Module 2 Entrepreneurial Behaviour

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INSTRUCTONAL MODULE
FOR
BS ENTREPRENEURSHIP

Subject : ENT 101- Entrepreneurial Behaviour

Module Title: UNIT 2 – Entrepreneurship in the Philippines setting

Author(s) : L. Ritualo , P. Segura

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CHAPTER 2 –ENREPRENEURSHIP IN PHILIPPINE SETTING

This chapter focuses on entrepreneurship in Philippine setting. It is

composed of 2 sub topics, 1st Entrepreneurship in the Philippines and 2nd, the
impact of entrepreneurship to the Philippine Economy. Addressing widespread
poverty is the single most important policy challenge facing the Philippines. Not
only is poverty high when benchmarked against countries in Asia, but also the
rate of poverty reduction has been slow. The critical challenge is to spread the
payback of this huge economic turnaround among the people, especially the
poorest of the poor. They should feel the benefits of the growing Philippine
economy.
Entrepreneurship can provide the solution by creating wealth, jobs, and
social empowerment. If we are to address the issue of poverty with some degree
of success, history tells us we have no choice but to actively encourage
entrepreneurial ventures.
Further, his chapter will enlighten you about the Entrepreneurial practices
and status when it comes to its standing in the ASEAN. You’ll be learning several
points to consider into venturing entrepreneurship in the Philippines with its
setting in the country.

Happy Learning 

MODULE OUTCOMES:
At the end of this module, You will be able to:
1. Identify the fundamentals and responsibilities of entrepreneurship primarily in
the Philippine context with ASEAN and Global perspectives.
2. Exemplified one’s capabilities in relation to the rigors of successful ventures.
3. Developed an entrepreneurial mind set and competencies

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Lesson 1. Entrepreneurship in the Philippines

LESSON OUTCOMES:
At the end of this topic you will be able to:
1. Discuss the nature of entrepreneurship in the Philippines
2. Determine the hindrances in venturing into business in the Philippines

Before we get started, I want you to re-encounter this successful

Entrepreneurs who will be our inspiration into going deep of the course. In the
box are the names, below are the picture of Entrepreneurs with their flagship
brands. Name those picture by selecting names inside the box.
Tony Tan Caktiong Lucio Tan
Henry Sy Socorro C. Ramos
Jaime Zobel De Ayala. Mariano Que

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Top 5 Filipino Entrepreneur

Truly, entrepreneurship is the backbone of our economy. And no one

monopolizes success in entrepreneurial venture. It takes a multiple good traits
and handwork in order to get what you desire. No body leads the race, no one
owns the winning venture. Instead it’s your collaborative efforts and undying
desire that will take you there. Here are some successful entrepreneurs behind
the Pinoys famous brands.

1. Socorro Ramos – National Book Store

Socorro Ramos entered the publishing and retail
industry by working as a salesgirl at a bookstore.
At the age of 19, she opened National Book Store
in Escolta with her husband with a capital of P200,
selling books and school supplies to students. At
that time, Manila was under the control of the
Japanese, who imposed censorship on books and
periodicals. To augment their earnings, she and
her husband resorted to selling other items like
candles and soaps.
After the post-war boom proved profitable for the
company, ushering in bigger revenues, the
Ramoses opened a nine-story building along Avenida. At 95, she still believes in
the time-honored tradition of “hands-on approach” in business. She even
designed the company’s logo herself.

2. Tony Tan Caktiong – Jollibee

Tony Tan Caktiong used to operate an ice
cream parlor, before converting it into a fast
food restaurant called Jollibee. With a starting
capital of P350,000, the young Caktiong
opened two branches in Cubao and Quiapo,
together with friends who supported his idea.
Caktiong decided to serve hamburgers, fried
chicken, and spaghetti to customers when they
started looking beyond the usual ice cream.
Eventually, the business grew, and he had to
hire more
employees. By
knowing the Filipino market, Jollibee managed to
excel as a fast food powerhouse.

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3. Edgar Sia – Mang Inasal
Hailing from Iloilo City, Edgar Sia dropped out of college to pursue his own
laundry and photo-developing business at the age of 19. In 2003, 26-year old Sia
decided to open the barbecue fast food restaurant Mang Inasal—Ilonggo for “Mr.
Barbecue.” The first branch was built at a mall parking lot in his home city.
The restaurant took off. When Tony Caktiong heard about Sia’s burgeoning
business, he decided to buy Mang Inasal for a total of P5 billion. Sia eventually
put the sales of Mang Inasal to other investments like banking and healthcare. At
42, he’s considered the country’s youngest billionaire.

4. Milagros, Clarita, and Doris Leelin –

Goldilocks
With only two cake displays and ten
employees, Milagros, Clarita, and Doris
Leelin started Goldilocks at a 70-sq-m
building space in Makati. Sisters Milagros
and Clarita loved baking and decided to
pursue their passion into business. With the
help of their sister-in-law Doris, the Leelins
opened their first branch.
In 1991, Goldilocks launched its franchising
program. As of 2015, the bakeshop chain had
almost 400 stores across the country, with other branches in the USA, Canada,
and Southeast Asia. From a modest capital of P66,000, Goldilocks is now a
multi-million food enterprise with more than 4,000 employees.

5. Joe Magsaysay – Potato Corner

The young Magsaysay left school to bust tables,
wash plates, and work on the cash register at a
fast food chain. In a few years, he became a
manager, handling five stores.
With his background and skills in store
management, Magsaysay’s friends asked him to
handle Potato Corner, of which he was a co-
founder. They pooled their money together and
started the food cart business in 1992, offering
franchises left and right. Today, Potato Corner
has more than 550 stalls in the Philippines and
around the world.

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Hindrance to entrepreneurs’ success in the Philippines.

1. RED-TAPE
Despite of the Anti-red tape law in the
Philippines, too much bureaucracy in
the government is still palpable.
Business owners and entrepreneurs
are still suffering from expensive and
time-consuming business registration
and compliance processes. Many
entrepreneurs dream of having a duly
registered business and wish to have
income tax returns but the
government is making it hard for
them to realize their dreams because
of red-tape.
What to do?
Despite of red-tape, entrepreneurs should still work harder and produce more
patience to comply with the government’ requirements. Remember to comply first
before you complain.

2. POOR PUBLIC UTILITY SERVICES

Entrepreneurs in the Philippines,
especially in the provinces, are
continuously annoyed by brownouts
and slow internet connection. These
poor services do not only destroy the
efficiency of their business operation
but also cause them a lot of stress.
What to do?
Consider buying a generator or
better use solar power which is a
more environment-friendly source of
electricity. For the slow Internet, if a
reliable Internet connection is vital to
your business operation, try to find a
better location where internet is
faster.

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3. LACK OF FINANCIAL SUPPORT
For start-up owners who are not yet
earning operating income, getting
financial aid from the government or
obtaining a loan from banks in the
Philippines seems to be impossible.
To get a loan, you must have a
collateral or show some years of
operating income. It seems that the
ones who can borrow money are
those who don’t need to borrow. We
can understand the banks because
it’s their business but for the government, I don’t get it.
What to do?
Get financial help from your family or from your close friends who can lend you
money with zero or little interest. Start a professional service business where you
only sell your talents and skills and don’t need big money to operate it.

4. LACK OF MARKETING SKILLS

Entrepreneurs need to sell, build good
customer relationships, earn lasting profits,
and continuously grow their business. But
many aspiring entrepreneurs in the
Philippines don’t spend enough on marketing
campaigns. They rely too much on their
product while forgetting the other elements
of marketing, such as place, price, people
and promotion.
What to do?
Learn the fundamentals of marketing and practice your marketing skills. Also
consider hiring a marketing strategist or outsourcing a marketing firm to delegate
the important marketing tasks that your
business needs in order to succeed.

5. INEFFECTIVE MANAGEMENT
Many entrepreneurs have passion for
business, but don’t have a passion for
management and leadership. Managing and
organizing things inside a business is a
tough job. Leading people is an even tougher
job. Without the ability to motivate
employees and build stronger teams in their

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companies, entrepreneurs cannot succeed and grow their business.
What to do?
Practice your management and leadership skills. Attend seminars and
workshops to champion the leader in you. Learn how to be compassionate and
how to make other people happy. You have to make your team happy, motivated
and more productive.

6. INABILITY TO INNOVATE
Technology evolves rapidly, so as the
people. New business processes and
marketing methods emerge. For example,
online channels like search engines and
social media are now vital for business
promotion. Without adapting to these new
strategies and changes, entrepreneurs
cannot become competitive.

What to do?
Know your competition. Spy on your competitors. Don’t be left behind and lose
your competition. Understand that technology is not a problem but rather an
opportunity or a power that you should harness to advance your business. To
start adapting to new technologies, start from the basics. You don’t need to know
it all at once. Read a book, read a blog, or get a mentor to teach you.

7. LACK OF CUSTOMER CARE

Businesses need to consistently satisfy and make their customers happy.
Without giving satisfaction to customers, a business cannot survive in a long run.
Many entrepreneurs focus on earning money rather than earning loyal customers.
Consequently, their profit doesn’t last for long.
What to do?
Listen to your customers to understand
their current and future needs. Get
feedbacks by putting a suggestion box
in your store of office. Interact and
answer your customers’ questions and
inquirers online and offline. Moreover,
you can also be a customer of your
own business to understand its
strengths and weaknesses.

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8. LACK OF SELF-GROWTH
Finally, what hinders the success of some Filipino entrepreneurs is the lack
of personal development. They lack self-control to concentrate on their core
goals. They lack self-leadership to lead others. They also lack patience,
compassion and some love to always make their customers smile. Without good
habits and personal qualities, an entrepreneur cannot advance. Without self-
growth, an entrepreneur cannot also achieve business growth.
What to do?
Lacking self-growth may vary from ones
needs and points of improvement. Some
may associate it to education or social
expertise or by simply carrying out yourself
especially in front of your clients and
business partners. Education as they say is
a never ending process, it’s progressive in
form and comes in different venue. We
have formal and also have informal
education. Both system could teach us life’s lessons that’ll eventually leads us
into improvement in what we do and who we are as humans. And since, we
should also develop ourselves together with product or service we are offering to
also cater the growing demands of our consumers. Take short courses to re-
invent your style. Attend social gatherings to observe what in, lastly never limits
yourself to do things beyond your force.

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Self – Assessment 2.1
Name: _______________________________ Date Submitted: ______________
Year & Section: ________________

Activity 1. What are your insights about the nature of entrepreneurship in the
Philippines? 10pts

Assessment: Among the hindrances discussed, which one do you think is the
worst habit in some of the Philippine government office. Expound your answer.
20pts.

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Lesson II. Impact of Entrepreneurship to the Philippine Economy

LESSON OUTCOMES:
At the end of the topic you will be able to:
1. Understand the development of entrepreneurship in the Philippines
2. Discuss the impact of entrepreneurship in the Philippines

Did you know?

Philippines jumped 29 notches in the World Bank’s annual Doing Business

Report, ranking 95th from 124th last year with a score of 62.8 and 57.68
respectively. New Zealand tops the 2020 ranking with a score/ value of 86.8
followed by Singapore with 86.2.

Based on the report, the Philippines improved in three areas: starting a business,
dealing with construction permits, and protecting minority investors. Starting a
business was made easier by abolishing the minimum capital requirement for
domestic companies. Furthermore, streamlining the process for obtaining an
occupancy certificate was improved in securing construction permits.

Among the ASEAN member states, there are no changes in the rankings from
2019 to 2020 report. Singapore still leads followed by Malaysia and Thailand.
The Philippines remained at 7th place followed by Cambodia, Lao PDR and
Myanmar for both 2019 and 2020.

See? That’s how working and effective entrepreneurship is in the Philippines.

Though were still a developing country. The ranking shows that Philippines is
able to get along with those highly developed countries. Kudos to all Pinoys and
Pinoy at heart entrepreneurs.

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I. Facts about the impact Entrepreneurship in the Philippines

1. In the Philippines, entrepreneurship is viewed as important to empowering the

poor, enhancing production, and as an impetus to innovation. The 1987
Philippine Constitution recognizes entrepreneurship as an engine of economic
growth. Article XII Section 1 highlights the role of private enterprises in
supporting equitable distribution of income and wealth, sustaining production of
goods and services and expanding productivity, therefore raising the quality of
life.
2. The Philippine Development Plan (PDP) further reinforces the thrust on
entrepreneurship through trade and investment to achieve the government’s goal
of economic development and job creation. Based on the plan, measures for
macro-economic stability, employment, trade and investment, agribusiness,
power-sector reforms, infrastructure, competition, science and technology, and
anti-corruption are being pursued to strengthen Philippines’s competitiveness
and contribute to job creation.
3. In 2011, there were approximately 830,000 business enterprises in the
Philippines. Of these, 99.6 percent are classified as micro, small, and medium
sized enterprises (MSME) which are responsible for 38 percent of total job
growth.

II. Enterprise development and competitiveness

Enterprise development in the context of competitiveness not only entails the
ability to produce products that can be accepted globally but also the level of
support given to enterprises to help them produce, innovate, and gain market
access.
While relatively mature and free, enterprise development in the Philippines is
beset with critical challenges. These challenges are found within the context of
pillars identified by the United Nations Development Programme in its report
Unleashing Entrepreneurship: rule of law, physical and social infrastructure,
domestic macro environment, and global macro environment; a level playing field,
access to financing, and access to skill development and knowledge.
If the challenges remain unresolved, gaps in enterprise development have the
potential to thwart the country’s competitiveness and ability to effectively function
within global production networks.

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III. Rule of Law
Rule of law, which encompasses regulatory structures, policy environment, and
enforcement of regulations, is one of the more important dimensions in assessing
the competitiveness of Philippine enterprises.
According to the World Bank’s 2013 Doing Business Survey, the Philippines
ranks 138 of 185 economies with regards to the ease of doing business. Except
for the indicator “trading across borders” where the Philippines fared in the top
third of the rankings (#53), the country sits at the bottom third in all other
enterprise development indicators such as starting a business (#161), dealing
with construction permits (#100), registering property (#122), getting credit (#129),
protecting investors (#128), paying taxes (#143), enforcing contracts (#111), and
resolving insolvency (#165).
Along these lines, it can be clearly noted that the Philippines’ regulatory
environment for enterprise development is still weak and needs further reform,
harmonization and standardization.
Taking the case of business start-ups for instance, when entrepreneurs draw up
a business plan and try to get under way, the first hurdle they face is complying
with the procedures required to incorporate and register the new firm before they
can legally operate. The Philippines requires at least 15 procedures and takes
some 30 or more days to start a business. Malaysia requires nine procedures
and 24 days while Taiwan requires eight procedures and 48 days. The rest of the
Southeast Asian region averaged 8.7 procedures and 46.8 days to start a
business.
IV. Access to credit
Another important dimension is access to financing. While specific laws such as
the MSME Magna Carta and Barangay Micro Business Enterprises (BMBE)
development specifically mandate financing for enterprises, obtaining said funds
is a different story. Most lending portfolios require collateral accompanied by
tedious documentation and other technical requirements that are difficult for
MSMEs to comply with.
An enterprise survey conducted by the Universal Access to Competitiveness and
Trade (U-ACT) in 2008 revealed that access to capital and financing are two of
the most problematic issues for enterprises, primarily MSMEs. Seventy-two
percent of the total respondents, or nearly three out of four, observed that
investment and/or capital are currently difficult to obtain. On the other hand, five
out of 10 surveyed MSMEs regarded access to and cost of credit as problematic,
in relation to their businesses. In fact, 14 percent strongly stressed that credit
availability and cost pose a serious problem to the operation of their businesses.
Internationalization and global production networks
The rapid integration of economies and globalization of markets has influenced
the evolution of entrepreneurship over the years. Thus, from the traditional
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concept of supporting the various factors of production, entrepreneurship now
entails the capacity to see an opportunity, come up with an idea, and organize
the capital, knowledge, partners and managerial skill needed to develop and
sustain business activities through internationalized value chains.
Taking advantage of liberalized trading environments is an emerging challenge
for Philippine enterprises. This is compounded by the reality of limited
opportunities for productivity and innovation. The World Economic Forum (WEF)
Global Competitiveness Index identified infrastructure, labor market efficiency,
innovation, technological readiness, intellectual property protection, R&D
spending by private companies, and availability of scientists as key areas in
business and enterprise development where the Philippines is lagging.
Enterprises need to be supported by strong social and physical infrastructure,
which include among others, labor productivity, laboratories, business incubators,
business planning, marketing and branding, and conformance to international
standards. All these should be linked to the supply chain while at the same time
economic clusters found in local economies need to be developed to allow
specialization and product complementarity.
V. Role of enterprise networks
In addressing the above mentioned challenges, there is a need to rally behind
national advocacy to push entrepreneurship to the next level. This means
nurturing micro-entrepreneurs from purely “survival” into “opportunity and
innovation driven” enterprise owners. This puts a premium on the role of
enterprise organizations such as chambers of commerce, industry associations
and dedicated enterprise networks.
The OECD Working Party on SMEs and Entrepreneurship in its 2009 study on
“Barriers and Drivers to SMEs Internationalization” undertaken by Kocker and
Buhl points out that institutionalization of networks/social ties and supply chains
is a key driver of SME international competitiveness. The study noted “the
importance of network/social ties and supply chain links in triggering an SME’s
first internationalization step and extending internationalization processes.”
In the Philippines, apart from institutions like chambers of commerce and industry
clubs, entrepreneurship advocacy is mainstreamed by the creation of enterprise
networks like the Philippine Center for Entrepreneurship (PCE). PCE’s concrete
goal is to spawn the creation of so-called “Go Negosyo Communities”
everywhere. These are communities where the academic, business and
government sectors are drawn into a triangle of almost seamless collaboration. In
such an ecosystem, there is constant networking, mentoring and cooperation
among professors, entrepreneurs, industry experts and venture capitalists, with
the government providing support through a viable policy infrastructure. Every
“Go Negosyo” community is distinguished by its ability to produce a continuous
stream of start-up ventures.

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PCE also seeks to embed strong entrepreneurship lessons into the school
curriculum. If the goal is to develop a culture of enterprise and cultivate
tomorrow’s competitive entrepreneurs, they must start at a young age. Primary
and secondary schools can teach the values and develop the mind sets of an
entrepreneur. At the college level, enterprise networks are looking at how to
assist in the area of curriculum enhancement, providing manuals, training the
teachers, and involving real entrepreneurs in the learning process.
VI. Nurturing the entrepreneurship paradigm
Entrepreneurship is more than just an economic term — it is a way of thinking.
Creating jobs, empowering people, and giving individuals access to better lives
for themselves and their children is a wonderful gift. Today, it has become a
dynamic, developing part of the economy promoting inclusive growth.
Entrepreneurship is a way of inspiring creative individuals to pursue opportunities
despite its risks.
In closing, the challenge for countries like the Philippines is to accelerate both the
political and economic leadership that can muster social reforms through
entrepreneurship. Entrepreneurs have the power to achieve great things.
Entrepreneurs will emerge as the well-oiled wheels that will keep the economy
going and the society efficiently running.

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Self – Assessment 2.1

Name: _______________________________ Date Submitted: ______________
Year & Section: ________________
Activity 1. Name 10 Micro Small medium Enterprise (MSME) in your locality.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Assessment: It’s a fact known to you that Philippines is still a developing country
with several possible hindrances to enable entrepreneurs to succeed. Given the
data above why do you think does the Philippine still manage to win over some
countries in ASEAN ranking?

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References:

https://wol.iza.org/articles/entrepreneurs-and-their-impact-on-jobs-and-economic-
growth/long

https://businesstips.ph/8-things-that-hinder-the-success-of-filipino-entrepreneurs/

https://www.cipe.org/resources/entrepreneurship-philippines-opportunities-
challenges-inclusive-
growth/#:~:text=In%20the%20Philippines%2C%20entrepreneurship%20is,an%2
0engine%20of%20economic%20growth.&text=In%202011%2C%20there%20wer
e%20approximately%20830%2C000%20business%20enterprises%20in%20the
%20Philippines.

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