TOPIC 3

CONTRIBUTION OF ENTREPRENEURS IN THE PHILIPPINES

Proverbs 14:4 
Where there are no oxen, the manger is clean, but abundant
crops come by the strength of the ox.

At the end of the topic, the students are expected to:

1. Discuss the status of entrepreneurship in the Philippines;

2. Describe the different role awaiting them as entrepreneurs;
3. Integrate the different roles they have learned into the decision –making
processes that entrepreneurs must understand; and
4. Put themselves in the place of entrepreneurs who are about to embark on an
undertaking that will affect their entire lives.

The focus of this topic is on the entrepreneurial landscape where the would be
entrepreneur will be situated. Then it will address the roles of would be entrepreneurs,
who will pursue an entrepreneurial career in the Philippines.

Poverty incidence in the Philippines remains above 20 percent of the population and
the Philippine government addresses this issue through entrepreneurship.
Entrepreneurship can provide the solution by creating wealth, jobs, and social
empowerment. This lesson provides an overview of the entrepreneurial activities in the
Philippines, its opportunities and challenges.

Entrepreneurship in the Philippines setting

The Philippine government, recognizing the relevance of entrepreneurship to the

economy, had initiated through the Department of Education (DEPed) the inclusion of
subjects on Entrepreneurship in the intermediate grades and high school. Even before
this compulsory inclusion, entrepreneurship has been among subject offering and
course majors in the college level and also in the post – graduate schools.
 The government does not only prescribe the academic requirement of the
entrepreneurship, it also provides government incentives for more people to go into
business. In addition government projects like trade fairs, trade missions, etc. are being
pushed to help entrepreneurs. Established businesses also serve as big brothers to
would be entrepreneurs. Civic Organizations or non-government organizations called
NGO’s help promote entrepreneurship.

The most common enterprises in the Philippines are Micro and small scale
enterprises. These enterprises are capitalized by a single owner who produces single
or very few products (or services) and sell to small, limited domestic markets. The
Philippines, through the small and medium Enterprise Development Council, has
categorized enterprise according to size in terms of assets and employment as follows:

Category Asset Size Number of Employees

Micro 3 million and below Below 10
Small 3 million and 1 peso to 15 10 to 99
million
Medium 15 million and 1 peso to 100 to 199
100 million
Large 100 million and 1 peso and 200 above
above

In terms of employment generated, the large firms contribute about 30% to

employment whereas the combined firms of micro, small and medium contribute to 70%
of total employments. The Philippine government is very supportive of micro, small and
medium enterprises as exemplified by the Magna Carta for Micro, Small and medium
Enterprises the legal framework, which was enacted way back in 1991 as (RA 6897)
then amended in 1997 as RA 8289. In 2007, the was once again amended as RA
9501. This law created the Small Enterprises Development Council to discuss and
prepare the policies and programs for implementation by various agencies involved in
MSME development.

MSMEs make up 25% of the country’s total export revenue. It is also estimated
that 60% of all exports in the country belongs to the MSME category. MSME are able to
contribute in export through subcontracting arrangement with large firms, or as suppliers
to exporting companies.

The Department of Trade and Industry, the Secretariat of the MSMED Council
prepared the DTI Road Map as follows:
  Promote services export and nurture the capabilities of competitive exporting
enterprises that produce high quality products.
 Sustain a more focus and aggressive export promotion campaign to maintain if
not expands existing, as well as target new and emerging markets.
 Realize foreign market access arising from bilateral, regional and multilateral
negotiations.
 Improve the business environment that directly impacts on exporters.
 Pursue a country – imaging program to promote the Philippines as a source of
quality and competitive products and services.

Activity 1 (DTI in HOT SEAT part 1) Conduct an interview with a personnel from the
agency and ask how the law supporting MSME evolve. Ask how one amendment
differs from the other amended law. It should be recorded then each member of the
group (4 members maximum) must draw a conclusion of the interview as to how great
the government support the entrepreneurs in this category.

Activity 2 (DTI in HOT SEAT PART 2). Using the matrix below, investigate the
distribution of establishment in Bohol. No municipality should be disregarded. Prepare
a chart in explaining the distribution of establishment. This is an individual activity.

District Micro Small Medium Total SMMEs

District 1
(municipalities)
(municipalities)
District 2
(municipalities)
(municipalities)
District 3
(municipalities)
(municipalities)

Activity 3 (DTI in HOT SEAT PART 3). Investigate how the agency, executes their DTI
road map through MSMED council. Prepare a flow diagram in explaining the map and
identify its bottleneck in achieving its goal. Make a conclusion and even
recommendation in order for its goal to be more achievable and in achieving it in lesser
time.

Entrepreneurial Challenges in the Philippines

 Every entrepreneur faces their own share of struggles or challenges. However,
there are some that are similar and cut across every industry. Such challenges provide
great entrepreneurial lessons when one overcomes them. Therefore, starting a new
business at any age is fraught with risk. This shouldn’t discourage those who are
aspiring to be entrepreneurs.

In a third world countries like the Philippines, there are four major challenges to
entrepreneurship development these are:

 Low start-up capital;

 Lack of entrepreneurial education and training;

 Inadequate business development support services; and

 Lack of access to financing.

Other problems that would-be entrepreneurs or aspiring entrepreneurs have to

hurdle include the following:

1. Relatively little specialization. MSMEs tend to manufacture anything

and everything that the customer order, thus making it difficult for them
to standardize their products. They are hard pressed to specialize
because they do not know what orders will come the next day.

2. Handling a variety of products. This is a direct result of having no

specialization in the business. The owner is forced to handle many
varieties of product that in the short run become difficult to sell.

3. “Backwardness” in the production technology and management

know-how. Many MSME owners still do not take advantage of the
benefits of the technology. They haave no up-to-date skills on the use of
computers and software that can ease their jobs of their workers. They
are some owners who have negative attitudes toward new technology,
and other new ways of doing things.

4. Close personal Contact. The owners, suppliers, hired managers, and

workers are always in close contact with one another giving rise to close
personal relationships that sometimes make it difficult for them to be
 objective and to commit themselves to work for the goals of the
organization.

5. Handicaps in obtaining capital/credit. Many owners find it difficult

to borrow money from banks and other formal sources of credit. They
need help in preparing business plans often required by banks.

Entrepreneurs give so much of themselves when starting or running an enterprise. In

turn they need support and assistance from those around them. The local and national
government should be the number 1 support of MSMEs. Besides the government,
entrepreneurs need an environment that encourages creativity, risk taking and self-
achievement.

Activity 1. (Draw me a picture). This is an individual activity. Imagine an

environment that you think is an ideal place to invest in business then with that
imaginary place, draw it in an illustration board. (you may ask help but the concept
should be yours)

Activity 2. (Knowing the challenge). With a group of 4, interview at least five

different entrepreneur in the locality to find out the problems they have encountered
and the support they NEED from the government and private assistance agencies. Use
the matrix below as your guide:

Owner’s Name:_____________________________________
Type of business/product/service offered: _________________________________

Types of Problems Brief Description /Remark by

interviewer
Problem 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
Problem with raw materials and where to
source them
Problem with high cost of raw materials
Problems with easier ways to produce a
product or deliver a service
Problems with transportation and moving
the goods from the factory to the market
Problems with importation of raw materials
and machinery
Problems with government support for
lending and finding capital and other
assistance required
Problem with peace and order within the
vicinity of the factory or the plantation or
the waters where the entrepreneur fish
Other perceived problems

Activity 3. (Finding Solutions). Let each group gather their answer from activity 1.
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 problems Possible solutions from Possible solutions from

ranked from highest to government agencies private agencies.
lowest

Roles expectation by entrepreneurs in the conduct of business

Entrepreneurs are expected to man up in the manner of conducting business.

Thus, he needs to master the art of compartmentalizing his roles, attitudes,
personalities and dealing with people, situation and entrepreneurial dealings. The lists
given are the roles:

1. Promoters. The ability to scan the environment, identify opportunities,

marshal resources and execute ideas is needed to be successful and with this
ability promoting is as easy as pie for them.
2. Partners. Running the business alone is difficult for an entrepreneur; he knows
that entrepreneurship is not a one man shop. He needs other people to keep
the business growing and thus soliciting other people’s idea is needed because of
the following reasons:

 The degree of success or failure factor involved and the complexity of a

business idea may require more than one person to run it;

 The influence, experience and capacity of others may be useful; and

 Friendship or acquaintances may be consolidated through joint business

association.

3. Shareholders. The would be entrepreneurs would participate as shareholders

under the following circumstances:

 When the business requires too much capital

 When they do not want to commit their full time to the enterprise

 When risk maybe reduced by spreading their investment portfolio

 When they do not have the capacity to manage such an enterprise.

4. Directors. Entrepreneurs most of the times contributes positive ideas for the
firm to be more competitive and relevant. Such would include the following

 Ensuring compliance with the legal requirement and safeguarding the

interest of employees, especially women, particularly in the context of
decent work.

 Protecting the interest of shareholders in the context of return on

investment; and

 Ensuring that business is conducted honestly and diligently, and is devoid

of fraud and deceit and ensuring that social responsibilities and
expectations are met.

5. Organizers. An organizational structure is a requisite for an entrepreneur to

have an effective control or monitor operation and facilitate proper
 communication with workers. Organizational structures can be formal or
informal, for instance:

 Various members of the family are assigned various positions; and

 Various employed assistant are given administrative position in the

running of a small business.

Activity 1. (Lifestyle of Choice) Recognize and examine what are your personal
values, interest and experiences and relate it to your future work in mind and lifestyle
of choice. Your personal values and interest are things you think are most important.
Your choice of job may depend on what you value and what interest you most. Using
the matrix below, try to contemplate what your life would be if you consider personal
values and lifestyle in your chosen career:

Things to ponder about your Conclusions: what

Personal values Lifestyle
future job/business should you do?
The job you choose may affect
where you live
The amount of money you earn
may affect how you live
The job you choose may affect
how you live
The job you choose may affect
who your friends are
The job you choose may affect
your family
The job you choose may affect
your personality

Activity 2. (Monologue) Compose a monologue piece about the roles of

entrepreneur in conducting business. Perform the monologue after completing it in a
video. Submit it through email or social media or depends upon stipulated by the class.

Creative decision making

To be entrepreneurial, creativity is a must not just in its daily tasks but especially
in decision making. Beliefs in themselves in finding the best verdict and judgement is
essential for entrepreneurs and a distinguishing mark. Decisions made by the
entrepreneurs always create impact on the future of the establishment. Intuitive
decision-making ability, a most valuable entrepreneurial resource, comes from the
experience of being exposed to making decisions in increasing complex situations.
 An entrepreneur must approach problems from different angle and viewpoints
and look for new ways to resolve them. Given a particular situation, the entrepreneur
must use insight to visualize the potential outcomes and consequences of alternative
solutions. But because most entrepreneurial decisions are subjective, they cannot be
completely free of emotional involvement. To see past the emotional aspect of a
decision, he should identify the advantages and disadvantages of a potential solution;
this will help him to see the outcomes of a specific decision more objectively.

The “scientific method” of decision making indicates that there are specific
procedures to be followed to solve problems and make a decision. The process usually
involves the following steps.

1. Identify major problems.

2. Determine the major causes of the problem.

3. Determine potential solutions to the problem.

4. Evaluate potential solutions.

5. Select the best solutions.

6. Implement the solutions.

7. Verify that the solution is correct.

Although this rational approach is logical and sensible, this “scientific method”
will not necessarily make the solution to the problem work. One’s leadership and power
are also needed to implement a solution successfully. A certain amount of firmness and
enthusiasm is required in implementing a decision. Entrepreneurs must be positive
about the future outcomes of the solution. One cannot waste time in second-guessing
a decision. Once an entrepreneur implements a decision, one must eave behind all
doubts and uncertainties.

Timing is extremely important in decision-making, especially when a business is

growing. In some instances, decisions must be made quickly and implemented
immediately. Some entrepreneurial decisions are made without the benefit or
knowledge of future conditions, developments or changing conditions. Effective
monitoring of the steps taken to implement the decision will reveal any weaknesses in
this decision and provide information for follow up actions by the entrepreneur.
 Critical decisions are not easy to make, but they may be required frequently.
The worst thing entrepreneurs can do than making a wrong decision is not making
decision at all. Decision making is an art; the more it is performed, the more one
becomes an expert in deciding well. Once a problem has been defined, and all relevant
information and data have been collected, one must identify possible solutions to the
problem. One must be able to compare various alternative solutions in relation to
potential advantages and potential disadvantages will indicate how each potential
solution will be beneficial. The potential disadvantage will illustrate how the potential
solution will not be beneficial. An advantage or disadvantage maybe similar for two or
more alternative solution and one must identify the potential consequences as best as
one can. The result of analysing the potential advantages and disadvantages should
equal the potential net result of implementing a particular solution.

Activity 1. (Pursuit of Happyness Movie Review) making decisions is difficult,

much more if you are an entrepreneur where in your actions could create a domino
effect. Watch the movie a “Pursuit of Happyness” (the movie is spelled that way) a
2006 movie. Identify the difficult decisions the main character made and how it paid
the way for him to succeed. What are the sacrifices he made to succeed? Use the
different matrixes below to thoroughly analyse the movie. A warning: Bring tissue
while watching the film.

Decision Sacrifices The result of the

sacrifices or decision

Character Describe the Attitude of the Relevant of Lessons Learn

(name) character Character the role from the
(briefly) Character

Reasons why entrepreneurship grow..

 Aside from the mandates of the government to encourage the interest of
students towards entrepreneurship, research has proven that there are plenty of
reasons why the interest of it sprouts. The following are some of the reasons:

1. Industry structure

2. Emergence of new technologies

3. Deregulation and Privatization

4. Formation of new business communities

5. Increasing demand for variety

6. Increase demand for service sectors

7. Government Incentives and subsidies

8. Increasing flow of information

9. Easier Access to resources

10.Entrepreneurial education

11.Return on Innovation

12.Entrepreneur as a Hero – they inspire others to do the same.

13.High regards for self – employment

14.Rising dissatisfaction at job

15.Acceptance of Ex – entrepreneurs in the Job Market – since they can be

considered as experts in the field of business.

Activity 1. (Scrapbook on reasons for entrepreneurial growth) Discuss the

topic using scrapbooking method. The students may research for further information.

Activity 2. (Essay) Write an essay using the following format, first paragraph is your
major premise-partly introduction but major argument is establish already then the
second paragraph is for the minor premise which is practically the body of the
argument and finally the conclusion where in your argument is sum up with a
concluding statement. The essay should be entitled “Entrepreneurship and its Growth”.
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Great men all started from the first step!