ASSESSMENT OF COCONUT FARMERS’ FUNDING CAPABILITY DUE

TO COPRA DEFLATION IN DAVAO ORIENTAL

Marlo H. Saumat
Melanie Todara
Nelyrose C. Mandaguay
Rafael Luis C. Pamonag

An Undergraduate Thesis Study

Submitted to the Faculty of the Institute of Business and Public Affairs
Davao Oriental State University
In Partial Fulfilment of the Requirements for the Degree

BACHELOR OF SCIENCE IN BUSINESS ADMINISTRATION

MAJOR IN FINANCIAL MANAGEMENT

DECEMBER 2021
 Republic of the Philippines
Davao Oriental State University
INSTITUTE OF BUSINESS AND PUBLIC AFFAIRS
Martinez Drive, Dahican, City of Mati, Davao Oriental, 8200

APPROVAL SHEET
This undergraduate research study hereto attached entitled “ASSESSMENT OF COCONUT
FARMERS’ FUNDING CAPABILITY DUE TO COPRA DEFLATION IN DAVAO
ORIENTAL” , prepared and submitted by Analyn Simafranca, Marlo H. Saumat, Melanie
Todara, Nelyrose C. Mandaguay, Rafael Luis C. Pamonag is hereby recommended for
approval and acceptance.
Endorsed by:

Necito V. Baldoz, PhD

Thesis Adviser
Date: _______________

Approved by the Panel Members

______________________________
Chairman of the Panel
Date: _______________

___________________________ ___________________________
Panel Member Panel Member
Date: __________________ Date: _________________

Accept the Partial Fulfillment Requirements for the Degree of Bachelor of Science
in Business Administration Major in Financial Management.

Janessa P. Catam-isan, PhD

Thesis Coordinator
Date:___________________

Jeralyn H. Sacro, PhD Roselyn V. Regino, PhD

IBPA Dean Director for Instruction
Date:_______________ Date: _______________
 CHAPTER I
INTRODUCTION

1.1 Background of the study

The coconut business has been modernized and optimized during the previous decade, with

the goal of really supporting local economies and farmers directly involved in coconut farming.

These initiatives have included planting new trees, using larger tracts of land used for coconut

farming, shifting the focus from raw coconuts to value-added processing, and making use of the

sunlight that filters through the trees to plant intercrops.

The coconut industry is extremely important to the Philippine economy. This significance

is reflected in farm income, land area dedicated to coconut cultivation, labor force employed, and

foreign exchange earnings. Only 30% of the value is attributable to the non-farm sector,

indicating that agriculture dominates the industry. Coconuts are grown on approximately 50% of

Philippine farms. Despite the fact that only one-fifth are classified as coconut farms. Profits from

coconut Production, which accounts for 12% of farm income, is fairly evenly distributed among

farmers.

The Philippines is the world's second largest producer of coconuts, but the coconut

plantation is plagued by numerous issues, and production continues to decline. The main causes

are: tree senility, the use of unsuitable land for this crop, poor nutritional status, poor harvesting

and post-harvest techniques, the felling of young coconut palms, and drought caused by intensive

deforestation. To prevent this decline, measures such as variety selection and efficient

hybridization, fertilization, the use of cover plants, and drought control are recommended
(cultivation techniques, land development, irrigation). The government is providing financial

incentives for the coconut plantation rehabilitation program. (F.R. Aldaba, 1995)

1.2 Theoretical Framework

Companies looked to show their ability to survive in their business, with numerous

approaches to business continuity and recovery methods, particularly in the area of product

supply and marketing. This conclusion goes hand-in-hand with McCarthy (2003), who suggests

that crisis experience enables entrepreneurs to act rationally and plan for decision-making.

1.3 Conceptual Framework

This conceptual framework provides the theoretical and empirical review approach that

was adopted in doing research. When objectives and research framework are aligned, it becomes

easier to discover additional study aspects such as the methodology and statistical techniques.

The conceptual framework also communicates the expectations of the researchers regarding the

results of the independent variables in the dependent variables.

There are two main variables in connection with this study, namely independent

variables and dependent variables also with intermediate variables that lead to independent

variable path to dependent variable. Independent variables are the small and medium-sized

enterprises (SMEs), while dependent variables are the  effect to the daily financial budgeting.
 Strategic Financial Management (SFM), a field of research attracted after 2010, is an

essential management area of small businesses due to its critical significance in the survival,

growth and performance of small and medium-sized enterprises. SMEs measure the daily

financial budgeting through the following independent variables particular in mitigation,

survival, growth, capital, food supply, and prices. The dependent variable will be the path of

independent variable depends on what will be the effects of daily financial budgeting amidst the

pandemic crisis in Mati City.

1.4 Statement of the Problem

Several media stories on the impact of movement control order on small companies have

been reported. for example, the loss of daily revenue for microenterprises is caused by a

disruption supply chain due to closures of the supporting sectors, the shortage of workers and a

fall in the cash supply (Dzulkifli, 2020; Aling,2020). Among the prohibitions set out are the

closure of government and private premises, except those related to key national services such as

health and safety, telecommunications, retail, finance and transportation (National Security

Council, 2020).

1.5 Objectives of the Study

The general objective of this study is to discover the extent of daily financial budgeting

of small and medium-sized enterprises (SMEs) in Mati City amidst pandemic crisis. This study

will focused on the following; Specifically:

1. What are the effects of the pandemic to the daily financial budgeting of small and

medium-sized enterprise owner of Mati City amidst pandemic crisis?

2. To what extent do these effects bring to small and medium-sized enterprise owner?
 3. What are the alternative ways to mitigate negative effects of pandemic crisis, if there

are?

1.6 Significance of the Study

The following stakeholders benefit from the study:

a) For Entrepreneurs. This study will provide concrete baseline data to the

following entrepreneurs who engage in small and medium-sized businesses. This

also serves as the basis for all business engagement, especially in the SMEs

industry.

b) For Government. This study will give baseline data on daily financial budgeting.

Thus, the data gathered in this study can be used as the basis for taking actions

and preventive measures for the businesses in the SMEs sector.

c) For Researchers. This research may benefit them because they will learn how

small and medium-sized enterprises mitigate the negative impact of pandemic

crisis.

1.7 Scope and Limitation of the Study

The study used survey questionnaires for the specified respondents to discover the extent

of daily financial budget, particular on survival, recovery, alternative ways and its impact on the

owners. The researchers distributed the questionnaires to random respondents in Mati City,

Davao Oriental. The data gathered from the survey was interpreted to form assumptions.
1.8 Definitions of Terms

a) Financial management refers to financial activities, such as the acquisition and

use of company money, planning, organizing, directing and controlling. It

indicates that general management ideas are applied to the company's financial

resources.

b) Financial refers to a phrase for money and investment management, creation and

study.

c) Budget refers to the process by which you create an expenditure plan.

d) Enterprise refers to an organization, especially a business, or a difficult and

important plan, especially one that will earn money.

CHAPTER II

REVIEW OF RELATED LITERATURE

This chapter primarily presents the different researches and other literatures form both

foreign and local researchers, which have significant bearings on the variables included in the

research. It focuses on several aspects that will help in the development of this study. The study

is generally concentrating on the extent of daily financial budgeting of small and medium-sized

enterprise amidst pandemic crisis. The literatures of this study come from books, journals,

articles, electronic materials such as PDF or e-book

and other existing theses and dissertations, Foreign and local that are believed to be useful in the

advancement of awareness concerning the study.

2.1 Foreign Literature

The acute crisis of Novel Coronavirus (Covid 19) from Wuhan, China, in 2019 spread to

over 200 nations worldwide, including Asia, Europe, America and Australia, in December 2019.

The World Health Organisation(WHO, 2019) classified this outbreak as pandemic since it

demonstrates an increase of human-to-human infection (Qiu, Rutherford, Mao & Chu, 2017)

which has resulted in more than 200,000 deaths within three months of the outbreak start (WHO,

2020). Covid-19 really registered the greatest infection and fatality rate compared to other

epidemics of coronavirus like MERS-CoV, SARS-CoV and influenza (Liu, Gayle, Smith &

Rocklov, 2020; Peeri, et al, 2020)

According to (Noor Fzlinda Fabeil , Khairul Hanim Pazim , Juliana Langgat, 2020),

Covid-19 pandemic outbreaks have resulted to limitations on travel and movement being

imposed in numerous nations. One of the most directly affected areas of the movement's control

order in Malaysia is the small business sector. Indeed, the impact among micro-enterprises is

more profound than its bigger partners. Business cancelation or closure and reduced income is

experienced by entrepreneurs owing to closure of numerous supportive sectors such as retail and

transport.

2.2 Foreign Studies

 The pandemic has had an impact on SMEs on both the demand and supply sides (OCED,

2020). On the supply side, SMEs faced a labor scarcity and a dearth of critical raw materials,

while on the demand side, they faced a rapid loss of demand and revenue.

Koyuncugil and Özgülbaş 2008, earlier literature on the Turkish SME's financing

features emphasize on the financing needs of SMEs (Uluyol 2013; Koyuncugil & Özgülbaş,

2008; Topal, Erkan & Elitaş, 2006; Arslan, 2003). Bartz and Winkler (2016) in their study of the

performance of entrepreneurial firms during crisis found that micro-enterprises exhibit a

relatively slow growth in crisis time, indicating fragility as compared to larger enterprises which

grow faster and more flexible. It is argued that crises are detrimental to micro-enterprises; hence

entrepreneurs need to think of strategies to manage and plan for alternative approaches to lessen

the impact of the crisis on their business.

Two-thirds of the global jobs and half the GDP of small and medium-sized firms (SMEs)

(Gibbens, 2020). 99 percent of the registered companies in Nepal are micro, small and medium-

sized and 95 percent are employed (Central Bureau of Statistics, 2019).

According to the World Health Organization (2020), by mid-August 2020, the COVID-

19 had resulted in approximately 720,000 human casualties and a terrible economic crisis in 216

countries worldwide. Massive economic shutdowns have occurred around the world in the

previous six months, affecting personal healthcare, social lives, employment, businesses, and the

general economy. The whole global supply chain has come to a halt, disrupting consumption,

company continuity, and overall global growth.

2.3 Local Literature

 Businesses that have temporarily closed due to a government-imposed quarantine, such

as business owners, may no longer be forced to reverse their welcome sign that says "Open for

business" ( Guevara, 2020). As a result of the COVID-19 outbreak, many famous brands and

small brands are expected to go bankrupt as people stay at home and economies shut down

(Tucker, 2020). COVID - 19 A unexpected "environmental shock" has greatly disrupted firms'

financial resources and increased business failures, causing financial difficulties in organizations

and hurting the financial position of many major and small businesses.

According to The World Bank (2020), social assistance to poor and vulnerable families,

as well as micro and small companies, will help mitigate the impact of COVID-19 and hasten

recovery in the Philippines. According to the World Bank's October 2020 Economic Update for

East Asia and the Pacific, From Containment to Recovery, which was released today.

2.4 Local Studies

For virtually everyone throughout the world, the COVID-19 Pandemic has affected

lifestyles clearly and directly. It made them practice social removal, fully wash their hands and

know how to wear cover. In the meanwhile, the threat to public health has also allowed many

people to work unexpectedly from home, and some will be doing so for a long time. In addition,

there is a strong relationship between small businesses and COVID 19, especially as specialists

restricted unneeded enterprises to close by chance and ordered all others to pursue new strategies

in terms of welfare and security (Partida, 2020).

According to Rivas (2020), Philippines was most appalling in relation to the impact of

the COVID-19 pandemic on businesses and families, according to the Asian Development Bank

study (ADB). The pandemic like COVID-19 has caused major disturbances in companies and
customers that damaged the global and local economy. Governments and other connected

authorities take initiatives to reduce the number of enterprises operating companies for

modifications.

According to Shin, Pang, and Kim (2015), ongoing technology upgrades and internet

developments have been observed which have improved online communication between

shareholders and customers. They included 200 companies and encouraged internet media to

create a direct dialog that then proclaimed open exchanges of ideas for and from clients.

The history of each business owner is unique and each business experienced its own

problems in the midst of the Coronavirus pandemic. DM's owner, The Club, claimed that the

health and safety of everyone is one of the major difficulties their businesses face. The place

should be kept clean and disinfected and employees should wear masks, be sanitized and check

the temperature. The clients should also wear masks and worship socially (Mager, 2020). 

CHAPTER III

METHODOLOGY

This chapter describes the research methods which were used during the study as well as

during the process of data collection, interpretation and analysis by the researcher. Generally, the
chapter discusses the research design, the sampling plan, research locale, sample size, sampling

technique, respondents of the study, data collection procedure and data treatment.

3.1 Research Design

The study made use of qualitative research methods. Researchers conducted these types

of studies in order to obtain reliable and accurate information about assessing the extent of daily

financial budgeting of small and medium-sized enterprise. According to Kothari (2004), research

design is a research framework for conducting research that assists the researcher in the best

possible way for data collection, organization, analysis, and interpretation, as well as providing

reliable answers to the research questions.

3.2 Sampling Plan

Our total population in Mati City, Davao Oriental was 141,141 and so minimum of 100

sample size was need. The customers were selected by random sampling. All data collection

procedures were designed to ensure the anonymity. Respondents typically held purposive

sample. For survey, few questionnaires were designed to collect data. Questionnaires were

assembled to know about the extent of daily financial budgeting of small and medium-sized

enterprise in Mati City, Davao Oriental.

3.3 Research Locale

This research study was conducted at City of Mati, Davao Oriental. The researchers

selected this city as the study’s research locale. City of Mati, Davao Oriental with an estimated

total population of 141,141 (Philippine Statistics Authority, 2015)

 Source: Wikipedia

Figure 3.3.1 Research Locale Map

3.4 Sample Size

According to Kothari (2004), sample size is defined as the total number of items or units

used to represent characteristics of the entire population. The researchers targeted a minimum of

100 respondents from City of Mati, Davao Oriental. The researchers asked for a sample of

selected random individuals between the ages of 25-65 from this city. The outcome towards

sample size indicates that the greatness or strength of a relationship between variables is

dependent on the sample size; thus, once other factors are held constant, the degree for

determining the phenomenon is dependent on the greatness of the sample size used (Baroudi and

Orlowiski, 1989).

3.5 Sampling Technique

The researchers used simple random sampling. A simple random sampling is a basic

sampling technique in which a selection of a larger group of people (a sample) is chosen for
research (a population). Each person is chosen at random, and everyone in the population has an

equal chance of being included in the sample, (Valerie J. Easton and John H. McColl's).

3.6 Respondents of the Study

The respondents who took part in the research survey were those owners of small and

medium-sized businesses in the City of Mati, Davao Oriental. The repondents are generally in

the age range of 25-65 years old. The researchers took advantage of this age range to participate

in the study which focused on the extent of daily financial budgeting of SMEs.

3.7 Data Collection Procedure

Survey questionnaires are prepared and used as the primary data instrument. Survey

methodology includes instruments or procedures that ask one or more questions that may, or may

not, be answered. Assumptions can be derived from the responses of the respondents. Survey

questionnaires are validated first before their distribution.

3.8 Data Treatment

The data gathered was tallied and statistically analyzed. The researchers used semi-

structural questionnaires as a tool for collecting data. This tool was used to generate a list of

open-ended questions related to our research objective, which were then used to guide the

interview.All of the information gathered was kept private.