict the authority of the corporation in performing acts.

Corporations may be public or private. - Public corporations are those formed or organized
for the government of a portion of the state. Private corporations are those formed for some
private purpose, benefit, aim, or end, as distinguished from public corporations, which have for
their purpose the general good and welfare. Private corporations are divided into stock
corporations and nonstock corporations. Corporations which have a capital stock divided into
shares and are authorized to distribute to the holders of such shares dividends or allotments of the
surplus profits on the basis of the shares held are stock corporations. All other private
corporations are nonstock corporations.
Corporators of a corporation are those who compose the corporation, whether stockholders or
members or both. Incorporations are those members or stockholders or both mentioned in the
articles of incorporation as originally forming and composing the corporation.
The owners of shares in a corporation which has capital stock are called stockholders or
shareholders. Corporators of a corporation which has no capital stock and corporators of a
corporation who do not own capital stock are members.
Before the revision of the Corporate code, Five or more persons, not exceeding fifteen, a
majority of whom are residents of the Philippine Islands, may form a private corporation for any
lawful purpose by filing with the Division of Archives, Patents, Copyrights, and Trade-Marks of
the Executive Bureau articles of incorporation duly executed and acknowledged before a notary
public. However, with the change set in 2020, one person can now form a corporation, and that is
a Corporation Sole or One Person Corporation.
The Revised Corporation Code defines the OPC as a “corporation with a single
stockholder: Provided, That only a natural person, trust, or an estate may form a one person
corporation.” Certain types of businesses however cannot operate as an OPC such as banks,
insurance companies, and publicly listed companies. The cost to pay government fee of an OPC
is about P33,000 (compared to a sole proprietorship – P15,000). An OPC is a separate entity
from the owner, thus will have a limited liability. The entity will have the label “OPC” at the
end. Perpetuity is preserved should the owner pass away. As part of the application process, the
owner is required to designate a nominee who will take over the business temporarily, until a
proper turnover can be done. It’s very easy to switch from an OPC to a domestic corporation.
The OPC just needs to amend the articles of incorporation and follow the required governance of
corporations.
https://www.myoffice.com.ph/2020/01/14/sole-proprietorship-vs-one-person-corporation/

*****

As defined, An industry – or sector – is the whole of all economic activities by

companies, people, and organizations involvedin the production of goods and services for a
particular field. Industries are usually categorized by the goods and services they produce.
https://corporatefinanceinstitute.com/
The type or level of industry is a key player in our economy. Let us then find out the
different levels of an industry.

PRIMARY deals with extraction or cultvation of natural resources on earth.

Examples: farming, fishing, forestry, mining
SECONDARY takes the raw materials produced by the primary sector and process
them into manufactured goods and products.
Examples: food processing, oil refining, light or heavy
manufacturing
TERTIARY referred to as the service sector of the economy.
Examples: banking and finance, education, health services
QUATERNARY often called as information industry.
This deals with information, education, intelligence and ability to
work with technology.
QUINARY Highest level of decision-making in the economy.It involves highly
paid professionals, research scientists, and government officials.

In the Philippines, we adopt the 2009 Philippine Standard Industrial Classification (PSIC)
which is a detailed classification of industries prevailing in the country based on the productive
activities undertaken by establishments which is useful for analysis. This was patterned with
modification after the United Nations International Standards Industrial Classification (UN-ISIC)
Revision 4 to reflect national situation and requirements.
To account, 2009 PSIC consists of the following sectors:

A Agriculture, forestry and fishing

B Mining and quarrying
 C Manufacturing
D Electricity, gas, steam and air-conditioning supply
E Water supply, sewerage, waste management and remediation
activities
F Construction
G Wholesale and retail trade; repair of motor vehicles and motorcycles
H Transportation and storage
I Accommodation and food service activities
J Information and communication
K Financial and insurance activities
L Real estate activities
M Professional, scientific and technical service activities
N Administrative and support service activities
O Public administrative and defense; compulsory social security
P Education
Q Human health and social work activities
R Arts, entertainment and recreation
S Other service activities
T Activities of private households as employers and undifferentiated
goods and services and producing activities of households for own
use.
U Activities for extraterritorial organizations and bodies

https://www.futurelearn.com/ published in August 25, 2021 the top 6 fast-growing

industries in the Philippines -

Construction
Construction is a vast industry that is made up of many types of building and civil
engineering jobs. It includes jobs in carpentry, road construction, bridge development, and home
design. (https://www.infobloom.com/)
As per the Department of Trade and Industry, this industry is one of the main contributors to
the growth of the country’s GDP on the second quarter of 2021.Likewise, it substantially
contributed 69.6 percent to overall capital investments or gross capital formation (GCF) in the
country.
 https://in.pinterest.com/

Manufacturing
Manufacturing industries are those that engage in the transformation of goods, materials
or substances into new products.
Retrieved from https://industry.gov.ph/ -
Manufacturing comprises more than half of the Philippines's industrial sector and
accounts for almost a quarter of the country's Gross Domestic Product (GDP). From an annual
growth rate of 5.4% in 2012, the manufacturing sector grew by 10.5% in 2013 and 8.1% in 2014.
Manufacturing industries have higher employment, income and output multipliers
relative to the agriculture and services sectors. Manufacturing also promotes stronger inter-
industry and inter-sectoral linkages, firm productivity, technological development and
innovation. As such, the growth of the manufacturing industry improves the upgrading and
diversification in the agricultural sector, as well as drives demand for higher value-added
services. Taking all these into consideration, the Philippines is accelerating the manufacturing
sector's competitiveness towards the achievement of sustainable and inclusive development in
the country.

https://www.subpng.com/

https://www.pinoybisnes.com/ provides small manufacturing ideas that you can start at

home:
a. Furniture Making
b. Drinking Water business
c. Soap manufacturing business
d. Commercial Bread Baking

Tourism
The set of industries which facilitate by providing infrastructure and products and
services and make possible travelling for different purposes and travelling to places of leisure
and business interests. Tourism industry is all about providing necessary means to assist tourists
throughout their travelling.( http://www.market-width.com/Tourism-Industry.htm)
Business Services
Encompasses many different categories of business operations; all of them provide some
sort of non-financial service to other companies. To name a few, these services include
advertising, marketing, consultation, logistics (including travel and facilities services), waste
handling, staffing services, shipping, administration, and security. This industry produces no
tangible product as it works to provide support to the business.
Retrieved from https://industry.gov.ph/ -
Services is actually one of the strongest and fast-growing sectors of the Philippine
economy. Its gross value added contribution reached to 57% in 2014 (from 36.6% in the 1970s),
and it also grows by an average of 6.3% from 2000 to 2014.
While this performance is considered as stellar by most analysts, there is still huge
potential for increasing value-added in services outputs, as well as deepening participation in
global value chains. Taking advantage of this unique competitive advantage in the services
sector, the Philippines aims to position itself as the core of services trade in Southeast Asia and
the Asia-Pacific region.

https://dbss.co.in/
Fast Moving Consumer Goods and Retail

https://www.investopedia.com/ defined consumer goods sector as a category of stocks

and companies that relate to items purchased by individuals and households rather than by
manufacturers and industries. These companies make and sell products that are intended for
direct use by the buyers for their own use and enjoyment.
This sector includes companies involved with food production, packaged goods, clothing,
beverages, automobiles, and electronics.
The Philippines’ Fast Moving Consumer Goods (FMCG) and Retail industries are two of
the main factors behind the country’s economic progress. This sector accounts for 23% of the
whole services industry and is regarded as one of the Philippines’ most important development
drivers. This trend looks set to continue, as more enterprises enter the market, diversify, or
expand their operations abroad.

Technology and Telecommunications

Information and communication technology or simply "ICT" refers to technologies
associated with the transmission and exchange of data in the form of sound, text, visual images,
signals or any other form or any combination of those forms through the use of digital
technology. It encompasses such services as telecommunications, posts, multimedia, electronic
commerce, broadcasting, and information technology. (https://www.tesda.gov.ph/)
The Philippines’ ICT industry has experienced tremendous expansion in recent years.
With the number of start-ups in the Philippines on the rise, this industry is a source of enormous
opportunity and promising future possibilities. Furthermore, with the recent launch of a third
telecommunications carrier, more Filipinos working abroad are expected to return home to look
for work.
As technology grows more widespread in the Philippines, the demand for graduates with
a strong educational background has increased. Fresh graduates should keep a look out for job
openings in this field. Software engineers and managers, as well as developers, project managers,
and human resource experts, are in high demand.
While being tech-savvy is desirable, applicants with sales, finance, or marketing skills are
also sought after. People management and digital marketing and analysis are the most valuable
skills in this industry.

https://mec.ph/
 *****
Agriculture also plays a vital role in the Philippine economy which was developed as
agribusiness.
Retrieved from https://industry.gov.ph/ -
Agribusiness refers to agriculture-related activities that put farmers, processors,
distributors, and consumers within a system that produces, processes, transports, markets, and
distributes agricultural products.
The transformation of agricultural farming into a thriving agribusiness-driven sector
entails acquiring farming technologies, training in more sophisticated farming techniques,
creating stable supply chains, establishing transport and agricultural infrastructure, investing and
research and development, and securing a reliable property rights regime.
These activities can contribute not only in diversifying and increasing the value of
agribusiness outputs, but also contribute to the inclusive growth and rural development agenda of
the Philippine government. Because of this, the agribusiness sector is positioned to largely
contribute to the industrial development of the Philippine economy.

List of Agri-business in the Philippines:

Hog or Pig Farming - .

the raising and breeding of domestic pigs
as livestock, and lly for food (e.g. pork,
bacon, gammon) and skins

https://www.freeimages.com/premium/pig-farmer-966328
https://

Poultry Raising
Raising of birds domestically or
commercially, primarily for meat and eggs
but also for feathers

www.gograph.com/
Cattle Raising
Includes cow-calf operation (Cows and
https://
bulls are raised to produce calves in this type
of operation. Calves are then raised until
they are weaned from their dams at seven to
eight months of age. After weaning, they can
be sold immediately, or raised for a few
more months for use as replacement stocks www.123rf.com/photo_71809977

or sold for fattening); breeder farm

operation (The main interest of the raisers is
to produce animals for breeding purposes.
Thus, the calves are raised until they are
ready for breeding, provided they passed the
selection criteria); growing fattening
operation (requires simple facilities and
level of management. The project is also
shorter and the return of investment is
relatively higher than the cow-calf
operation.)

Goat Raising
Raising of goats in farms, backyards and
even ranches.
Filipino opt to raise native goats as it does
not require massive investment and cheaper
than purebreds. It also multiplies faster than
cattle or carabaos.
https://www.shutterstock.com/

Rice Farming
Planting and growing of rice.

https://www.dreamstime.com/

Vegetable Farming
Growing of vegetable crops, primarily for
use as human food.

https://www.istockphoto.com/
 Fish Farming
The process of raising aquatic organisms
commercially in a controlled or semi-
controlled environment to increase
productivity.

https://startuptalky.com/
Corn Farming
Planting and growing of corn.

Faith Integration:
Creating a business and choosing the industry you want to be in is the same as believing
and having faith – that is recognizing its worth and value while contributing something good to
the society.

Learning Activity 2:

Identify the level of industry of the following business:

_____________________

_____________________

_____________________
 _____________________

_____________________

Learning Activity 3:
From your activity 1, create a 2-column table. Put the business logo of the businesses you have
identified and determine which industry does each belong in Column 1 and 2 respectively.

Business Logo Industry

Learning Activity 4:
Food and business management is one great idea to have this time. If you are to start your
own business related to this trend, what product will you make and why? What form of business
will you consider then?